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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-14 · 313 added, 311 removed, 608 unchanged (51% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

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

We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services;

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trust services;

and non-discretionary advisory services.

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

and other advisory services.

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

Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.

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These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.

The investment management industry has been evolving and industry participants are facing challenging trends including passive investments taking market share from traditional active strategies;

continued downward fee pressure;

demand for new investment vehicles to meet client needs;

and an ever-changing regulatory landscape.

In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities.

We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.

The investment management industry continues to evolve and face challenging trends, including the shift in market share from traditional active strategies to passive products, persistent downward fee pressure, demand for lower cost investment vehicles, and an ever-changing regulatory landscape.

In this environment, we maintain ample liquidity and resources that allow us to take advantage of attractive growth opportunities and deliver 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 existing and future capabilities.

In 2025, we took several steps to execute on this plan, including targeted role eliminations, outsourcing and expanding some of our technology capabilities through trusted vendor partnerships, and the decision to exit certain owned buildings with plans to dispose of the properties in 2026.

The impact of these actions has been recorded as a restructuring charge in the consolidated statements of income and is discussed later in Item 7.

These measures also help offset ongoing inflationary pressures on compensation and contractual spending.

Our strategic investments include hiring investment and distribution professionals, adopting new technologies, offering new products, and growing and diversifying our business through innovative global partnerships.

MARKET TRENDS.

stocks produced strong gains for the second consecutive year in 2024, and various equity indexes reached new all-time highs during the year.

The equity market was buoyed by generally favorable corporate earnings and by continuing interest in companies expected to benefit from AI developments.

Although inflation remained above the Federal Reserve’s long-term 2% target, the central bank shifted its focus toward the moderating labor market in the second half of the year and began reducing interest rates starting in September.

In the final months of the year, equity investors generally welcomed not only looser monetary policy, but also diminished political uncertainty following U.S.

elections in early November.

Market volatility increased, however, as investors curtailed their expectations for short-term interest rate cuts in 2025.

stock market indices rose in 2025.

After a challenging start to 2025 stemming from new U.S.

tariff and trade policies, equities advanced starting in April, as the U.S.

and China made efforts to improve their trade relationship, economic growth and corporate earnings remained favorable, investors favored artificial intelligence-related businesses and other high-growth companies, and Congress passed tax legislation that should provide some fiscal stimulus to the economy.

In addition, signs of a weakening labor market in the latter part of the year prompted the Federal Reserve to reduce short-term interest rates, despite continued elevated inflation.

The central bank lowered rates in September, October, and December.

Developed non-U.S.

equity markets were mostly positive in 2024, helped by looser monetary policies from various central banks around the world.

However, returns to U.S.

investors were hurt by a stronger dollar versus major non-U.S.

In Europe, equity markets were widely mixed in U.S.

dollar terms, whereas developed Asian markets were mostly positive.

Emerging equity markets generally appreciated and outperformed stocks in developed non-U.S.

markets in U.S.

equity markets outperformed U.S.

stocks in U.S.

dollar terms, helped by a weaker dollar versus major non-U.S.

In Europe, equity markets were mostly positive in dollar terms.

Stocks in 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 with stocks in Hong Kong climbing 35% and Japanese stocks rising 25%.

Stocks in emerging markets outperformed equities in developed markets in U.S.

dollar terms.

Emerging Asian markets were mostly positive in dollar terms, though South Korean stocks fell sharply due in large part to late-year political turmoil.

Equities in the emerging Europe, Middle East, and Africa (EMEA) region were also mostly positive.

In Latin America, stocks in regional heavyweights Brazil and Mexico fell sharply, though some smaller markets produced positive returns.

In the emerging Asian, Latin American, and the emerging Europe, Middle East, and Africa (EMEA) regions, markets were mostly positive.

Returns of several major equity market indexes for 2025 are as follows:

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(1) Returns exclude dividends

Global bond returns were mostly positive in 2024, as many central banks around the world reduced short-term interest rates due to easing inflation pressures.

In the U.S., Treasury bill yields declined as the Federal Reserve reduced the federal funds target rate by 100 basis points (1.00%) in three steps starting in mid-September.

Intermediate- and long-term U.S.

Treasury yields fluctuated throughout the year, but ultimately increased for the year amid expectations for fewer interest rate cuts in 2025 due to inflation remaining above the Federal Reserve’s 2% long-term goal.

Global bond returns were positive in 2025.

In the U.S., Treasury bill yields, which tend to track the federal funds target rate, declined about 70 basis points (0.70%) for the year, as the Federal Reserve reduced the federal funds target rate by 25 basis points (0.25%) three times in the final months of the year.

At the end of the year, the federal funds target rate was in the 3.50% to 3.75% range.

Short- and intermediate-term U.S.

Treasury yields had a comparable decline, but the 10-year U.S.

Treasury note yield fell 40 basis points (0.40%), from 4.58% to 4.18%.

The 30-year U.S.

Treasury note yield was 4.58% at December 31, 2024 compared to 3.88% at December 31, 2023 .

investment-grade universe, sector performance was broadly positive.

Non-agency commercial mortgage-backed securities and asset-backed securities produced solid gains.

Corporate bonds rose to a lesser degree.

Mortgage-backed securities performed in line with the broad investment-grade market.

Treasuries lagged with slight positive returns.

Tax-free municipal bonds slightly trailed the broad taxable bond market.

High yield corporate bonds produced solid gains and strongly outperformed the investment-grade bond market.

Treasury bond yield rose modestly for the year.

investment-grade bond universe, mortgage-backed securities performed best, but corporate bonds and non-agency commercial mortgage-backed securities also did well.

Treasuries and asset-backed securities slightly lagged.

Tax-free municipal bonds underperformed taxable bonds, but high yield corporates outperformed the investment-grade bond market.

Bonds in developed non-U.S.

markets produced negative returns in U.S.

dollar terms due to weaker currencies versus the dollar and rising bond yields in some countries.

Easing inflation pressures enabled central banks in Europe and the UK to reduce interest rates a few times.

In Japan, longer-term interest rates rose as the Bank of Japan increased short-term rates in March, ending a multi-year period of negative interest rates.

The Bank of Japan also unexpectedly raised rates at the end of July.

In the emerging markets fixed income universe, dollar-denominated bonds produced gains in U.S.

dollar terms, but local currency bonds produced negative returns, as most developing markets currencies declined versus the dollar.

markets produced positive returns in U.S.

dollar terms, helped by a weaker dollar versus major non-U.S.

In the eurozone, longer-term bond yields increased in many countries, though policymakers for the European Central Bank reduced short-term interest rates four times in the first half of 2025.

In the UK, longer-term bond yields fell slightly for the year, as the Bank of England reduced the Bank Rate by 25 basis points (0.25%) four times in 2025.

The euro strengthened more than 13% versus the U.S.

dollar, while the British pound rose more than 7%.

In Japan, long-term government bond yields climbed as the Bank of Japan raised its benchmark interest rate to 0.50% in January and to 0.75% in December.

Bond yields were also pressured higher by late-year concerns that new Prime Minister Sanae Takaichi will pursue aggressive fiscal stimulus funded by debt issuance.

The yen rose marginally versus the dollar.

Emerging markets bonds produced strong positive returns in U.S.

dollar terms.

Bonds denominated in local currencies generally outperformed dollar-denominated bonds, as many emerging markets currencies appreciated versus the dollar, boosting returns to U.S.

Returns of several major bond market indexes for 2025 are as follows:

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This increase was driven by net market appreciation and income, net of distributions not reinvested, of $216.7 billion, offset by net cash outflows of $56.9 billion.

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 management, by asset class, during the last three years:

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829.7 188.1 536.0 52.8 1,606.6

Managed account - model delivery assets (5)

9.2 — — — 9.2

Net cash flows prior to manager-driven distributions (74.9) 12.5 1.8 6.9 (53.7)

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114.5 11.0 89.2 2.0 216.7

Change during the period 86.1 18.1 53.0 4.9 162.1

Change during the period (net cash flows and market appreciation (depreciation) and income) 39.6 23.5 91.0 5.7 159.8

Assets under management at December 31, 2025

$ 878.5 $ 211.6 $ 627.0 $ 58.5 $ 1,775.6

(1) The underlying AUM of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.

(1) Includes assets in which T.

Rowe Price and its affiliates have full discretionary authority and, beginning in 2025, managed account - model delivery assets.

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

(3) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed/distressed, non-investment grade CLOs, special situations, business development companies, or that have absolute return as its investment objective.

Generally, only those strategies with longer than daily liquidity are included.

Unfunded capital commitments of $16.2 billion at December 31, 2024, $11.6 billion at December 31, 2023, and $10.5 billion at December 31, 2022 are not reflected in AUM above.

(3) Reflects net distributions not reinvested of $5.9 billion in 2024, $2.9 billion in 2023, and $3.3 billion in 2022.

Investment advisory clients outside the U.S.

accounted for 8.8% of our assets under management at December 31, 2024, 8.6% at December 31, 2023, and 9.1% at December 31, 2022.

Unfunded capital commitments were $21.6 billion at December 31, 2025, $16.2 billion at December 31, 2024, and $11.6 billion at December 31, 2023, and are not reflected in fee basis AUM above.

(4) Includes net distributions not reinvested of $6.8 billion in 2025, $5.9 billion in 2024, and $2.9 billion in 2023.

(5) Amount represents the net assets as of July 1, 2025 and all activity for the second half of 2025 is presented in the lines that follow.

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

The following table details our assets under management and net flows in our target date retirement products, which are included in the multi-asset column shown above:

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Net cash flows $ 5.2 $ 16.3 $ 13.1

Our net cash outflows in 2024 were driven primarily by growth-oriented equity strategies and a multi-asset sub-advised variable annuity outflow.

These outflows were partially offset by net cash inflows in our target date retirement products, fixed income and alternative strategies.

Our net cash outflows in 2025 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 alternatives strategies.

Financial intermediaries were the main sources of net outflows in 2024.

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For 2023, net outflows were driven primarily by our growth-oriented equity strategies sourced from Americas financial intermediaries and institutional clients.

These outflows were partially offset by net cash inflows in our multi-asset strategies, predominately our target date retirement products, and alternative strategies.

These outflows were partially offset by net cash inflows in our multi-asset strategies, predominately our target date retirement products, and alternatives strategies.

From a geography perspective, net outflows were predominantly from U.S.

clients invested in equity strategies, though all regions experienced net outflows.

For 2022, net outflows were driven primarily by our growth-oriented equity strategies sourced from U.S.

intermediaries.

These outflows were partially offset by net cash inflows in our international fixed income, multi-asset, and alternative strategies.

From a geographical perspective, the Americas and EMEA regions experienced net outflows predominantly in equities, while APAC had positive net flows.

We provide strategic investment advice solutions for certain portfolios.

These advice solutions, the vast majority of which are overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays.

We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery.

As of December 31, 2024, total assets in these solutions were $557 billion, of which $542 billion are reported in assets under management in the tables above.

We provide participant accounting and plan administration for defined contribution retirement plans that primarily invest in the firm's U.S.

mutual funds, collective investment trusts and funds managed outside of the firm's complex.

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 $27.8 billion at December 31, 2025, compared with $8.0 billion at December 31, 2024.

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 the our complex.

As of December 31, 2025, our assets under administration were $314 billion, of which $178 billion were assets we manage.

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Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success.

The following table presents investment performance for the one-, three-, five-, and 10-years ended December 31, 2024.

Past performance is no guarantee of future results.

mutual funds that outperformed Morningstar median (2),(3)

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 December 31, 2025.

Past performance is not a guarantee nor a reliable indicator of future performance.

funds that outperformed Morningstar median (2),(3)

1 year 3 years 5 years 10 years

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All funds 49% 56% 46% 61%

mutual funds that outperformed passive peer median (2),(4)

funds that outperformed passive peer median (2),(4)

1 year 3 years 5 years 10 years

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AUM Weighted Performance

mutual funds AUM that outperformed Morningstar median (2),(3)

funds AUM that outperformed Morningstar median (2),(3)

1 year 3 years 5 years 10 years

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All funds 42% 72% 54% 79%

mutual funds AUM that outperformed passive peer median (2),(4)

funds AUM that outperformed passive peer median (2),(4)

1 year 3 years 5 years 10 years

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All composites 25% 42% 29% 36%

As of December 31, 2024, 54 of 90 (60.0%) of our rated U.S.

As of December 31, 2025, 68 of 141 (48.2%) 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, 63.0% (6) of AUM in our rated U.S.

In addition, 60.4% (6) of AUM in the firm's rated U.S.

mutual funds (across primary share classes) ended 2025 with an overall rating of 4 or 5 stars.

(1) The investment performance reflects that of T.

Rowe Price sponsored mutual funds and composites AUM.

Rowe Price U.S.

mutual funds, ETFs, and composites.

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The top chart reflects the percentage of T.

Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the Morningstar category median.

Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the Morningstar category median.

The bottom chart reflects the percentage of T.

Rowe Price funds AUM that has outperformed for the time periods indicated.

Total Fund AUM included for this analysis includes $322B for 1 year, $318B for 3 years, $317B for 5 years, and $316B for 10 years.

Total AUM included for this analysis includes $329B for 1 year, $319B for 3 years, $317B for 5 years, and $316B for 10 years.

(4) Passive Peer Median was created by T.

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Rowe Price passive funds, and T.

Rowe Price funds that are clones of other funds.

This analysis compares T.

Rowe Price funds that are clones of a retail fund.This analysis compares T.

Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms.

The top chart reflects the percentage of T.

Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe.

Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the passive peer universe.

The bottom chart reflects the percentage of T.

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The following table and discussion set forth information regarding our consolidated financial results for 2025, 2024 and 2023 on a U.S.

GAAP basis and a non-GAAP basis.

The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any.

GAAP and a non-GAAP basis.

2025 compared to 2024 2024 compared to 2023

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Investment advisory fees $ 6,602.3 $ 6,399.7 $ 5,709.5 $ 202.6 3.2 % $ 690.2 12.1 %

$ 6,399.7 $ 5,709.5 $ 5,962.7 $ 690.2 12.1 % $ (253.2) (4.2) %

Performance-based advisory fees (2)

$ 59.3 $ 38.2 $ 6.4 $ 21.1 55.2 % $ 31.8 n/m

Capital allocation-based income (2)

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Net operating income $ 2,188.8 $ 2,333.3 $ 1,986.2 $ (144.5) (6.2) % $ 347.1 17.5 %

Non-operating income $ 486.3 $ 504.1 $ (425.5) $ (17.8) (3.5) % $ 929.6 n/m

Non-operating income (loss) $ 686.7 $ 486.3 $ 504.1 $ 200.4 41.2 % $ (17.8) (3.5) %

Net income to T.

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Diluted earnings per common share $ 9.24 $ 9.15 $ 7.76 $ 0.09 1.0 % $ 1.39 17.9 %

Weighted average common shares outstanding assuming dilution 220.3 223.3 224.8 (3.0) (1.3) % (1.5) (0.7) %

Adjusted basis (3)

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Net operating income $ 2,720.8 $ 2,685.9 $ 2,263.2 $ 34.9 1.3 % $ 422.7 18.7 %

Non-operating income (loss) $ 148.7 $ 140.8 $ (24.4) $ 7.9 5.6 % $ 165.2 n/m

Non-operating income (loss) $ 177.5 $ 148.7 $ 140.8 $ 28.8 19.4 % $ 7.9 5.6 %

Net income to T.

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EFR with performance-based fees 39.6 41.4 42.2 (1.8) (4.3) % (0.8) (1.9) %

(1) The percentage change is not meaningful (n/m).

(2) Performance-based advisory fees were previously included in investment advisory fees.

Prior periods were recast to reflect this change.

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

(2) Capital allocation-based income represents the change in accrued carried interest.

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Results Overview - 2025 compared to 2024

Net revenues consist of investment advisory revenues;

performance-based advisory fees;

administrative, distribution, services, and other fees;

and capital allocation-based income.

More than 90% of our net revenues are related to investment advisory fees.

Total net revenues were $7,314.8 million in 2025, a 3.1% increase compared to $7,093.6 million in 2024.

The increase was driven primarily by higher investment advisory fees on higher average assets under management, as well as higher capital allocation-based income, which was partially offset by lower performance-based advisory fees.

Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows.

As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner.

Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.

The average annualized effective fee rate earned for 2025 declined from 2024 primarily due to client flows and transfers shifting assets under management toward lower-fee strategies and products, partially offset by market appreciation.

Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds assuming the funds’ underlying investments were realized as of the end of the period.

Operating expenses on a U.S.

GAAP basis were $5,126.0 million in 2025, an increase of 7.7% compared to $4,760.3 million in 2024.

On a non-GAAP basis, operating expenses were $4,666.5 million, an increase of 3.7% compared to $4,498.8 million in 2024.

Compared to 2024, the increase in U.S.

GAAP operating expenses was primarily due to the restructuring charge as well as higher technology and facility costs, compensation and related costs, and distribution and servicing costs.

These increases were partially offset by lower advertising and promotion costs.

The drivers of the increase in non-GAAP operating expenses were the same as those for the increase in U.S.

GAAP operating expenses with the exception of the restructuring charge, which is excluded from our non-GAAP operating expenses measures.

We currently estimate our 2026 non-GAAP operating expenses, excluding non-GAAP accrued carried interest compensation, will grow in the range of 3%-6% from the 2025 amount of $4,608.0 million.

We could elect to adjust our expense growth should unforeseen circumstances arise, including significant market movements.

Operating margin was 29.9% in 2025 compared to 32.9% in 2024.

The decrease is primarily driven by the restructuring charge recognized in 2025, which largely contributed to operating expense growth exceeding net revenue growth.

Diluted earnings per share was $9.24 in 2025 compared to $9.15 in 2024.

The increase in GAAP basis diluted earnings per share was primarily due to higher non-operating income and fewer outstanding shares, partially offset by lower operating income.

On a non-GAAP basis, diluted earnings per share was $9.72 in 2025 compared to $9.33 in 2024.

The increase was primarily due to fewer outstanding shares and higher net income.

See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.

Results Overview - 2024 compared to 2023

Investment advisory fees are earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets, investment performance, and net cash flows.

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On a non-GAAP basis, operating expenses were $4,498.8 million, an increase of 5.6% compared to 2023.

The increase in our non-GAAP operating expenses was primarily driven by higher costs across compensation and benefits, distribution and servicing, advertising, professional fees, and a non-recurring recovery of general and administrative costs recognized in 2023.

The increase in our non-GAAP operating expenses was primarily driven by higher costs across compensation and benefits, distribution and servicing, advertising, professional fees, and a nonrecurring recovery of general and administrative costs recognized in 2023.

These increases were partially offset by lower external research fees, lower accrued carried interest compensation, and higher capitalized labor.

In 2024, the firm changed its approach to paying for external research, consistent with regulations and general industry practice.

We currently estimate our 2025 non-GAAP operating expenses, excluding non-GAAP accrued carried interest compensation, will grow in the range of 4%-6% from the 2024 amount of $4,456.3 million.

We could elect to adjust our expense growth should unforeseen circumstances arise, including significant market movements.

Operating margin was 32.9% in 2024 compared to 30.7% in 2023.

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See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.

Results Overview - 2023 compared to 2022

Investment advisory fees are earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows.

As our average assets under management increase or decrease in a given period, the level of our investment advisory fees for that same period generally fluctuates in a similar manner.

Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset and share classes, price changes in existing products, and asset level changes in products with tiered-fee structures.

Investment advisory fees earned in 2023 decreased 3.7% over the comparable 2022 period as average assets under our management decreased $36.1 billion, or 2.6%, to $1,362.3 billion.

The average annualized effective fee rate earned on our assets under management was 41.9 basis points in 2023, compared to 42.6 basis points earned in 2022.

Our effective fee rate has declined largely due to a mix shift toward lower fee asset classes and vehicles as a result of net equity outflows, partially offset by higher market returns.

The average annualized fee rate earned on our assets under management was 41.5 basis points for the fourth quarter of 2023.

Operating expenses were $4,474.3 million in 2023, an increase of 8.7% over the comparable 2022 period.

The impact of market movements on the supplemental savings plan liability accounted for about 70% of the increase in U.S.

GAAP operating expenses.

Non-operating income has a corresponding increase due to our economic hedge of the liability.

On a non-GAAP basis, operating expenses were $4,260.7 million, a 4.2% increase over the comparable 2022 period.

The increase in our non-GAAP operating expenses was primarily driven by higher costs across compensation and benefits, accrued carried interest related compensation expense, technology, facility, advertising, and professional fees.

These increases were offset in part by higher capitalized labor, lower stock-based compensation, and a non-recurring recovery of general and administrative costs incurred in 2022.

Operating margin was 30.7% in 2023, compared to 36.6% in 2022.

The decrease in our operating margin in 2023 compared to 2022 is primarily driven by a decrease in investment advisory fees as a result of lower average assets under management and higher operating expenses.

Diluted earnings per share.

Diluted earnings per share was $7.76 in 2023 compared to $6.70 in 2022.

The increase in 2023 GAAP basis diluted earnings per share from 2022 was primarily due to net investment income in 2023 compared to net investment losses in 2022.

These increases were partially offset by lower operating income and a higher effective tax rate.

On a non-GAAP basis, diluted earnings per share was $7.59 in 2023 compared to $8.02 in 2022.

The decrease in 2023 was primarily due to lower operating income and a higher effective tax rate.

These decreases were offset by net investment income earned on our cash and discretionary investment portfolio in 2023 compared to net investment losses in 2022.

See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.

2025 compared to 2024 2024 compared to 2023

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Equity $ 3,923.7 $ 3,864.7 $ 3,442.3 $ 59.0 1.5 % $ 422.4 12.3 %

Fixed income, including money markets 410.7 400.4 426.3 10.3 2.6 % (25.9) (6.1) %

Fixed income, including money market 433.0 410.7 400.4 22.3 5.4 % 10.3 2.6 %

Multi-asset 1,910.6 1,814.1 1,583.4 96.5 5.3 % 230.7 14.6 %

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Performance-based advisory fees 37.4 59.3 38.2 (21.9) (36.9) % 21.1 55.2 %

59.3 38.2 6.4 21.1 55.2 % 31.8 n/m

Capital allocation-based income 46.6 161.9 (54.3) (115.3) n/m 216.2 n/m

Administrative, distribution, and servicing fees

Administrative fees 498.8 467.5 481.4 31.3 6.7 % (13.9) (2.9) %

Capital allocation-based income

Change in accrued carried interest 149.5 134.1 223.2 15.4 n/m (89.1) n/m

Acquisition-related amortization and impairments (68.3) (87.5) (61.3) 19.2 n/m (26.2) n/m

81.2 46.6 161.9 34.6 n/m (115.3) n/m

Administrative, distribution, services, and other fees

Administrative and other fees 506.3 498.8 467.5 7.5 1.5 % 31.3 6.7 %

Distribution and servicing fees 87.6 89.2 83.4 (1.6) (1.8) % 5.8 7.0 %

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Average AUM $ 1,677.3 $ 1,561.9 $ 1,362.3 $ 115.4 7.4 % $ 199.6 14.7 %

Ending AUM (in billions) $ 1,606.6 $ 1,444.5 $ 1,274.7 $ 162.1 11.2 % $ 169.8 13.3 %

Investment advisory annualized effective fee rate (EFR) (in bps)

EFR without performance-based fees 39.4 41.0 41.9 (1.6) (3.9) % (0.9) (2.1) %

EFR with performance-based fees 39.6 41.4 42.2 (1.8) (4.3) % (0.8) (1.9) %

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

(2) Performance-based advisory fees were previously included in investment advisory fees.

Prior periods were recast to reflect this change.

Investment advisory fees.

The relationship between the change in average assets under management and the change in investment advisory fees for 2025, 2024 and 2023 are presented above.

In 2024, the increase in investment advisory fees was due to higher average AUM as stronger market returns and appreciation were offset by net outflows over the last two years.

In 2023, the decline in overall advisory revenues was driven by lower average AUM and a mix shift toward lower fee asset classes and vehicles.

A lower starting AUM and net outflows in 2023 were the primary drivers of a lower average AUM in 2023.

These impacts were partially offset by stronger overall market returns in 2023.

Performance-based advisory fees in each period were primarily related to alternative strategies.

Capital allocation-based income increased net revenues by $46.6 million.

The 2024 amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences.

Impairments recognized in 2024 were $36.6 million, and should market and performance conditions deteriorate, additional impairments may be recognized in future periods.

The firm realized carried interest of $139.6 million compared to $109.8 million in the 2023 period.

For 2025 and 2024, the increases in investment advisory fees were due to higher average AUM as stronger market returns and appreciation were slightly offset by net outflows in each of the last two years.

Performance-based advisory fees in each period were primarily from alternatives strategies, and the decline in 2025

from prior periods were primarily related to lower overall market returns.

Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments.

For 2025, the change in accrued carried interest increased net revenues by $149.5 million compared to $134.1 million for 2024.

The year‑over‑year change reflects relative performance and market impacts between 2025 and 2024.

Additionally, the decrease in acquisition-related amortization and impairments for 2025 compared to 2024 period was primarily due to higher impairments recognized in 2024.The firm realized carried interest of $117.8 million compared to $139.6 million in 2024.

For 2024, capital allocation-based income increased net revenues by $46.6 million.

This amount includes an increase of $223.2 million in accrued carried interest, partially offset by $61.3 million of non-cash amortization and impairments related to the difference in the acquisition closing date fair value and the carrying value on the date they were acquired.

A portion of the capital allocation-based income is passed through as compensation and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest on the consolidated balance sheet.

In 2024, the compensation expense was $5.4 million, consisting of $42.5 million related to the accrued carried interest offset in part by $37.1 million in amortization and impairment charges.

For 2023, we recognized compensation expense of $44.6 million, consisting of $70.0 million in compensation expense related to the accrued carried interest offset in part by $25.4 million in amortization and impairment charges.

Administrative, distribution, and servicing fees in 2024 were $588.0 million, an increase of $37.1 million compared to 2023.

The increase was primarily driven by higher average assets on which we earn non-discretionary advisory services revenue and higher transfer agent servicing activities provided to the T.

This amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences.

Impairments recognized in 2024 were $36.6 million.

The firm realized carried interest of $139.6 million compared to $109.8 million in 2023.

A portion of the capital allocation-based income is passed through to employees and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest in the consolidated balance sheet.

In 2025, we recognized compensation expense of $30.8 million, consisting of $58.5 million related to the change in accrued carried interest offset in part by $27.7 million in amortization and impairment charges.

For 2024, we recognized compensation expense of $5.4 million, consisting of $42.5 million related to the change in accrued carried interest offset in part by $37.1 million in amortization and impairment charges.

Administrative, distribution, services, and other fees in 2025 were $593.9 million, an increase of $5.9 million compared to 2024.

The increase was primarily driven by higher recordkeeping and transfer agent servicing activities provided to the T.

Rowe Price mutual funds.

For 2023, the decrease was primarily driven by lower transfer agent servicing activities provided to the T.

Rowe Price mutual funds, and lower 12b-1 revenue earned from the Advisor and R share classes of the U.S.

mutual funds as a result of lower average assets under management in these share classes.

The decrease in 12b-1 revenue was offset entirely by a decrease in the costs paid to third-party intermediaries that source these assets and is reported in distribution and servicing expense.

Beginning in the third quarter of 2025, revenue from managed account model delivery assets and certain other advisory services is reported in investment advisory fees.

This change muted the increases mentioned above, as more than $28 million of revenue in the second half of 2025 is now reported in investment advisory fees.

For 2024, the increase was primarily driven by higher average assets on which we earn non-discretionary advisory services revenue and higher transfer agent servicing activities provided to the T.

Rowe Price mutual funds.

Net revenues are presented after the elimination of $4.2 million for 2025, $3.6 million for 2024, and $2.1 million for 2023, earned from our consolidated investment products.

2 unchanged sentences

2025 compared to 2024 2024 compared to 2023

(in millions) 2024 2023 2022 $ Change % Change $ Change % Change

(in millions) 2025 2024 2023 $ Change % Change (1)

$ Change % Change (1)

Compensation, benefits, and related costs $ 2,644.3 $ 2,603.4 $ 2,450.7 $ 40.9 1.6 % $ 152.7 6.2 %

Acquisition-related retention agreements 56.7 44.8 55.0 11.9 26.6 % (10.2) (18.5) %

Capital allocation-based income compensation 5.4 44.6 (22.9) (39.2) n/m 67.5 n/m

Deferred compensation liabilities 104.3 123.2 (132.3) (18.9) (15.3) % 255.5 n/m

Compensation and related costs 2,757.9 2,673.5 2,320.8 84.4 3.2 % 352.7 15.2 %

Distribution and servicing costs 354.1 289.9 301.5 64.2 22.1 % (11.6) (3.8) %

Capital allocation-based income compensation (2)

30.8 5.4 44.6 25.4 n/m (39.2) n/m

Market-related change in deferred compensation liabilities 136.3 104.3 123.2 32.0 30.7 % (18.9) n/m

Total compensation and related costs 2,868.1 2,757.9 2,673.5 110.2 4.0 % 84.4 3.2 %

Distribution and servicing 383.5 354.1 289.9 29.4 8.3 % 64.2 22.1 %

Advertising and promotion 107.4 129.6 114.2 (22.2) (17.1) % 15.4 13.5 %

2 unchanged sentences

General, administrative, and other 441.9 433.8 421.3 8.1 1.9 % 12.5 3.0 %

Change in fair value of contingent consideration (13.4) (82.4) (161.2) 69.0 (83.7) % 78.8 (48.9) %

Change in fair value of contingent consideration — (13.4) (82.4) 13.4 n/m 69.0 n/m

Acquisition-related amortization and impairment costs 111.3 156.7 134.2 (45.4) (29.0) % 22.5 16.8 %

Restructuring charge 177.3 — — 177.3 n/m — n/m

Total operating expenses $ 5,126.0 $ 4,760.3 $ 4,474.3 $ 365.7 7.7 % $ 286.0 6.4 %

1 unchanged sentence

$ 4,666.5 $ 4,498.8 $ 4,260.7 $ 167.7 3.7 % $ 238.1 5.6 %

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

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

(3) See the reconciliation to the comparable U.S.

GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.

Compensation, benefits and related costs were $2,603.4 million, an increase of $152.7 million, or 6.2%, compared to 2023.

The increase was driven by a higher bonus pool on an increase in revenue and higher salaries and related benefits partially offset by higher capitalized labor and lower other employee related costs.

The firm employed 8,158 associates at December 31, 2024, an increase of 3.2% from the end of 2023.

Compensation, benefits, and related costs were $2,644.3 million for 2025, an increase of $40.9 million, or 1.6%, compared to 2024.

The increase was driven by higher salaries, benefits and long-term incentive compensation.

These increases were partially offset by lower temporary personnel costs, net of capitalized labor, and other employee-related costs.

The firm employed 7,773 associates at December 31, 2025, a decrease of 4.7% from the end of 2024.

The average headcount for first half of 2025 was 8,089, an increase of 2.5% compared to the first half of 2024.

Additionally, the average headcount for 2025 was 7,969, a decrease of 0.2% compared to 2024.

The decrease in associates from 2024 was primarily driven by the workforce action in July 2025 as part of our broad plan to reduce expense growth and realign resources.

For 2024, compensation, benefits, and related costs were $2,603.4 million, an increase of $152.7 million, or 6.2%, compared to 2023.

The increase was driven by $99.1 million in higher salaries and related benefits as a result of base salary increases in January 2023 and July 2022.

These increases were offset by higher capitalized labor, lower non-cash stock-based compensation, and lower other employee-related costs.

The increase was driven by a higher bonus pool on an increase in revenue and higher salaries and related benefits partially offset by higher capitalized labor and lower other employee related costs.

Distribution and servicing costs were $383.5 million for 2025, an increase of $29.4 million, or 8.3%, compared to $354.1 million in 2024.

The increase was primarily driven by higher average assets under management distributed through intermediaries.

For 2023, distribution and services costs were $289.9 million, a decrease of $11.6 million, or 3.8%, compared to 2022.

The decrease was primarily driven by lower average assets under management in certain share classes of the U.S.

mutual funds that earn 12b-1 fees and SICAVs.

These decreases were partially offset by higher costs incurred to distribute certain products through U.S.

intermediaries as the average assets under management in these products were higher.

The costs in this expense category primarily include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S.

For 2024, distribution and services costs were $354.1 million, an increase of $64.2 million, or 22.1%, compared to 2023.

The increases in 2025 and 2024 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 our international products, such as our Japanese ITMs and SICAVs.

These costs were offset entirely by the distribution revenue we earn and report in net revenues:

12b-1 revenue is recognized in administrative, distribution, and servicing fees for the Advisor and R share classes of the U.S.

mutual funds and investment advisory fees for our international products.

Advertising and promotion costs were $129.6 million for 2024, an increase of $15.4 million, or 13.5%, compared to 2023.

The increase was primarily driven by higher media advertising.

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 are recognized in administrative, distribution, services, and other fees.

Advertising and promotion costs were $107.4 million for 2025, a decrease of $22.2 million, or 17.1%, compared to 2024.

The decrease was primarily driven by lower media spending from the absence of the prior year’s elevated media costs related to a specific campaign and broader marketing initiatives.

For 2024, advertising and promotion costs were $129.6 million, an increase of $15.4 million, or 13.5%, compared to 2023.

The increase was primarily driven by higher media advertising and agency costs in 2023.

The increase was primarily driven by higher media advertising.

Product and recordkeeping related costs were $312.9 million for 2025, an increase of $15.4 million, or 5.2%, compared to 2024.

The increase was primarily driven by higher recordkeeping related costs and higher custody fees related to our trust products from higher assets under management.

For 2024, product and recordkeeping related costs were $297.5 million for 2024, an increase of $6.5 million, or 2.2%, compared to 2023.

The increase was primarily driven by higher product related costs to be reimbursed from our sponsored investment products partially offset by lower recordkeeping related costs.

For 2023, product and recordkeeping related costs were $291.0 million for 2023, a decrease of $9.1 million, or 3.0%, compared to 2022.

The decrease was driven by lower recordkeeping related costs.

Technology, occupancy, and facility costs were $723.6 million for 2025, an increase of $79.5 million or 12.3%, compared to 2024.

The increase was due to ongoing investment in our technology capabilities, primarily hosted solutions, partially offset by lower facility costs as 2023 included the rent cost of two London facilities until we occupied our new building in September 2023.

The increase was driven by higher technology-related costs, including hosted solutions and depreciation, as well as higher occupancy and facility costs related to our new corporate headquarters, which we began occupying in March 2025.

For 2024, technology, occupancy, and facility costs were $644.1 million, an increase of $11.5 million or 1.8%, compared to 2023.

The increase was primarily due to ongoing investment in our technology capabilities, including depreciation and hosting solution licenses, and increased office facility costs, mainly related to rent expense associated with a new London office that we began leasing in the second half of 2022 and occupied in September 2023.

General, administrative, and other costs were $433.8 million for 2024, an increase of $12.5 million or 3.0%, compared to 2023.

General, administrative, and other expenses were $441.9 million for 2025, an increase of $8.1 million or 1.9%, compared to 2024.

The increase was primarily driven by higher charitable contributions and other general and administrative costs, partially offset by lower travel-related expenses and lower external research fees.

For 2024, general, administrative, and other expenses were $433.8 million, an increase of $12.5 million or 3.0% compared to 2023.

The increase was primarily due to a cost recovery recognized in 2023 that did not recur in 2024, higher professional fees and travel costs.

1 unchanged sentence

In 2024, the firm changed its approach to paying for external research, consistent with regulations and general industry practice.

For 2023, general, administrative, and other costs were $421.3 million, an increase of $9.1 million or 2.2% compared to 2022.

The increase was primarily due to higher professional fees and travel costs, partially offset by a $20.8 million recovery of nonrecurring costs that were incurred in 2022.

Change in fair value of contingent consideration.

1 unchanged sentence

Each reporting period, we record the fair value of the contingent consideration due under this arrangement.

Reduced revenue expectations have resulted in a reduction in the fair value of the contingent consideration liability of $13.4 million in 2024, $82.4 million in 2023, and $161.2 million in 2022.

The fair value of the contingent consideration liability as of December 31, 2024 is zero.

Reduced revenue expectations resulted in a reduction in the fair value of the contingent consideration liability of $13.4 million in 2024 and $82.4 million in 2023.

The fair value of the contingent consideration liability as of December 31, 2025 and 2024 is zero.

Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible assets identified and separately recognized, at fair value, on acquisition date.

In 2024, we recognized acquisition-related amortization and impairment costs of $156.7 million, an increase of $22.5 million or 16.8%, compared to 2023.

In 2025, we recognized acquisition-related amortization and impairment costs of $111.3 million, a decrease of $45.4 million or 29.0%, compared to 2024.

The decline was largely due to impairment charges recorded in 2024 for the trade name intangible asset that did not recur in 2025, as well as lower amortization expense resulting from the reduced carrying amount of our definite‑lived intangible asset base.

For 2024, we recognized acquisition-related amortization and impairment costs of $156.7 million, an increase of $22.5 million, compared to 2023.

The increase was primarily driven by impairment charges related to the trade name intangible asset.

For 2023, we recognized acquisition-related amortization and impairment costs of $134.2 million, a decrease of $149.3 million, compared to 2022.

The decrease was primarily driven by an insignificant amount of impairment charges in 2023 for certain intangibles compared to $175.1 million in 2022.

The impairment charges for both periods were the result of reduced growth expectations for both investment management and incentive fees and higher discount rate compared to when the acquisition closed in 2021.

The impairment charges in all periods were the result of reduced growth expectations for both investment management and incentive fees compared to when the acquisition closed in 2021.

The remaining weighted average amortization period for our definite-lived intangible assets is 2.8 years.

Should conditions that led us to recognize these impairment charges worsen, additional impairments may be recognized in future periods.

Should conditions that led us to recognize impairment charges worsen, additional impairments may be recognized in future

Restructuring charge of $177.3 million for 2025 relates to actions taken under our previously announced broad and ongoing expense management program, which is designed to reduce expense growth and realign resources to support investment in existing and future capabilities.

The charge includes accelerated depreciation and impairment charges related to certain owned real estate of $127.3 million as well as compensation‑related costs, primarily severance.

Non-operating income (loss)

Non-operating income was $486.3 million in 2024 compared to $504.1 million in 2023 and a non-operating loss of $425.5 million in 2022.

Non-operating activity for the years ended December 31, 2025, 2024 and 2023 are as follows:

2024 compared to 2023 2023 compared to 2022

(in millions) 2024 2023 2022 $ Change $ Change

Net gains (losses) from non-consolidated sponsored investment products

(in millions) 2025 compared to 2024 2024 compared to 2023

2025 2024 2023 $ Change $ Change

Net gains (losses) from non-consolidated investment products

Cash and discretionary investments

7 unchanged sentences

Total cash, discretionary, and seed investments 228.0 207.8 185.7 20.2 22.1

Net gains recognized upon deconsolidation (0.4) — 3.0 (0.4) (3.0)

Net gains (losses) recognized upon deconsolidation 3.1 (0.4) — 3.5 (0.4)

Investments used to hedge the deferred compensation liabilities 142.4 96.4 123.6 46.0 (27.2)

2 unchanged sentences

Net gains (losses) on investments 464.9 363.2 355.2 101.7 8.0

Net gains (losses) on consolidated investment portfolios 130.3 164.6 (203.5) (34.3) 368.1

Other losses, including foreign currency losses (7.2) (15.7) (17.3) 8.5 1.6

Net gains (losses) on consolidated investment products 219.9 130.3 164.6 89.6 (34.3)

Other gains (losses), including foreign currency gains (losses) 1.9 (7.2) (15.7) 9.1 8.5

Non-operating income (loss) $ 686.7 $ 486.3 $ 504.1 $ 200.4 $ (17.8)

3 unchanged sentences

GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.

In 2024 and 2023, strong market returns contributed to the increased valuation and gains of our investment portfolio, along with higher cash balances and interest rates increased dividend income.

In 2022, our overall investment portfolio valuations were negatively impacted by market declines caused by the continued elevated inflation, supply chain disruptions, and a more aggressive pace of Federal Reserve interest rate increases.

The impact of consolidating investment products on the individual lines of our consolidated statements of income for 2024, 2023, and 2022 is as follows:

Higher average cash balances increased dividend income in 2025 despite declining money-fund yields from 2024 and 2023.

Market returns remained positive, contributing to continued gains within our investment portfolio.

The table above shows the net investment income of the underlying products of the consolidated investment products, not just the income from our ownership share.

The table below displays how consolidated investment products affected the individual lines of our consolidated statements of income and the portion attributable to our interest.The impact of consolidating investment products on the individual lines of our consolidated statements of income for 2025, 2024, and 2023 is as follows:

2025 compared to 2024 2024 compared to 2023

11 unchanged sentences

federal income tax rate 21.0 % 21.0 % 21.0 %

State income taxes for current year, net of federal income tax benefits (1)

Net income attributable to redeemable non-controlling interests (2)

State income taxes, net of federal income tax benefits 2.1 2.9 2.3

Net (income) losses attributable to redeemable non-controlling interests (1)

(0.9) (0.3) (0.4)

Net excess tax benefits from stock-based compensation plans activity — (0.1) 0.1

Valuation allowance 0.2 3.4 —

Valuation allowances 0.4 0.2 3.3

Other items 0.6 0.6 —

Effective income tax rate 23.2 % 24.3 % 26.3 %

(1) State income tax benefits are reflected in the total benefits for net income attributable to redeemable non-controlling interests and stock-based compensation plans activity.

Adjusted effective tax rate 24.3 % 24.5 % 27.2 %

(1) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income.

Our effective tax rate for 2025 was 23.2%, compared to 24.3% for 2024 and 26.3% for 2023.

The decrease in our effective tax rate in 2024 from 2023 was primarily due to lower valuation allowances recognized in 2024.

The decrease in our effective tax rate in 2025 from 2024 was primarily due to lower state taxes resulting from prior period settlements.

Additionally, the impact of redeemable non-controlling interest contributed to the lower U.S.

GAAP effective tax rate compared to 2024.

For 2024, the decrease in our effective tax rate from 2023 was primarily due to lower valuation allowances recognized in 2024.

These favorable impacts were slightly offset by higher state taxes.

For 2023, the increase in our effective tax rate from 2022 was primarily due to an increase in the valuation allowances recorded mainly against UK-based deferred tax assets, including net operating losses, and a decrease in discrete tax benefits associated with option exercises and restricted stock vests.

These unfavorable impacts were partially offset by a favorable impact of net gains attributable to redeemable non-controlling interests held in our consolidated investment products and state tax liability settlements.

The non-GAAP tax rate primarily adjusts for the impact of the consolidated investment products, including net income attributable to redeemable non-controlling interests.

Our non-GAAP effective tax rates were 24.5% for 2024 , 27.2% for 2023, and 24.7% for 2022 .

Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact on the stock-based compensation tax benefits recognized from market fluctuations in our stock price and timing of option exercises, changes in the mix of our earnings among countries with differing tax laws, and changes in the valuation allowance of foreign-based deferred tax assets.

As of December 31, 2024, the total valuation allowance recorded was $118.9 million, of which nearly all is related to UK-based deferred tax assets.

We intend to continue maintaining a full valuation allowance on these and future deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

GAAP effective tax rate is also impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests, non-controlling interests reflected in permanent equity and the remeasurement of the contingent consideration liability.

Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact on the stock-based compensation tax benefits recognized from market fluctuations in our stock price, changes in the mix of our earnings among countries with differing tax laws or rates, and changes in the valuation allowance of foreign-based deferred tax assets.

As of December 31, 2025, total valuation allowances recorded were $130.1 million, of which nearly all is related to UK-based deferred tax assets.

We intend to continue maintaining a full valuation allowance on these and future UK- based deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

GAAP effective tax rate is also impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity.

We currently estimate our effective tax rates for the full-year 2026 will be in the range of 23.0% to 27.0% on a GAAP basis, and 24.0% to 27.0% on a non-GAAP basis.

The Organization of Economic Co-operation and Development has issued Pillar Two Model Rules (Pillar Two) introducing a global 15% minimum tax effective January 1, 2024 within certain countries where we operate.

For countries that have adopted Pillar Two in 2024, it did not have a material impact on the company's consolidated results of operations, cash flows, and overall financial position.

We will continue to monitor and evaluate the impacts of future Pillar Two legislation proposed or enacted in jurisdictions that have not yet adopted the rules.

The Organization of Economic Co-operation and Development (OECD) has issued Pillar Two Model Rules (Pillar Two) introducing a global 15% minimum tax effective January 1, 2024 within certain countries in which we operate.

In addition, on January 5, 2026, the OECD published administrative guidance (the “side-by-side package”) designed to simplify the Pillar Two tax regime for multinational enterprise groups with an ultimate parent entity in certain countries, primarily the U.S.

Our current assessment is that Pillar Two should have no material impact on the company's consolidated results of operations, cash flows, and overall financial position.

We will continue to evaluate the impact of Pillar Two as its rules evolve.

NON-GAAP INFORMATION AND RECONCILIATION.

4 unchanged sentences

The following schedules reconcile certain U.S.

GAAP financial measures for each of the last three years.

GAAP financial measures to non-GAAP financial measures for each of the last three years:

(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)

Net income attributable to T.

Rowe Price Group, Inc.

Diluted earnings per share (7)

Rowe Price Group Diluted earnings per share (7)

GAAP Basis (FS line item) $ 5,126.0 $ 2,188.8 $ 686.7 $ 667.2 $ 2,087.1 $ 9.24

5 unchanged sentences

(56.7) 56.7 — 12.1 44.6 0.20

Contingent consideration (1)

13.4 (13.4) — (1.8) (11.6) (0.05)

Intangible assets amortization and impairments (1)

3 unchanged sentences

(136.3) 136.3 (142.4) (1.4) (4.7) (0.02)

Restructuring charge (3)

(177.3) 177.3 — 43.6 133.7 0.59

Consolidated investment products (4)

2 unchanged sentences

— — (146.9) (29.5) (117.4) (0.52)

Adjusted Non-GAAP Basis $ 4,498.8 $ 2,685.9 $ 148.7 $ 695.1 $ 2,139.5 $ 9.33

Adjusted Basis $ 4,666.5 $ 2,720.8 $ 177.5 $ 703.4 $ 2,194.9 $ 9.72

(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)

Net income attributable to T.

Rowe Price Group, Inc.

Diluted earnings per share (7)

Rowe Price Group Diluted earnings per share (7)

GAAP Basis (FS line item) $ 4,760.3 $ 2,333.3 $ 486.3 $ 683.8 $ 2,100.1 $ 9.15

16 unchanged sentences

— — (110.9) (23.9) (87.0) (0.38)

Adjusted Non-GAAP Basis $ 4,260.7 $ 2,263.2 $ 140.8 $ 653.9 $ 1,750.1 $ 7.59

Adjusted Basis $ 4,498.8 $ 2,685.9 $ 148.7 $ 695.1 $ 2,139.5 $ 9.33

(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)

Net income attributable to T.

Rowe Price Group, Inc.

Diluted earnings per share (7)

Rowe Price Group Diluted earnings per share (7)

GAAP Basis (FS line item) $ 4,474.3 $ 1,986.2 $ 504.1 $ 654.6 $ 1,788.7 $ 7.76

9 unchanged sentences

(134.2) 134.2 — 28.8 105.4 0.46

Transaction costs (2) (General, administrative and other)

(0.9) 0.9 — 0.2 0.7 0.01

Total acquisition-related (81.4) 142.7 — 36.9 105.8 0.46

5 unchanged sentences

— — (75.1) (15.8) (59.3) (0.26)

Adjusted Non-GAAP Basis $ 4,087.8 $ 2,500.5 $ (24.4) $ 611.3 $ 1,864.8 $ 8.02

(1) These non-GAAP adjustments remove the impact of acquisition-related amortization and costs, including amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements.

We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.

(2) This non-GAAP adjustment removes acquisition-related transactions costs.

Adjusted Basis $ 4,260.7 $ 2,263.2 $ 140.8 $ 653.9 $ 1,750.1 $ 7.59

(1) These non-GAAP adjustments remove the impact of acquisition-related amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements.

We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.

(3) This non-GAAP adjustment removes the compensation expense impact from market valuation changes in the deferred compensation liabilities, which include the supplemental savings plan and, beginning in the fourth quarter of 2024, restricted fund units, and the related net gains (losses) on investments designated as economic hedges against the related liabilities.

The liabilities are adjusted for appreciation (depreciation) of hypothetical investments chosen by participants.

(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in Q4 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities.

The liabilities are adjusted

based on the performance of hypothetical investments selected by participants.

We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units.

We believe it is useful to offset the non-operating investment income (loss) recognized on the economic hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(4) This non-GAAP adjustment removes the impact the consolidated investment products have on our U.S.

GAAP consolidated statements of income.

Specifically, we add back the operating expenses and subtract the investment income of the consolidated investment products.

The adjustment to operating expenses represents the operating expenses of the consolidated investment products, net of the elimination of related investment advisory and administrative fees.

We believe it is useful to offset the non-operating investment income (loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(3) This non-GAAP adjustment removes accelerated depreciation and impairment charges related to certain owned real estate, as well as compensation expenses, primarily severance, resulting from actions taken as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities.

We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.

(4) This non-GAAP adjustment removes the impact of the consolidated investment products by adding back their operating expenses and subtracting their investment income.

The operating expense adjustment represents their operating expenses net of related investment advisory and administrative fees.

The adjustment to net income attributable to T.

Rowe Price Group, Inc.

represents the net income of the consolidated investment products, net of redeemable non-controlling interests.

We believe adjusting for the impact of the consolidated investment products helps the reader’s ability to understand our core operating results and increases comparability period to period.

(5) This non-GAAP adjustment represents non-operating income (loss) and the net gains (losses) earned on the firm's investment portfolio that are not designated as economic hedges of the deferred compensation liabilities and that are not part of the cash and discretionary investment portfolio.

We retain in our non-GAAP measures the investment gains recognized on the cash and discretionary investments as these assets and related income (loss) are considered part of the firm's core operations.

Rowe Price Group represents the consolidated investment products' net income, net of redeemable non-controlling interests.

We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.

(5) This non-GAAP adjustment removes non-operating income (loss) earned on those investments that are not economic hedges for the deferred compensation liabilities and are not part of the cash and discretionary investment portfolio.

We retain gains from cash and discretionary investments in our non-GAAP measures, as they are considered part of our core operations.

We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand the firm's core operating results and increases comparability period to period.

Additionally, we do not emphasize the impact of this portion of non-operating income (loss) when managing and evaluating the firm's performance.

Additionally, we do not emphasize this portion of non-operating income (loss) when assessing the firm's performance.

(6) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 24.3% for 2025, 24.5% for 2024 and 27.2% for 2023.

(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to

Rowe Price Group and dividing by the weighted-average common shares outstanding assuming dilution.

The calculation of net income allocated to common stockholders is as follows:

Rowe Price Group divided by the weighted-average common shares outstanding assuming dilution.

The calculation of adjusted net income allocated to common stockholders is as follows:

(in millions) 2025 2024 2023

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Rowe Price Group $ 2,194.9 $ 2,139.5 $ 1,750.1

net income allocated to outstanding restricted stock and stock unit holders 56.8 43.4 43.3

adjusted net income allocated to outstanding restricted stock and stock unit holders 53.3 56.8 43.4

Adjusted net income allocated to common stockholders $ 2,141.6 $ 2,082.7 $ 1,706.7

CAPITAL RESOURCES AND LIQUIDITY.

During 2024, stockholders’ equity attributable to T.

Rowe Price Group, Inc.

increased from $9.5 billion to $10.3 billion, and tangible book value increased to $7.5 billion at December 31, 2024 from $6.5 billion at December 31, 2023.

Stockholders' equity attributable to T.

Rowe Price Group increased to $10.9 billion at December 31, 2025 from $10.3 billion at December 31, 2024, and tangible book value increased to $7.9 billion at December 31, 2025 from $7.3 billion at December 31, 2024.

Sources of Liquidity

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Total cash and investments in T.

Rowe Price products $ 5,480.1 $ 4,795.8

Our discretionary investment portfolio is comprised primarily of short duration fixed income ETFs, which typically yield higher than money market rates.

Of our cash and cash equivalents, $653.9 million at December 31, 2024, and $699.0 million at December 31, 2023 were held by our subsidiaries located outside the U.S.

Our cash and discretionary investment portfolio experienced market gains of $148.7 million in 2024 and $140.8 million in 2023.

Rowe Price products attributable to T.

Rowe Price Group $ 6,303.3 $ 5,480.1

Our discretionary investment portfolio is primarily comprised of short duration bond funds, which typically yield higher than money market rates.

Of our cash and cash equivalents, $730.6 million at December 31, 2025 and $653.9 million at December 31, 2024 were held by subsidiaries located outside the U.S.

Our cash and discretionary investment portfolio experienced market gains and dividends of $177.5 million in 2025 and $148.7 million in 2024.

Given the availability of our financial resources and cash expected to be generated through future operations, we do not maintain an available external source of additional liquidity.

Our seed capital investments are redeemable, although we generally expect to be invested for several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage.

The cash and investment presentation on the consolidated balance sheet is based on how we account for the cash or investment.

The following table details how our interests in cash and investments relate to where they are presented in the consolidated balance sheet as of December 31, 2024.

Our seed capital investments are redeemable, although we generally expect to be invested several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage.

The cash and investment presentation on the consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item.

The following table details how T.

Rowe Price Group’s interests in cash and investments relate to where they are presented on the consolidated balance sheet as of December 31, 2025.

(in millions) Cash and cash equivalents Investments Net assets of consolidated investment products (1)

Cash and discretionary investments $ 3,378.2 $ 463.7 $ — $ 3,841.9

Seed capital investments — 391.6 870.7 1,262.3

Redeemable seed capital investments — 324.4 819.7 1,144.1

Investments used to hedge the deferred compensation liabilities — 1,243.3 74.0 1,317.3

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Rowe Price products attributable to T.

Rowe Price Group, Inc.

2,649.8 1,792.4 1,037.9 5,480.1

Rowe Price Group 3,378.2 2,031.4 893.7 6,303.3

Investments in affiliated private investment funds (2)

— 695.0 — 695.0

Investments in CLOs — 67.4 — 67.4

Investments in affiliated collateralized loan obligations — 25.0 — 25.0

Investment in UTI and other investments — 573.8 — 573.8

Total cash and investments attributable to T.

Rowe Price Group, Inc.

2,649.8 3,000.5 1,037.9 6,688.2

Rowe Price Group 3,378.2 3,325.2 893.7 7,597.1

Redeemable non-controlling interests — — 1,036.0 1,036.0

As reported on consolidated balance sheet at

December 31, 2024

$ 2,649.8 $ 3,000.5 $ 1,981.9 $ 7,632.2

(1) The c onsolidated investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest.

As reported on the consolidated balance sheet at December 31, 2025 $ 3,378.2 $ 3,325.2 $ 1,929.7 $ 8,633.1

(1) The consolidated investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest.

These products generally represent U.S.

mutual funds, ETFs, and funds regulated outside the U.S.

The $893.7 million represents the total value at December 31, 2025 of our interest in the consolidated investment products.

The total net assets of the investment products at December 31, 2024 of $1,981.9 million includes assets of $2,044.0 million, less liabilities of $62.1 million as reflected in the consolidated balance sheet in Item 8.

The total net assets of the T.

Rowe Price investment products at December 31, 2025 of $1,929.7 million includes assets of $1,951.0 million, less liabilities of $21.3 million as reflected in the consolidated balance sheets in Item 8.

Financial Statements of this Form 10-K.

(2) Includes $160.7 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by third parties, that we cannot sell in order to obtain cash for general operations.

(2) Includes $157.1 million of non-controlling interests in consolidated entities held by related parties, which we cannot sell in order to obtain cash for general operations.

Our consolidated balance sheet reflects the assets and liabilities of those investment products we consolidate, as well as redeemable non-controlling interests for the portion of these investment products that are held by unrelated third-party investors.

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Further, we expended $624.6 million in 2025 to repurchase nearly 6.2 million shares, or 2.8%, of our outstanding common stock at an average price of $101.15 per share.

These dividends and repurchases were expended using existing cash balances and cash generated from operations.

We generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

Since the end of 2021, we have returned $4.8 billion to stockholders through stock repurchases and our regular quarterly dividends, as follows:

(in millions) Recurring dividend Stock repurchases Total cash returned to stockholders

These dividends and repurchases were funded using existing cash balances and cash generated from operations.

While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

Since the end of 2022, we have returned $4.6 billion to stockholders through stock repurchases and regular quarterly dividends, as follows:

(in millions) Recurring dividend Stock repurchases Total returned to stockholders

2023 $ 1,121.9 $ 254.3 $ 1,376.2

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Total $ 3,400.5 $ 1,213.4 $ 4,613.9

We anticipate property and equipment expenditures for the full-year 2025 to be about $300 million, of which more than three-quarters is planned for technology initiatives.

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2026 to be about $270 million, of which more than three-quarters is planned for technology initiatives.

We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.

The following tables summarize the cash flows for 2025, 2024 and 2023, that are attributable to T.

Rowe Price Group Inc., our consolidated investment products, and the related eliminations required in preparing the consolidated statement of cash flows.

Rowe Price Group, our consolidated investment products, and the related eliminations required in preparing the consolidated statement of cash flows.

(in millions) Cash flow attributable to T.

Rowe Price Group, Inc.

Cash flow attributable to consolidated investment products Eliminations As reported

Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported

Cash flows from operating activities

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Amortization and impairment of acquisition-related assets and retention agreements 199.7 — — 199.7

Fair value remeasurement of contingent consideration liability (13.4) — — (13.4)

Stock-based compensation expense 216.9 — — 216.9

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Total non-cash adjustments 281.1 — 88.9 370.0

Net investments in sponsored investment products used to economically hedge deferred compensation liabilities (123.2) — 30.0 (93.2)

Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (64.6) — 72.6 8.0

Net change in trading securities held by consolidated investment products — (1,002.7) — (1,002.7)

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(in millions) Cash flow attributable to T.

Rowe Price Group, Inc.

Cash flow attributable to consolidated investment products Eliminations As reported

Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported

Cash flows from operating activities

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(in millions) Cash flow attributable to T.

Rowe Price Group, Inc.

Cash flow attributable to consolidated investment products Eliminations As reported

Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported

Cash flows from operating activities

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Total non-cash adjustments 97.5 — 106.5 204.0

Net investments in sponsored investment products used to economically hedge deferred compensation liabilities (18.8) — — (18.8)

Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (10.3) — 66.4 56.1

Net change in trading securities held by consolidated investment products — (1,070.3) — (1,070.3)

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During 2025, operating activities attributable to T.

Rowe Price Group, Inc.

provided cash flows of $2,313.9 million, an increase of $255.3 million from $2,058.6 million provided during 2023.

Rowe Price Group provided cash flows of $2,489.5 million, an increase of $175.6 million from $2,313.9 million provided during 2024.

The increase was primarily driven by a $162.0 million increase in cash flows related to timing differences associated with the cash settlement of our assets and liabilities.

Additionally, net investments in 2025 into investment products that economically hedge our deferred compensation liabilities were $58.6 million lower than made in 2024.

These increases to operating cash flows were offset in part by a $13.0 million decrease in net income and a $32.0 million decrease in the add-back for non-cash items as detailed in the 2025 table above.

The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying products.

During 2024, operating activities attributable to T.

Rowe Price Group provided cash flows of $2,313.9 million, an increase of $255.3 million from $2,058.6 million provided during 2023.

The increase was primarily driven by a $311.4 million increase in net income and a $215.6 million increase in the add-back for non-cash items as detailed in the 2024 table above.

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Additionally, in 2024, we made $112.9 million more net investments in sponsored investment products used to economically hedge our deferred compensation liabilities compared to 2023.

The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.

During 2023, operating activities attributable to T.

Rowe Price Group, Inc.

provided cash flows of $2,058.6 million, a decrease of $381.7 million from $2,440.3 million provided during 2022.

The decrease was primarily driven by a $986.5 million decrease in the add-back for non-cash items as detailed in the 2023 table above.

These decreases to operating cash flows were offset in part by a $230.8 million increase in net income and $365.5 million increase in cash flows related to timing differences associated with the cash settlement of our assets and liabilities.

Additionally, in 2023, we expended $8.5 million less in net investments in sponsored investment products used to economically hedge our deferred compensation liabilities compared to 2022.

The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.

The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying products.

Investing activities

Net cash used in investing activities that are attributable to T.

Rowe Price Group Inc.

totaled $187.9 million in 2024 compared to $310.2 million in 2023.

Net cash provided by investing activities that are attributable to T.

Rowe Price Group totaled $59.5 million in 2025 compared to net cash used in investing activities of $187.9 million in 2024.

In 2025, we decreased our property and equipment expenditures by $149.2 million, primarily due to the completion of our new corporate headquarters in early 2025, and decreased our other investing activity by $83.0 million.

Net investing activities from our investments in sponsored investment products generated net proceeds of $422.3 million in 2025 compared to $407.1 million in 2024.

In 2024, we increased our property and equipment expenditures by $115.5 million and our other investing activity by $133.2 million.

We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows.

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Rowe Price Group totaled $187.9 million in 2024 compared to $310.2 million in 2023.

During 2023, net proceeds from the sale of investments of $36.1 million were lower compared to $62.0 million during 2022.

Net investing activities from our investments in sponsored investment products generated net proceeds of $407.1 million in 2024 compared to $36.1 million in 2023.

In 2024, we increased our property and equipment expenditures by $115.5 million and our other investing activity by $133.2 million.

We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows.

The remaining change in reported cash flows from investing activities of $48.1 million is primarily related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

The remaining change in reported cash flows from investing activities of $41.0 million was related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

Financing Activities

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During 2025, we used $620.9 million to repurchase nearly 6.2 million shares compared to $337.2 million to repurchase 3.0 million shares in 2024.

In 2025, cash flow related to common stock issued under stock compensation plans increased by $11.0 million compared to 2024.

In addition, the $7.4 million increase in dividends paid in 2025 was a result of the 2.4% increase in our quarterly dividend per share.

The remaining change in reported cash flows from financing activities is attributable to a $63.0 million decrease in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2025.

Net cash used in financing activities attributable to T.

Rowe Price Group totaled $1,542.8 million in 2024 compared to $1,437.4 million in 2023.

During 2024, we used $337.2 million to repurchase nearly 3.0 million shares compared to $254.4 million to repurchase 2.4 million shares in 2023.

The $13.9 million increase in dividends paid in 2024 was a result of the 1.6% increase in our quarterly dividend per share.

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The remaining change in reported cash flows from financing activities is attributable to a $247.4 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2024.

Net cash used in financing activities attributable to T.

Rowe Price Group totaled $1,437.4 million in 2023 compared to $2,028.5 million in 2022.

During 2023, we used $254.4 million to repurchase 2.4 million shares compared to $849.8 million to repurchase 6.8 million shares in 2022.

The $14.3 million increase in dividends paid in 2023 is a result of the 1.7% increase in our quarterly dividend per share in 2023.

In addition, net distributions to non-controlling interests in consolidated entities increased by $8.2 million and cash flow related to common stock issued under stock compensation plans increased by $18.2 million during 2023 compared to 2022.

The remaining change in reported cash flows from financing activities is primarily attributable to a $407.2 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2023.

MATERIAL CASH COMMITMENTS.

Our material cash commitments primarily include our obligations related to our deferred compensation liabilities, facility leases, our headquarters build out, and other contractual amounts that will be due for the purchase of goods or services to be used in our operations.

Our material cash commitments primarily include our obligations related to our deferred compensation liabilities, facility leases, and other contractual amounts that will be due for the purchase of goods or services to be used in our operations.

Some of these contractual amounts may be cancellable under certain conditions and may involve termination fees.

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of this Form 10-K.

While most of our other material cash commitments consist of goods and services used in our operations, these commitments primarily consist of obligations related to long-term software licensing and maintenance contracts, construction in process, and service contracts.

We also have outstanding commitments to fund additional contributions to investment partnerships totaling $199.3 million.

The vast majority of these additional contributions will be made to investment partnerships in which we have

an existing investment.

The vast majority of these additional contributions will be made to investment partnerships in which we have an existing investment.

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

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As of December 31, 2025, T.

Rowe Price has $360 million remaining to commit to OHA products.

Rowe Price has a $287 million remaining commitment to OHA products.

Rowe Price has also entered into certain earnout and other arrangements as part of that acquisition.

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Consolidation

We consolidate all subsidiaries and sponsored investment products in which we have a controlling financial interest.

We consolidate all subsidiaries and investment products in which we have a controlling financial interest.

We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity (VIE).

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Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions.

During 2024, we recognized $31.1 million of non-cash impairment charges on the trade name intangible asset.

During 2025, we recognized $3.3 million of non-cash impairment charges on the indefinite-lived investment advisory agreements intangible asset.

The maximum future impairment of indefinite-lived intangible assets that we could incur is the amount recognized in our consolidated balance sheets within intangible assets, $148.3 million as of December 31, 2025.

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Our annual testing has demonstrated that the fair value of our investment advisory business (our market capitalization) exceeds our carrying amount (our stockholders’ equity) and, therefore, no impairment exists.

Should we reach a different conclusion in the future, additional work would be performed to ascertain the amount of the noncash impairment charge to be recognized.

Should we reach a different conclusion in the future, additional work would be performed to ascertain the amount of the non-cash impairment charge to be recognized.

We must also perform impairment testing at other times if an event or circumstance occurs indicating that it is more likely than not that an impairment has been incurred.

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Provision for income taxes

After compensation and related costs, our provision for income taxes on our earnings is our largest annual expense.

We operate in numerous states and countries through our various subsidiaries and must allocate our income, expenses, and earnings under the various laws and regulations of each of these taxing jurisdictions.

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From time to time, we may also provide for estimated liabilities associated with uncertain tax return filing positions that are subject to, or in the process of, being audited by various tax authorities.

Because the determination of our annual provision is subject to judgments and estimates, it is likely that actual results will vary from those recognized in our financial statements.

Because the determination of our annual provision is subject to judgments and estimates, actual results will vary from those recognized in our financial statements.

As a result, we recognize additions to, or reductions of, income tax expense during a reporting period that pertain to prior period provisions as our estimated liabilities are revised and actual tax returns and tax audits are settled.

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future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We recognize a valuation allowance for any portion of the deferred tax asset that is not expected to be realized based on the available positive and negative evidence.

An increase in the valuation allowances increases the provision expense and effective tax rate.

Furthermore, if we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would reduce the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

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Our revenues are substantially dependent on fees earned under contracts with the T.

Rowe Price funds and could be adversely affected if the independent directors of one or more of the T.

Rowe Price funds terminated or significantly altered the

terms of the investment management or related administrative services agreements.

Rowe Price funds and could be adversely

affected if the independent directors of one or more of the T.

Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements.

Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees’ net income.

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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 7. Management’s Discussion and Analysis