What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-14 compared with 2024-02-16 · 257 added, 234 removed, 754 unchanged (39% of the section changed)

16 unchanged sentences

Investments 3,000.5 2,554.7

Assets of consolidated sponsored investment products ($ 1,204.4 million at December 31, 2023 and $ 1,375.6 million at December 31, 2022, related to variable interest entities)

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

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Accounts payable and accrued expenses $ 353.5 $ 422.9

Liabilities of consolidated sponsored investment products ($ 35.2 million at December 31, 2023 and $ 39.1 million at December 31, 2022, related to variable interest entities)

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)

Operating lease liabilities 278.7 308.5

Accrued compensation and related costs 219.8 240.8

Supplemental savings plan liability 895.0 761.2

Contingent consideration liability 13.4 95.8

Deferred compensation liabilities 1,020.7 895.0

Income taxes payable 87.1 66.2

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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 )

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Compensation and related costs 2,757.9 2,673.5 2,320.8

Distribution and servicing costs 289.9 301.5 373.9

Distribution and servicing 354.1 289.9 301.5

Advertising and promotion 129.6 114.2 97.3

9 unchanged sentences

Net gains (losses) on consolidated investment products 130.3 164.6 ( 203.5 )

Other losses ( 15.7 ) ( 17.3 ) ( 5.9 )

Other losses, including foreign currency losses ( 7.2 ) ( 15.7 ) ( 17.3 )

Total non-operating income (loss) 486.3 504.1 ( 425.5 )

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Net income attributable to T.

Rowe Price Group $ 1,788.7 $ 1,557.9 $ 3,082.9

Rowe Price Group, Inc.

$ 2,100.1 $ 1,788.7 $ 1,557.9

Earnings per share on common stock of T.

Rowe Price Group

Rowe Price Group, Inc.

Basic $ 9.18 $ 7.78 $ 6.73

7 unchanged sentences

Currency translation adjustments:

Consolidated sponsored investment products—variable interest entities 21.7 ( 34.9 ) ( 37.7 )

Reclassification gains recognized in non-operating investment income upon deconsolidation of certain sponsored investment products — ( 3.0 ) ( 2.4 )

Total currency translation adjustments of consolidated sponsored investment products—variable interest entities 21.7 ( 37.9 ) ( 40.1 )

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 )

Reclassification adjustment recognized upon partial disposition of equity method investment — — —

Total equity method investments ( 1.6 ) ( 14.6 ) 7.0

Other comprehensive income (loss) before income taxes ( 12.9 ) 20.1 ( 52.5 )

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Comprehensive income attributable to T.

Rowe Price Group $ 1,794.2 $ 1,531.2 $ 3,079.4

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.

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Net (gains) losses recognized on other investments ( 340.2 ) ( 460.8 ) 210.6

Net investments in sponsored investment products used to economically hedge supplemental savings plan liability 56.1 ( 18.8 ) ( 85.7 )

Net change in securities held by consolidated sponsored investment products ( 1,070.3 ) 87.9 14.9

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 )

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Dispositions of sponsored investment products 533.4 616.6 263.6

Net cash of sponsored investment products on consolidation (deconsolidation) ( 56.8 ) ( 8.7 ) ( 16.9 )

Net cash of investment products upon deconsolidation ( 15.8 ) ( 56.8 ) ( 8.7 )

Additions to property and equipment ( 423.4 ) ( 307.9 ) ( 237.6 )

Acquisition, net of cash acquired — — ( 2,450.8 )

Other investing activity ( 171.6 ) ( 38.4 ) ( 3.7 )

Net cash used in investing activities 128.2 ( 41.5 ) ( 1,098.1 )

Net cash provided by (used in) investing activities ( 177.5 ) 128.2 ( 41.5 )

Cash flows from financing activities

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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 sponsored investment products 0.4 9.5 2.6

Net change in cash and cash equivalents during period 269.1 250.5 ( 632.3 )

Cash and cash equivalents at beginning of period, including $ 119.1 million at December 31, 2022, $ 101.1 million at December 31, 2021 and $ 104.8 million at December 31, 2020 held by consolidated sponsored investment products

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 period, 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 sponsored investment products

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

15 unchanged sentences

— — — ( 1,108.7 ) — ( 1,108.7 ) — ( 1,108.7 ) —

Special cash dividend declared ($ 3.00 per share)

— — — ( 699.5 ) — ( 699.5 ) — ( 699.5 ) —

Common stock-based compensation plans activity:

5 unchanged sentences

Common shares repurchased ( 6,751 ) ( 1.3 ) ( 731.4 ) ( 122.6 ) — ( 855.3 ) — ( 855.3 ) —

Common shares issued for acquisition 4,447 0.9 880.6 881.5 — 881.5 —

Non-controlling interests — — — — — — 248.7 248.7 —

Net redemptions from sponsored investment products — — — — — — — — ( 67.7 )

Net deconsolidations of sponsored investment products — — — — — — — — ( 501.1 )

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

5 unchanged sentences

Shares issued upon option exercises 585 0.1 35.6 — — 35.7 — 35.7 —

Restricted shares issued, net of shares withheld for taxes 9 — — — — — — — —

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 ) —

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Net distributions to non-controlling interests in consolidated entities — — — — — — ( 43.3 ) ( 43.3 ) —

Net redemptions from sponsored investment products — — — — — — — — ( 49.3 )

Net deconsolidations of sponsored investment products — — — — — — — — ( 147.0 )

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

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Net distributions to non-controlling interests in consolidated entities — — — — — — ( 36.7 ) ( 36.7 ) —

Net subscriptions into sponsored investment products — — — — — — — — 356.9

Net deconsolidations of sponsored investment products — — — — — — — — ( 479.2 )

Net subscriptions into consolidated investment products — — — — — — — — 592.0

Net deconsolidations of investment products — — — — — — — — ( 272.8 )

Balances at December 31, 2024

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trust services;

and non-discretionary advisory services through model delivery.

and non-discretionary advisory services.

The investment solutions are provided in a number of vehicles including the T.

1 unchanged sentence

mutual funds ("U.S.

mutual funds"), subadvised funds, separately managed accounts, collective investment trusts, and other T.

Rowe Price products.

Rowe Price products include:

open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and collateralized loan obligations.

Investment advisory revenues depend largely on the total value and composition of assets under our management.

mutual funds"), subadvised funds, separately managed accounts, collective investment trusts, exchange-traded funds, and other sponsored products.

The other sponsored products include:

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.

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Actual results may vary from our estimates.

We completed our acquisition of Oak Hill Advisors, L.P.

and other entities that have common ownership (collectively, "OHA") on December 29, 2021, therefore, our results of operations for 2021 does not include any financial results of OHA.

Additionally, certain prior period tax-related amounts were recast to conform to current year presentation.

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.

INFLATION REDUCTION LEGISLATION.

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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 was not material to our financial position and results of operations.

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 November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07 - Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance.

The amendment is effective for the firm on January 1, 2024 and is retrospectively applicable to all prior periods presented in its consolidated financial statements.

We are currently evaluating the impact of adopting this standard, however, we expect the standard to result in additional segment footnote disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

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This amendment is effective for the firm on January 1, 2025.

We are currently evaluating the impact of adopting this standard and have not yet determined our transition approach.

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.

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.

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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 of affiliated private investment funds ("carried interest entities"), and sponsored investment products in which we have a controlling interest.

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").

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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 sponsored 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.

We have determined that our carried interest entities are considered VIEs and T.

Rowe Price is determined to be the primary beneficiary of these entities.

Further, our carried interest entities hold general partner interests in affiliated private investment funds that are VIEs, though these carried interest entities were determined to not be the primary beneficiary.

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 sponsored investment products held by unrelated third-party investors as their interests are convertible to cash and other assets at their option.

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 and present it as a component of permanent equity in our consolidated balance sheets.

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).

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.

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Investments held at fair value

Investments in sponsored investment products have been made for both general corporate investment purposes and to provide seed capital for newly formed products.

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 sponsored investment products retain investment company specialized accounting in consolidation;

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 our interest 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.

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 - seed/co-investment, for which we have the ability to exercise significant influence over the operating and financial policies of the investee.

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.

1 unchanged sentence

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") earnings on a quarter lag as current financial information is not available in a timely manner.

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

The investments in affiliated private investment funds - carried interest represent interests in general partners of affiliated private investment funds that have arrangements that entitle them to a disproportionate allocation of income, which is also referred to as 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.

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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 borrowings, we estimate our incremental borrowing rate using an estimated credit rating and available market information.

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.

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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 the agreements, which 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 is determined to have an indefinite life as there is no foreseeable limit on the contract period.

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.

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 or more frequently when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible 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.

Definite-lived intangible assets are tested when there is an indication of impairment.

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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.

value is determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount.

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.

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

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.

We internally conduct, manage, and report our operations as one investment advisory business.

1 unchanged sentence

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 of each year using a fair value approach.

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 as well as capital allocation-based income.

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.

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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 investment products are presented net of fees waived pursuant to the contractual expense limitations of the product.

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.

1 unchanged sentence

prices furnished by dealers who make markets in such securities;

or from data provided by an independent pricing

service that considers yield or price of investments of comparable quality, coupon, maturity, and type.

or from data provided by independent pricing

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.

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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.

We recognize performance-based incentive fees in connection with the investment advisory agreements from certain separately managed and subadvised accounts.

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.

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trust services;

and non-discretionary advisory services through model delivery.

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 basis points of the related assets under management and represent variable consideration.

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.

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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 disclosed in Note 3 - Information about Receivables, Revenues and Services relates to distribution and servicing obligations that were satisfied during prior periods.

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.

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Capital allocation-based income

This represents the income earned from 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 represents the proportionate share of the income or loss of the fund assuming the fund was liquidated as of each reporting date pursuant to each investment fund's governing agreements.

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.

Accordingly, this income is accounted for outside of the scope of ASC 606, Revenue Recognition , and recorded as part of capital allocation-based income in our consolidated statements of income.

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.

Costs of advertising are expensed the first time that the advertising takes place.

Stock-based compensation

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 that our stock-based compensation programs align the interests of our employees and directors with those of our common stockholders.

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 5.0 year graded schedule.

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.

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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.

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.

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We have not granted options to non-employee directors since 2016.

Both time-based and performance-based restricted stock units are valued on the grant-date using the closing market price of our common stock.

We recognize the grant-date fair value of these awards as compensation expense ratably over the awards' requisite service period.

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.

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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 sponsored investment products into U.S.

Assets and liabilities are translated into U.S.

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NOTE 3 – INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.

Revenues earned during the years ended December 31, 2023, 2022 and 2021, are included in the table below along with details of investment advisory revenues 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 revenues.

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

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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 )

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investment advisory clients outside the U.S.

account for 8.6 % and 9.1 % of our assets under management at December 31, 2023 and 2022, respectively.

account for 8.8 % at December 31, 2024 and 8.6 % at December 31, 2023 of assets under management.

NOTE 4 – INVESTMENTS.

The carrying values of investments that are not part of the consolidated sponsored investment products at December 31 are as follows:

The carrying values of investments that are not part of the consolidated investment products at December 31 are as follows:

(in millions) 2024 2023

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Seed capital 262.8 247.8

Supplemental savings plan liability economic hedges 806.6 760.7

Deferred compensation liabilities economic hedges 992.8 806.6

Investment partnerships and other investments 62.6 69.7

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Seed capital 128.8 91.1

Supplemental savings plan liability economic hedges 21.0 —

Deferred compensation liabilities economic hedges 88.4 21.0

Investment in UTI Asset Management Company Limited (India) 173.5 164.5

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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 2022, we recognized $ 240.5 million of net unrealized losses on investments held at fair value that were still held at December 31, 2022.

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 sponsored 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 sponsored investment products as either an equity method investment or an investment held at fair value.

Additionally, during 2023 and 2022, certain sponsored 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.

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.

(in millions) 2024 2023 2022

Net decrease in assets of consolidated sponsored investment products $ ( 663.8 ) $ ( 256.9 ) $ ( 753.0 )

Net decrease in liabilities of consolidated sponsored investment products $ ( 29.7 ) $ ( 12.8 ) $ ( 17.6 )

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 sponsored investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

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 accounted for as equity method investments and our allocable share of income 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 the repurchase agreements.

There is debt associated with our long-term investments in affiliated collateralized loan obligations (“CLOs”).

This debt is carried at $ 89.4 million at December 31, 2023 and $ 103.0 million at December 31, 2022, and is reported in accounts payable and accrued expenses in our consolidated balance sheets.

The debt includes outstanding repurchase agreements of € 65.5 million (equivalent to $ 72.3 million at December 31, 2023 and $ 71.3 million at December 31, 2022 at the respective EUR spot rates) that are collateralized by the CLO investments.

The debt also includes outstanding note facilities of € 15.5 million (equivalent to $ 17.1 million at December 31, 2023 and $ 31.7 million at December 31, 2022 at the respective EUR spot rates) that are collateralized by first priority security interests in the assets of a consolidated subsidiary that is party to the notes.

These note facilities bear interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 1.15 % to 12.87 % as of December 31, 2023.

The debt matures on various dates through 2035 or if the investments are paid back in full or cancelled, whichever is sooner.

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 investments at December 31, 2023 and 2022, include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary.

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:

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In addition to such amounts, a percentage of prior distributions may be called under certain circumstances.

INVESTMENTS IN AFFILIATED FUNDS - CARRIED INTEREST.

Certain of the investments in affiliated funds represent the general partners interest in affiliated private investment funds and are entitled to a disproportionate allocation of income.

These general partner entities are considered variable interest entities and are consolidated as T.

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 consolidated variable interest entities as of December 31 are as follows:

The total assets, liabilities and non-controlling interests of these carried interest entities as of December 31 are as follows:

(in millions) 2024 2023

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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.

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.

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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 sponsored investment products which are presented separately on our consolidated balance sheets and are detailed in Note 6.

This table excludes investments held by consolidated investment products which are presented separately on our consolidated balance sheets and are detailed in Note 6.

(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

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Seed capital 209.4 53.4 — 206.0 41.8 —

Supplemental savings plan liability economic hedges 806.6 — — 760.7 — —

Deferred compensation liabilities economic hedges 992.8 — — 806.6 — —

Other investments 0.1 — — 0.7 — —

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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 the amount of 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 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.

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

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.

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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 measured at fair value for which we used Level 3 inputs to determine fair value is as follows:

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:

(in millions) 12/31/2024

Balance at beginning of the year $ 13.4 $ 95.8

Measurement period adjustment — ( 49.3 )

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 measured using the Monte Carlo simulation methodology of valuation.

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.

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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.

During 2023 and 2022, we recognized impairment charges on certain of our identified intangible assets related to the OHA acquisition.

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 SPONSORED INVESTMENT PRODUCTS.

The sponsored 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.

mutual funds and certain other sponsored products are considered voting interest entities, while those regulated outside the U.S.

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.

mutual funds and certain other products are considered voting interest entities, while those regulated outside the U.S.

are considered variable interest entities.

The following table details the net assets of the consolidated sponsored investment products at December 31:

The following table details the net assets of the consolidated investment products at December 31:

(in millions) VOE VIE Total VOE VIE Total

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Rowe Price money market mutual funds.

(2) Investments include $ 6.2 million and $ 7.6 million at December 31, 2023 and 2022, respectively, of sponsored investment products.

Although we can generally redeem our net interest in the sponsored investment products at any time, we cannot directly access or sell the assets held by these products to obtain cash for general operations.

(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 sponsored 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 third-party investors as net income attributable to redeemable non-controlling interests.

The operating results of the consolidated sponsored investment products, are reflected in our consolidated statements of income for the year ended December 31 as follows:

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

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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 sponsored investment products.

The following table details the impact of these consolidated investment products on the individual lines of our consolidated statements of cash flows.

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(in millions) VOE VIE Total VOE VIE Total VOE VIE Total

Net cash provided by operating activities $ ( 517.5 ) $ ( 371.4 ) $ ( 888.9 ) $ ( 84.1 ) $ 6.9 $ ( 77.2 ) $ ( 135.3 ) $ 160.8 $ 25.5

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 used in financing activities 559.7 343.7 903.4 92.9 1.5 94.4 147.4 ( 162.3 ) ( 14.9 )

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

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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 $ 544.6 million in 2023, $ 142.8 million in 2022 and $ 51.9 million in 2021, of net subscriptions we made into the consolidated sponsored investment products, net of dividends received.

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 sponsored investment products using the following broad levels of inputs as defined by related accounting standards:

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.

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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 sponsored investment products using fair value measurements determined based on the differing levels of inputs as of December 31.

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 3 Level 1

Cash equivalents $ 6.3 $ — $ 17.2 $ 8.0

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Liabilities $ ( 1.7 ) $ ( 14.5 ) $ ( 5.1 ) $ ( 16.2 )

The fair value of Level 3 investments held by consolidated sponsored investment products are derived from inputs that are unobservable and which reflect the company's own determinations about the assumptions that market participants would use in pricing the investments, including assumptions about risk.

These inputs are developed based on the company's own data, which is adjusted if information indicates that market participants would use different assumptions.

Changes in fair value Level 3 are solely attributable to the deconsolidation of certain investments in 2023, and the purchase of investments in 2022.

The following table provides information about the significant Level 3 inputs:

Fair value measurements as of December 31, 2022

(in millions) Fair value Valuation techniques Unobservable inputs Ranges

Other investments $ 71.8 Market Yield (Comparables) Yield 9.8 % - 12.4 %

There were no transfers into or out of Level 3 of the fair value hierarchy for the year ended December 31, 2023 or 2022.

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.

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 late 2024.

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 variable common area maintenance charges and other management-related costs, and not included in the measurement of the lease liabilities, were $ 11.2 million in 2023.

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.

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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.

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NOTE 9 - GOODWILL AND INTANGIBLE ASSETS.

Goodwill and intangible assets consist of the following:

(in millions) As of December 31,

Goodwill and intangible assets consist of the following at December 31:

(in millions) 2024 2023

Goodwill $ 2,642.8 $ 2,642.8

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Total $ 3,010.9 $ 3,150.1

Goodwill activity during the years ended December 31, 2023 and 2022, was as follows:

(in millions) 2023 2022

Balance, beginning of the year $ 2,642.8 $ 2,693.2

Measurement period adjustments — ( 50.4 )

Balance, end of the year $ 2,642.8 $ 2,642.8

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.

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 no t record any impairment charges for goodwill for the years ended December 31, 2024, 2023, or 2022.

INTANGIBLE ASSETS .

Intangible assets consisted of the following:

(in millions) Remaining weighted-average estimated useful life Gross carrying amount Accumulated amortization & impairments Net carrying amount

December 31, 2023

Definite-lived intangible assets - Investment advisory agreements 5.5 613.9 ( 289.3 ) 324.6

December 31, 2022

Definite-lived intangible assets - Investment advisory agreements 6.5 613.9 ( 166.8 ) 447.1

Amortization and Impairments.

We recognized no impairments of indefinite-lived intangibles in 2023 compared with $ 116.8 M in 2022.

Of the $ 116.8 M in impairments in 2022, $ 99.2 M was attributable to investment advisory agreements and $ 17.6 M for the trade name.The impairments in 2022 were the result of reduced growth expectations for both management and incentive fees and a higher discount rate.

We recognized insignificant impairments of definite-lived intangibles in 2023 compared with $ 58.3 M in 2022.

The impairments in 2022 were the result of 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 $ 122.5 million for 2023.

Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the five succeeding years is a follows:

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

NOTE 10 – INCOME TAXES.

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(in millions) 2024 2023 2022

Property and equipment $ ( 43.2 ) $ ( 64.1 ) $ 11.8

Asset impairments — 4.6 2.0

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 )

Stock-based compensation 1.9 ( 9.0 ) ( 8.1 )

Accrued compensation ( 4.1 ) ( 0.5 ) ( 1.6 )

Supplemental savings plan liability ( 26.4 ) 21.3 ( 29.3 )

Acquisition-related retention liability ( 12.9 ) ( 14.8 ) ( 13.6 )

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Acquired investments ( 27.9 ) ( 19.5 ) ( 73.0 )

Unrealized holding gains recognized in non-operating income 43.8 ( 114.6 ) ( 26.1 )

Foreign net operating losses ( 31.5 ) ( 11.0 ) —

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

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Deferred tax assets

Stock-based compensation $ 94.5 $ 96.4

Property and equipment 30.6 —

Operating lease liabilities 44.8 48.6

Accrued compensation 13.7 9.6

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

Supplemental savings plan 195.3 168.9

Net operating loss carry-forwards 53.7 42.5

Net unrealized holding losses recognized in income — 10.6

Currency translation adjustment 6.6 8.5

Operating lease liability 39.8 44.8

Other 12.9 16.0

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Deferred tax liabilities

Acquisition-related retention liability ( 39.5 ) ( 54.3 )

Contingent consideration liability ( 50.9 ) ( 47.8 )

Property and equipment — ( 12.6 )

Unrealized gains (losses) recognized in non-operating income ( 50.0 ) ( 33.2 )

Operating lease assets ( 41.1 ) ( 42.8 )

Net unrealized holding gains recognized in income ( 33.2 ) —

Acquisition-related retention liability ( 26.6 ) ( 39.5 )

Other ( 15.9 ) ( 17.8 )

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Net deferred tax assets $ 278.0 $ 193.8

We had operating loss carryforwards before tax of $ 173.4 million and $ 61.7 million at December 31, 2023 and 2022, respectively.

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.

The increase from 2022 is primarily related to operating losses generated by certain subsidiaries based outside the U.S.

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.

As of December 31, 2023 and 2022, the valuation allowances total $ 102.8 million and $ 16.4 million, respectively.

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.

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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 2023, stock-based compensation plans activity increased income tax expense by $ 3.4 million.

In 2022 and 2021, stock-based compensation plans activity decreased income tax expense by $ 7.1 million and $ 82.7 million, respectively.

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.

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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.

has concluded examinations related to federal tax obligations through the year 2021.

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.

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NOTE 11 – STOCKHOLDERS' EQUITY.

SPECIAL DIVIDEND.

On June 14, 2021, the Board of Directors declared a special cash dividend of $ 3.00 per common share, or $ 699.8 million, that was paid on July 7, 2021, to stockholders of record as of the close of business on June 25, 2021.

SHARE REPURCHASES.

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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 – STOCK-BASED COMPENSATION.

NOTE 12 – LONG-TERM INCENTIVE COMPENSATION.

SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.

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Exercised ( 812,959 ) $ 76.72

Outstanding at December 31, 2023 1,476,104 $ 75.39 1.1

Exercisable at December 31, 2023 1,476,104 $ 75.39 1.1

There was no stock option-based compensation expense in 2023, 2022, or in 2021.

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.

All outstanding options are exercisable.

RESTRICTED SHARES AND STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during 2023.

shares Restricted

The following table summarizes the status of, and changes in, our restricted stock units during 2024.

units Weighted-

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( 1,956,869 ) $ 133.11

Nonvested dividend equivalents granted to non-employee directors — 4,039 $ 108.28

Forfeited ( 214,358 ) $ 128.24

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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 and restricted stock units of $ 265.6 million in 2023, $ 285.4 million in 2022, and $ 274.6 million in 2021.

At December 31, 2023, non-employee directors held 86,591 vested stock units that will convert to common shares upon their separation from the Board.

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.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

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Total $ 369.1

RESTRICTED FUND UNITS.

We granted $ 103.3 M 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

2027 through 2030 21.6

NOTE 13 – EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation of net income attributable to T.

Rowe Price Group 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 reflect the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested.

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 $ 1,788.7 $ 1,557.9 $ 3,082.9

Rowe Price Group Inc.

$ 2,100.1 $ 1,788.7 $ 1,557.9

net income allocated to outstanding restricted stock and stock unit holders 55.8 44.4 36.1

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Currency translation adjustments $ 3.7 $ ( 2.0 ) $ 4.2

Reclassification adjustment recognized in the provision for income taxes upon deconsolidation of T.

Rowe Price investment product 0.1 0.8 0.6

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

The changes in each component of accumulated other comprehensive income (loss), including reclassification are presented below.

Currency translation adjustments

(in millions) Equity method investments Consolidated sponsored investment products - variable interest entities Total currency translation adjustments Total

(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 )

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Other comprehensive income (loss) before reclassifications and income taxes ( 1.6 ) 9.0 7.4

Reclassification adjustments recognized in non-operating income — ( 3.0 ) ( 3.0 ) ( 3.0 )

( 14.6 ) ( 16.9 ) ( 31.5 ) ( 31.5 )

Net deferred tax benefits (income taxes) 0.2 ( 2.1 ) ( 1.9 )

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Balances at December 31, 2023 ( 51.9 ) 4.4 ( 47.5 )

Other comprehensive income before reclassifications and income taxes ( 1.6 ) 9.0 7.4 7.4

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

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$ ( 49.5 ) $ ( 2.2 ) $ ( 51.7 )

The other comprehensive income (loss) in the table above excludes $ 12.7 million in 2023, $( 21.0 ) million in 2022, and $( 26.2 ) million in 2021 of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.

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.

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.

Rowe Price has committed $ 404.0 million to fund OHA products over the next four years .

Rowe Price has committed $ 360 million for investments in future OHA product launches through 2026.

CONTINGENCIES.

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SUPPLEMENTAL SAVINGS PLAN.

The Supplemental Savings Plan provides certain senior officers the opportunity to defer the lesser of 50 % of their annual cash incentive earned or $ 2 million.

The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from a list of mutual funds.

The officer can defer these amounts for a period of five to 15 years.

Certain senior officers elected to defer $ 51.7 million in 2023, $ 51.8 million in 2022, and $ 62.4 million in 2021.

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 .

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.-generally accepted accounting principles.

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.

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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 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.

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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 are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(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 it relates.

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AUM data represents a significant input to the calculation of investment advisory fees.

The Company recognized $3.3 billion in investment advisory fees related to T.

Rowe Price U.S.

mutual funds (Funds) during the year ended December 31, 2023.

The Company recognized $6.4 billion in investment advisory fees during the year ended December 31, 2024, which included revenue related to T.

mutual funds (Funds).

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data