T. Rowe Price (TROW) 10-K risk factor changes: FY2020 vs FY2019

We derive our revenues primarily from investment advisory services provided by our subsidiaries to individual and institutional [removed: investors in the U.S. mutual funds and other investment products.][added: investors.]

[removed: | • | Investment Performance.] If the investment performance of our managed investment portfolios is less than that of our competitors or applicable third-party benchmarks, we could lose existing and potential [removed: customers] [added: clients] and suffer a decrease in assets under management. [removed: Institutional investors in particular, consider changing investment advisers based upon poor relative investment performance. Individual investors in contrast are more likely to react to poor absolute investment performance. |]

[removed: | • | Investor Mobility.] Our investors generally may withdraw their funds at any time, without advance notice and with little to no significant penalty. [removed: |]

[removed: | • | Capacity Constraints.] Prolonged periods of strong relative investment performance and/or strong investor inflows has resulted in and may result in capacity constraints within certain strategies, which can lead to, among other things, the closure of those strategies [removed: from additional investor inflows. If certain of our strategies are capacity constrained, our investment results in subsequent periods may be negatively impacted. |][added: to new investors.]

[removed: | • | Investing Trends.] Changes in investing trends, particularly investor preference for passive or alternative investment products, and in retirement savings trends, may reduce interest in our products and may alter our mix of assets under management. [removed: |]

[removed: | • | Interest Rate Changes.] Investor interest in and the valuation of our fixed income [removed: investment funds] and [added: multi-asset investment] portfolios are affected by changes in interest rates. [removed: |]

[removed: | • | Geo-Political Exposure.] Our managed investment portfolios may have significant investments in [removed: international] markets that are subject to risk of loss from political or diplomatic developments, government policies, civil unrest, currency fluctuations, illiquidity and capital controls, and changes in legislation related to [removed: foreign ownership. |][added: ownership limitations.]

For any period in which revenues decline, net income and operating margins will likely [added: decline by a greater proportion because certain expenses will be fixed over that finite period and may not decrease in proportion to the decrease in revenues.]

A [removed: significant] majority of our revenues are based on contracts with the U.S. mutual funds that are subject to termination without cause and on short notice.

Competitive pressures may result in a loss of [removed: customers] [added: clients] and their assets or compel us to reduce the fees we charge to clients, thereby reducing our revenues and net income.

Some of these financial institutions have [removed: substantially] greater resources than we do and may offer a broader range of financial products across more markets.

While we believe there will always be demand for [removed: good] [added: strong performing] active management, we cannot predict how much market share these competitors will gain.

Our success depends on our key personnel and our [removed: financial] [added: investment] performance [added: and financial results] could be negatively affected by the loss of their services.

[removed: We have near- and long-term succession planning processes,] including programs to develop our future leaders, which are intended to address future talent needs and minimize the impact of losing key talent.

Our operations are complex and a failure to [removed: perform] [added: properly execute] operational processes could have an adverse effect on our reputation and decrease our revenues.

We provide [added: global] investment [removed: management, product administration, product recordkeeping,] [added: management] and [removed: tax reporting] [added: administrative] services to our clients.

In certain cases, we rely on third-party [removed: vendors in] [added: service providers for] the execution and delivery of these services.

Failure to properly execute or oversee these services could [added: have an adverse impact on our business, financial results and reputation, and] subject us to regulatory sanctions, fines, penalties, or litigation.

We use various quantitative models to support investment decisions and [added: investment] processes, including those related to [removed: risk assessment,] portfolio management, [added: portfolio risk analysis,] and [removed: activities.][added: client investment guidance.]

[removed: Additionally,] [added: While] we [added: maintain policies, procedures, and controls to reduce the likelihood of unauthorized activities, we] are subject to the risk that our [removed: employees] [added: associates] or third parties acting on our behalf may circumvent controls or act in a manner inconsistent with our policies and procedures.

Any damage to our brand could impede our ability to attract and retain [removed: customers] [added: clients] and key personnel, and reduce the amount of assets under our management, any of which could have a material adverse effect on our revenues and net income.

[removed: | • |] [added: -] expenses incurred in connection with our multi-year strategic plan to strengthen our long-term competitive position; [removed: |]

[removed: | • |] [added: -] variations in the level of total compensation expense due [removed: to,] [added: to changes in,] among other things, [removed: changes in] bonuses, stock-based awards, [removed: changes in] employee benefit costs due to regulatory or plan design changes, [removed: changes in] our employee count and mix, competitive factors, market performance, and inflation; [removed: |]

[removed: | • |] [added: -] changes in the level of our advertising and promotion expenses, including the costs of expanding investment advisory services to investors outside of the U.S. and further penetrating U.S. distribution channels; [removed: |]

[removed: | • |] [added: -] expenses and capital costs incurred to maintain and enhance our administrative and operating services infrastructure, such as technology assets, depreciation, amortization, and research and development; [removed: |]

[removed: | • |] [added: -] changes in the costs incurred for third-party vendors that perform certain administrative and operating services; [removed: |]

[removed: | • |] [added: -] changes in expenses that are correlated to our assets under management, such as distribution and servicing fees; [removed: |]

[removed: | • |] [added: -] a future impairment of investments that is recognized in our consolidated balance sheet; [removed: |]

[removed: | • |] [added: -] a future impairment of goodwill that is recognized in our consolidated balance sheet; [removed: |]

[removed: | • |] [added: -] unanticipated material fluctuations in foreign currency exchange rates applicable to the costs of our operations abroad; [removed: |]

[removed: | • |] [added: -] unanticipated costs incurred to protect investor accounts and client goodwill; [removed: and |]

[removed: | • |] [added: -] future changes to legal and regulatory requirements and potential litigation; [removed: |][added: and]

[removed: | • |] [added: -] disruptions of third-party services such as communications, power, and mutual fund transfer agent, investment management, trading, and accounting systems. [removed: |]

Based on the global nature of our business, from time to [removed: time,] [added: time] we are subject to tax audits in various jurisdictions.

We have contracted with third-party financial intermediaries that distribute our [removed: investment products and] [added: investment products and] such relationships may not be available or profitable to us in the future.

It would be difficult for us to acquire or retain the management of those assets without the assistance of the intermediaries, and we cannot assure that we will be able to maintain an adequate number of investment [removed: product offerings and successful distribution relationships.]

[added: In addition, some investors rely on third-party financial] planners, registered investment advisers, and other consultants or financial professionals to advise them on the choice of investment adviser and investment product.

Armed conflicts, trade wars, tariffs or sanctions, terrorist attacks, [removed: cyber-attacks,] [added: cyberattacks,] power failures, [added: pandemics,] climate change, [added: increased severity of weather events,] and natural disasters [added: and other events outside of our control] could adversely affect our revenues, expenses, and net income by:

[removed: | • |] [added: -] decreasing investment valuations in, and returns on, the investment portfolios that we manage, [removed: |]

[removed: | • |] [added: -] causing disruptions in national or global economies that decrease investor confidence and make investment products generally less attractive, [removed: |]

- Investment Performance.

- General Market Declines.

We derive a significant portion of our revenues from advisory fees on managed investment portfolios.

A downturn in stock or bond prices would cause the value of assets under our management to decrease, and may also cause investors to withdraw their investments, thereby further decreasing the level of assets under our management.

- Investor Mobility.

- Capacity Constraints.

- Investing Trends.

- Interest Rate Changes.

- Geo-Political Exposure.

As part of our continued efforts to attract and retain clients, we develop and launch new products and services, which may require expenditure of resources and may expose us to new regulatory or compliance requirements as well as increased risk of operational or client service errors.

Actual or perceived failure to adequately address the environmental, social, and governance ("ESG") expectations of our various stakeholders could lead to a tarnished reputation and loss of customers.

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

We employ hedging strategies related to our supplemental savings plan in order to hedge the liability related thereto.

In the event that our hedging strategies are not effective, the resulting impact may adversely affect our results of operations, cash flows or financial condition.

product offerings and successful distribution relationships.

Our business, financial condition, and results of operation may be adversely affected by the 2020 coronavirus outbreak.

Beginning in early 2020, global financial markets have been monitoring and reacting to the novel coronavirus pandemic.

The spread of the coronavirus has created significant volatility, uncertainty and economic disruption to the global economy and may impact our business, financial condition and results of operations.

While we have in place robust and well-established business continuity plans that address the potential impact to our associates and our facilities, and a comprehensive suite of technologies which enable our associates to work remotely and conduct business, no assurance can be given that the steps we have taken will continue to be effective or appropriate.

Additionally we must effectively manage the ongoing risks of a remote workforce, ensure a safe working environment for associates working onsite in our offices, and adequately manage the post-pandemic transition from remote to onsite or a hybrid working environment.

In the event that our associates become incapacitated by the coronavirus, our business operations may be impacted, which could lead to reputational and financial harm.

Since our revenue is based on the market value and composition of the assets under our management, the ultimate impact on global financial markets and our clients’ decisions related to this event could adversely affect the Company’s revenue and operating results.

Separately from the investments we manage for our clients, we currently have a substantial investment portfolio.

We operate in a number of jurisdictions outside of the United States.

HUMAN CAPITAL RISKS.

We have near- and long-term succession planning processes,

We could experience adverse business impacts if legislative and regulatory changes limit retirement plans to certain products and services, or favor certain investment vehicles, that we do not offer, materially limit retirement savings opportunities or foster substantial outflows from retirement savings plans for non-retirement purposes.

Actions taken by applicable regulatory or legislative bodies may impact our business activities and increase our costs.

- The Commodity Futures Trading Commission ("CFTC") has adopted rules that would limit the ability of T.

Rowe Price investment products to use futures, swaps, and other derivatives.

We have registered certain subsidiaries with the CFTC, subjecting us to additional regulatory requirements and costs, but also providing us additional flexibility to utilize such products.

Nonetheless, there are still certain limitations on our investment products due to CFTC rules.

- There has been increased global regulatory focus on the manner in which intermediaries are paid for distribution of mutual funds.

These requirements continue to evolve, most commonly in ways that increase the complexity and costs of compliance.

For example, California enacted the California Consumer Privacy Act of 2018 (the "CCPA") effective in January 1, 2020, which, among other things, significantly increased compliance obligations and the potential penalties for non-compliance, and California voters in November 2020 approved a replacement of this law effective January 1, 2023 with a new law that expands various requirements.

Alongside their general stabilizing and risk-reducing effect on the markets, these requirements have introduced operational complexity and additional costs to derivatives portfolios.

- The revised Markets in Financial Instruments Directive ("MiFID II Directive") and Regulation ("MiFIR") (together “MiFID II”) applied across the EU and member states of the European Economic Area beginning on January 3, 2018.

Implementation of MiFID II has significantly impacted both the structure and operation of EU financial markets.

Compliance with MiFID II has increased operational complexity and increased our costs.

For example, we began to pay for third-party investment research used by our UK-based investment manager, T.

We generally earn higher fees on assets invested in our equity funds and equity investment portfolios than we earn on assets invested in our fixed income funds and portfolios.

Among equity products, there is a significant variation in fees earned from index-based products at the low end and emerging markets products at the high end.

Fees also vary across the fixed income products, though not as widely as equity products, with stable value products and money market products at the lower end and non-U.S. dollar denominated bond products at the high end.

| | |

| --- | --- |

| • | General Market Declines. We derive a significant portion of our revenues from advisory fees on sponsored portfolios. A downturn in stock or bond prices would cause the value of assets under our management to decrease, and may also cause investors to withdraw their investments, thereby further decreasing the level of assets under our management. A decline in equity market valuations may cause investors to transition to lower-fee portfolios such as fixed income, reducing our overall profitability. In addition, international markets, particularly emerging markets, which are often smaller, may not have the liquidity of established markets, may lack established regulations, and may experience significantly more volatility than established markets. |

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decline by a greater proportion because certain expenses will be fixed over that finite period and may not decrease in proportion to the decrease in revenues.

If current or potential customers decide to move their assets to one of our competitors, we could face a significant decline in market share, assets under management, revenues, and net income.

Changes to benchmark indices may impact our business.

The manner in which certain reference rates are calculated could impact the investment portfolios we manage.

The withdrawal and replacement of widely used benchmark indices such as the London Interbank Offered Rate (“LIBOR”) with alternative benchmark rates may introduce a number of risks for our business.

The FCA in the U.K., which regulates LIBOR, has announced that it will no longer compel panel banks to submit rates for LIBOR after 2021.

Changes in the method pursuant to which LIBOR is determined or the discontinuance of LIBOR may adversely affect the amount of interest payable or interest receivable on certain portfolio investments.

These changes may also impact the market liquidity and market value of these portfolio investments.

In addition, some investors rely on third-party financial

We currently have a substantial investment portfolio.

Rowe Price products that are consolidated or accounted for under the equity method.

regulatory requirements, operating facilities and technologies, and new employees; adverse effects on our earnings in the event acquired intangible assets or goodwill become impaired; and the existence of liabilities or contingencies not disclosed to or otherwise known by us prior to closing a transaction.

We operate in a number of jurisdictions outside of the U.S. and have an equity investment in UTI.

| • | The Commodity Futures Trading Commission ("CFTC") has adopted certain amendments to its rules that would limit the ability of T. Rowe Price investment products to use futures, swaps, and other derivatives without additional registration. As such, we intend to register certain subsidiaries with the CFTC which would subject us to additional regulatory requirements and costs associated with registrations. |

The ultimate impact of the UK exit (“Brexit”) from the European Union (“EU”), on our business operations in the UK and Europe could vary depending on the details of the separation agreement or any subsequent trade relationship between the UK and EU.

While we cannot predict the outcome at this time, we have realigned our EU and UK operations so that we are as prepared if the EU and UK are unable to reach a separation agreement or future trade agreement.

| • | customer service, |

An externally caused information security incident, such as a

Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in U.S. mutual funds, subadvised funds, separately managed accounts, [added: collective investment trusts,] and other T.

Rowe Price [added: investment] products.

We manage a broad range of U.S., international and global stock, bond, and money market mutual funds and [added: collective investment trusts and] other investment products, which meet the varied needs and objectives of individual and institutional investors.

Additionally, approximately [removed: one-third] [added: 30%] of our operating expenses are impacted by [removed: financial markets.][added: changes in assets under management.]

We are investing in key capabilities, including investment professionals, [added: distribution professionals,] technologies, and new product offerings; and, most importantly, we provide our clients with strong investment management expertise and [removed: service both now and in the future.][added: service.]

Stocks in developed non-U.S. equity markets [removed: rose strongly] [added: produced positive returns in U.S. dollar terms] but [removed: underperformed] [added: generally lagged] U.S. shares.

Emerging markets stocks [removed: underperformed shares in] [added: outperformed] developed [added: non-U.S.] markets.

[removed: Results] [added: Returns] of several major equity market indexes for [removed: 2019] [added: 2020] are as follows:

| S&P 500 Index | [removed: 31.5%] | [added: | 18.4% | | |]

| NASDAQ Composite Index(1) | [removed: 35.2%] | [added: | 43.6% | | |]

| Russell 2000 Index | [removed: 25.5%] | [added: | 20.0% | | |]

| MSCI EAFE (Europe, Australasia, and Far East) Index | [removed: 22.7%] | [added: | 8.3% | | |]

| MSCI Emerging Markets Index | [removed: 18.9%] | [added: | 18.7% | | |]

[removed: Results] [added: Returns] of several major bond market indexes for [removed: 2019] [added: 2020] are as follows:

| Bloomberg Barclays U.S. Aggregate Bond Index | [removed: 8.7%] | [added: | 7.5% | | |]

| JPMorgan Global High Yield Index | [removed: 14.6%] | [added: | 5.4% | | |]

| Bloomberg Barclays Municipal Bond Index | [removed: 7.5%] | [added: | 5.2% | | |]

| Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index | [removed: 5.1%] | [added: | 10.1% | | |]

| JPMorgan Emerging Markets Bond Index Plus | [removed: 12.6%] | [added: | 7.1% | | |]

Assets under management ended [removed: 2019] [added: 2020] at [removed: $1,206.8] [added: $1,470.5] billion, an increase of [removed: $244.5] [added: $263.7] billion from the end of [removed: 2018.][added: 2019.]

[removed: Net cash inflows of $13.2 billion for 2019, combined with] [added: This increase was driven by] market appreciation and income, net of distributions not reinvested, [removed: increased our assets under management by $231.3 billion.][added: of $256.9 billion and net cash inflows of $5.6 billion for 2020.]

| (in billions) | | [added: | | | |] U.S. mutual funds | | | | [added: | |] Subadvised and separate accounts | | | | [removed: Other] [added: | | Collective] investment [added: trusts and other investment] products | | | | [added: | |] Total | | |

| Net cash flows before client transfers | | [removed: 9.4] | | | | [removed: 1.4] [added: 4.4] | | | | [removed: 3.2] | | [added: (.2)] | | [removed: 14.0] | | | [added: | 9.0 | | | | | | 13.2 | | |]

| Net cash flows after client transfers | | [removed: (10.8] | | [removed: )] | | [removed: 3.1] [added: (15.6)] | | | | [removed: 21.7] | | [added: .8] | | [removed: 14.0] | | | [added: | 28.0 | | | | | | 13.2 | | |]

| Distributions not reinvested | | [removed: (1.7] | | [removed: )] | | [added: (1.8) | | | | | |] — | | | | [added: | |] — | | | | [removed: (1.7] | | [removed: )] [added: (1.8)] | [added: | |]

| Assets under management at December 31, 2017 | | [added: | | | | $ |] 606.3 | | | | [added: | $ |] 255.2 | | | | [added: | $ |] 129.6 | | | | [removed: 991.1] | [added: $] | [added: 991.1] | [added: |]

| Net cash flows before client transfers | | [removed: 4.4] | | | | [removed: (.2] [added: 7.6] | | [removed: )] | | [removed: 9.0] | | [added: (.3)] | | [added: | | | | 5.9 | | | | | |] 13.2 | | |

| Client transfers(1) | | [removed: (20.5] | | [removed: )] | | [added: (20.5) | | | | | |] 2.8 | | | | [added: | |] 17.7 | | | | [added: | |] — | | |

| Net cash flows after client transfers | | [removed: (16.1] | | [removed: )] | | [added: (16.1) | | | | | |] 2.6 | | | | [added: | |] 26.7 | | | | [added: | |] 13.2 | | |

| Net market depreciation, net of income | | [removed: (22.7] | | [removed: )] | | [removed: (7.8] [added: (22.7)] | | [removed: )] | | [removed: (8.4] | | [removed: )] [added: (7.8)] | | [removed: (38.9] | | [removed: )] | [added: | (8.4) | | | | | | (38.9) | | |]

| Distributions not reinvested | | [removed: (3.0] | | [removed: )] | | [added: (3.0) | | | | | |] — | | | | [removed: (.1] | | [removed: )] [added: (.1)] | | [removed: (3.1] | | [removed: )] | [added: | (3.1) | | |]

| Change during the period | | [removed: (41.8] | | [removed: )] | | [removed: (5.2] [added: (41.8)] | | [removed: )] | | [added: | | (5.2) | | | | | |] 18.2 | | | | [removed: (28.8] | | [removed: )] [added: (28.8)] | [added: | |]

| Assets under management at December 31, 2018 | | [added: | | | |] 564.5 | | | | [added: | |] 250.0 | | | | [added: | |] 147.8 | | | | [added: | |] 962.3 | | |

| Net cash flows before client transfers | | [removed: 7.6] | | | | [removed: (.3] [added: (11.5)] | | [removed: )] | | [removed: 5.9] | | [added: 8.0] | | [removed: 13.2] | | | [added: | 9.1 | | | | | | 5.6 | | |]

| Client transfers(1) | | [removed: (23.2] | | [removed: )] | | [added: (23.2) | | | | | |] 1.1 | | | | [added: | |] 22.1 | | | | [added: | |] — | | |

| Net cash flows after client transfers | | [removed: (15.6] | | [removed: )] | | [removed: .8] [added: (25.2)] | | | | [removed: 28.0] | | [added: 10.0] | | [removed: 13.2] | | | [added: | 20.8 | | | | | | 5.6 | | |]

| Net market appreciation and income | | [added: | | | |] 135.6 | | | | [added: | |] 63.0 | | | | [added: | |] 34.5 | | | | [added: | |] 233.1 | | |

| Distributions not reinvested | | [removed: (1.8] | | [removed: )] | | [removed: —] [added: (2.9)] | | | | [added: | |] — | | | | [removed: (1.8] | | [removed: )] [added: (.2)] | [added: | | | | | (3.1) | | |]

| Change during the period | | [added: | | | |] 118.2 | | | | [added: | |] 63.8 | | | | [added: | |] 62.5 | | | | [added: | |] 244.5 | | |

| Assets under management at December 31, 2019 | | [removed: $] | [added: | | |] 682.7 | | | [removed: $] | [added: | |] 313.8 | | | [removed: $] | [added: | |] 210.3 | | | [removed: $] | [added: | |] 1,206.8 | | [added: |]

Rowe Price products include: open-ended investment products offered to investors outside the U.S. and products offered through variable annuity life insurance plans in the U.S. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services through model delivery.

U.S. stocks produced strong returns in 2020.

Shares fell sharply during the first quarter in response to the global spreading of the coronavirus and severe economic weakness following lockdown measures.

Starting in late March, equities rose sharply—and continued climbing throughout the year—in response to massive fiscal and monetary stimulus measures by governments and central banks around the world, as well as some economic re-opening efforts.

Toward the end of the year, investor sentiment was lifted further by reduced political uncertainty following former Vice President Joe Biden’s victory over incumbent President Donald Trump in the November election.

Also, investors were encouraged by the beginning of the distribution of some coronavirus vaccines that demonstrated very high efficacy rates in drug trials.

Local returns to U.S. investors were lifted by a weaker dollar against major non-U.S. currencies.

In Asia, most major markets rose; Japanese shares advanced about 15%.

In Europe, most markets also rose, but shares in the UK declined more than 10% due to uncertainty for most of the year about the UK’s post-Brexit trade relationship with the European Union.

Asia outperformed other emerging regions, thanks to market strength in South Korea, Taiwan, and China.

In emerging Europe, Turkish and Russian shares declined moderately in U.S. dollar terms amid weak currencies versus the greenback.

Latin American shares were mostly weaker, with regional heavyweight Brazil falling 19% in U.S. dollar terms as the real plunged more than 22% over the last year.

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Global bonds produced mostly positive returns, as central banks slashed short-term interest rates and sovereign bond yields in many countries fell sharply.

In the U.S. investment-grade market, corporate bonds did best, as investors sought attractive yields in a low interest rate environment.

Treasury securities also did well as yields dropped across the yield curve.

The 10-year U.S. Treasury note yield decreased from 1.92% to 0.93% over the last year.

Asset- and mortgage-backed securities produced relatively mild gains.

High yield corporate bonds and tax-free municipal bonds rose but trailed the broad taxable investment-grade bond market.

Bonds in developed non-U.S. markets produced strong gains in U.S. dollar terms, helped by dollar weakness against the euro and, to a lesser extent, the Japanese yen and the British pound.

Bonds in developing markets generally appreciated in U.S. dollar terms, though local currency weakness in some countries, especially Brazil, Turkey, and Russia, reduced local returns to U.S. investors.

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In addition, we acquired client contracts from PNC Bank in September 2020 that added $1.2 billion of stable value assets under management.

Clients transferred $13.7 billion in net assets from the U.S. mutual funds to primarily collective investment trusts and other investment products, of which $8.6 billion transferred into the retirement date trusts.

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| Client transfers(1) | | | | | | (13.7) | | | | | | 2.0 | | | | | | 11.7 | | | | | | — | | |

| Net market appreciation and income | | | | | | 140.0 | | | | | | 76.3 | | | | | | 43.7 | | | | | | 260.0 | | |

| Acquired AUM | | | | | | — | | | | | | — | | | | | | 1.2 | | | | | | 1.2 | | |

| Change during the period | | | | | | 111.9 | | | | | | 86.3 | | | | | | 65.5 | | | | | | 263.7 | | |

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| Assets under management at December 31, 2020 | | | | | | $ | 794.6 | | | | | $ | 400.1 | | | | | $ | 275.8 | | | | | $ | 1,470.5 | |

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Rowe Price products include: collective investment trusts, open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

U.S. stocks surged in 2019, as equities bounced back strongly from deep losses in the fourth quarter of 2018.

A major driver of market performance was the Federal Reserve’s decision to keep short-term interest rates steady in the first half of the year, then reduce rates three times starting in late July as a “midcycle adjustment” of its monetary policy.

Many other central banks around the world also reduced rates in response to slowing economic growth.

The trade conflict between the U.S. and China was another major driver of market sentiment.

Markets wavered at times through much of the year as both sides announced new tariffs on the other’s goods.

Speculation then arose in the fall that the U.S. and China were close to reaching an agreement, but a preliminary “phase one” trade deal was not reached until December.

European stocks were widely positive.

UK shares advanced more than 21% but lagged the region as Brexit-related uncertainty persisted for most of the year.

Boris Johnson succeeded Theresa May as Prime Minister during the summer, but the House of Commons did not vote in favor of the United Kingdom’s Withdrawal Agreement with the European Union until December, shortly after the Conservative Party decisively won a general election.

Returns in developed Asian markets were broadly positive in U.S. dollar terms.

Hong Kong underperformed the region with a 10% gain.

Hong Kong’s economy and stock market have been hurt by ongoing protests that were triggered by a controversial extradition bill.

Asian equities were mostly positive in U.S. dollar terms, but most markets significantly lagged strong returns in China and Taiwan.

In emerging Europe, Russian stocks surged about 53%; Turkish stocks lagged with a 12% gain.

In Latin America, stocks in Colombia and Brazil posted very strong returns, but shares in Argentina and Chile fell sharply.

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

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| --- | --- |

Global bond returns were broadly positive, as longer-term government bond yields in developed markets declined and various central banks enacted new stimulus measures.

In the U.S., the Federal Reserve reduced the federal funds target rate to a range of 1.50%-1.75% by the end of the year.

The 10-year Treasury note yield decreased from 2.69% to 1.92% at year-end, though above its late-summer lows, which were around 1.50%.

In the U.S., the investment-grade bond market, long-term Treasuries and corporate bonds fared best.

Mortgage-backed securities advanced to a lesser extent, hindered by an increase in mortgage prepayments and refinancing activity.

Municipal bonds did well amid solid demand but slightly underperformed taxable securities.

High yield bonds advanced strongly for the year as investors embraced riskier assets and searched for higher yields because of falling interest rates.

Bonds in developed non-U.S. markets produced positive returns in U.S. dollar terms, as the dollar weakened against most major currencies and government bond yields generally declined.

In the eurozone, the European Central Bank decided to cut its short-term benchmark rate deeper into negative territory in September.

On November 1, the European Central Bank resumed its quantitative easing program and began purchasing €20 billion of securities every month.

Emerging markets debt appreciated strongly in dollar terms.

Bonds denominated in U.S. dollars outperformed local currency debt, as a few key emerging markets currencies declined against the dollar.

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Assets under management at December 31, 2016 | | $ | 514.2 | | | $ | 206.9 | | | $ | 89.7 | | | $ | 810.8 | |

| Client transfers(1) | | (20.2 | | ) | | 1.7 | | | | 18.5 | | | | — | | |

| Net market appreciation and income | | 104.6 | | | | 45.2 | | | | 18.2 | | | | 168.0 | | |

| Change during the period | | 92.1 | | | | 48.3 | | | | 39.9 | | | | 180.3 | | |

| Assets under management at December 31, 2016 | | $ | 450.6 | | | $ | 121.2 | | | $ | 239.0 | | | $ | 810.8 | |

| Net cash flows | | (1.6 | | ) | | 8.6 | | | | 7.0 | | | | 14.0 | | |

| Net market appreciation and income(2) | | 115.1 | | | | 4.6 | | | | 46.6 | | | | 166.3 | | |

Rowe Price investment products [removed: as they] are carried at fair [removed: value.][added: value, these investments are subject to market risk.]

[removed: Seed capital investments, which are used for new product offerings, experience market volatility as we] [added: We] do not actively manage the market risk [removed: for these] [added: related to our seed capital] investments.

The potential future loss of value, before any income tax benefits, of these investments at December 31, [removed: 2019] [added: 2020] was determined by using the lower of each product’s lowest net asset value per share during [removed: 2019] [added: 2020] or its net asset value per share at December 31, [removed: 2019,] [added: 2020,] reduced by 10%.

| (in millions) | [added: | |] Fair value [removed: 12/31/2019] [added: 12/31/2020] | | | | [added: | |] Potential lower value | | | | [added: | |] Potential loss | | | | | | [added: | | |]

| Investments in T. Rowe Price products | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| Seed capital not consolidated | [removed: 181.1] | | [added: 169.5] | | [removed: 157.5] | | | | [removed: 23.6] [added: 139.9] | | | | [removed: 13] | [added: | 29.6 | | | | | | 17 | |] % |

| Investments designated as an economic hedge of supplemental savings plan liability | [removed: 561.1] | | [added: 768.1] | | [removed: 474.4] | | | | [removed: 86.7] [added: 537.0] | | | | [removed: 15] | [added: | 231.1 | | | | | | 30 | |] % |

| Direct investment in consolidated T. Rowe Price investment products | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| Investment partnerships and other investments held at fair value | [added: | |] $ | [removed: 99.7] [added: 95.1] | | | [added: | |] $ | [removed: 82.6] [added: 78.0] | | | [added: | |] $ | 17.1 | | | [removed: 17] | [added: | 18 | |] % |

Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI [removed: ($164.5] [added: ($145.5] million at December 31, [removed: 2019).][added: 2020).]

We had a cumulative translation loss, net of tax, of [removed: $46.9] [added: $43.6] million at December 31, [removed: 2019,] [added: 2020,] related to our investment in UTI.

The majority of our currency translation risk on our consolidated balance sheet at December 31, [removed: 2019,] [added: 2020,] related to cash and non-consolidated investments of [removed: $284.6] [added: $95.2] million that are denominated in foreign currencies.

During the first quarter of 2020, the impact of the global coronavirus pandemic began to rapidly spread throughout the world and caused increasing disruption to populations, economic activity, and the global financial markets.

While markets recovered sharply since that time, the impact and ongoing uncertainty related to the pandemic continued into the end of 2020.

Since our investments in T.

Rowe Price investment products.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Discretionary investments | | | $ | 1,647.7 | | | | | $ | 1,463.1 | | | | | $ | 184.6 | | | | | 11 | | % |

| Total | | | $ | 2,585.3 | | | | | $ | 2,140.0 | | | | | $ | 445.3 | | | | | 17 | | % |

| Discretionary investments | | | $ | 205.1 | | | | | $ | 124.7 | | | | | $ | 80.4 | | | | | 39 | | % |

| Seed capital | | | 871.0 | | | | | | 668.5 | | | | | | 202.5 | | | | | | 23 | | % |

| Total | | | $ | 1,076.1 | | | | | $ | 793.2 | | | | | $ | 282.9 | | | | | 26 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | |

Further, we have investments that are used to economically hedge the change in our supplementary savings plan liability.

Since we are hedging the liability, an impact on our net income attributable to T.

Rowe Price Group would result from any ineffectiveness of this economic hedge.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Discretionary investments | $ | 1,221.8 | | | $ | 1,099.6 | | | $ | 122.2 | | | 10 | % |

| Total | $ | 1,964.0 | | | $ | 1,731.5 | | | $ | 232.5 | | | 12 | % |

| Discretionary investments | $ | 67.8 | | | $ | 58.3 | | | $ | 9.5 | | | 14 | % |

| Seed capital | 1,048.9 | | | | 905.3 | | | | 143.6 | | | | 14 | % |

| Total | $ | 1,116.7 | | | $ | 963.6 | | | $ | 153.1 | | | 14 | % |

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

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| --- | --- |

We provide an array of U.S. mutual funds, subadvised funds, separately managed accounts, [added: collective investment trusts,] and other T.

The other [removed: T.]

Rowe Price products include: [removed: collective investment trusts,] open-ended investment products offered to investors outside the [removed: U.S.,] [added: U.S.] and products offered through variable annuity life insurance plans in the U.S. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; [removed: and] trust [removed: services.][added: services; and non-discretionary advisory services through model delivery.]

The industry in which we operate has been evolving quickly and a number of headwinds have arisen over the last few years, including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; [added: capacity challenges with some of our mutual funds] and [added: portfolios and] an ever-changing regulatory landscape.

[removed: | • |] [added: -] Maintain our position as a premier active asset manager, delivering durable value to clients. [removed: |]

[removed: | • | Build T.] Rowe Price into a more globally diversified asset manager. [removed: |]

[removed: | • |] [added: -] Extend and leverage our retirement expertise globally while becoming an ever more integrated investment solutions provider. [removed: |]

[removed: | • |] [added: -] Embed best practices for sustainability and environmental, social and corporate governance throughout the company. [removed: |]

[removed: | • |] [added: -] Maintain strong processes and controls, which is increasingly important with growing business complexity and regulation. [removed: |]

[removed: | • |] [added: -] Remain a destination of choice for top talent, with a culture of [added: diversity, inclusivity,] empowerment, accountability and collaboration. [removed: |]

[removed: | • |] [added: -] Deliver attractive financial results and balance sheet strength for our stockholders over the long term. [removed: |]

[added: | | | | | | | \- T.] Rowe Price [removed: Associates and T.][added: UK | | | | | |]

[removed: Rowe Price International Ltd.] Our revenues depend largely on the total value and composition of our assets under management.

At December 31, [removed: 2019,] [added: 2020,] we had [removed: $1,206.8] [added: $1,470.5] billion in assets under management, including [removed: $682.7] [added: $794.6] billion in U.S. mutual [removed: funds and $524.1] [added: funds, $400.1] billion in subadvised [removed: funds,] [added: funds and] separately managed accounts, and [added: $275.8 billion in collective investment trusts, and] other T.

The assets under management in our target date retirement products totaled [removed: $292.4] [added: $332.2] billion at December 31, [removed: 2019,] [added: 2020,] or [removed: 24.2%] [added: 22.6%] of our managed assets at December 31, [removed: 2019,] [added: 2020,] compared with [removed: 23.9%] [added: 24.2%] at the end of [removed: 2018.][added: 2019.]

The following tables show our assets under management by [added: vehicle, asset class,] distribution channel, [removed: vehicle, account type,] and [removed: asset class:][added: account type:]

| (in billions) | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | [added: | 2019 | | |]

| Assets under management by vehicle | | | | | | | | [added: | | | |]

| U.S. mutual funds | [added: | |] $ | [removed: 682.7] [added: 794.6] | | | [added: | |] $ | [removed: 564.5] [added: 682.7] | |

[removed: | Subadvised and] [added: *Subadvised funds,] separate [removed: accounts] [added: accounts, collective investment trusts,] and other investment [removed: products: | | | | | | | |][added: products*]

| Subadvised and separately managed accounts | [removed: 313.8] | | [added: 400.1] | | [removed: 250.0] | | | [added: | 313.8 | | |]

| [removed: T. Rowe Price collective] [added: Collective] investment trusts | [removed: 158.7] | | [added: 199.6] | | [removed: 106.0] | | | [added: | 158.7 | | |]

| [removed: T. Rowe Price stable value and] [added: Stable value,] variable annuity [removed: products] [added: products, and exchange-traded funds] | [removed: 21.4] | | [added: 28.0] | | [removed: 20.0] | | | [added: | 21.4 | | |]

| [removed: T. Rowe Price] SICAVs and other [added: sponsored] funds regulated outside the U.S. | [removed: 30.2] | | [added: 48.2] | | [removed: 21.8] | | | [added: | 30.2 | | |]

| Total assets under management | [added: | |] $ | [removed: 1,206.8] [added: 1,470.5] | | | [added: | |] $ | [removed: 962.3] [added: 1,206.8] | |

| Assets under management by asset class | | | | | | | | [added: | | | |]

| Equity | [added: | |] $ | [removed: 698.9] [added: 895.8] | | | [added: | |] $ | [removed: 539.9] [added: 698.9] | |

| Fixed income, including money market | [removed: 147.9] | | [added: 168.7] | | [removed: 136.1] | | | [added: | 147.9 | | |]

| Multi-Asset(1) | [removed: 360.0] | | [added: 406.0] | | [removed: 286.3] | | | [added: | 360.0 | | |]

| Assets under management by distribution channel | | | | | | | | [added: | | | |]

| Global financial intermediaries(2) | [added: | |] $ | [removed: 623.0] [added: 765.4] | | | [added: | |] $ | [removed: 484.0] [added: 623.0] | |

| Global institutions(2)(3) | [removed: 265.4] | | [added: 335.9] | | [removed: 211.4] | | | [added: | 265.4 | | |]

| Individual U.S. investors on a direct basis | [removed: 190.7] | | [added: 221.7] | | [removed: 159.3] | | | [added: | 190.7 | | |]

| U.S. retirement plan sponsors - full service recordkeeping | [removed: 127.7] | | [added: 147.5] | | [removed: 107.6] | | | [added: | 127.7 | | |]

| Assets under management by account type | | | | | | | | [added: | | | |]

| Defined contribution retirement assets: | | | | | | | | [added: | | | |]

| Defined contribution - investment only | [added: | |] $ | [removed: 510.6] [added: 614.0] | | | [added: | |] $ | [removed: 401.8] [added: 510.6] | |

| Defined contribution - full-service recordkeeping | [removed: 121.0] | | [added: 136.0] | | [removed: 101.8] | | | [added: | 121.0 | | |]

| Total defined contribution retirement assets | [removed: 631.6] | | [added: 750.0] | | [removed: 503.6] | | | [added: | 631.6 | | |]

| Deferred annuity and direct retail retirement assets | [removed: 186.0] | | [added: 219.6] | | [removed: 149.9] | | | [added: | 186.0 | | |]

- Build T.

Rowe Price International Ltd. In November 2020, we announced our plan to establish T.

Rowe Price Investment Management, a separate SEC-registered investment advisor, to support our continued focus on generating strong investment results for clients.

Rowe Price Investment Management is anticipated to begin operations in the second half of 2022.

Assets under management increased $263.7 billion from the end of 2019.

This increase was driven by market appreciation and income, net of distributions not reinvested, of $256.9 billion and net cash inflows of $5.6 billion for 2020.

In addition, we acquired client contracts from PNC Bank during 2020 that added $1.2 billion of stable value assets under management.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| T. Rowe Price collective investment trusts and other sponsored investment products: | | | | | | | | | | | |

| Total T. Rowe Price collective investment trusts and other sponsored investment products | | | 275.8 | | | | | | 210.3 | | |

| | | | | | | | | | | | |

| Total assets under management | | | $ | 1,470.5 | | | | | $ | 1,206.8 | |

| | | | | | | | | | | | |

| Total assets under management | | | $ | 1,470.5 | | | | | $ | 1,206.8 | |

| | | | | | | | | | | | |

| Total assets under management | | | $ | 1,470.5 | | | | | $ | 1,206.8 | |

In 2020, our target date retirement products experienced net cash outflows of $6.5 billion.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Active Exchange-Traded Funds | | | | | | | | | | | | | | | | | | | | | | | | Cayman Funds | | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Equity | | | | | | | | | | | | | | | | | |

| Growth | | | Core | | | Value | | | Concentrated | | | Quantitative | | | Sustainable | | | | | |

| *U.S.:* | | | All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors | | | Large-Cap, Mid-Cap, Small-Cap | | | Large-Cap, Mid-Cap, Small-Cap | | | Large-Cap (Growth & Value) | | | Large-Cap (Value), Multi-Cap, Small-Cap | | | Large-Cap (Growth & Value) | | |

| *Global / International:* | | | All-Cap, Large-Cap, Small-Cap, Sectors, Regional | | | Large-Cap | | | Large-Cap | | | Large-Cap | | | Large-Cap (Growth & Value) | | | All-Cap, Large-Cap | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fixed Income | | | | | | | | | | | | | | | | | | | | |

| Cash / Stable Value | | | High Yield / Bank Loans | | | Emerging Markets | | | Credit | | | Multi-Sector | | | Government / Securitized | | | Municipal | | | | | |

| *U.S.:* | | | Stable Value, Taxable, Tax-Exempt | | | Credit Opportunities, Bank Loans, High Yield | | | N/R | | | Investment Grade Corporate, Long Duration | | | Enhanced Index, Short-Term, Core, Core Plus, Investment Grade Core, Total Return, Ultra Short-Term | | | Inflation Protection, Securitized/GNMA, Treasury | | | High Yield, Intermediate, Long-Term, Short/Intermediate | | |

| *Global / International:* | | | N/R | | | Euro High Yield, High Income, High Yield | | | Corporate, Hard Currency, Local Currency | | | Asia Credit, Dynamic Credit, Dynamic Investment Grade Corporate, Investment Grade Corporate, Euro Investment Grade Corporate | | | Global Multi-Sector, Aggregate, Global ex US | | | Government | | | N/R | | |

*N/R - Not relevant*

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Multi-Asset | | | | | | | | | | | | | | |

| *U.S. / Global / International:* | | | Target Date, Custom Target Date | | | Target Allocation | | | Global Allocation | | | Global Income | | | Managed Volatility | | |

T.

| | |

| --- | --- |

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

During 2019, market appreciation and income, net of distributions not reinvested, of $231.3 billion combined with net cash inflows of $13.2 billion increased assets under management by $244.5 billion from the end of 2018.

In 2019, our net cash inflows included $9.8 billion into our target date retirement products, which provide shareholders with a single, diversified portfolio that invests in underlying U.S. mutual funds or collective investment trusts.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Total subadvised and separate accounts and other investment products | 524.1 | | | | 397.8 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| U.S. | | International / Global | | U.S. | | International / Global | | U.S. / International / Global |

| Large-Cap: Growth, Core, Value | | Global: All-Cap, Concentrated, Equity Income, Growth, Value | | Core Bond | | Global Aggregate | | Target Date/Custom Target Date |

| Mid-Cap: Growth, Core, Value | | International Developed: Growth, Concentrated, Core, Small-Cap, Value | | Credit Opportunities | | Global Multi-Sector | | Target Allocation |

| Small-Cap: Growth, Core, Value | | International Developed Regional: Australia, Europe, Europe ex UK, Europe Smaller Companies, Europe Core, Japan | | Corporate | | Global Dynamic Bond | | Global Allocation |

| Quantitative Equity: Multi-Cap, Factor Portfolios | | Emerging Markets Global: Growth, Value | | Bank Loan | | Global High Income | | Managed Volatility |

| Tax Efficient | | Emerging Markets Regional: Asia ex-Japan, China, Emerging Europe, Frontier Markets, Latin America, Middle East, Africa | | High Yield | | Emerging Markets: Corporate, Hard Currency, Local Currency | | Multi-Asset Solutions |

| Sectors | | Quantitative Equity: Global Growth, Global Value | | Stable Value | | International Developed | | Real Assets |

| | | Sectors | | Securitized | | Global Corporate | | Retirement Income |

| | | | | Treasury | | Global High Yield | | Alternatives |

| | | | | Short Duration | | Global Government | | |

| | | | | Municipal | | Asia | | |

| | | | | Municipal Ladders | | | | |

| | | | | Quantitative Fixed: Factor Portfolios | | | | |

commentators, government experts, and market analysts.

| U.S. Mid-Cap Value | 2010 |

| Global Technology* | 2017 |

* This fund will re-open for new accounts in the second quarter of 2020.

*Subadvised and separate accounts and other investment products*

Our standard separately managed account agreements provide for termination at any time and the refunding of any unearned fees paid in advance.

| | | | | |

| --- | --- | --- | --- | --- |

In addition to providing investment management services to the U.S. mutual funds, our subsidiaries, T.

Rowe Price International offer separately managed institutional investment management and subadvised investment management services to global intermediaries.

Our subsidiary, T.

Rowe Price Trust Company, offers and provides investment management services to our T.

Rowe Price collective investment trusts, which are used in the investment portfolios of certain qualified U.S. retirement plans.

These services are limited in scope and include retirement planning services, such as saving for retirement, transitioning into retirement, and income in retirement.

An investment portfolio evaluation service is an integral part of these services.

An ongoing checkup service is also available to assist investors in staying on track to achieve their financial goals.

For information about our legal proceedings, please see our Commitments and Contingencies footnote to our audited consolidated financial statements in Item 8.

of this Form 10-K.

On February 14, 2017, T.

Rowe Price Group, Inc., T.

Rowe Price Associates, Inc., T.

Rowe Price Trust Company, current and former members of the management committee, and trustees of the T.

Rowe Price U.S. Retirement Program were named as defendants in a lawsuit filed in the United States District Court for the District of Maryland.

The lawsuit alleges breaches of ERISA’s fiduciary duty and prohibited transaction provisions on behalf of a class of all participants and beneficiaries of the T.

Rowe Price 401(k) Plan from February 14, 2011, to the time of judgment.

The matter has been certified as a class action.

T.

Rowe Price believes the claims are without merit and is vigorously defending the action.

This matter is in the discovery phase of litigation and we cannot predict the eventual outcome, or whether it will have a material negative impact on our financial results, or estimate the possible loss or range of loss that may arise from any negative outcome.

On April 27, 2016, certain shareholders in the T.

Rowe Price Blue Chip Growth Fund, T.

Rowe Price Capital Appreciation Fund, T.

Rowe Price Equity Income Fund, T.

Rowe Price Growth Stock Fund, T.

Rowe Price International Stock Fund, T.

Rowe Price High Yield Fund, T.

Rowe Price New Income Fund and T.

Rowe Price Small Cap Stock Fund (the “Funds”) filed a Section 36(b) complaint under the caption Zoidis v.

Rowe Price Assoc., Inc., against T.

Rowe Price Associates, Inc. (“T.

Rowe Price”) in the United States District Court for the Northern District of California.

The complaint alleges that the management fees for the identified funds are excessive because

Rowe Price charges lower advisory fees to subadvised clients with funds in the same strategy.

The complaint seeks to recover the allegedly excessive advisory fees received by T.

Rowe Price in the year preceding the start of the lawsuit, along with investments’ returns and profits.

In the alternative, the complaint seeks the rescission of each fund’s investment management agreement and restitution of any allegedly excessive management fees.

In addition to the matters discussed above, various 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.

| | |

| --- | --- |

[removed: FORM 10-K][added: FORM 10-K]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| Maryland | | [added: | | | |] 52-2264646 | [added: | |]

| State of incorporation | | [added: | | | |] IRS Employer Identification No. | [added: | |]

100 East Pratt [removed: Street, Baltimore, Maryland 21202][added: Street, Baltimore, Maryland 21202]

[removed: (410) 345-2000][added: (410) 345-2000]

| Common stock, $.20 par value per share | [added: | |] TROW | [added: | |] The NASDAQ Stock Market LLC | [added: | |]

| (Title of class) | [added: | |] (Ticker symbol) | [added: | |] (Name of exchange on which registered) | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer (do not check if smaller reporting company) | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | [added: | |] Emerging growth company | [added: | |] ☐ | | [added: | | | |]

The aggregate market value of the common equity (all voting) held by non-affiliates (excludes executive officers and directors) computed using [removed: $109.71] [added: $123.50] per share (the NASDAQ Official Closing Price on June 30, [removed: 2019,] [added: 2020,] the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $25.6] [added: $27.8] billion.

The number of shares outstanding of the registrant's common stock as of the latest practicable date, February [removed: 11, 2020,] [added: 8, 2021,] is [removed: 236,041,040.][added: 227,946,081.]

DOCUMENTS INCORPORATED BY REFERENCE: In Part III, the Definitive Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders to be filed pursuant to Regulation 14A.

Exhibit index begins on page [removed: 83.][added: 84.]

| | | [added: | | | |] PAGE | [added: | |]

| ITEM 1. | [removed: [Business](#sDB071C114A77516184C6E58F5486D57B)] | [removed: [2](#s55166583436B54C1BF6C0C34EEAB0022)] | [added: Business | | | [2](#i549ad6450d8045ca8ea48f5cee33a039_13) | | |]

| ITEM 1A. | [added: | |] [Risk [removed: Factors](#s4F8EF7E8782957968C4392A32352C588)] [added: Factors](#i549ad6450d8045ca8ea48f5cee33a039_52)] | [removed: [12](#s4F8EF7E8782957968C4392A32352C588)] | [added: | [12](#i549ad6450d8045ca8ea48f5cee33a039_52) | | |]

| ITEM 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s91D0B6BE32845C99BFF4DE473E2CD316)] [added: Comments](#i549ad6450d8045ca8ea48f5cee33a039_55)] | [removed: [21](#s91D0B6BE32845C99BFF4DE473E2CD316)] | [added: | [21](#i549ad6450d8045ca8ea48f5cee33a039_55) | | |]

| ITEM 2. | [removed: [Properties](#s8282F8477E585F26957330C43F59A862)] | [removed: [21](#s8282F8477E585F26957330C43F59A862)] | [added: [Properties](#i549ad6450d8045ca8ea48f5cee33a039_58) | | | [21](#i549ad6450d8045ca8ea48f5cee33a039_58) | | |]

| ITEM 3. | [added: | |] [Legal [removed: Proceedings](#s54DC87B8B58A540FBFB67E636A326FEA)] [added: Proceedings](#i549ad6450d8045ca8ea48f5cee33a039_61)] | [removed: [21](#s54DC87B8B58A540FBFB67E636A326FEA)] | [added: | [22](#i549ad6450d8045ca8ea48f5cee33a039_61) | | |]

| ITEM 4. | [added: | |] [Mine Safety [removed: Disclosures](#sFD60B68D76DD51E99BE63DD191EBB8EA)] [added: Disclosures](#i549ad6450d8045ca8ea48f5cee33a039_64)] | [removed: [21](#sFD60B68D76DD51E99BE63DD191EBB8EA)] | [added: | [22](#i549ad6450d8045ca8ea48f5cee33a039_64) | | |]

| ITEM 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s168795EBB14C5781A1AAEAC1E863349F)] [added: Securities](#i549ad6450d8045ca8ea48f5cee33a039_73)] | [removed: [23](#s168795EBB14C5781A1AAEAC1E863349F)] | [added: | [23](#i549ad6450d8045ca8ea48f5cee33a039_73) | | |]

| ITEM 6. | [added: | |] [Selected Financial [removed: Data](#s1B6CE0B18EF859AA875257A0884313E2)] [added: Data](#i549ad6450d8045ca8ea48f5cee33a039_76)] | [removed: [24](#s1B6CE0B18EF859AA875257A0884313E2)] | [added: | [24](#i549ad6450d8045ca8ea48f5cee33a039_76) | | |]

| ITEM 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s3BCB328ED96C5248BD0FA5CC01C153AA)] [added: Operations](#i549ad6450d8045ca8ea48f5cee33a039_79)] | [removed: [25](#s3BCB328ED96C5248BD0FA5CC01C153AA)] | [added: | [25](#i549ad6450d8045ca8ea48f5cee33a039_79) | | |]

| ITEM 7A. | [added: | |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#s9D1D035580015A8F8F900A71B384E4E5)] [added: Risk](#i549ad6450d8045ca8ea48f5cee33a039_136)] | [removed: [48](#s9D1D035580015A8F8F900A71B384E4E5)] | [added: | [48](#i549ad6450d8045ca8ea48f5cee33a039_136) | | |]

| ITEM 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s980B254D0D3650B598D24A1A483DCF57)] [added: Data](#i549ad6450d8045ca8ea48f5cee33a039_139)] | [removed: [50](#s980B254D0D3650B598D24A1A483DCF57)] | [added: | [50](#i549ad6450d8045ca8ea48f5cee33a039_139) | | |]

| ITEM 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s71EBD875BD0A500BADDDC337C47D8ECF)] [added: Disclosure](#i549ad6450d8045ca8ea48f5cee33a039_244)] | [removed: [80](#s71EBD875BD0A500BADDDC337C47D8ECF)] | [added: | [81](#i549ad6450d8045ca8ea48f5cee33a039_244) | | |]

| ITEM 9A. | [removed: [Controls] [added: | | Controls] and [removed: Procedures](#sC49C2E92EAD05ECFA2DD080D856A98EA)] [added: Procedures] | [removed: [80](#s95639EB4661358618244B32524E0B614)] | [added: | [81](#i549ad6450d8045ca8ea48f5cee33a039_247) | | |]

| ITEM 9B. | [removed: [Other Information](#s55167FD5CB135B23BFB11A7DFEDC8D43)] | [removed: [80](#sC399F8A6A899516A9926326A92047807)] | [added: Other Information | | | [81](#i549ad6450d8045ca8ea48f5cee33a039_250) | | |]

| | [added: | |] [PART [removed: III](#sB8FB42BC999351EC82CEB31C372B6FA7)] [added: III](#i549ad6450d8045ca8ea48f5cee33a039_259)] | [removed: [83](#sB8FB42BC999351EC82CEB31C372B6FA7)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_259) | | |]

| ITEM 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s0F78EC3FC4B454B8ABA76B8365A44260)] [added: Governance](#i549ad6450d8045ca8ea48f5cee33a039_262)] | [removed: [83](#s0F78EC3FC4B454B8ABA76B8365A44260)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_262) | | |]

| ITEM 11. | [added: | |] [Executive [removed: Compensation](#s5122527C0B4558AAAC1477DB80DED086)] [added: Compensation](#i549ad6450d8045ca8ea48f5cee33a039_265)] | [removed: [83](#s5122527C0B4558AAAC1477DB80DED086)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_265) | | |]

| ITEM 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s8F650055C1D651EEAC16D163791570BC)] [added: Matters](#i549ad6450d8045ca8ea48f5cee33a039_268)] | [removed: [83](#s8F650055C1D651EEAC16D163791570BC)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_268) | | |]

| ITEM 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s532ECDA831B75DB3AB340DD5909B03C8)] [added: Independence](#i549ad6450d8045ca8ea48f5cee33a039_271)] | [removed: [83](#s532ECDA831B75DB3AB340DD5909B03C8)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_271) | | |]

| ITEM 14. | [added: | |] [Principal Accountant Fees and [removed: Services](#s462DCA61BDC3557F9347F44EAF367F6C)] [added: Services](#i549ad6450d8045ca8ea48f5cee33a039_274)] | [removed: [83](#s462DCA61BDC3557F9347F44EAF367F6C)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_274) | | |]

| ITEM 15. | [added: | |] [Exhibits, Financial Statement [removed: Schedules](#sA567684D6FD354F2A2D937ED1F7AF7CE)] [added: Schedules](#i549ad6450d8045ca8ea48f5cee33a039_280)] | [removed: [83](#sA567684D6FD354F2A2D937ED1F7AF7CE)] | [added: | [84](#i549ad6450d8045ca8ea48f5cee33a039_280) | | |]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | [PART I](#i549ad6450d8045ca8ea48f5cee33a039_10) | | | [2](#i549ad6450d8045ca8ea48f5cee33a039_10) | | |

| ITEM. | | | Information about our [Executive Officers](#i549ad6450d8045ca8ea48f5cee33a039_67) | | | [22](#i549ad6450d8045ca8ea48f5cee33a039_67) | | |

| | | | | | | | | |

| | | | [PART II](#i549ad6450d8045ca8ea48f5cee33a039_70) | | | [23](#i549ad6450d8045ca8ea48f5cee33a039_70) | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | [PART IV](#i549ad6450d8045ca8ea48f5cee33a039_277) | | | [84](#i549ad6450d8045ca8ea48f5cee33a039_277) | | |

| ITEM 16. | | | Form 10-K Summary | | | [87](#i549ad6450d8045ca8ea48f5cee33a039_2442) | | |

| [SIGNATURES](#i549ad6450d8045ca8ea48f5cee33a039_283) | | | | | | [88](#i549ad6450d8045ca8ea48f5cee33a039_283) | | |

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

| | | |

| --- | --- | --- |

| | | | |

| --- | --- | --- | --- |

| | [PART I](#s758A98F5EE605203AAF7555E275776B2) | [2](#s758A98F5EE605203AAF7555E275776B2) |

| ITEM. | [Executive Officers of the Registrant](#s343F721D1C49558CBD518420ABF99B73) | [22](#s343F721D1C49558CBD518420ABF99B73) |

| | [PART II](#sFC69D9CD63865284A37011F33168BA00) | [23](#sFC69D9CD63865284A37011F33168BA00) |

| | [PART IV](#sDFB60970E33C5944A26E551488C36998) | [83](#sDFB60970E33C5944A26E551488C36998) |

| [SIGNATURES](#s160FCF7834805A21A80EA97F9242D076) | | [87](#s160FCF7834805A21A80EA97F9242D076) |

| | |

| --- | --- |

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| --- | --- |

Our corporate headquarters occupies 472,000 square feet of space under lease [removed: until 2027] at 100 East Pratt Street in Baltimore, Maryland.

Our operating and servicing activities are largely conducted at owned facilities in campus settings comprising [removed: 1.2] [added: 1.1] million square feet on [removed: three] [added: two] parcels of land in close proximity to Baltimore in Owings Mills, Maryland, and about [removed: 290,000 square feet in Colorado Springs, Colorado.]

We also maintain a nearly 60,000 square foot technology support facility in Hagerstown, Maryland, and own a [removed: 72\-acre] [added: 72-acre] parcel of land in Pasco County, Florida.

We lease all our offices outside the U.S. with London and Hong Kong being our largest, as well as our business operations recovery site and innovation center in Maryland, our technology development center in New York City, and offices in San [removed: Francisco] [added: Francisco, Washington D.C.] and Philadelphia.

Information concerning our anticipated capital expenditures in [removed: 2020] [added: 2021] and our future minimum rental payments under [removed: noncancelable] [added: noncancellable] operating leases at December 31, [removed: 2019,] [added: 2020,] is set forth in the capital resources and liquidity and contractual obligations discussions in Item 7 of this Form 10-K.

In December 2020, we announced that we are moving our headquarters in 2024 to a complex to be built with approximately 470,000 square feet of space under lease in Baltimore, Maryland.

In 2024, we will vacate the space at 100 East Pratt Street.

20

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290,000 square feet in Colorado Springs, Colorado.

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| --- | --- |

The following information includes the names, ages, and positions of our executive officers as of February [removed: 13, 2020.][added: 11, 2021.]

The first [removed: nine] [added: ten] individuals are members of our management committee.

Stromberg [removed: (59), President and] [added: (60),] Chief Executive Officer since 2016 and Chairman of the Board of Directors since 2019.

Mr. Stromberg was previously the [added: President from 2016 to 2021,] Head of Equity from 2010 to 2015 and a Vice President from 1990 to 2015.

Dufétel [removed: (39),] [added: (40),] Chief [added: Operating Officer since 2021, Chief] Financial Officer and Treasurer since 2018 and a Vice President since 2017.

[removed: Alderson (57), Co-Head of Global Equity since 2017,] [added: Justin Thomson (53),] Head of International Equity [removed: from 2009 to 2017,] [added: since 2021,] and a Vice President since [removed: 2002.][added: 2001.]

Robert C.T. Higginbotham [removed: (52),] [added: (53),] Head of Global Distribution since 2019, Head of Global Investment Management Services from 2018 to 2019, Head of Global Investment Services from 2012 to 2018, and a Vice President since 2012.

[removed: Andrew] McCormick [removed: (59),] [added: (60),] Head of Fixed Income [removed: from] [added: since] 2019, Head of U.S. Taxable Bond from 2013 to 2018, and a Vice President since 2008.

David Oestreicher [removed: (52), Chief Legal] [added: (53), General] Counsel since [removed: 2008,] [added: 2020,] Corporate Secretary since 2012, and a Vice President since 2001.

Sebastien Page [removed: (43),] [added: (44),] Head of Global Multi-Asset and a Vice President since 2015.

Sharps [removed: (48),] [added: (49), President since 2021,] Head of Investments since 2018, Group Chief Investment Officer since 2017, Co-Head of Global Equity from 2017 to 2018, Lead Portfolio Manager, Institutional U.S. Large-Cap Equity Growth Strategy from 2001 to 2016, and a Vice President [removed: since 2001.][added: from 2001 to 2021.]

[removed: Eric] Veiel [removed: (48),] [added: (49),] Co-Head of Global Equity since 2018, Head of U.S. Equity from 2016 to 2018, Director of Equity Research North America from 2014 to 2015, and a Vice President since 2006.

Hiebler [removed: (44),] [added: (45),] Principal Accounting Officer since 2010 and a Vice President since 2009.

Information about our Executive Officers.

Stephon A.

Jackson (58), Head of T.

Rowe Price Investment Management since 2020, Associate Head of U.S Equity since 2020, and a Vice President since 2007.

Andrew C.

From 2009 through 2020, Mr. Oestreicher was the Chief Legal Counsel.

Eric L.

20

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[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

Executive Officers of the Registrant.

Christopher D.

| | |

| --- | --- |

| | [removed: 1st quarter] | | [added: 1st quarter] | | [removed: 2nd quarter] | | | | [removed: 3rd quarter] [added: 2nd quarter] | | | | [removed: 4th quarter] | | [added: 3rd quarter] | [added: | | | | | 4th quarter | | |]

| 2019 | [added: | |] $ | .76 | | | [added: | |] $ | .76 | | | [added: | |] $ | .76 | | | [added: | |] $ | .76 | |

These plans provide for the following issuances of shares of our common stock at December 31, [removed: 2019:][added: 2020:]

| | | [added: | | | |] Employee and non-employee director plans | | | [added: | | |] Employee stock purchase plan | | | [added: | | |] Total | | [added: |]

| Exercise of outstanding options | | [removed: 7,388,068] | | | [added: | 4,329,056 | | | | | |] — | | | [removed: 7,388,068] | | [added: | 4,329,056 | | |]

| Settlement of outstanding restricted stock units | | [removed: 6,775,504] | | | [added: | 6,443,411 | | | | | |] — | | | [removed: 6,775,504] | | [added: | 6,443,411 | | |]

The outstanding options included in the table above have a weighted-average exercise price of [removed: $71.06.][added: $72.52.]

Under the terms of the [removed: 2012] [added: 2020] Long-Term Incentive Plan, approved by stockholders in [removed: April 2012,] [added: May 2020, and] the [added: 2012 Long-Term Incentive Plan, the] number of shares provided and available for future issuance will increase as we repurchase common stock in the future with the proceeds from stock option exercises.

The following table presents repurchase activity during the fourth quarter of [removed: 2019.][added: 2020.]

| Month | | [added: | | | |] Total number [removed: of shares] [added: of shares] purchased | | | [added: | | |] Average [removed: price paid] [added: price paid] per share | | | | [added: | |] Total number [removed: of shares] [added: of shares] purchased [removed: as part] [added: as part] of [removed: publicly announced] [added: publicly announced] program | | | [added: | | |] Maximum number [removed: of shares] [added: of shares] that may [removed: yet be] [added: yet be] purchased [removed: under the] [added: under the] program | | [added: |]

Of the total number of shares purchased during the fourth quarter of [removed: 2019, 222,824] [added: 2020, 110,483] were related to shares surrendered in connection with employee stock option exercises and [removed: 47,556] [added: none] were related to shares withheld to cover tax withholdings associated with the vesting of restricted stock awards.

| Authorization dates | | [removed: 12/31/2018] | | | [added: | 12/31/2019 | | | | | | Additional shares authorized | | | | | |] Total Number of Shares Purchased | | | [added: | | |] Maximum Number of Shares that May Yet Be Purchased at [removed: 12/31/2019] [added: 12/31/2020] | | [added: |]

| April 2018 | | [removed: 8,655,640] | | | [removed: (1,280,593] | [removed: )] [added: 7,375,047] | | [removed: 7,375,047] | | [added: | | — | | | | | | (7,375,047) | | | | | | — | | |]

| February 2019 | | [added: | | | |] 10,000,000 | | | [added: | | |] — | | | [removed: 10,000,000] | | [added: | (3,532,689) | | | | | | 6,467,311 | | |]

We have [removed: 7,441] [added: 7,649] stockholders of record and approximately [removed: 290,000] [added: 360,000] beneficial stockholder accounts held by brokers, banks, and other intermediaries holding our common stock.

Common stock owned outright by our associates and directors, combined with outstanding vested stock options and unvested restricted stock awards, total approximately 8% of our outstanding stock and outstanding vested stock options at December 31, [removed: 2019.][added: 2020.]

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2020 | | | $ | .90 | | | | | $ | .90 | | | | | $ | .90 | | | | | $ | .90 | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Future issuances | | | | | | 11,085,553 | | | | | | 1,602,666 | | | | | | 12,688,219 | | |

| Total | | | | | | 21,858,020 | | | | | | 1,602,666 | | | | | | 23,460,686 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October | | | | | | 56,706 | | | | | | $ | 144.31 | | | | | 300 | | | | | | 21,612,258 | | |

| November | | | | | | 10,934 | | | | | | $ | 140.14 | | | | | — | | | | | | 21,612,258 | | |

| December | | | | | | 188,090 | | | | | | $ | 148.11 | | | | | 144,947 | | | | | | 21,467,311 | | |

| Total | | | | | | 255,730 | | | | | | $ | 147.33 | | | | | 145,247 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| March 2020 | | | | | | — | | | | | | 15,000,000 | | | | | | — | | | | | | 15,000,000 | | |

| | | | | | | 17,375,047 | | | | | | 15,000,000 | | | | | | (10,907,736) | | | | | | 21,467,311 | | |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2018 | $ | .70 | | | $ | .70 | | | $ | .70 | | | $ | .70 | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Future issuances | | 22,213,930 | | | 1,964,676 | | | 24,178,606 | |

| Total | | 36,377,502 | | | 1,964,676 | | | 38,342,178 | |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October | | 1,156,989 | | | $ | 109.69 | | | 1,155,593 | | | 17,500,047 | |

| November | | 108,595 | | | $ | 120.84 | | | — | | | 17,500,047 | |

| December | | 285,389 | | | $ | 122.63 | | | 125,000 | | | 17,375,047 | |

| Total | | 1,550,973 | | | $ | 112.85 | | | 1,280,593 | | | | |

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

| | | 18,655,640 | | | (1,280,593 | ) | | 17,375,047 | |

| | |

| --- | --- |

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016] | | | | [removed: 2015] [added: 2016] | | |

| | [added: | |] (in millions, except per-share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Net revenues(1) | [added: | |] $ | [removed: 5,618] [added: 6,207] | | | [added: | |] $ | [removed: 5,373] [added: 5,618] | | | [added: | |] $ | [removed: 4,855] [added: 5,373] | | | [added: | |] $ | [removed: 4,285] [added: 4,855] | | | [added: | |] $ | [removed: 4,201] [added: 4,285] | |

| Net operating income | [added: | |] $ | [removed: 2,387] [added: 2,746] | | | [added: | |] $ | [removed: 2,361] [added: 2,387] | | | [added: | |] $ | [removed: 2,109] [added: 2,361] | | | [added: | |] $ | [removed: 1,733] [added: 2,109] | | | [added: | |] $ | [removed: 1,899] [added: 1,733] | |

| Net income | [added: | |] $ | [removed: 2,249] [added: 2,523] | | | [added: | |] $ | [removed: 1,769] [added: 2,249] | | | [added: | |] $ | [removed: 1,581] [added: 1,769] | | | [added: | |] $ | [removed: 1,254] [added: 1,581] | | | [added: | |] $ | [removed: 1,223] [added: 1,254] | |

| Net income (loss) attributable to redeemable non-controlling interests | [added: | |] $ | [removed: 118] [added: 151] | | | [added: | |] $ | [removed: (69] [added: 118] | [removed: )] | | [added: | |] $ | [removed: 83] [added: (69)] | | | [added: | |] $ | [removed: 39] [added: 83] | | | [added: | |] $ | [removed: —] [added: 39] | |

| Net income attributable to T. Rowe Price Group | [added: | |] $ | [removed: 2,131] [added: 2,373] | | | [added: | |] $ | [removed: 1,838] [added: 2,131] | | | [added: | |] $ | [removed: 1,498] [added: 1,838] | | | [added: | |] $ | [removed: 1,215] [added: 1,498] | | | [added: | |] $ | [removed: 1,223] [added: 1,215] | |

| Adjusted net income attributable to T. Rowe Price Group(2) | [added: | |] $ | [removed: 1,976] [added: 2,277] | | | [added: | |] $ | [removed: 1,807] [added: 1,976] | | | [added: | |] $ | [removed: 1,361] [added: 1,807] | | | [added: | |] $ | [removed: 1,149] [added: 1,361] | | | [added: | |] $ | [removed: 1,160] [added: 1,149] | |

| Per common share information | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Basic earnings | [added: | |] $ | [removed: 8.82] [added: 10.08] | | | [added: | |] $ | [removed: 7.41] [added: 8.82] | | | [added: | |] $ | [removed: 6.07] [added: 7.41] | | | [added: | |] $ | [removed: 4.85] [added: 6.07] | | | [added: | |] $ | [removed: 4.74] [added: 4.85] | |

| Diluted earnings | [added: | |] $ | [removed: 8.70] [added: 9.98] | | | [added: | |] $ | [removed: 7.27] [added: 8.70] | | | [added: | |] $ | [removed: 5.97] [added: 7.27] | | | [added: | |] $ | [removed: 4.75] [added: 5.97] | | | [added: | |] $ | [removed: 4.63] [added: 4.75] | |

| Adjusted diluted earnings(2) | [added: | |] $ | [removed: 8.07] [added: 9.58] | | | [added: | |] $ | [removed: 7.15] [added: 8.07] | | | [added: | |] $ | [removed: 5.43] [added: 7.15] | | | [added: | |] $ | [removed: 4.49] [added: 5.43] | | | [added: | |] $ | [removed: 4.39] [added: 4.49] | |

| Cash dividends [removed: declared(3)] [added: declared] | [added: | |] $ | [removed: 3.04] [added: 3.60] | | | [added: | |] $ | [removed: 2.80] [added: 3.04] | | | [added: | |] $ | [removed: 2.28] [added: 2.80] | | | [added: | |] $ | [removed: 2.16] [added: 2.28] | | | [added: | |] $ | [removed: 4.08] [added: 2.16] | |

| Weighted-average common shares outstanding | [added: | | 228.8 | | | | | |] 235.4 | | | | [added: | |] 242.2 | | | | [removed: 241.2] | | [added: 241.2] | | [removed: 245.5] | | | | [removed: 254.6] [added: 245.5] | | |

| Weighted-average common shares outstanding assuming dilution | [added: | | 231.2 | | | | | |] 238.6 | | | | [added: | |] 246.9 | | | | [removed: 245.1] | | [added: 245.1] | | [removed: 250.3] | | | | [removed: 260.9] [added: 250.3] | | |

| | [added: | |] December 31, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Balance sheet data (in millions) | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Total assets | [added: | |] $ | [removed: 9,330] [added: 10,659] | | | [added: | |] $ | [removed: 7,689] [added: 9,330] | | | [added: | |] $ | [removed: 7,535] [added: 7,689] | | | [added: | |] $ | [removed: 6,226] [added: 7,535] | | | [added: | |] $ | [removed: 5,107] [added: 6,226] | |

| Redeemable non-controlling interests | [added: | |] $ | [removed: 1,121] [added: 1,562] | | | [added: | |] $ | [removed: 740] [added: 1,121] | | | [added: | |] $ | [removed: 993] [added: 740] | | | [added: | |] $ | [removed: 687] [added: 993] | | | [added: | |] $ | [removed: —] [added: 687] | |

| Stockholders’ equity | [added: | |] $ | [removed: 7,102] [added: 7,707] | | | [added: | |] $ | [removed: 6,124] [added: 7,102] | | | [added: | |] $ | [removed: 5,824] [added: 6,124] | | | [added: | |] $ | [removed: 5,009] [added: 5,824] | | | [added: | |] $ | [removed: 4,762] [added: 5,009] | |

| Assets under management (in billions) | [added: | |] $ | [removed: 1,206.8] [added: 1,470.5] | | | [added: | |] $ | [removed: 962.3] [added: 1,206.8] | | | [added: | |] $ | [removed: 991.1] [added: 962.3] | | | [added: | |] $ | [removed: 810.8] [added: 991.1] | | | [added: | |] $ | [removed: 763.1] [added: 810.8] | |

*(1)* *Net revenues [removed: for* *2018* *and* *2017* *have] [added: for 2018 and 2017 have] been adjusted to reflect the adoption of new revenue accounting guidance on January 1, 2018.

Accordingly, net revenues [removed: for* *2016* *and* *2015* *have] [added: for 2016 have] not been adjusted.*

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

*(3)* *Cash dividends declared in 2015 includes a special dividend of $2.00 per share that we paid during that year.*

[Table of Contents](#s55CC2C4AF60851E0A0B9ED1ACA62FBFB)C^<l3Q6*4v9%C:Mg

| | [added: | |] Page | [added: | |]

| Index to Financial Statements: | | [added: | | | |]

| Consolidated Balance Sheets at December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] | [removed: [51](#s58DC7820C918529094F50D5B4E65B2E5)] | [added: | [51](#i549ad6450d8045ca8ea48f5cee33a039_142) | | |]

| Consolidated Statements of Income for each of the years in the three-year period ended December 31, [removed: 2019] [added: 2020] | [removed: [52](#s520A399EFA3C5B17949EAA6EBC18854A)] | [added: | [52](#i549ad6450d8045ca8ea48f5cee33a039_148) | | |]

| Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, [removed: 2019] [added: 2020] | [removed: [53](#sF235482A709D50CBAB4037C027BABA09)] | [added: | [53](#i549ad6450d8045ca8ea48f5cee33a039_151) | | |]

| Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, [removed: 2019] [added: 2020] | [removed: [54](#s6C48AA6D31965FCB88F89EF6573B5071)] | [added: | [54](#i549ad6450d8045ca8ea48f5cee33a039_154) | | |]

| Consolidated Statements of Stockholders' Equity for each of the years in the three-year period ended December 31, [removed: 2019] [added: 2020] | [removed: [55](#sFE903C8CD46759ADA3E1DEF32E299310)] | [added: | [55](#i549ad6450d8045ca8ea48f5cee33a039_160) | | |]

| [Notes to Consolidated Financial [removed: Statements](#s765DC8CC57BB5B738D177C04DA464B56)] [added: Statements](#i549ad6450d8045ca8ea48f5cee33a039_166)] | [removed: [57](#s765DC8CC57BB5B738D177C04DA464B56)] | [added: | [57](#i549ad6450d8045ca8ea48f5cee33a039_166) | | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#s247266C783165D60AB2549797DCFD0A9)] [added: Firm](#i549ad6450d8045ca8ea48f5cee33a039_241)] | [removed: [78](#s247266C783165D60AB2549797DCFD0A9)] | [added: | [79](#i549ad6450d8045ca8ea48f5cee33a039_241) | | |]

| | [removed: 12/31/2019] | | [added: 2020] | | [removed: 12/31/2018] | | | [added: | 2019 | | | | | | 2018 | | |]

| ASSETS | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 1,781.8] [added: 2,151.7] | | | [added: | |] $ | [removed: 1,425.2] [added: 1,781.8] | |

| Accounts receivable and accrued revenue | [removed: 646.6] | | [added: 863.1] | | [removed: 549.6] | | | [added: | 646.6 | | |]

| Investments | [removed: 2,939.8] | | [added: 3,250.8] | | [removed: 2,453.4] | | | [added: | 2,939.8 | | |]

| Assets of consolidated T. Rowe Price investment products [removed: ($1,975.3] [added: ($2,497.4] million at December 31, [removed: 2019] [added: 2020] and [removed: $1,392.6] [added: $1,975.3] million at December 31, [removed: 2018,] [added: 2019,] related to variable interest entities) | [removed: 2,276.9] | | [added: 2,695.5] | | [removed: 1,680.4] | | | [added: | 2,276.9 | | |]

| Operating lease assets | [removed: 110.8] | | [added: 117.6] | | [removed: —] | | | [added: | 110.8 | | |]

| Property and equipment, net | [removed: 674.4] | | [added: 695.4] | | [removed: 661.3] | | | [added: | 674.4 | | |]

| Goodwill | [added: | |] 665.7 | | | | [added: | |] 665.7 | | |

| Other assets | [removed: 234.4] | | [added: 219.2] | | [removed: 253.7] | | | [added: | 234.4 | | |]

| Total assets | [added: | |] $ | [removed: 9,330.4] [added: 10,659.0] | | | [added: | |] $ | [removed: 7,689.3] [added: 9,330.4] | |

| LIABILITIES | | | | | | | | [added: | | | |]

| Accounts payable and accrued expenses | [added: | |] $ | [removed: 214.5] [added: 187.7] | | | [added: | |] $ | [removed: 228.5] [added: 214.5] | |

| Liabilities of consolidated T. Rowe Price investment products [removed: ($27.0] [added: ($47.7] million at December 31, [removed: 2019] [added: 2020] and [removed: $22.7] [added: $27.0] million at December 31, [removed: 2018,] [added: 2019,] related to variable interest entities) | [removed: 39.2] | | [added: 57.7] | | [removed: 38.7] | | | [added: | 39.2 | | |]

| Operating lease liabilities | [removed: 146.3] | | [added: 154.1] | | [removed: —] | | | [added: | 146.3 | | |]

| Accrued compensation and related costs | [removed: 112.1] | | [added: 133.6] | | [removed: 123.3] | | | [added: | 112.1 | | |]

| Supplemental savings plan liability | [removed: 563.4] | | [added: 772.2] | | [removed: 380.0] | | | [added: | 563.4 | | |]

| Income taxes payable | [removed: 31.8] | | [added: 85.0] | | [removed: 54.2] | | | [added: | 31.8 | | |]