TROW 10-K & 10-Q changes, risk factors and insider trading

•Investment Performance. If the investment performance of our managed investment portfoliosproducts 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.products. 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.

•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 portfoliosproducts could reduce our assets under management. These could be caused by investors reducing their investments in our portfoliosproducts in general or in the market segments in which we focus; investors taking profits from their investments; portfolioproduct risk characteristics, which could cause investors to move assets to other investment managers; and investor and market sentiments.

•Investing Trends. Changes in investing trends, particularly investor preference for passive or alternativealternatives 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 portfoliosproducts are affected by changes in,in as well as uncertainty about interest rates.

•Geo-Political Exposure. Our managed investment portfoliosproducts 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, therecent threatevents thatin Russia’s military aggression may expand,Venezuela and the recenton-going conflicts in the Middle East, including the Israel-Hamas war, and potential escalation of such conflictsEast), trade policies, wars or tariffs (including those imposed or threatened by the U.S. and retaliatory tariffs by U.S. trading partners), currency fluctuations, market volatility, illiquidity and capital controls, and changes in legislation related to ownership limitations.

A majority of our revenues are based on contracts with collectivecommingled investment fundsvehicles that are subject to termination without cause and on short notice.

We provide investment advisory, distribution, and other administrative services to collectivecommingled investment fundsvehicles under various agreements. Investment advisory services are provided to each sponsoredcollective 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 and ETF 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.

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, sustainability, 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.

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. In addition, should we be subject to a cybersecurity event or data breach, or the target of cyber criminals who seek to defraud our clients, our reputation could be harmed and we could suffer financial loss. 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.

Our alternatives products include investments in private credit, real estate, infrastructure and equity investments in private companies, which may expose us to new or increased risks and liabilities and to reputational harm.

Our alternatives products include investments in private credit, real estate, infrastructure and 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, valuationvaluation, concentration and disposition of such investments;

Our hedging strategies utilized to mitigate risk may not be effective, which could impact our earnings.net income.

We employ hedging strategies related to our supplementaldeferred savings plan and other incentivecompensation 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 resultsnet of operations, cash flows or financial condition.income.

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.

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),events, and other events outside of our control could adversely affect our revenues, expenses, and net income by:

•decreasing investment valuations in, and returns on, the investment portfoliosproducts that we manage;

A significant portion of our business operations are concentrated in the Baltimore, Maryland region; Colorado Springs, Colorado; ForthFort 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.

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 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,continuity, no assurance can be given that the steps we have taken will continue to be effective or appropriate against future pandemics, epidemics or disease outbreaks. 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 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 assureguarantee 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 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 adequateadequate, resilient and secure technology to conduct or expand our operations or if our technology became inoperative or obsolete.

All of our technology systems, including those provided or operated by third-party service providers, are not fully redundant and are vulnerable to disability or failures due to cyberattacks, natural disasters or extreme weather events (which may increase in frequency or intensity as a result of climate change),events, 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.clients, potentially resulting in financial losses that may not be sufficiently mitigated by insurance coverage.

We are dependent on the effectiveness of the information and cybersecurity policies, procedures and technology-based capabilities we maintain to protect our systems and data. An externally caused data security incident, such as a cyberattack, phishingsocial scam,engineering attacks (including phishing, impersonation and identity takeover attempts), virus, ransomware attack, denial-of-service attack, or an attack launched from within our systems could compromise the integrity of personal data of clients, personnel and other parties, as well as confidential client or competitive information and materially interrupt our business operations. 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 integrityintegrity, confidentiality and confidentialitysecurity 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 operationstechnologies 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.

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 sensitivepersonal or confidential sensitive data, is either prevented or detected in a timely manner. We also leverage cloud-based solutions for the transmission and storage of data. 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:

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.jurisdictions and any insurance we have may not be sufficient to cover our liability which would impact our financial results.

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 potential risk of usviolating violatingapplicable 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, understandingappreciating the risks and monitoring the capabilities of the AI technology developed by third parties, and, to that extent, are dependent in part on the manner in which those third parties develop and train their models, including for example, risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. Further, the use of AI technologies requires ongoing operational controls and procedures and the development and deployment of appropriate protections and safeguards. AI technologies may also disrupt the competitive landscape for investment management and technology services, including in commercial and operational areas such as data aggregation and quantitative models. 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,Furthermore, we may experienceface brandcompetition orfrom reputationalinvestment harm,managers competitivewho harm,use orAI legalin liability.lieu of human managers, which may lead to lower cost solutions which could impact our business.

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, executive orders, directives, policies and legal interpretations has increased both in the U.S. and globally, which requires additional resources and expense in order for us to digest and institute processes to comply.

Furthermore, in recent years several governments have proposed or enacted policies, legislation, and executive actions relating to ESGsustainability and DEIhuman capital initiatives for the private sector. More recently, interested parties on both sides of the debate have sought to utilize the courts, social media and other means to change the practices of companies. We communicate certain approaches regarding environmental, social, diversity,human capital, and other ESG-relatedrelated 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.

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 fundproduct 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. Certain new regulatory proposals that may impact or relate to our business, include cybersecurity disclosures, sustainability, privacy and data protection, financial products, fiduciary and fund-related reforms, digital assets, tax compliance, and other investment management disclosure and compliance requirements. 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.

•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,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 with additional flexibility to utilize such products. Nonetheless, there are still certain limitations on our investment products due to CFTC rules.

•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’sEU's General Data Protection Regulation (“GDPR”) and laws enacted by a growing number of U.S. states; cybersecurity; current and emerging technology, including AI and automated decision-making technologies; storage, localization, retention and destruction of data; disclosure, transfer, availability, security and integrity of data; notification of regulators and/or impacted parties regarding adverse data-related events, including the SEC’s cybersecurity disclosure rules; amended Regulation S-P; and other similar matters that can concern the data of our clients and/or personnel. 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 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.products.

•New laws or regulations involving ESGsustainability integration and disclosure may materially impact the asset management industry.industry, For example,including the EU’sEU'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,Regulation, the EU’s Corporate Sustainability Reporting Directive imposes enhanced sustainability reporting requirements for certain EU companiesDirective, and non-EUsimilar companies, with phased reporting requirements beginning in 2025 for certain companies. In the U.S., states haveinitiatives proposed or adopted lawsby 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 thevarious U.S. states. Conversely, some U.S. states and foreign governments 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 ESGsustainability factors in their investment processes and proxy voting. As jurisdictions globally continue to develop legal frameworks on ESGsustainability 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.

Our revenues and net income are derived primarily from investment advisory services provided globally to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternativealternatives 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-discretionaryother advisory services.

Investment advisory fees depend largely on the total value and composition of our assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.

The investment management industry hascontinues beento evolvingevolve and industry participants are facingface challenging trendstrends, including passivethe investmentsshift takingin market share from traditional active strategies; continuedto passive products, persistent downward fee pressure;pressure, demand for newlower cost investment vehicles to meet client needs;vehicles, and an ever-changing regulatory landscape. In this regard,environment, we havemaintain ample liquidity and resources that allow us to take advantage of attractive growth opportunities.opportunities Weand aredeliver new capabilities that meet the evolving needs of our clients globally. At the same time, we have developed a broad and ongoing plan to further align our expense growth with our anticipated revenue growth, which will allow us to realign resources and continue investing in key capabilities, including investment professionals, distribution professionals, technologies,existing and newfuture product offerings in order to provide our clients with strong investment management expertise and service.capabilities.

Developed non-U.S. equity markets wereoutperformed mostlyU.S. positivestocks in 2024,U.S. dollar terms, helped by looser monetary policies from various central banks around the world. However, returns to U.S. investors were hurt by a strongerweaker dollar versus major non-U.S. currencies. In Europe, equity markets were widelymostly mixedpositive in U.S. dollar terms,terms. whereasStocks developedin Spain and Austria fared best, surging 80%, while equities in Finland, Ireland, and Italy advanced close to 60%. UK stocks rose 35%. Developed Asian markets were also mostly positive.positive with stocks in Hong Kong climbing 35% and Japanese stocks rising 25%.

EmergingStocks equityin emerging markets generally appreciated and outperformed stocksequities in developed non-U.S. markets in U.S. dollar terms. EmergingIn Asianthe marketsemerging wereAsian, mostlyLatin positiveAmerican, in dollar terms, though South Korean stocks fell sharply due in large part to late-year political turmoil. Equities inand the emerging Europe, Middle East, and Africa (EMEA) regionregions, markets were also mostly positive. In Latin America, stocks in regional heavyweights Brazil and Mexico fell sharply, though some smaller markets produced positive returns.

In the U.S. investment-grade bond universe, sectormortgage-backed performancesecurities wasperformed broadlybest, positive.but Non-agencycorporate bonds and non-agency commercial mortgage-backed securities also did well. Treasuries and asset-backed securities producedslightly 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.lagged. Tax-free municipal bonds slightly trailed the broadunderperformed taxable bondbonds, market.but Highhigh yield corporate bonds produced solid gains and stronglycorporates outperformed the investment-grade bond market.

ASSETS UNDER MANAGEMENT.(1)

Assets under management ended 20242025 at $1,606.6$1,775.6 billion, an increase of $162.1$169.0 billion from the end of 2023.2024. This increase was driven by net market appreciation and income, net of distributions not reinvested, of $205.3$216.7 billion, offset by net cash outflows of $43.2$56.9 billion. Beginning on July 1, 2025, assets under management include managed account - model delivery portfolios assets, which had $9.2 billion in assets as of that date, and are reflected in the increase from December 31, 2024.

The following table details changes in our assets under managementmanagement, by asset classclass, during the last three years:

(12) The underlying AUMassets under management of the multi-asset portfoliosproducts have been aggregated and presented in this category and not reported in the equity and fixed income columns.

(23) 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 ofwere $21.6 billion at December 31, 2025, $16.2 billion at December 31, 2024, and $11.6 billion at December 31, 2023, and $10.5 billion at December 31, 2022 are not reflected in fee basis AUM above.

(34) ReflectsIncludes net distributions not reinvested of $6.8 billion in 2025, $5.9 billion in 2024, and $2.9 billion in 2023, and $3.3 billion in 2022.2023.

Investment advisory clients outside the U.S.United accountedStates account for 8.8% of our assets under management at December 31, 2024,2025 and December 31, 2024 and 8.6% at December 31, 2023, and 9.1% at December 31, 2022.2023.

Our net cash outflows in 20242025 were driven primarily by growth-oriented equity strategies. These outflows were partially offset by net cash inflows in fixed income, target date retirement products, and alternatives strategies. Financial intermediaries and institutional clients were the main sources of net outflows in 2025. From a geography perspective, net outflows were predominantly from U.S. clients invested in equity strategies, though all regions experienced net outflows. For 2024, net outflows 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 alternativealternatives 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 alternativealternatives strategies. From a geography perspective, net outflows were predominantly from U.S. clients invested in equity strategiesstrategies, 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 participant accounting and plan administration for defined contribution retirement plans that primarily invest in the firm'sour U.S. mutual funds, collective investment trusts and funds managed outside of the firm'sour complex. As of December 31, 2024,2025, our assets under administration were $282$314 billion, of which $159$178 billion were assets we manage.

INVESTMENT PERFORMANCEPERFORMANCE.(1).

Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, U.S. fund performance against passive peers, and composite performance against benchmarks. The following tabletables presentspresent investment performance for the one-, three-, five-, and 10-years ended December 31, 2024.2025. Past performance is nonot a guarantee nor a reliable indicator of future results.performance.

As of December 31, 2024,2025, 5468 of 90141 (60.0%48.2%) of ourthe firm's 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%60.4%(6) of AUM in ourthe firm's rated U.S. mutual funds (across primary share classes) ended 20242025 with an overall rating of 4 or 5 stars.

(1) The investment performance reflects that of T. Rowe Price sponsoredU.S. mutual fundsfunds, ETFs, and composites AUM.composites.

(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 outperformingoutperformed 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$329B for 1 year, $318B$319B for 3 years, $317B for 5 years, and $316B for 10 years.

(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. 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 othera funds.retail Thisfund.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 outperformingoutperformed 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$272B for 1 year, $302B$262B for 3 years, $262B$260B for 5 years, and $257B$252B for 10 years.

(5) Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. 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$1,565B for 1 year, $1,420B$1,557B for 3 years, $1,418B$1,551B for 5 years, and $1,367B$1,512B for 10 years.

The following table and discussion set forth information regarding our consolidated financial results for 2024,2025, 20232024 and 20222023 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, ifincluding any.the restructuring charges.

(1) Then/m - the percentage change is not meaningful (n/m).meaningful.

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-recurringnonrecurring 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.

The investment management industry is evolving, facing challenging trends such as passive strategies 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. Furthermore, we have developed a broad and ongoing plan to align our expense growth with anticipated revenue growth. As a result, we have initiated certaintaken actions to reduce expense growth, realign resources, and invest in existing and future capabilities, while also helping to offset ongoing inflationary pressures on compensation and contractual spending. These investments include hiring investment and distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.

Assets under management ended the firstsecond quarter of 2026 at $1,709.7$1,893.4 billion, aan decreaseincrease of $65.9$183.7 billion from DecemberMarch 31, 2025.2026. The decreaseincrease was driven by market depreciationappreciation, net of $52.2distributions billionnot andreinvested, of $190.2 billion, offset by net cash outflows of $13.7$6.5 billion.

The following table details changes in our assets under management, by asset class, during the firstthree- quarterand ofsix-month periods ended June 30, 2026:

(3) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed / distressed, non-investment grade CLOs, special situations, private equity, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $21.0 billion at June 30, 2026, $20.9 billion at March 31, 20262026, and $21.6 billion at December 31, 20252025, and are not reflected in fee basis AUM above.

(4) Includes net distributions not reinvested for the firstthree- quarterand ofsix-month periods ended June 30, 2026 of $0.6.$0.6 billion and $1.2 billion, respectively.

InvestmentInvestors advisory clientsdomiciled outside the United States account for 8.6%9.1% of our assets under management at June 30, 2026, 8.6% at March 31, 20262026, and 8.8% at December 31, 2025.

Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $622.0 billion at June 30, 2026, $561.3 billion at March 31, 2026, compared withand $561.4 billion at December 31, 2025. Net flows into these portfolios were $4.9$1.7 billion and $6.6 billion in the firstthree- quarterand ofsix-month 2026.periods ended June 30, 2026, respectively.

Our multi-asset investment division provides advisory solutions that include investment insights, strategic asset allocation design, tactical asset allocation recommendations, and portfolio rebalancing services. The assets in these solutions, predominantly in the United States, were $31.1 billion at June 30, 2026 and $27.8 billion at March 31, 2026 and December 31, 2025.2026.

We provide participant accounting and plan administration for defined contribution retirement plans that primarily invest in our U.S. mutual funds, collective investment trusts and funds managed outside of our complex. As of MarchJune 31,30, 2026, our assets under administration were $314$349 billion, of which $176$192 billion arewere assets we manage.managed.

Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, U.S. fund performance against passive peers, and composite performance against benchmarks. The following tables present investment performance for the one-, three-, five-, and 10-years ended MarchJune 31,30, 2026. Past performance is not a guarantee nor a reliable indicator of future performance.

As of MarchJune 31,30, 2026, 6864 of 140142 (48.6%45.1%) of the firm's 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, 61.0%57.0%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended MarchJune 31,30, 2026 with an overall rating of 4 or 5 stars.

The following table and discussion sets forth information regarding our consolidated financial results for the firstthree- quarterand ofsix-month periods ended June 30, 2026 and 2025 on a U.S. GAAP 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 nonrecurringnon-recurring charges and gains, including the restructuring charges.

Results Overview - Quarter ended MarchJune 31,30, 2026

Net revenues consist of investment advisory revenues; performance-based advisory fees; capital allocation-based income; and administrative, distribution, servicing, and other fees; and capital allocation-based income.fees. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,857.0$1,907.4 million in the firstsecond quarter of 2026, a 5.3%10.7% increase over $1,763.9$1,723.3 million in the firstsecond quarter of 2025. The increase was primarily driven by aan 5.3%11.3% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 9.6% and a $29.3 million increase in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.15.7%.

Operating expenses on a U.S. GAAP basis were $1,176.5$1,366.9 million in the firstsecond quarter of 2026, a 0.8%9.8% increase over the comparable 2025 period. On a non-GAAP basis, adjusted operating expenses were $1,155.2$1,203.2 million, a 1.8%4.9% increase over the comparable 2025 period.

Operating margin in the firstsecond quarter of 2026 was 36.6%28.3% on a U.S. GAAP basis, compared to 33.8%27.8% earned in the firstsecond quarter of 2025. The increase in our operating margin for the firstsecond quarter of 2026 compared to the 2025 period was driven by net revenue growth outpacing operating expense growth primarily due to higher investment advisory fees.

Diluted earnings per share was $2.23$2.88 for the firstsecond quarter of 2026 compared to $2.15$2.24 for the firstsecond quarter of 2025. The increase was primarily driven by ahigher lowernet taxinvestment rategains and lowerhigher weightedoperating average shares outstandingincome compared to the 2025 period.

On a non-GAAP basis, adjusted diluted earnings per share was $2.52$2.57 for the firstsecond quarter of 2026 compared to $2.23$2.24 for the firstsecond quarter of 2025. The increase was primarily due to higher adjusted operating income and lower weighted average shares outstanding compared to the 2025 period.

Investment advisory fees in the firstsecond quarter of 2026 increased 5.3%11.3% over the comparable 2025 quarter as average assets under management increased $155.5$248.9 billion or 15.7%, to $1,837.7 billion. For the six months ended June 30, 2026, investment advisory revenues increased 8.3% over the comparable 2025 period as average assets under management increased $202.4 billion, or 9.6%,12.6%, to $1,775.8$1,806.9 billion.

The average annualized effective fee rate earned for the firstthree- quarterand ofsix-month periods ended June 30, 2026 declined from the comparable 2025 periodperiods due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes.classes partially offset by market appreciation.

Performance-based advisory fees in the firstsecond quarter of 2026 and 2025 were primarily earned from alternative strategies. For the six months ended June 30, 2026, fees were primarily earned from alternative strategies, whereaswhile infor the 2025 comparativecomparable period feesof 2025, they were earned acrosson both alternative and equity and alternative strategies.

Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. ForIn the 2026second quarter,quarter of 2026, accrued carried interest increased net revenues by $31.3$15.2 million, compared to $9.2$36.5 million in 2025,the 2025 period, reflecting weaker relative investment performance.performance in credit strategies. Capital allocation-based income for the second quarter of 2026 also includes carried interest earned on our late stage venture fund. For the six months ended June 30, 2026, accrued carried interest increased net revenues by $46.5 million compared to $45.7 million for the 2025 period. The decrease in acquisition-related amortization and impairments from the comparable 2025 periodperiods primarilywas reflectsdue amortization andto impairments recognized over time, which reducedin the remaining2025 carryingperiods valuethat ofdid thenot acquired-assets.recur. We realized carried interest of $41.0$8.2 million and $49.2 million in the firstthree- quarterand ofsix-month 2026periods ended June 30, 2026, respectively, compared to $43.1$10.9 million and $54.0 million in the 2025 period.periods, respectively.

Administrative, distribution, servicing, and other fees in the firstsecond quarter of 2026 were $138.4$144.2 million, a decrease of $17.9$5.5 million, or 11.5%,3.7%, from the comparable 2025 quarter. TheFor the six months ended June 30, 2026, these fees were $282.6 million, a decrease of $23.4 million, or 7.6%, from the 2025 period. The decreases primarily reflectsreflect the reporting change implemented in Q3the third quarter of 2025, in which revenue earned from managed account - model delivery assets and certain other advisory services began being reported within investment advisory fees, asalong wellwith aslower recordkeeping fees. For the quarterly comparison, these decreases were partially offset by the timing of cost reimbursements from theour U.S. mutual funds.

Our net revenues reflect the elimination of advisory and administrative fee revenue earned from our consolidated investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the firstsecond quarter, we eliminated net revenue of $1.1$1.6 million in 2026 and $1.4 million in 2025. For the six months ended June 30, we eliminated net revenue of $2.7 million in 2026 and $2.8 million in 2025.

(2) Capital allocation-based income compensation represents the compensation related to the change in accrued carried interest compensation along with acquisition-related, non-cash amortization and impairments.

(3) In Q1 2026, we beganimplemented a reporting change the moved technology-related professional fees and servicing costs from general, administrative, and other costs to technology, occupancy, and facilities costs to better align with the nature of the expenses following the outsourcing and expansion of our technology capabilities through trusted vendor partnerships. Prior periods were recast to reflect this change. The amountamounts reclassified for the firstthree- quarterand ofsix-month periods ended June 30, 2025 waswere $13.6M.$15.5 million and $29.1 million.

Compensation, benefits, and related costs were $655.1$675.9 million for the firstsecond quarter of 2026, aan decreaseincrease of $2.8$27.1 million, or 0.4%,4.2%, compared to the 2025 quarter. For the six months ended June 30, 2026, these costs were $1,331.0 million, an increase of $24.3 million, or 1.9%, compared to the 2025 period. The decreaseincreases wasin both periods were primarily due to a higher interim bonus accrual partially offset by lower salaries and related benefits, partially offset by higher long-term incentive compensation.benefits.

Distribution and servicing costs were $99.3$106.1 million for the firstsecond quarter of 2026, an increase of $5.7$13.6 million, or 6.1%,14.7%, from $93.6$92.5 million recognized in the 2025 quarter. TheFor the six months ended June 30, 2026, these costs were $205.4 million, an increase wasof 10.4%, from $186.1 million recognized in the comparable 2025 period. The increases in both periods were primarily driven by higher average assets under management distributed through intermediaries.

The costs in this expense category include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds, ETFs, and ourcertain international products, such as our Japanese ITMs and SICAVs. These costs are offset entirely by the investment advisory revenue we earn from these products, or in the case of the Advisor and R share classes of the U.S. mutual funds, are12(b)-(1) fees recognized in administrative, distribution, servicing, and other fees.

Advertising and promotion costs were $18.4$20.3 million in the firstsecond quarter of 2026, a decrease of $7.7$9.6 million, or 29.5%,32.1%, compared to the $26.1$29.9 million recognized in the 2025 quarter. TheFor the six months ended June 30, 2026, these costs were $38.7 million, a decrease wasof $17.3 million, or 30.9%, compared to $56.0 million recognized in the 2025 period. The decreases in both periods were primarily due to timing oflower media spend and events.agency costs.

Product and recordkeeping related costs were $74.3$83.1 million in the firstsecond quarter of 2026, aan decreaseincrease of $9.5$8.3 million, or 11.3%,11.1%, compared to the $74.8 million recognized in the 2025 quarter. For the six months ended June 30, 2026, these costs were $157.4 million, a decrease of $1.2 million, or 0.8%, compared to $158.6 million recognized in the 2025 period. The decreaseincrease for the second quarter of 2026 over the comparable 2025 period was primarily due to the timing of costs reimbursed by our U.S. mutual funds. The offsetting reimbursement is recognized in administrative, distribution, servicing, and other fees revenue.

Technology, occupancy, and facility costs were $204.4$205.9 million in the firstsecond quarter of 2026, an increase of $23.2$10.9 million, or 12.8%,5.6%, compared to the $181.2$195.0 million recognized in the 2025 quarter. TheFor the six months ended June 30, 2026, these costs were $410.3 million, an increase fromof $34.1 million, or 9.1%, compared with $376.2 million recognized in the 2025 quarterperiod. wasThe increases in both periods were primarily due to higher technology costs, includingincluding, hosted solutions, cloud services,services,and depreciation, and our decision in the prior year to outsource certain technology capabilities.capabilities which were partially offset by a reduction in compensation expenses.

General, administrative, and other expenses were $92.4$104.9 million in the firstsecond quarter of 2026, an increase of $2.7$11.0 million, or 3.0%,11.7%, compared to the $89.7$93.9 million recognized in the 2025 quarter. For the six months ended June 30, 2026, these costs were $197.3 million, an increase of $13.7 million, or 7.5%, compared with $183.6 million recognized in the 2025 period. The increase was primarily due to higher externaltravel researchcosts and othercertain general andnon-recurring administrative costs.

Acquisition-related amortization and impairment costs. As part of the purchase accounting for our acquisitions, we identified and separately recognized, at fair value, certain intangible assets. During the firstthree- quarterand ofsix-month periods ended June 30, 2026, we recognized $18.0$16.5 million and $34.5 million, respectively, in amortization and impairments compared to $28.7$31.2 million and $59.9 million, respectively, in the comparable 2025 period.periods. The decreasedecreases primarily reflectsreflect amortization and impairments recognized over time, which reduced the remaining carrying value of the related definite-lived intangibles.intangibles as well as impairments recognized in 2025 that did not recur in the 2026 period.