Core Viewpoint - The article posits that T. Rowe Price is expected to thrive in the next decade due to the current overvaluation of the broader market, presenting a significant investment opportunity for value dividend investors [1]. Group 1: Company Analysis - T. Rowe Price is identified as a heavily undervalued company with substantial upside potential, making it an attractive target for long-term growth dividend investors [1]. - The author emphasizes a strategy focused on long-term compounding through investments in dividend-paying companies, indicating a belief in the sustainability of T. Rowe Price's business model [1]. Group 2: Investment Strategy - The article reflects a value dividend investment approach, highlighting the importance of identifying undervalued companies to capitalize on future growth [1]. - The author expresses a commitment to investing in companies that can provide a reliable income stream through dividends, which aligns with the long-term investment philosophy [1].

Part I [Business Overview](index=3&type=section&id=Item%201.%20Business) T. Rowe Price is a global investment advisory firm providing diverse solutions, with revenue tied to AUM, actively addressing industry challenges through strategic initiatives - T. Rowe Price is a global financial services holding company providing investment advisory services and managing diverse investment solutions for clients worldwide[10](index=10&type=chunk) - The firm addresses industry challenges like passive competition and fee pressure by pursuing strategic initiatives in retirement, wealth management, global growth, and alternative markets[13](index=13&type=chunk)[14](index=14&type=chunk) [Assets Under Management (AUM)](index=4&type=section&id=ASSETS%20UNDER%20MANAGEMENT%20(AUM)) As of December 31, 2024, AUM reached **$1,606.6 billion**, primarily driven by market appreciation despite net cash outflows, with strong growth in target date retirement products AUM by Asset Class (in billions USD) | Asset Class | 2024 AUM | 2023 AUM | 2022 AUM | | :--- | :--- | :--- | :--- | | Equity | $829.7 | $743.6 | $664.2 | | Fixed Income, including money market | $188.1 | $170.0 | $167.0 | | Multi-Asset | $536.0 | $483.0 | $400.1 | | Alternatives | $52.8 | $47.9 | $43.4 | | **Total** | **$1,606.6** | **$1,444.5** | **$1,274.7** | - Total AUM increased by **$162.1 billion** in 2024, driven by **$205.3 billion** in market appreciation, partially offset by **$43.2 billion** in net cash outflows[16](index=16&type=chunk)[182](index=182&type=chunk) - Target date retirement products saw net inflows of **$16.3 billion** in 2024, reaching **$475.6 billion** in AUM, representing **29.6%** of total managed assets[17](index=17&type=chunk)[185](index=185&type=chunk) [Investment Management Services](index=5&type=section&id=INVESTMENT%20MANAGEMENT%20SERVICES) The firm offers a comprehensive range of global investment strategies across various asset classes and vehicles, supported by seed capital and co-investments - The firm manages a broad range of investment strategies across Equity, Fixed Income, Multi-Asset, and Alternatives categories[24](index=24&type=chunk)[27](index=27&type=chunk) - Products are distributed through five primary channels globally, serving clients in **54 countries**, with non-U.S. investors accounting for approximately **9%** of total AUM[32](index=32&type=chunk)[33](index=33&type=chunk) - As of December 31, 2024, the firm held **$1.3 billion** in seed capital investments and **$0.3 billion** in co-investments in its managed products[30](index=30&type=chunk) [Revenue Sources](index=8&type=section&id=INVESTMENT%20ADVISORY%20FEES) Revenue is primarily from AUM-based investment advisory fees, with higher rates for equity and alternatives, supplemented by performance fees, carried interest, and administrative service income - Substantially all net revenue derives from AUM-based investment advisory fees, with nearly **57%** from sponsored U.S. mutual funds[36](index=36&type=chunk) - Fee rates are typically higher for equities and alternatives compared to multi-asset and fixed income products[37](index=37&type=chunk) - The firm also earns performance-based fees and capital allocation-based income (carried interest) from certain affiliated private investment funds[39](index=39&type=chunk)[41](index=41&type=chunk) - Ancillary revenue is generated from administrative services, including mutual fund transfer agent, recordkeeping, brokerage, and trust services[42](index=42&type=chunk) [Regulation](index=9&type=section&id=REGULATION) The firm's business is subject to extensive and complex federal, state, and international regulations, with key oversight from bodies like the SEC and FCA, and all subsidiaries met net capital requirements - The business is subject to extensive federal, state, and foreign laws and regulations, with broad powers granted to supervisory agencies[44](index=44&type=chunk) - Key regulators include the SEC, U.S. Department of Labor (ERISA), and international bodies like the Financial Conduct Authority (UK) and Securities and Futures Commission (Hong Kong)[47](index=47&type=chunk) - Certain subsidiaries are subject to net capital requirements, all of which were met or exceeded as of December 31, 2024[50](index=50&type=chunk) [Human Capital](index=11&type=section&id=HUMAN%20CAPITAL) The company values its 8,158 associates, focusing on talent development, internal promotion, and comprehensive benefits to attract and retain skilled personnel - As of December 31, 2024, the company employed **8,158** associates, a **3.2%** increase from **7,906** associates at year-end 2023[55](index=55&type=chunk) - The firm emphasizes internal promotion, filling approximately **one-third** of open positions with internal candidates, including most portfolio managers[56](index=56&type=chunk) - Key human capital strategies include investing in employee development, offering mentorship programs, and providing competitive benefits for health, wellness, and family needs[54](index=54&type=chunk)[57](index=57&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks, including AUM dependency, intense competition, operational failures, reputational damage, regulatory changes, cybersecurity threats, and alternative investment complexities [Business and Industry Risks](index=13&type=section&id=RISKS%20RELATING%20TO%20OUR%20BUSINESS%20AND%20THE%20FINANCIAL%20SERVICES%20INDUSTRY) Business risks include revenue sensitivity to AUM fluctuations, intense competition, short-notice contract terminations, operational failures, reputational damage, and complexities from alternative investments - Revenues are primarily based on AUM, subject to significant fluctuation due to external factors like investment performance, market downturns, and changing investor trends[67](index=67&type=chunk)[69](index=69&type=chunk)[74](index=74&type=chunk) - The company operates in an intensely competitive industry, facing pressure from passive investment products that could lead to client loss or fee reductions[73](index=73&type=chunk)[74](index=74&type=chunk) - A majority of revenues derive from collective investment fund contracts terminable on short notice, posing a risk to revenue stability[72](index=72&type=chunk) - Operational complexity, reliance on third-party providers, and human error create risks of financial loss, regulatory sanctions, and reputational damage[79](index=79&type=chunk)[81](index=81&type=chunk) - Alternative products, including private credit and real estate, expose the firm to new risks such as illiquidity, valuation challenges, and credit risks[87](index=87&type=chunk)[90](index=90&type=chunk) [Human Capital Risks](index=24&type=section&id=HUMAN%20CAPITAL%20RISKS) The firm's success depends on key personnel, and their loss could negatively impact investment performance, reputation, and AUM due to intense talent competition - The firm's success depends on highly skilled personnel, and the loss of their services could negatively affect investment performance and financial results[111](index=111&type=chunk) - Competition for qualified personnel is intense, and the loss of key employees could damage reputation, hinder investor attraction, and decrease AUM[111](index=111&type=chunk)[112](index=112&type=chunk) [Technology and Cybersecurity Risks](index=24&type=section&id=TECHNOLOGY%20RISKS) Heavy reliance on technology exposes the firm to system failures, cyberattacks, and AI-related risks, potentially leading to data breaches, operational disruptions, and financial harm - The business depends on significant technology for trading, portfolio management, and data security; failures could lead to client loss and reputational harm[113](index=113&type=chunk)[114](index=114&type=chunk) - Cyberattacks, such as ransomware and phishing, pose a significant threat to data integrity and could materially interrupt business operations[116](index=116&type=chunk) - Increased AI use presents risks including incorrect output, data privacy violations, and navigating an uncertain, evolving legal and regulatory environment[121](index=121&type=chunk) [Legal and Regulatory Risks](index=26&type=section&id=LEGAL%20AND%20REGULATORY%20RISKS) Operating in a complex, evolving regulatory environment, the firm faces risks from non-compliance, new retirement rules, ESG legislation, data privacy laws, and increased legal challenges to regulations - The business is subject to extensive, complex, and frequently changing global regulations, imposing significant financial and strategic costs[122](index=122&type=chunk)[123](index=123&type=chunk) - Potential regulatory changes include new U.S. retirement system rules, evolving ESG disclosure requirements, and expanding data privacy and cybersecurity regulations[127](index=127&type=chunk)[128](index=128&type=chunk) - Recent U.S. Supreme Court decisions, like Loper Bright Enterprises v. Raimondo, may increase legal challenges against federal regulations, creating greater regulatory uncertainty[131](index=131&type=chunk) - The firm is subject to costly, time-consuming legal proceedings, regulatory inquiries, and negative publicity that can damage its reputation[130](index=130&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Cybersecurity](index=30&type=section&id=Item%201C.%20Cybersecurity) T. Rowe Price employs a firm-wide cybersecurity risk management approach, overseen by the Board and led by executive management, with robust policies, regular assessments, and external audits, reporting no material incidents in 2024 - The firm has a holistic, firm-wide cybersecurity risk management approach, overseen by the Board and managed by executive leadership including the COO, CRO, and CISO[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - The cybersecurity program includes documented incident management policies, regular risk assessments, employee training, phishing tests, and business continuity testing[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - The firm undergoes annual external examinations (e.g., Sarbanes-Oxley, SOC 1, SOC 2) and engages third parties for independent evaluations and penetration testing[146](index=146&type=chunk) - Although targeted by cybersecurity attacks, no incident in 2024 materially impacted the firm's operations, strategy, or financial condition[148](index=148&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) The company's headquarters will relocate to a new Baltimore leased facility in 2025, while it owns major operating campuses in Maryland and Colorado, and leases other domestic and international offices - The corporate headquarters will move to a new **553,000 sq. ft.** leased space in Baltimore, Maryland in early 2025[149](index=149&type=chunk) - The company owns primary operating campuses in Owings Mills, MD (**1.1 million sq. ft.**) and Colorado Springs, CO (approx. **290,000 sq. ft.**)[150](index=150&type=chunk) - All non-U.S. offices are leased, with the largest located in London and Hong Kong[151](index=151&type=chunk) [Executive Officers](index=33&type=section&id=Information%20about%20our%20Executive%20Officers) This section lists the company's executive officers as of February 14, 2025, including Robert W. Sharps (CEO), Jennifer B. Dardis (CFO), and Kimberly H. Johnson (COO) - Robert W. Sharps, **53**, is the Chair of the Board, Chief Executive Officer, and President[156](index=156&type=chunk) - Jennifer B. Dardis, **51**, is the Chief Financial Officer and Treasurer[157](index=157&type=chunk) - Kimberly H. Johnson, **52**, is the Chief Operating Officer[159](index=159&type=chunk) Part II [Market for Common Equity and Shareholder Matters](index=35&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ (TROW), paid **$1.24** quarterly dividends in 2024, repurchased **651,090** shares in Q4 2024, and authorized an additional **15.0 million** shares for repurchase Quarterly Dividends Per Share (USD) | Year | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | | :--- | :--- | :--- | :--- | :--- | | 2024 | $1.24 | $1.24 | $1.24 | $1.24 | | 2023 | $1.22 | $1.22 | $1.22 | $1.22 | Share Repurchase Activity (Q4 2024) | Month | Total Shares Purchased | Average Price Paid (USD) | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | October | 3,951 | $110.30 | — | | November | 17,125 | $121.70 | — | | December | 630,014 | $115.36 | 623,136 | | **Total** | **651,090** | **$115.50** | **623,136** | - In December 2024, the Board approved an increase of **15.0 million** shares to the repurchase program, bringing the total remaining authorization to **18,377,353** shares as of December 31, 2024[167](index=167&type=chunk)[169](index=169&type=chunk) [Management's Discussion and Analysis (MD&A)](index=36&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's financial condition and operations, highlighting 2024 AUM growth to **$1.61 trillion**, **9.8%** revenue increase to **$7.1 billion**, and diluted EPS of **$9.15**, driven by higher AUM and strategic investments [Market Trends](index=36&type=section&id=MARKET%20TRENDS) In 2024, U.S. stocks saw strong gains, major indexes hit new highs, the Federal Reserve began rate reductions, and global bond returns were mostly positive - U.S. stocks produced strong gains in 2024, with the S&P 500 returning **25.0%** and the NASDAQ Composite returning **28.6%**[175](index=175&type=chunk)[178](index=178&type=chunk) - Global bond returns were mostly positive as many central banks reduced interest rates, with the Bloomberg Barclays U.S. Aggregate Bond Index returning **1.3%**[178](index=178&type=chunk)[181](index=181&type=chunk) [Assets Under Management (AUM) Analysis](index=37&type=section&id=ASSETS%20UNDER%20MANAGEMENT) AUM reached **$1,606.6 billion** in 2024, increasing by **$162.1 billion** due to market appreciation offsetting net cash outflows, with target date products showing strong inflows Change in AUM by Asset Class (2024, in billions USD) | Asset Class | 2023 AUM | Net Cash Flows | Market Appreciation & Income | 2024 AUM | | :--- | :--- | :--- | :--- | :--- | | Equity | $743.6 | $(52.0) | $138.1 | $829.7 | | Fixed Income | $170.0 | $12.6 | $5.5 | $188.1 | | Multi-Asset | $483.0 | $(6.5) | $59.5 | $536.0 | | Alternatives | $47.9 | $2.7 | $2.2 | $52.8 | | **Total** | **$1,444.5** | **$(43.2)** | **$205.3** | **$1,606.6** | - Net cash outflows in 2024 were **$43.2 billion**, an improvement from **$81.8 billion** of outflows in 2023[184](index=184&type=chunk) - Target date retirement products continued to attract assets, with net cash inflows of **$16.3 billion** in 2024, up from **$13.1 billion** in 2023[185](index=185&type=chunk) [Investment Performance](index=39&type=section&id=INVESTMENT%20PERFORMANCE) As of December 31, 2024, **54%** of U.S. mutual funds outperformed their Morningstar median over one year, with **70%** outperforming over ten years, and **60%** holding a 4 or 5-star rating % of U.S. Mutual Funds Outperforming Morningstar Median (as of 12/31/2024) | Period | 1 Year | 3 Years | 5 Years | 10 Years | | :--- | :--- | :--- | :--- | :--- | | All Funds | 54% | 56% | 56% | 70% | % of U.S. Mutual Funds AUM Outperforming Morningstar Median (as of 12/31/2024) | Period | 1 Year | 3 Years | 5 Years | 10 Years | | :--- | :--- | :--- | :--- | :--- | | All Funds AUM | 61% | 61% | 59% | 83% | - As of December 31, 2024, **60%** of the firm's rated U.S. mutual funds received an overall Morningstar rating of **4 or 5 stars**, compared to **32.5%** for the overall fund population[192](index=192&type=chunk) [Results of Operations](index=40&type=section&id=RESULTS%20OF%20OPERATIONS) In 2024, T. Rowe Price reported strong financial results, with net revenues up **9.8%** to **$7.1 billion**, net operating income up **17.5%** to **$2.3 billion**, and diluted EPS up **17.9%** to **$9.15**, driven by higher average AUM Consolidated Financial Results (U.S. GAAP, in millions USD, except per-share data) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Revenues | $7,093.6 | $6,460.5 | 9.8% | | Operating Expenses | $4,760.3 | $4,474.3 | 6.4% | | Net Operating Income | $2,333.3 | $1,986.2 | 17.5% | | Net Income to T. Rowe Price Group | $2,100.1 | $1,788.7 | 17.4% | | Diluted EPS | $9.15 | $7.76 | 17.9% | - The increase in 2024 revenue was driven by a **14.7%** rise in average AUM to **$1,561.9 billion**[194](index=194&type=chunk)[196](index=196&type=chunk) - The annualized effective fee rate (excluding performance fees) declined from **41.9 bps** in 2023 to **41.0 bps** in 2024, largely due to a mix shift toward lower-fee products[197](index=197&type=chunk) - The firm estimates 2025 non-GAAP operating expense growth to be in the range of **4%-6%** from the 2024 base of **$4,456.3 million**[201](index=201&type=chunk) [Capital Resources and Liquidity](index=54&type=section&id=CAPITAL%20RESOURCES%20AND%20LIQUIDITY) The company maintains strong liquidity, with cash and investments increasing to **$5.5 billion** in 2024, returning **$1.47 billion** to stockholders, and anticipating **$300 million** in 2025 capital expenditures for technology Sources of Liquidity (in millions USD) | Item | 12/31/2024 | 12/31/2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,649.8 | $2,066.6 | | Discretionary investments | $457.1 | $463.7 | | Redeemable seed capital investments | $1,262.3 | $1,370.9 | | **Total Cash and Key Investments** | **$5,480.1** | **$4,795.8** | Cash Returned to Stockholders (in millions USD) | Year | Recurring Dividend | Stock Repurchases | Total | | :--- | :--- | :--- | :--- | | 2024 | $1,135.2 | $334.5 | $1,469.7 | | 2023 | $1,121.9 | $254.3 | $1,376.2 | | 2022 | $1,108.8 | $855.3 | $1,964.1 | - Anticipated property and equipment expenditures for 2025 are about **$300 million**, with over **75%** planned for technology initiatives[261](index=261&type=chunk) - As part of the OHA acquisition, T. Rowe Price has a remaining commitment of **$360 million** to fund OHA product launches through 2026[276](index=276&type=chunk) [Critical Accounting Policies and Estimates](index=60&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Critical accounting policies involve significant judgment in VIE consolidation, goodwill and intangible asset impairment testing (including a **$31.1 million** trade name impairment in 2024), and income tax provisions - Critical policies involve significant judgment, particularly in consolidation of VIEs, impairment of goodwill and intangibles, and income tax provisions[277](index=277&type=chunk)[278](index=278&type=chunk) - Goodwill is tested annually for impairment at the single reporting unit level, with fair value consistently exceeding carrying amount, resulting in no impairment[284](index=284&type=chunk)[285](index=285&type=chunk) - Indefinite-lived intangible assets are tested annually for impairment; in 2024, a non-cash impairment charge of **$31.1 million** was recognized on the trade name intangible asset[282](index=282&type=chunk) - The provision for income taxes is a major expense requiring significant estimates for allocating income and expenses across multiple tax jurisdictions[286](index=286&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to equity price risk from corporate investments, with a hypothetical **$304.7 million** pre-tax loss from a **10-13%** decline, and currency translation risk from its UTI (India) investment Potential Loss from Equity Price Risk (as of 12/31/2024, in millions USD) | Investment Category | Fair Value | Potential Lower Value | Potential Loss | | :--- | :--- | :--- | :--- | | Investments in sponsored products (non-consolidated) | $1,520.7 | $1,328.7 | $192.0 | | Direct investment in consolidated products | $1,037.9 | $925.2 | $112.7 | | Investment partnerships & other | $62.6 | $55.7 | $6.9 | | **Total** | **$2,621.2** | **$2,309.6** | **$311.6** | - The most significant currency translation risk relates to the investment in UTI, denominated in Indian rupees, with a cumulative translation loss of **$49.5 million** (net of tax) as of December 31, 2024[302](index=302&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for the three years ended December 31, 2024, with KPMG LLP issuing an unqualified opinion on both the financials and internal controls [Consolidated Financial Statements](index=67&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of **$13.5 billion** and stockholders' equity of **$10.5 billion** as of December 31, 2024, with 2024 net income of **$2.1 billion** on **$7.1 billion** net revenues Key Balance Sheet Figures (in millions USD) | Account | 12/31/2024 | 12/31/2023 | | :--- | :--- | :--- | | Total Assets | $13,472.0 | $12,278.8 | | Total Liabilities | $2,021.9 | $1,987.6 | | Total Stockholders' Equity | $10,506.1 | $9,697.1 | Key Income Statement Figures (in millions USD) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Revenues | $7,093.6 | $6,460.5 | $6,488.4 | | Net Operating Income | $2,333.3 | $1,986.2 | $2,373.7 | | Net Income | $2,135.8 | $1,835.7 | $1,449.6 | [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed accounting policies and disclosures, including a **$31.1 million** trade name impairment in 2024, a **24.3%** effective tax rate, and **$369.1 million** in unrecognized stock-based compensation expense - Note 4 & 5: The firm holds **$3.0 billion** in corporate investments, and the contingent consideration liability from the OHA acquisition was reduced to zero as of December 31, 2024[382](index=382&type=chunk)[396](index=396&type=chunk) - Note 9: Goodwill remained at **$2.6 billion** with no impairment, while a **$31.1 million** impairment charge was recognized on the indefinite-lived trade name intangible asset in 2024[413](index=413&type=chunk)[414](index=414&type=chunk) - Note 10: The effective tax rate for 2024 was **24.3%**, down from **26.3%** in 2023, primarily due to lower valuation allowances[418](index=418&type=chunk)[242](index=242&type=chunk) - Note 12: As of December 31, 2024, **$369.1 million** of total unrecognized compensation cost related to nonvested restricted stock units remained[436](index=436&type=chunk)[437](index=437&type=chunk) [Report of Independent Registered Public Accounting Firm](index=100&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting, identifying AUM data evaluation as a critical audit matter - KPMG LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[459](index=459&type=chunk)[460](index=460&type=chunk)[477](index=477&type=chunk) - A critical audit matter was identified regarding the completeness and accuracy of AUM data used for investment advisory fee revenue, due to the multiple IT systems involved[464](index=464&type=chunk)[465](index=465&type=chunk) [Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes in Q4 2024, and KPMG LLP provided an unqualified attestation - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[468](index=468&type=chunk) - Management's report states the company's internal control over financial reporting was effective as of December 31, 2024, based on the COSO framework[475](index=475&type=chunk) - KPMG LLP's attestation report expressed an unqualified opinion on the effective operation of the company's internal control over financial reporting as of December 31, 2024[476](index=476&type=chunk)[477](index=477&type=chunk) Part III [Part III](index=106&type=section&id=Part%20III) Items 10-14, covering Directors, Executive Compensation, Security Ownership, Certain Relationships, and Principal Accountant Fees, are incorporated by reference from the 2025 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Stockholders[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk)[488](index=488&type=chunk)[489](index=489&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the report, confirming financial statements under Item 8 and providing a comprehensive index of exhibits - This item contains the index of all exhibits filed with the Form 10-K, including management contracts and compensatory plans[491](index=491&type=chunk)[492](index=492&type=chunk)

Core Viewpoint - T. Rowe Price Group, Inc. reported a preliminary assets under management (AUM) of $1.65 trillion for January 2025, reflecting a sequential increase of 2.7% despite experiencing net outflows of $2.1 billion during the same month [1]. AUM Performance Breakdown - At the end of January, T. Rowe Price's equity products totaled $854 billion, which is a 2.9% increase from the previous month [2]. - Fixed income products, including money market, grew by 1.1% to reach $190 billion [2]. - Multi-asset products increased by 3.2% to $553 billion [2]. - Alternative products remained stable at $53 billion compared to the prior month [2]. - Target date retirement portfolios registered $492 billion, marking a 3.4% rise from the previous month [3]. Company Outlook - The company's diversified business model and efforts to expand distribution through acquisitions are expected to support future top-line growth [4]. - The rising AUM base is viewed as encouraging, although there are concerns regarding the company's overdependence on investment advisory fees [4]. - T. Rowe Price's bottom-line growth is currently under pressure due to high costs [4]. Market Performance Comparison - Over the past six months, T. Rowe Price shares have gained 3.2%, while the industry has seen a growth of 21.8% [5].

Core Insights - T. Rowe Price Group, Inc. reported preliminary month-end assets under management of $1.65 trillion as of January 31, 2025, reflecting an increase from $1.607 trillion at the end of 2024 [1][2] - The firm experienced preliminary net outflows of $2.1 billion in January 2025 [1] - The assets under management by asset class include $854 billion in equity, $190 billion in fixed income (including money market), $553 billion in multi-asset, and $53 billion in alternatives [2] Asset Class Breakdown - Equity assets increased from $830 billion at the end of 2024 to $854 billion as of January 31, 2025 [2] - Fixed income assets rose slightly from $188 billion to $190 billion during the same period [2] - Multi-asset investments grew from $536 billion to $553 billion [2] - Alternatives remained stable at $53 billion [2] Target Date Retirement Portfolios - Target date retirement portfolios saw an increase in assets from $476 billion at the end of 2024 to $492 billion as of January 31, 2025 [2] - Approximately two-thirds of T. Rowe Price's total assets under management are related to retirement [3]

Core Viewpoint - The individual expresses a strong preference for fundamental analysis over technical analysis in financial markets, emphasizing the importance of evaluating actual company performance rather than price movements [1] Group 1: Investment Focus - The individual primarily invests in stocks and ETFs, with a preference for US companies, while also analyzing European and Chinese companies [1] - Investments are approached with a long-term perspective, often taking a contrarian view [1] Group 2: Sector Interest - The banking sector is highlighted as a key area of interest, viewed as fundamental for understanding economic health [1] - There is a noted interest in macroeconomics, indicating a broader perspective on economic factors influencing investments [1]

Company Overview - Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience, managing approximately $71 billion of capital across various credit strategies as of September 30, 2024 [3][4] - Triumvirate Environmental, founded in 1988, provides sustainable environmental solutions to over 4,000 customers across North America, focusing on life sciences, healthcare, education, and advanced manufacturing [5] - Berkshire Partners is a 100% employee-owned investment firm with a focus on private and public equity, currently investing from its Fund XI, which has approximately $7.8 billion in commitments [6] Financing Details - OHA served as Administrative Agent and Joint Lead Arranger for a private unitranche facility to support Berkshire Partners' acquisition of Triumvirate Environmental, which includes a unitranche term loan, delayed draw term loan, and revolver [1][2] - OHA's financing flexibility and structuring expertise, along with its relationship with Berkshire Partners, enabled a quick diligence process and a tailored financing solution for the acquisition [2][3] Strategic Insights - Triumvirate has established a niche competitive position within the environmental services industry, and OHA aims to support the company's growth trajectory through effective financing solutions [3]

Company Overview - Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience, managing approximately $71 billion of capital across various credit strategies as of September 30, 2024 [3][4]. - Triumvirate Environmental, founded in 1988, provides sustainable environmental solutions to over 4,000 customers across North America, focusing on life sciences, healthcare, education, and advanced manufacturing [5]. - Berkshire Partners is a 100% employee-owned investment firm with a focus on private and public equity, currently investing from its Fund XI, which has approximately $7.8 billion in commitments [6]. Financing Details - OHA served as Administrative Agent and Joint Lead Arranger for a private unitranche facility to support Berkshire Partners' acquisition of Triumvirate Environmental, which includes a unitranche term loan, delayed draw term loan, and revolver [1][2]. - The financing solution was tailored to meet the specific needs of Berkshire Partners, leveraging OHA's flexibility and structuring expertise [2][3]. Strategic Positioning - Triumvirate has established a niche competitive position within the environmental services industry, which is expected to support its growth trajectory [3]. - OHA emphasizes long-term partnerships with companies and sponsors, providing access to proprietary opportunities and customized credit solutions across market cycles [3][4].

Core Viewpoint - T. Rowe Price Group, Inc. (TROW) reported lower-than-expected results for the fourth quarter of 2024, with adjusted earnings per share of $2.12, missing the consensus estimate of $2.23, despite a year-over-year increase of 23.3% [1][3] Financial Performance - Fourth-quarter net revenues increased by 11.1% year over year to $1.82 billion, but fell short of the Zacks Consensus Estimate of $1.88 billion [4] - For the full year 2024, net revenues reached $7.09 billion, up 9.8% year over year, yet also missed the consensus estimate of $7.16 billion [4] - Investment advisory fees rose by 16.1% year over year to $1.67 billion, aligning with estimates [4] - Net income attributable to T. Rowe Price on a GAAP basis was $439.9 million, showing a slight year-over-year increase [2] Expenses and Income - Total operating expenses increased marginally to $1.26 billion in the fourth quarter, slightly below the estimate of $1.33 billion [5] - Capital allocation-based income significantly declined to negative $5.2 million from $40.2 million in the prior year quarter, primarily due to lower market returns [5] Assets Under Management (AUM) - As of December 31, 2024, total AUM grew by 11.2% year over year to $1.61 trillion, although the projection was $1.71 billion [6] - The fourth quarter saw net market appreciation and income of $5.9 billion, but net cash outflows amounted to $8.2 billion [6] Liquidity and Capital Distribution - T. Rowe Price had a strong liquidity position with cash and cash equivalents of $2.65 billion as of December 31, 2024, up from $2.07 billion a year earlier, enabling continued investment [6] - The company distributed a total of $355 million to shareholders through dividends and share repurchases in the fourth quarter [7] Strategic Outlook - TROW's solid AUM balance, expanding distribution reach, and diversification efforts through acquisitions are expected to support future top-line growth [8] - However, concerns remain regarding elevated expenses and reliance on investment advisory fees [9]

Financial Data and Key Metrics Changes - The company closed 2024 with $1.6 trillion in assets under management (AUM) and $43.2 billion in net outflows, which is a significant improvement from previous years [7][19] - Adjusted diluted earnings per share (EPS) for Q4 2024 was $2.12, bringing full-year adjusted diluted EPS to $9.33, up 23% from 2023 [18] - Full-year adjusted revenue reached nearly $7.2 billion, a 10.1% increase from 2023 [23] Business Line Data and Key Metrics Changes - The ETF business grew significantly, closing the year with almost $8 billion in AUM, with net inflows of $4.7 billion for the year, more than tripling from 2023 [10][22] - The target date franchise had net inflows of $16.3 billion for the year, with $2.2 billion in net flows for Q4, marking its strongest Q4 since 2019 [10][20] - Fixed income and alternatives also saw positive net flows for both the fourth quarter and the full year [21] Market Data and Key Metrics Changes - The EMEA and APAC regions, along with the Americas Institutional channel, experienced positive net flows during the year [21] - The company noted a significant increase in gross sales, with a strong net pipeline ending the year better than the previous year [14] Company Strategy and Development Direction - The company is focused on expanding its ETF business and enhancing its insurance asset management offerings through partnerships, particularly with Aspida [12][60] - There is a commitment to delivering innovative retirement offerings and exploring the integration of alternatives into target date products [40][41] - The company aims to leverage its strong balance sheet for potential M&A and strategic investments to enhance capabilities and client access [63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about reducing outflows in 2025 and building on the momentum from 2024, despite acknowledging the challenges in the current market environment [16][110] - The company is focused on improving investment performance and strategic initiatives to regain positive net flows [110] Other Important Information - The company returned over $1.4 billion to stockholders in 2024 and maintained a strong balance sheet with $3.1 billion in cash and discretionary investments [16][28] - Adjusted operating expenses for the full year were $4.46 billion, up 6.3% from 2023, with expectations for a 4-6% increase in 2025 [26][27] Q&A Session Summary Question: Insights on the Aspida partnership and insurance opportunities - Management highlighted excitement about the partnership with Aspida, focusing on refining insurance asset management offerings and potential co-development of investment products [58][60] Question: Fee rate dynamics and outlook - Management noted higher fee compression this year, with an average of about 2%, influenced by sales in lower fee strategies and elevated redemptions in higher fee products [72][73] Question: Client demand for hybrid products - Management acknowledged the growing interest in hybrid products across public and private markets, with ongoing discussions about potential offerings [88][90] Question: Future private equity allocations in retirement products - Management indicated a commitment to offering best-in-class solutions, open to partnerships or M&A to enhance capabilities in private equity and credit [96][97] Question: Gross sales trends and pipeline context - Management reported improved gross sales across channels, with a strong pipeline for retirement date funds and a positive outlook for 2025 [104][108]

Core Insights - T. Rowe Price reported revenue of $1.82 billion for the quarter ended December 2024, reflecting an 11.1% increase year-over-year, but fell short of the Zacks Consensus Estimate by 3.02% [1] - The company's EPS was $2.12, up from $1.72 in the same quarter last year, but also missed the consensus estimate of $2.23 by 4.93% [1] Financial Performance Metrics - Assets Under Management (EOP) for Equity stood at $829.7 billion, below the average estimate of $847.53 billion [4] - Multi-asset Assets Under Management (EOP) totaled $536 billion, compared to the average estimate of $549.88 billion [4] - Total Net Cash Inflows were reported at -$19.3 billion, worse than the average estimate of -$12.84 billion [4] - Total Assets Under Management reached $1,606.6 billion, below the average estimate of $1,640.43 billion [4] - Fixed Income Assets Under Management (EOP) was $188.1 billion, slightly below the estimate of $190.6 billion [4] Revenue Breakdown - Administrative, distribution, and servicing fees generated net revenues of $143.20 million, below the average estimate of $154 million, but showed a 1.9% increase year-over-year [4] - Investment advisory fees amounted to $1.67 billion, slightly below the estimate of $1.68 billion, but represented a 14.1% increase year-over-year [4] - Capital allocation-based income reported a loss of -$5.20 million, significantly lower than the average estimate of $40.06 million, marking a 112.9% decline year-over-year [4] - Multi-asset investment advisory fees were $473.80 million, exceeding the estimate of $470.95 million, with an 18.3% year-over-year increase [4] - Fixed income investment advisory fees reached $106.20 million, slightly above the estimate of $105.81 million, reflecting an 8.2% year-over-year increase [4] - Alternatives investment advisory fees were $81 million, below the estimate of $100.57 million, showing a 17.4% decline year-over-year [4] - Equity investment advisory fees matched the estimate at $1.01 billion, with a 16.4% increase year-over-year [4] Stock Performance - T. Rowe Price shares returned +2.2% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]