T Rowe Price Group TROW · USD

SEGMENT REPORTING.We have one reportable segment: investment management services. We derive our revenue and net income globally and manage business activities on a consolidated basis.We largely derive our revenues and net income from investment advisory services provided to individual and institutional investors. We also provide certain administrative services, including mutual fund transfer agent, fund and product accounting, distribution, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; and other advisory services. Our revenues and net income depend largely on the total value and composition of our assets under management, as such, the consideration for our services is generally variable and recognized over time.Our chief operating decision maker (CODM) is the chief executive officer. The CODM utilizes consolidated net income attributable to T. Rowe Price Group as reported on the consolidated statements of income and certain non-GAAP metrics to assess performance and allocate resources. Based on these metrics, the CODM decides either to reinvest profits into the business based on our strategic priorities and/or return cash to stockholders through dividends and share repurchases. We determined there are no significant segment expenses that require a separate disclosure, as the major categories of expenses regularly reviewed by the CODM to manage operations are disclosed in the consolidated statements of income. Quarterly reviews of expenses highlight those influenced by financial markets, such as distribution and servicing costs, as well as those that are both qualitatively and quantitatively significant. The measure of segment assets is reported on the consolidated balance sheet as total assets.

COMMITMENTS AND CONTINGENCIES.COMMITMENTS.T. Rowe Price Group has committed $287 million for investment in future OHA product launches through 2026. CONTINGENCIES.Contingent ConsiderationAs part of the purchase consideration for our acquisition of OHA in December 2021, there is contingent consideration in the amount of up to $900 million, payable in cash, that may be due as part of an earnout payment in 2026 and 2027 upon satisfying or exceeding certain defined revenue targets. These defined revenue targets will be evaluated on a cumulative basis from 2022 through 2026. About 22% of the earnout is conditioned upon continued service with T. Rowe Price Group and was excluded from the purchase consideration and deemed compensatory. The fair value of the earnout is remeasured each reporting period and was valued at zero as of December 31, 2025 and December 31, 2024.Value CreationIn addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain employees of OHA will receive incentive payments equal to 10% of the appreciated value of the OHA business on the fifth anniversary of the acquisition date, subject to an annualized preferred return to T. Rowe Price. This arrangement is treated as a post-combination compensation expense. This arrangement will be remeasured at fair value at each reporting date and recognized over the related service period. For the year ended December 31, 2025, 2024, and 2023, the amounts recognized as part of compensation expense in our consolidated statements of income were immaterial. OtherVarious claims against us arise in the ordinary course of business, including employment-related claims. In the opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of these pending ordinary course of business claims that would have a material adverse effect on our financial position or results of operations is remote.

INCOME TAXES. Income before income taxes for each of the past three years was earned almost entirely in the United States.INCOME TAX PROVISION.The provision for income taxes consists of:(in millions)202520242023Current income taxesU.S. federal$434.5 $634.7 $554.0 State and local91.2 112.4 68.1 Foreign44.7 24.7 23.9 Deferred income taxes (benefits)96.8 (88.0)8.6 Total$667.2 $683.8 $654.6 In 2025 and 2023, stock-based compensation plans activity increased income tax expense by $3.2 million and $3.4 million, respectively. In 2024, stock-based compensation plans activity decreased income tax expense by $4.5 million. These income tax impacts were recognized in the income tax provision.The following table reconciles the statutory federal income tax rate to our effective income tax rate. 202520242023AmountPercentAmountPercentAmountPercentStatutory U.S. federal income tax rate$603.8 21.0 %$592.1 21.0 %$523.0 21.0 %U.S. federalNet income (loss) attributable to redeemable non-controlling interests(1) (25.5)(0.9)(7.5)(0.3)(9.9)(0.4)Net excess tax benefits from stock-based compensation plans activity1.4 — (4.0)(0.1)2.8 0.1 Other(0.7)— (0.5)(0.1)(7.8)(0.3)State and local income taxes, net of federal effect58.2 2.1 79.9 2.9 55.8 2.3 Foreign tax effectsUnited Kingdom: changes in valuation allowances13.1 0.4 10.8 0.4 81.1 3.3 Other16.9 0.6 13.0 0.5 9.6 0.3 Effective income tax$667.2 23.2 %$683.8 24.3 %$654.6 26.3 %(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.In each of 2023, 2024, and 2025, more than 50% of our state and local tax expense was attributable to a concentrated group of jurisdictions. For 2023 and 2025, these jurisdictions were Maryland, California, New York City, and New Jersey, and for 2024 they were Maryland, California, New York City, and New York State.Deferred income taxes (benefits) arise from temporary differences between taxable income for financial statement and income tax return purposes. The deferred income taxes (benefits) recognized as part of our provision for income taxes is related to:(in millions)202520242023Property, equipment and software$149.8 $(60.3)$(43.2)Accrued, deferred, and long-term incentive compensation(20.0)(14.2)(28.6)Operating lease assets33.9 (1.7)(6.3)Operating lease liabilities(41.7)5.0 3.8 Acquisition-related liabilities(13.5)(9.8)0.

LEASES.All of our leases are operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. At December 31, 2025, the weighted-average remaining lease term on our leases is 11.9 years and the weighted-average discount rate used to measure the lease liabilities is 4.0%. Operating lease expense was $56.0 million in 2025, $42.2 million in 2024, and $52.4 million in 2023. Charges related to our operating leases that are variable, including certain maintenance charges and other management-related costs, and not included in the measurement of the lease liabilities, were $19.4 million in 2025, $14.1 million in 2024, and $11.2 million in 2023. We made lease payments of $53.0 million during 2025, $59.6 million during 2024, and $42.4 million during 2023. Our future undiscounted cash flows related to our operating leases, and the reconciliation to the operating lease liability as of December 31, 2025, are as follows:(in millions)20252026$56.0 202756.0 202851.6 202942.8 203040.4 Thereafter317.2 Total future undiscounted cash flows564.0 Less: imputed interest to be recognized in lease expense(116.8)Operating lease liabilities, as reported$447.

Enterprise Risk is primarily responsible for reporting risks from cybersecurity threats to executive leadership and our Enterprise Risk Management Committee (ERMC). The ERMC supports the efforts of the CRO in providing corporate-wide oversight of our firm’s risk management efforts and provides a path for risk escalation. This committee monitors risk management activities, including cybersecurity matters, and reports periodically and more frequently, as necessary, to our Board of Directors and Audit Committee. For example, at each quarterly meeting the Audit Committee receives an update concerning the company’s cybersecurity metrics. In addition, at least annually the Board receives a technology and cybersecurity update led by the senior management from the company’s technology and information security teams. Cybersecurity risk management practices operate enterprise-wide, across T. Rowe Price legal entities, including Oak Hill Advisors (OHA). In addition, OHA has established an independent risk committee, which includes responsibilities for prompt escalation of key risks and incidents such as cybersecurity to the T. Rowe Price CRO.T. Rowe Price maintains documented Enterprise Incident Management and Reporting Policies and Procedures, outlining responsibilities and requirements for escalation of various types of incidents, including cybersecurity threats and incidents. Our process is designed to investigate incidents efficiently, identify root cause, communicate with the affected parties as appropriate, spot trends, and recommend improvements to mitigate risk. These procedures incorporate incident materiality determination within senior executive levels and operate firm-wide.Global Technology and Business Unit management are also responsible for implementing internal controls to manage risks from cybersecurity threats to an appropriate level and in line with the firm’s risk appetite. Cybersecurity risks are managed across all lines of business, requiring support and participation across all levels in the organization. Within TDO, Enterprise Security is responsible for maintaining security policies, standards, and guidelines and routinely works with our Enterprise Risk, Compliance, Internal Audit, and other key technology and corporate stakeholders to establish security controls, enforce them, and monitor their adherence on an ongoing basis.

INVESTMENTS.The carrying values of our investments that are not consolidated investment products at December 31 are as follows:(in millions)20252024Investments held at fair valueT. Rowe Price investment productsDiscretionary investments$463.7 $258.8 Redeemable seed capital investments316.1 262.8 Investments used to hedge the deferred compensation liabilities1,243.3 992.8 Investment partnerships and other investments154.7 62.6 Investments in affiliated collateralized loan obligations3.2 6.3 Equity method investmentsT. Rowe Price investment productsDiscretionary investments— 60.8 Redeemable seed capital investments8.3 128.8 Investments used to hedge the deferred compensation liabilities— 88.4 Investment in UTI Asset Management Company Limited (India)162.8 173.5 Investments in affiliated private investment funds - carried interest390.3 426.9 Investments in affiliated private investment funds - seed/co-investment304.7 269.9 Investment partnerships and other investments204.9 162.1 Held to maturityInvestments in affiliated collateralized loan obligations21.8 61.1 Certificates of deposit50.4 44.7 U.S. Treasury note1.0 1.0 Total$3,325.2 $3,000.5 During each of the last three years, certain T. Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest, we report our residual interests in these T. Rowe Price investment products as either an equity method investment or an investment held at fair value. The net impact on our consolidated balance sheets and statements of income as of the dates the products were deconsolidated or reconsolidated is detailed below.(in millions)202520242023Net decrease in assets of consolidated investment products$(1,186.4)$(673.9)$(663.8)Net decrease in liabilities of consolidated investment products$(43.8)$(20.5)$(29.7)Net decrease in redeemable non-controlling interests$(595.0)$(272.8)$(479.2)Net gains (losses) recognized upon deconsolidation$3.1 $(0.4)$— The net gains (losses) recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain consolidated investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

CASH EQUIVALENTS.Cash equivalent investments in the T. Rowe Price money market mutual funds aggregate to $3,049.0 million at December 31, 2025, and $2,309.8 million at December 31, 2024. Dividends earned on these investments totaled $123.8 million in 2025, $128.3 million in 2024, and $101.3 million in 2023.

OTHER DISCLOSURES.RETIREMENT PLANS.Compensation and related costs includes expense recognized for our defined contribution retirement plans of $170.6 million in 2025, $162.0 million in 2024, and $152.5 million in 2023.SUPPLEMENTAL SAVINGS PLAN.The supplemental savings plan provides certain senior officers the opportunity to defer payment on up to 50% of their annual cash incentive, limited to $2 million annually. The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from a list of T. Rowe Price products. The officer must specify if they would like to receive payment as a lump sum or up to ten annual installments upon separation of service. Additionally, the officer may elect to receive a lump sum payment while still employed in as little as five years. Below is a roll forward of the supplement savings plan liability which is reported in deferred compensation liabilities on the consolidated balance sheets. (in millions)20252024Balance at beginning of the year$1,006.0 $895.0 Deferrals (including taxes)68.2 53.4 Market appreciation (depreciation), including foreign currency gains (losses)128.6 104.3 Distributions(80.7)(46.7)Balance at end of the year$1,122.1 $1,006.