Item 8. Financial Statements.

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Item 8. Financial Statements.


			Page
Index to Financial Statements:
Consolidated Balance Sheets at December 31, 2025 and 2024			58
Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2025			59
Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2025			60
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2025			61
Consolidated Statements of Stockholders' Equity for each of the years in the three-year period ended December 31, 2025			62
Notes to Consolidated Financial Statements			64
Report of Independent Registered Public Accounting Firm (KPMG LLP, Baltimore, MD, Auditor ID: 185)			89

Page 57

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)


	12/31/2025		12/31/2024
ASSETS
Cash and cash equivalents	$	3,378.2	$	2,649.8
Accounts receivable and accrued revenue	931.2		877.4
Investments	3,325.2		3,000.5
Assets of consolidated investment products ($1,596.1 million at December 31, 2025 and $1,555.6 million at December 31, 2024, related to variable interest entities)	1,951.0		2,044.0
Operating lease assets	382.9		226.8
Property, equipment and software, net	845.3		977.0
Intangible assets, net	274.2		368.1
Goodwill	2,642.8		2,642.8
Other assets	611.0		685.6
Total assets	$	14,341.8	$	13,472.0

LIABILITIES
Accounts payable and accrued expenses	$	352.7	$	353.5
Liabilities of consolidated investment products ($14.2 million at December 31, 2025 and $46.2 million at December 31, 2024, related to variable interest entities)	21.3		62.1
Operating lease liabilities	447.2		278.7
Accrued compensation and related costs	235.7		219.8
Deferred compensation liabilities	1,176.8		1,020.7

Income taxes payable	54.9		87.1
Total liabilities	2,288.6		2,021.9

Commitments and contingent liabilities

Redeemable non-controlling interests	1,036.0		944.0

STOCKHOLDERS' EQUITY
Preferred stock, undesignated, $0.20 par value — authorized and unissued 20,000,000 shares	—		—
Common stock, $0.20 par value — authorized 750,000,000; issued 218,565,000 shares at December 31, 2025 and 222,966,000 at December 31, 2024	43.8		44.6
Additional capital in excess of par value	—		311.9
Retained earnings	10,866.8		10,040.6
Accumulated other comprehensive loss	(50.5)		(51.7)
Total stockholders' equity attributable to T. Rowe Price Group	10,860.1		10,345.4
Non-controlling interests in consolidated entities	157.1		160.7
Total permanent stockholders' equity	11,017.2		10,506.1
Total liabilities, redeemable non-controlling interests, and permanent stockholders' equity	$	14,341.8	$	13,472.0

The accompanying notes are an integral part of these statements.

Page 58

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per-share amounts)



	2025		2024		2023
Revenues
Investment advisory fees	$	6,602.3	$	6,399.7	$	5,709.5
Performance-based advisory fees	37.4		59.3		38.2
Capital allocation-based income	81.2		46.6		161.9
Administrative, distribution, services, and other fees	593.9		588.0		550.9
Net revenues	7,314.8		7,093.6		6,460.5

Operating expenses
Compensation and related costs	2,868.1		2,757.9		2,673.5
Distribution and servicing costs	383.5		354.1		289.9
Advertising and promotion costs	107.4		129.6		114.2
Product and recordkeeping related costs	312.9		297.5		291.0
Technology, occupancy, and facility costs	723.6		644.1		632.6
General, administrative, and other costs	441.9		433.8		421.3
Change in fair value of contingent consideration	—		(13.4)		(82.4)
Acquisition-related amortization and impairment costs	111.3		156.7		134.2
Restructuring charge	177.3		—		—
Total operating expenses	5,126.0		4,760.3		4,474.3

Net operating income	2,188.8		2,333.3		1,986.2

Non-operating income
Net gains on investments	464.9		363.2		355.2
Net gains on consolidated investment products	219.9		130.3		164.6
Other gains (losses), including foreign currency gains (losses)	1.9		(7.2)		(15.7)
Total non-operating income	686.7		486.3		504.1

Income before income taxes	2,875.5		2,819.6		2,490.3
Provision for income taxes	667.2		683.8		654.6
Net income	2,208.3		2,135.8		1,835.7
Less: net income attributable to redeemable non-controlling interests	121.2		35.7		47.0
Net income attributable to T. Rowe Price Group	$	2,087.1	$	2,100.1	$	1,788.7

Earnings per share on common stock of T. Rowe Price Group
Basic	$	9.26	$	9.18	$	7.78
Diluted	$	9.24	$	9.15	$	7.76

The accompanying notes are an integral part of these statements.

Page 59

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	2025		2024		2023
Net income	$	2,208.3	$	2,135.8	$	1,835.7
Other comprehensive income (loss)
Currency translation adjustments
Consolidated investment products—variable interest entities	24.8		(14.0)		21.7
Reclassification (gains) losses recognized in non-operating income upon deconsolidation of certain investment products	(3.1)		0.4		—

Equity method investments	(9.3)		0.7		(1.6)











Other comprehensive income (loss) before income taxes	12.4		(12.9)		20.1
Net deferred tax (expense) benefit	(1.4)		3.7		(1.9)
Total other comprehensive income (loss)	11.0		(9.2)		18.2
Total comprehensive income	2,219.3		2,126.6		1,853.9
Less: comprehensive income attributable to redeemable non-controlling interests	131.0		30.7		59.7
Comprehensive income attributable to T. Rowe Price Group	$	2,088.3	$	2,095.9	$	1,794.2

The accompanying notes are an integral part of these statements.

Page 60

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)



	2025		2024		2023
Cash flows from operating activities
Net income	$	2,208.3	$	2,135.8	$	1,835.7
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and impairment of property, equipment and software	405.8		254.1		254.8
Amortization and impairment of acquisition-related assets and retention arrangements	199.7		250.1		226.8
Fair value remeasurement of contingent consideration liability	—		(13.4)		(82.4)
Stock-based compensation expense	216.9		247.3		265.6


Net gains recognized on investments	(452.4)		(340.2)		(460.8)
Net (investments) redemptions in investment products used to economically hedge deferred compensation liabilities	8.0		(93.2)		56.1
Net change in securities held by consolidated investment products	(1,002.7)		(760.4)		(1,070.3)
Other changes in assets and liabilities	169.8		5.5		193.6
Net cash provided by operating activities	1,753.4		1,685.6		1,219.1

Cash flows from investing activities
Purchases of sponsored investment products	(112.9)		(100.1)		(85.3)
Dispositions of sponsored investment products	769.1		533.4		616.6
Net cash of investment products upon deconsolidation	(63.1)		(15.8)		(56.8)
Additions to property, equipment and software	(274.2)		(423.4)		(307.9)

Other investing activity	(88.6)		(171.6)		(38.4)
Net cash provided by (used in) investing activities	230.3		(177.5)		128.2

Cash flows from financing activities
Repurchases of common stock	(620.9)		(337.2)		(254.4)
Common share issuances under stock-based compensation plans	(22.3)		(33.3)		(18.0)
Dividends paid to common stockholders and equity-unit holders	(1,143.0)		(1,135.6)		(1,121.7)
Net distributions to non-controlling interests in consolidated entities	(34.4)		(36.7)		(43.3)
Net subscriptions from redeemable non-controlling interest holders	543.2		606.2		358.8
Net cash used in financing activities	(1,277.4)		(936.6)		(1,078.6)

Effect of exchange rate changes on cash and cash equivalents of consolidated investment products	(1.9)		(2.4)		0.4

Net change in cash and cash equivalents during year	704.4		569.1		269.1
Cash and cash equivalents at beginning of year, including $63.1 million at December 31, 2024, $77.2 million at December 31, 2023, and $119.1 million at December 31, 2022, held by consolidated investment products	2,712.9		2,143.8		$	1,874.7
Cash and cash equivalents at end of year, including $39.1 million at December 31, 2025, $63.1 million at December 31, 2024, and $77.2 million at December 31, 2023, held by consolidated investment products	$	3,417.3	$	2,712.9	$	2,143.8

The accompanying notes are an integral part of these statements.

Page 61

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)


	Common shares outstanding	Common stock		Additional capital in excess of par value		Retained earnings		AOCI(1)		Total stockholders’ equity attributable to T. Rowe Price Group		Non-controlling interests in consolidated entities		Total permanent stockholders' equity		Redeemable non-controlling interests
Balances at December 31, 2022	224,310	$	44.9	$	437.9	$	8,409.7	$	(53.0)	$	8,839.5	$	190.7	$	9,030.2	$	656.7
Net income	—	—		—		1,788.7		—		1,788.7		44.6		1,833.3		47.0
Other comprehensive income, net of tax	—	—		—		—		5.5		5.5		—		5.5		12.7
Dividends declared ($4.88 per share)	—	—		—		(1,121.9)		—		(1,121.9)		—		(1,121.9)		—

Common stock-based compensation plans activity:
Shares issued upon option exercises	585	0.1		35.6		—		—		35.7		—		35.7		—
Restricted shares issued, net of shares withheld for taxes	57	—		—		—		—		—		—		—		—

Net shares issued upon vesting of restricted stock units	1,413	0.3		(54.0)		—		—		(53.7)		—		(53.7)		—

Stock-based compensation expense	—	—		265.6		—		—		265.6		—		265.6		—
Restricted stock units issued as dividend equivalents	—	—		0.4		(0.4)		—		—		—		—		—
Common shares repurchased	(2,427)	(0.5)		(253.8)		—		—		(254.3)		—		(254.3)		—
Net distributions to non-controlling interests in consolidated entities	—	—		—		—		—		—		(43.3)		(43.3)		—

Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		—		—		356.9
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		—		—		(479.2)
Balances at December 31, 2023	223,938	44.8		431.7		9,076.1		(47.5)		9,505.1		192.0		9,697.1		594.1





Net income	—	—		—		2,100.1		—		2,100.1		5.4		2,105.5		35.7
Other comprehensive loss, net of tax	—	—		—		—		(4.2)		(4.2)		—		(4.2)		(5.0)
Dividends declared ($4.96 per share)	—	—		—		(1,135.2)		—		(1,135.2)		—		(1,135.2)		—

Common stock-based compensation plans activity:
Shares issued upon option exercises	577	0.1		36.3		—		—		36.4		—		36.4		—
Restricted shares issued, net of shares withheld for taxes	7	—		(0.3)		—		—		(0.3)		—		(0.3)		—

Net shares issued upon vesting of restricted stock units	1,415	0.3		(69.6)		—		—		(69.3)		—		(69.3)		—

Stock-based compensation expense	—	—		247.3		—		—		247.3		—		247.3		—
Restricted stock units issued as dividend equivalents	—	—		0.4		(0.4)		—		—		—		—		—
Common shares repurchased	(2,971)	(0.6)		(333.9)		—		—		(334.5)		—		(334.5)		—
Net distributions to non-controlling interests in consolidated entities	—	—		—		—		—		—		(36.7)		(36.7)		—

Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		—		—		592.0
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		—		—		(272.8)
Balances at December 31, 2024	222,966	$	44.6	$	311.9	$	10,040.6	$	(51.7)	$	10,345.4	$	160.7	$	10,506.1	$	944.0

(1) Accumulated other comprehensive income

The accompanying notes are an integral part of these statements.

Page 62

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)



	Common shares outstanding	Common stock		Additional capital in excess of par value		Retained earnings		AOCI(1)		Total stockholders’ equity attributable to T. Rowe Price Group		Non-controlling interests in consolidated entities		Total permanent stockholders' equity		Redeemable non-controlling interests
Balances at December 31, 2024	222,966	$	44.6	$	311.9	$	10,040.6	$	(51.7)	$	10,345.4	$	160.7	$	10,506.1	$	944.0
Net income	—	—		—		2,087.1		—		2,087.1		30.8		2,117.9		121.2
Other comprehensive income, net of tax	—	—		—		—		1.2		1.2		—		1.2		9.8
Dividends declared ($5.08 per share)	—	—		—		(1,143.4)		—		(1,143.4)		—		(1,143.4)		—

Common stock-based compensation plans activity:
Shares issued upon option exercises	495	0.1		31.5		—		—		31.6		—		31.6		—
Restricted shares issued, net of shares withheld for taxes	—	—		(0.2)		—		—		(0.2)		—		(0.2)		—

Net shares issued upon vesting of restricted stock units	1,279	0.3		(54.2)		—		—		(53.9)		—		(53.9)		—

Stock-based compensation expense	—	—		216.9		—		—		216.9		—		216.9		—
Restricted stock units issued as dividend equivalents	—	—		0.5		(0.5)		—		—		—		—		—
Common shares repurchased	(6,175)	(1.2)		(506.4)		(117.0)		—		(624.6)		—		(624.6)		—
Net distributions to non-controlling interests in consolidated entities	—	—		—		—		—		—		(34.4)		(34.4)		—

Net subscriptions into T. Rowe Price investment products	—	—		—		—		—		—		—		—		556.0
Net deconsolidations of T. Rowe Price investment products	—	—		—		—		—		—		—		—		(595.0)
Balances at December 31, 2025	218,565	$	43.8	$	—	$	10,866.8	$	(50.5)	$	10,860.1	$	157.1	$	11,017.2	$	1,036.0

(1) Accumulated other comprehensive income

The accompanying notes are an integral part of these statements.

Page 63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

T. Rowe Price Group derives its consolidated revenues and net income primarily from investment advisory services that its subsidiaries provide to individual and institutional investors that invest in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services.

The investment solutions are provided in a number of vehicles including the T. Rowe Price U.S. mutual funds (U.S. mutual funds), subadvised funds, separately managed accounts, collective investment trusts, exchange-traded funds, and other sponsored products. The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds, business development companies, an interval fund, and collateralized loan obligations.

Investment advisory fees depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.

BASIS OF PREPARATION.

These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States. These principles require that we make certain estimates and assumptions. Actual results may vary from our estimates.

RECENTLY ADOPTED ACCOUNTING GUIDANCE AND TAX REGULATION.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA contains significant changes and modifications to federal and international tax provisions including 100% bonus depreciation and domestic research cost expensing. We believe that the impact of the OBBBA’s provisions as they become effective will not have a material impact on our financial position and results of operations.

On January 1, 2025, the Company adopted the FASB issued Accounting Standards Update No. 2023-09 - Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. We adopted the standard retrospectively and have updated prior‑period disclosures accordingly. The new required disclosures for all years presented are included in Note 10 – Income Taxes.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 - Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-4): Disaggregation of Income Statement Expenses, which requires disclosures of additional information and disaggregation of certain expenses included in the income statement. The guidance is effective for the firm on January 1, 2027, and allows for either a prospective or retrospective approach on adoption. We are currently evaluating the impact the adoption will have on our financial statements and have not yet determined our transition approach.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06 - Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends the existing internal-use software guidance. The amendment eliminates the project stage model and clarifies that capitalization of internal-use software costs commences when management has authorized and committed funding for the project and it is probable that software will be completed and used for its intended function. The amendment allows for varying transition approaches and is effective for the firm on January 1, 2028, with early adoption permitted. We are currently evaluating the impact that the adoption will have on our financial statements and have not yet determined our transition approach.

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We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our consolidated financial statements, including those we have not yet adopted. We do not believe that any such guidance has or will have a material effect on our financial position or results of operations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Consolidation

Our consolidated financial statements include the accounts of all wholly-owned subsidiaries, majority-owned entities that are entitled to a disproportionate allocation of income, or carried interest, of affiliated private investment funds (carried interest entities), and investment products in which we have a controlling interest. We are deemed to have a controlling interest when we own the majority of a voting interest entity (VOE) or are deemed to be the primary beneficiary of a variable interest entity (VIE). We perform an analysis of our investments to determine if the investment entity is a VOE or a VIE. Our analysis involves judgment and considers several factors, including an entity’s legal organization, capital structure, the rights of the equity investment holders, our ownership interest in the entity, and our contractual involvement with the entity. We continually review and reconsider our VOE or VIE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing documents. All material accounts and transactions between consolidated entities are eliminated in consolidation.

Variable interest entities (VIE)

VIEs are entities that, by design: (i) lack sufficient equity to permit the entity to finance its activities independently or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the entity’s losses, or the rights to receive the entity’s residual returns. We consolidate a VIE when we are the primary beneficiary, which is the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be significant.

Our Luxembourg-based SICAV funds and other investment products regulated outside the U.S. that we provide seed capital were determined to be VIEs and are consolidated when we are the primary beneficiary. Certain of the investment partnerships we have an interest in were also determined to be VIEs and are not consolidated as we concluded that we are not the primary beneficiary.

We have determined that the carried‑interest entities are VIEs and that T. Rowe Price is the primary beneficiary. In addition, the carried‑interest entities hold interests in the general partners of certain affiliated private investment funds that are themselves VIEs; however, the carried‑interest entities are not the primary beneficiary of those funds. Accordingly, these affiliated private investment funds are not consolidated.

Redeemable non-controlling interests

We recognize redeemable non-controlling interests for the portion of the net assets of our consolidated investment products held by unrelated third-party investors as their interests are convertible to cash and other assets at their option. As such, we reflect redeemable non-controlling interests as temporary equity in our consolidated balance sheets.

Non-controlling interests in consolidated entities

We recognize non-controlling interests in the consolidated carried interest entities as a component of permanent equity in our consolidated balance sheets. The non-controlling interests represent the minority interest held by limited partnerships controlled by employees, one of which is a member of our Board of Directors. Income (loss) is allocated to these non-controlling interests based on the contractual arrangements that govern the allocation of income (loss) and recognized as compensation expense.

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Investments in T. Rowe Price money market mutual funds

We do not consider our investments in T. Rowe Price money market mutual funds when performing our consolidation analysis as the guidance provides a scope exception for interests in entities that are required to comply with, or operate in accordance with, requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

Cash equivalents

Cash equivalents consist primarily of short-term, highly liquid investments in T. Rowe Price money market mutual funds. The cost of these funds is equivalent to fair value.

Investments

Investments held at fair value

Investments in sponsored products have been made for both general corporate investment purposes and to provide seed capital for newly formed sponsored investment products. Those investments that we do not consolidate are carried at fair value using the quoted closing NAV per share of each fund as of the balance sheet date. We also have investments in securities that are held in separately managed accounts and are each valued using quoted market prices and other observable market inputs when available.

The underlying products investments held by our consolidated investment products retain investment company specialized accounting in consolidation; are considered securities held in a trading account for cash flow reporting purposes; and are valued in accordance with the valuation and pricing policy used to value our assets under management which is further described in the Revenue Recognition policy below.

We elected to value certain interests in investment partnerships and other investments, for which market prices or quotations are not readily available, at fair value using the NAV per share as a practical expedient or the measurement alternative.

Changes in the fair values of all these investments are reflected in non-operating income in our consolidated statements of income.

Equity method investments

Equity method investments consist of investments in entities for which we have the ability to exercise significant influence over the operating and financial policies of the investee. The carrying values of these investments are adjusted to reflect our proportionate share of the investee's net income or loss, any unrealized gain or loss resulting from the translation of foreign-denominated financial statements into U.S. dollars, and dividends received. Our proportionate share of income or loss is included in non-operating income in our consolidated statements of income.

As permitted under existing accounting guidance, we adopted a policy by which we recognize our share of UTI Asset Management Company Limited’s (UTI) and other certain investment partnership earnings on a quarter lag as current financial information is not available in a timely manner. The basis difference between our carrying value and our proportionate share of UTI’s book value is primarily related to consideration paid in excess of the stepped-up basis of assets and liabilities on the date of purchase.

Investments in affiliated private investment funds - carried interest

Investments in affiliated private investment funds - carried interest represent interests in general partners of affiliated private investment funds that are contractually entitled to a disproportionate allocation of income, which is also referred to as carried interest. We account for these investments as financial instruments under ASC 323, Investments – Equity Method and Joint Ventures (ASC 323) since the general partner has significant governance rights in the investment funds in which it invests, which demonstrate significant influence. The income earned is recognized as capital-allocation based income in our consolidated statements of income. Additionally, the basis difference arising between the carrying value and fair market value of these investments upon acquisition is included in the carrying value and amortized on a straight‑line basis over each funds’ estimated useful life. This amortization reduces both the investment balance and capital allocation-based income in the consolidated statements of income.

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Held to Maturity

Investments in rated notes of certain European collateralized loan obligation funds along with the certificates of deposit are designated as held-to-maturity and carried on the balance sheet at amortized cost.

Concentration of risk

Concentration of credit risk in accounts receivable is believed to be minimal as our clients generally have substantial assets, including those in the investment products we manage for them.

Our investments held at fair value expose us to market risk, that is, the potential future loss of value that would result from a decline in the fair value of each investment or its underlying net assets. The underlying holdings of our assets under management are also subject to market risk, which may arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.

Leases

We review new arrangements at inception to evaluate whether we have the right to obtain substantially all the economic benefits of and have the right to control the use of an asset. If we determine that an arrangement qualifies as a lease, we recognize a lease liability and a corresponding asset on the lease’s commencement date. The lease liability is initially measured at the present value of the future minimum lease payments over the lease term using the rate implicit in the arrangement or, if not available, our incremental borrowing rate. An operating lease asset is measured initially at the value of the lease liability less any lease incentives received and initial direct costs incurred.

Our leases qualify as operating leases and consist primarily of real estate leases for corporate offices, data centers, and other facilities. We measure our operating lease liabilities using an estimated incremental borrowing rate as an implicit rate cannot be readily determinable from any of our operating lease arrangements. Since we do not have any outstanding corporate borrowings, we estimate our incremental borrowing rate using an estimated credit rating and available market information. Additionally, certain of our leases contain options to extend or terminate the lease term that, if exercised, would result in the remeasurement of the operating lease liability.

Our operating leases contain both lease and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the lease assets, such as common area maintenance and other management costs. We elected to measure the lease liability of our real estate operating leases by combining the lease and non-lease components into one single lease component. As such, we included the fixed payments and any payments that depend on a rate or index related to our lease and non-lease components in measuring the operating lease liability.

We recognize operating lease expense on a straight-line basis over the lease term as part of technology, occupancy, and facility costs in our consolidated statements of income.

Property, equipment and software

Property, equipment and software is stated at cost net of accumulated depreciation and amortization computed using the straight-line method. Provisions for depreciation and amortization are based on the following weighted-average estimated useful lives: computer and communications software and equipment, 3 years; buildings and improvements, 32 years; leasehold improvements, 11 years; and furniture and other equipment, 6 years.

Intangible assets

Intangible assets consist primarily of acquired investment advisory agreements and a trade name. The fair values of the acquired investment advisory agreements were based on the net present value of estimated future cash flows attributable to each agreement, and included significant assumptions related to revenue, discount rate, and effective tax rate.

The investment advisory agreement intangible assets are amortized using the straight-line method over their estimated useful lives unless the asset was determined to have an indefinite life as there is no foreseeable limit on the contract period. The weighted average remaining useful life of definite-lived intangibles assets is 2.8 years.

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Definite-lived intangible assets carrying value is tested when there is an indication of impairment. Impairment is indicated when the carrying value of the asset is not recoverable and exceeds its fair value. If indicators are present, we perform a recoverability test by comparing the estimated undiscounted future cash flows attributable to the asset group in question to the asset group’s carrying amount. If the undiscounted estimated future cash flows are less than the carrying amount of the asset, the asset’s cost is adjusted to fair value and an impairment loss is recognized. The fair value is determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which included revenue growth, discount rates, and effective tax rates.

The trade name fair value was determined using the relief from royalty method based on net present value of estimated cash flows, which include significant assumptions about royalty rate, revenue growth rate, discount rate and effective tax rate. Additionally, we identified the trade name intangible asset as indefinite-lived as there is no foreseeable limit on use of the acquired name.

Indefinite-lived intangible assets are tested for impairment annually in the fourth quarter or more frequently when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible asset below its carrying value. The fair value for each asset is determined using a discounted cash flow analysis where estimated future cash flows were discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates.

Goodwill

We internally conduct, manage, and report our operations as one investment advisory business. This reflects how the chief operating decision maker allocates resources and assesses performance. Accordingly, we have one reporting unit - investment advisory business, consistent with our single operating segment, to which all goodwill has been assigned.

We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis, in the fourth quarter, using a fair value approach. Our evaluations have indicated that no impairment exists.

Revenue recognition

Our revenue is earned from investment advisory, administrative, and distribution services we provide to our clients. Each distinct service we promise in our agreements is considered a performance obligation and is the basis for determining when we recognize revenue. The fees are allocated to each distinct performance obligation and we recognize revenue when, or as, we satisfy our promises. The consideration for our services is generally variable and included in net revenues, when it is improbable that a significant reversal could occur in the future. For certain client agreements, we have the discretion to hire a third party to provide services to our clients. In these circumstances, we are generally deemed to control the services before transferring them to our clients, and accordingly present the revenues gross of the related third-party costs. The timing of when we bill our clients and related payment terms vary in accordance with agreed-upon contractual terms. For the majority of our agreements, billing occurs after we have recognized revenue, which results in accounts receivable and accrued revenue. For an insignificant portion of our contracts, billing occurs in advance of providing services, which results in deferred revenue within the accounts payable and accrued expenses line of our consolidated balance sheets.

Taxes billed to our clients based on our fees for services rendered are not included in revenues.

Investment advisory fees

The majority of our investment advisory agreements, including those with the U.S. mutual funds, have a single performance obligation as the promised services are not separately identifiable from other promises in the agreements and, therefore, are not distinct. Substantially all performance obligations for providing advisory services are satisfied over time and revenue is recognized as time passes.

Investment advisory agreements with sponsored investment products regulated outside the U.S. generally have two performance obligations; one for investment management and one for distribution. For these agreements, we allocate the management fee to each performance obligation using our best estimate of the standalone fee of each

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of these services. The performance obligation for providing investment management services, like our other advisory contracts, is satisfied over time and revenue is recognized as time passes. The performance obligation for distribution is satisfied at the point in time when an investor makes an investment into the product. Accordingly, a portion of the investment advisory fees earned from these products relate to distribution performance obligations that were satisfied during prior periods. These distribution fees are reported within the investment advisory fees line of our consolidated statements of income.

The management fee for our investment advisory agreements are based on our assets under management, which change based on fluctuations in financial markets and net cash flows from investors, and represents variable consideration. Therefore, investment advisory fees are generally constrained, and excluded from revenue, until the asset values on which our client is billed are no longer subject to financial market volatility. Investment advisory fees for certain investment products are presented net of fees waived pursuant to the contractual expense limitations of the product. Our assets under management are valued in accordance with valuation and pricing processes for each major type of investment. Fair values used in our processes are primarily determined from quoted market prices; prices furnished by dealers who make markets in such securities; or from data provided by independent pricing services that considers yield or price of investments of comparable quality, coupon, maturity, and type. Investments for which market prices are not readily available are not a material portion of our total assets under management.

We provide all services to the U.S. mutual funds under contracts that are subject to periodic review and approval by the funds’ Boards. Regulations require that the funds’ shareholders also approve material changes to investment advisory contracts.

Investment advisory fees also include fees earned from affiliated private investment funds or private accounts that are determined either monthly or quarterly and are generally based on the fund’s or account's net asset value or invested capital. Investment advisory fees earned from CLOs include senior collateral management fees and subordinated collateral management fees, which are generally determined quarterly based on the sum of collateral principal amounts and the aggregate principal amount of all defaulted obligations. If amounts distributable on any payment date are insufficient to pay the collateral management fee according to the priority of payments, any shortfall is deferred and payable on subsequent payment dates.

Performance-Based Fees

We recognize performance-based incentive fees in connection with the investment advisory agreements from certain sponsored products and separately managed and subadvised accounts. We are entitled to receive performance-based incentive fees when the return on investment assets exceeds a certain benchmark return. In such arrangements, these incentive fees are recognized at the end of the measurement period when the performance benchmark or contractual outperformance has been achieved. Performance-based incentive fees are considered a form of variable consideration, and as such, these fees are subject to potential reversal up until the end of the measurement period (which is generally one year) when the performance-based incentive fees become fixed, determinable, and are not subject to significant reversal. There are no significant judgments made when determining the performance-based incentive fees.

Administrative, distribution, servicing, and other fees

Administrative and other fees

The administrative services we provide include mutual fund transfer agent, accounting and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and other advisory services.

The administrative service agreements with the U.S. mutual funds for accounting oversight, transfer agency and recordkeeping services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage services, and trust services generally have one performance obligation as the promised services in each agreement are not separately identifiable from other performance obligations in the contract and, therefore, are not distinct. Our performance obligation in each agreement is satisfied over time and revenue is recognized as time passes. The fees for these services vary by contract and are both fixed and variable.

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Distribution and servicing fees

The agreements for distribution and servicing fees earned from 12b-1 plans of the Advisor Class, R Class, and Variable Annuity II Class shares of the U.S. mutual funds have one performance obligation, as distribution services. The distribution services are not separately identifiable from shareholder servicing promises in the agreements and, therefore, are not distinct. Our performance obligation is satisfied at the point in time when an investor makes an investment into these share classes of the U.S. mutual funds. The fees for these distribution and servicing agreements are based on the assets under management in these share classes, which change based on fluctuations in financial markets, and represent variable consideration. These fees are generally constrained, and excluded from revenue, until the asset values on which our client is billed are not subject to financial market volatility. Accordingly, the majority of the distribution and servicing revenue relates to distribution and servicing obligations that were satisfied during prior periods.

We also recognize the corresponding costs paid to the third-party financial intermediaries that distribute these funds' share classes within the distribution and servicing costs line of the consolidated statements of income. The fee revenue that we recognize from the funds and the expense that we recognize for the fees paid to third-party intermediaries are equal in amount and, therefore, do not impact our net operating income.

Capital allocation-based income

This represents the income earned from general partner investments in affiliated private investment funds with arrangements that are entitled to a disproportionate allocation of income, which is also known as carried interest. As discussed above, these investments are accounted for under ASC 323 and the income recognized in capital allocation-based income in our consolidated statements of income represents the proportionate share of the income or loss assuming the funds were liquidated as of each reporting date pursuant to the fund's governing agreements. The realization of accrued carried interest occurs over a number of years. Since this income is accounted for under ASC 323, it is outside the scope of ASC 606, Revenue Recognition. A portion of this income is allocated to non-controlling interest holders and is reflected as compensation expense.

Advertising

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

Long-term incentive compensation

We maintain two stockholder-approved employee long-term incentive plans (2020 Long-Term Incentive Plan and 2012 Long-Term Incentive Plan (collectively, the LTI Plans), and two stockholder-approved non-employee director plans (2017 Non-Employee Director Equity Plan and 2007 Non-Employee Director Equity Plan, collectively the Director Plans). We believe our stock-based compensation programs align the interests of our employees and directors with those of our common stockholders. As of December 31, 2025, a total of 7,947,644 shares were available for future grant under the 2020 Long-Term Incentive Plan (2020 Plan) and the 2017 Non-Employee Director Equity Plan (2017 Plan).

Under our LTI Plans, we have granted restricted stock units to employees that settle in shares of our common stock after vesting. Vesting of these awards is based on the individual continuing to render service over an average five-year graded schedule. All restricted stock unit holders receive non-forfeitable cash dividend equivalents on our dividend payable date. We are also authorized to grant qualified incentive and nonqualified fixed stock options with a maximum term of 10 years. We have not granted options to employees since 2015.

We also grant performance-based restricted stock units to certain executive officers in which the number of restricted stock units ultimately retained is determined based on achievement of certain performance thresholds. These awards have a three-year performance period followed by a two-year time-based requirement for those units that are retained. Cash dividend equivalents are accrued and paid to the holders of performance-based restricted stock units only after the performance period has lapsed and the performance thresholds have been met.

In 2024, the 2020 Plan was amended to provide certain employees the opportunity to receive 50% of their annual long-term incentive award in the form of restricted fund units. Vesting of restricted fund units is based on the

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individual continuing to render service over an average five-year graded schedule. These awards settle in cash upon vesting.

Under the Director Plans, we have granted options with a maximum term of 10 years, restricted shares, and restricted stock units to non-employee directors. Under the 2017 Plan, awards generally vest over one year and, in the case of restricted stock units, are settled upon the non-employee directors’ departure from the Board. For restricted shares, cash dividends are accrued and paid only after the award vests. Restricted stock unit holders receive dividend equivalents in the form of unvested stock units that vest over the same period as the underlying award. We have not granted options to non-employee directors since 2016. As of December 31, 2025, the non-employee directors held 17,668 outstanding stock options, all of which will expire in 2026, 102,459 vested stock units, 14,745 unvested stock units, and 10,785 unvested restricted stock awards. The unvested awards are expected to vest over the next six months and the stock units will convert to common shares upon their separation from the Board.

Our long-term incentive equity award values are converted to restricted stock units or stock awards on the grant-date using the closing market price of our common stock. For restricted fund units, the award value is converted using the closing market price of one or more hypothetical funds selected by employees from a group of sponsored investment products prior to the grant date. We recognize the grant-date fair value of all long-term incentive awards as compensation expense ratably over the awards' requisite service period. Compensation expense recognized for performance-based restricted units includes an estimate regarding the probability of the performance thresholds being met. For restricted fund units, their value is remeasured against the hypothetical funds chosen by the unit holder each reporting period and the adjustment reported in compensation expense over the requisite service period. We account for all award forfeitures as they occur.

Earnings per share

We compute our basic and diluted earnings per share under the two-class method, which considers our outstanding restricted shares and stock units, on which we pay non-forfeitable dividends as if they were a separate class of stock.

Comprehensive income

The components of comprehensive income are presented in a separate statement following our consolidated statements of income and include net income and the change in our currency translation adjustments. The currency translation adjustments result from translating our proportionate share of the financial statements of our equity method investment in UTI, and certain consolidated investment products into U.S. dollars. Assets and liabilities are translated into U.S. dollars using year-end exchange rates, and revenues and expenses are translated using weighted-average exchange rates for the period.

The changes in accumulated balances of each component of other comprehensive income, the deferred tax impacts of each component, and information about significant items reclassified out of accumulated other comprehensive income are presented in the notes to the consolidated financial statements. The notes also indicate the line item of our consolidated statements of income in which significant reclassifications were recognized.

We reclassify income tax effects relating to currency translation adjustments to tax expense when there is a reduction in our ownership interest in the related investment. The amount of the reclassification depends on the investment’s accounting treatment before and after the change in ownership percentage.

NOTE 2 – CASH EQUIVALENTS.

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

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

Net revenues earned during the years ended December 31, 2025, 2024 and 2023, are included in the table below along with details of investment advisory revenues by underlying asset class. We also included average assets under management by asset class, on which we earn investment advisory fees.


(in millions)	2025		2024		2023
Investment advisory fees
Equity	$	3,923.7	$	3,864.7	$	3,442.3
Fixed income, including money market	433.0		410.7		400.4
Multi-asset	1,910.6		1,814.1		1,583.4
Alternatives	335.0		310.2		283.4
Total investment advisory fees	$	6,602.3	$	6,399.7	$	5,709.5
Performance-based advisory fees	37.4		59.3		38.2
Capital allocation-based income	81.2		46.6		161.9
Administrative, distribution, services, and other fees	593.9		588.0		550.9
Net revenues	$	7,314.8	$	7,093.6	$	6,460.5

Average AUM (in billions):
Equity	$	840.9	$	804.3	$	705.2
Fixed income, including money market	201.0		178.6		169.3
Multi-asset	580.7		529.0		442.3
Alternatives	54.7		50.0		45.5
Average AUM	$	1,677.3	$	1,561.9	$	1,362.3

Total net revenues earned from sponsored investment products totaled $6,128.1 million in 2025, $5,859.8 million in 2024, and $5,327.9 million in 2023. Accounts receivable from these products aggregate to $664.2 million at December 31, 2025 and $602.0 million at December 31, 2024.

Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 8.8% at December 31, 2025 and December 31, 2024 of our assets under management.

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NOTE 4 – INVESTMENTS.

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


(in millions)	2025		2024
Investments held at fair value
T. Rowe Price investment products
Discretionary investments	$	463.7	$	258.8
Redeemable seed capital investments	316.1		262.8
Investments used to hedge the deferred compensation liabilities	1,243.3		992.8
Investment partnerships and other investments	154.7		62.6
Investments in affiliated collateralized loan obligations	3.2		6.3
Equity method investments
T. Rowe Price investment products
Discretionary investments	—		60.8
Redeemable seed capital investments	8.3		128.8
Investments used to hedge the deferred compensation liabilities	—		88.4
Investment in UTI Asset Management Company Limited (India)	162.8		173.5
Investments in affiliated private investment funds - carried interest	390.3		426.9
Investments in affiliated private investment funds - seed/co-investment	304.7		269.9

Investment partnerships and other investments	204.9		162.1
Held to maturity
Investments in affiliated collateralized loan obligations	21.8		61.1
Certificates of deposit	50.4		44.7
U.S. Treasury note	1.0		1.0
Total	$	3,325.2	$	3,000.5

During each of the last three years, certain T. Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest, we report our residual interests in these T. Rowe Price investment products as either an equity method investment or an investment held at fair value. The net impact on our consolidated balance sheets and statements of income as of the dates the products were deconsolidated or reconsolidated is detailed below.


(in millions)	2025		2024		2023
Net decrease in assets of consolidated investment products	$	(1,186.4)	$	(673.9)	$	(663.8)
Net decrease in liabilities of consolidated investment products	$	(43.8)	$	(20.5)	$	(29.7)
Net decrease in redeemable non-controlling interests	$	(595.0)	$	(272.8)	$	(479.2)

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

The net gains (losses) recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain consolidated investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

INVESTMENTS AT FAIR VALUE

The investment partnerships and other investments held at fair value are valued using net asset value (NAV) per share as a practical expedient or using the measurement alternative. Our interests in the investment partnerships are generally not redeemable and are subject to significant transferability restrictions. The underlying investments of these partnerships have contractual terms through 2034, though we may receive distributions of liquidating assets

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over a longer term. The investment strategies of these partnerships include growth equity, buyout, venture capital, and real estate.

During 2025, we recognized $142.6 million of net unrealized gains on investments held at fair value that were still held at December 31, 2025. For 2024, we recognized $51.3 million of net unrealized gains on investments held at fair value that were still held at December 31, 2024. For 2023, we recognized $86.7 million of net unrealized gains on investments held at fair value that were still held at December 31, 2023.

Dividends, including capital gain distributions, earned on the sponsored investment products held at fair value, totaled $84.6 million in 2025, $67.6 million in 2024, and $38.2 million in 2023.

VARIABLE INTEREST ENTITIES.

Our fair value and equity method investments at December 31, 2025 and 2024 include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary. Our maximum risk of loss related to our involvement with these entities is as follows:


(in millions)	2025		2024
Investment carrying values	$	978.7	$	955.9
Unfunded capital commitments	199.3		202.5
Accounts receivable	113.3		96.2
Maximum risk of loss	$	1,291.3	$	1,254.6

We have unfunded capital commitments, totaling $199.3 million at December 31, 2025 and $202.5 million at December 31, 2024, related primarily to the affiliated private investment funds and the investment partnerships in which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be recalled under certain circumstances.

Investments in affiliated private investment funds - carried interest represent interests in the general partners of affiliated private investment funds that are entitled to a disproportionate allocation of income, also known as carried interest. The entities that hold these interests (carried interest entities) are considered variable interest entities and are consolidated as T. Rowe Price is determined to be the primary beneficiary. The total assets, liabilities and non-controlling interests of these carried interest entities as of December 31 are as follows:


(in millions)	2025		2024
Assets	$	438.7	$	467.7
Liabilities	$	5.8	$	0.4
Non-controlling interest	$	157.1	$	160.7

INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.

These investments represent European CLOs that invest in 5% vertical strips in each class of rated notes and subordinated notes. Certain investments in the debt tranches of the CLOs are measured at amortized cost as investments held to maturity and included in investments in our consolidated balance sheets. The subordinated note tranches of these investments are held at fair value and any gain or loss is included in non-operating income (loss) in the consolidated statements of income. Certain of the investments in the debt tranches of the CLOs have been pledged as collateral against repurchase agreements.

There is debt associated with our investments in affiliated collateralized loan obligations. The debt outstanding is related to repurchase agreements of €18.6 million at December 31, 2025, compared to €56.9 million at December 31, 2024 (equivalent to $21.8 million at December 31, 2025 and $59.1 million at December 31, 2024 at the respective EUR spot rates) that are collateralized by the CLO investments and reported in accounts payable and accrued expenses in our consolidated balance sheets. These repurchase agreements bear interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 2.99% to 10.88% as of December 31, 2025. The debt matures on various dates through 2035 or if the investments are paid back in full or cancelled, whichever is sooner.

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NOTE 5 – FAIR VALUE MEASUREMENTS.

We determine the fair value of our cash equivalents and certain investments held at fair value using the following broad levels of inputs as defined by related accounting standards:

Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.

Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads. These inputs are based on market data obtained from independent sources.

Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs into the determination of fair value require significant management judgment or estimation. Investments in this category generally include investments for which there is not an actively-traded market. There are no level 3 investments at December 31, 2025 and 2024.

These levels are not necessarily an indication of the risk or liquidity associated with our investments. The following table summarizes our investments and liabilities that are recognized in our consolidated balance sheets at December 31 using fair value measurements determined based on the differing levels of inputs. This table excludes investments held by the consolidated investment products, which are presented separately in our consolidated balance sheets and are detailed in Note 6.


	2025				2024
(in millions)	Level 1		Level 2			Level 1		Level 2
T. Rowe Price investment products
Cash equivalents held in money market funds	$	3,049.0	$	—		$	2,309.8	$	—
Discretionary investments	463.7		—			258.8		—
Redeemable seed capital investments	258.6		57.5			209.4		53.4
Investments used to hedge the deferred compensation liabilities	1,243.3		—			992.8		—
Other investments	0.3		—			0.1		—
Investments in affiliated collateralized loan obligations	—		3.2			—		6.3
Total	$	5,014.9	$	60.7		$	3,770.9	$	59.7

The fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical expedient or the measurement alternative. The carrying value of these investments as disclosed in Note 4 were $154.4 million at December 31, 2025 and $62.5 million at December 31, 2024.

In 2025, 2024, and 2023, we recognized impairment charges on certain of our identified intangible assets. As part of the impairment recognition, a fair value measurement was determined for these intangible assets. See Note 9 for further discussion of the impairments.

NOTE 6 – CONSOLIDATED INVESTMENT PRODUCTS.

The investment products that we consolidate in our consolidated financial statements are generally those products we provided initial seed capital at the time of their formation and have a controlling interest. Our U.S. mutual funds and certain other products are considered voting interest entities, while those regulated outside the U.S. are considered variable interest entities.

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


	2025						2024
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Cash and cash equivalents(1)	$	3.0	$	36.1	$	39.1	$	7.2	$	55.9	$	63.1
Investments(2)	344.3		1,541.2		1,885.5		470.8		1,465.4		1,936.2
Other assets	7.6		18.8		26.4		10.4		34.3		44.7
Total assets	354.9		1,596.1		1,951.0		488.4		1,555.6		2,044.0
Liabilities	7.1		14.2		21.3		15.9		46.2		62.1
Net assets	$	347.8	$	1,581.9	$	1,929.7	$	472.5	$	1,509.4	$	1,981.9

Attributable to T. Rowe Price Group	$	269.8	$	623.9	$	893.7	$	348.5	$	689.4	$	1,037.9
Attributable to redeemable non-controlling interests	78.0		958.0		1,036.0		124.0		820.0		944.0
	$	347.8	$	1,581.9	$	1,929.7	$	472.5	$	1,509.4	$	1,981.9

(1) Cash and cash equivalents includes $2.5 million at December 31, 2025 and $4.9 million at December 31, 2024 of investments in

T. Rowe Price money market mutual funds.

(2) Investments include $61.7 million at December 31, 2025 and $9.3 million at December 31, 2024 of other T. Rowe Price investment products.

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

Since third-party investors in these investment products have no recourse to our credit, our overall risk related to the net assets of consolidated investment products is limited to valuation changes associated with our net interest. However, we are required to recognize the valuation changes associated with all underlying investments held by these products in our consolidated statements of income and disclose the portion attributable to unrelated third-party investors as net income attributable to redeemable non-controlling interests.

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


	2025						2024						2023
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Operating expenses reflected in net operating income	$	(0.6)	$	(9.2)	$	(9.8)	$	(2.4)	$	(7.4)	$	(9.8)	$	(3.7)	$	(7.4)	$	(11.1)
Net investment income (loss) reflected in non-operating income (loss)	30.9		189.0		219.9		41.7		88.6		130.3		52.4		112.2		164.6
Impact on income before taxes	$	30.3	$	179.8	$	210.1	$	39.3	$	81.2	$	120.5	$	48.7	$	104.8	$	153.5

Net income (loss) attributable to T. Rowe Price Group	$	22.7	$	66.2	$	88.9	$	31.4	$	53.4	$	84.8	$	40.9	$	65.6	$	106.5
Net income (loss) attributable to redeemable non-controlling interests	7.6		113.6		121.2		7.9		27.8		35.7		7.8		39.2		47.0
	$	30.3	$	179.8	$	210.1	$	39.3	$	81.2	$	120.5	$	48.7	$	104.8	$	153.5

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The operating expenses of the consolidated investment products are reflected in general, administrative and other expenses. In preparing our consolidated financial statements, we eliminated operating expenses of $4.2 million in 2025, $3.6 million in 2024, and $2.1 million in 2023, against the investment advisory and administrative fees earned from these products. The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated investment products.

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


	2025						2024						2023
(in millions)	Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total		Voting interest entities		Variable interest entities		Total
Net cash provided by (used in) operating activities	$	(370.5)	$	(426.8)	$	(797.3)	$	(239.4)	$	(394.4)	$	(633.8)	$	(517.5)	$	(371.4)	$	(888.9)
Net cash provided by (used in) investing activities	0.6		(63.7)		(63.1)		(14.7)		(1.1)		(15.8)		(32.7)		(24.1)		(56.8)
Net cash provided by (used in) financing activities	365.7		472.6		838.3		235.6		402.3		637.9		559.7		343.7		903.4
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products	—		(1.9)		(1.9)		—		(2.4)		(2.4)		—		0.4		0.4
Net change in cash and cash equivalents during period	(4.2)		(19.8)		(24.0)		(18.5)		4.4		(14.1)		9.5		(51.4)		(41.9)
Cash and cash equivalents at beginning of year	7.2		55.9		63.1		25.7		51.5		77.2		16.2		102.9		119.1
Cash and cash equivalents at end of year	$	3.0	$	36.1	$	39.1	$	7.2	$	55.9	$	63.1	$	25.7	$	51.5	$	77.2

The net cash provided by financing activities includes $295.1 million in 2025, $31.7 million in 2024 and $544.6 million in 2023, of net subscriptions we made into the consolidated investment products, net of dividends received. These cash flows were eliminated in consolidation.

FAIR VALUE MEASUREMENTS.

We determine the fair value of investments held by consolidated investment products using the following broad levels of inputs as defined by related accounting standards:

Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.

These levels are not necessarily an indication of the risk or liquidity associated with these investment holdings. The following table summarizes the investment holdings held by our consolidated investment products using fair value measurements determined based on the differing levels of inputs as of December 31.

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	2025				2024
(in millions)	Level 1		Level 2			Level 1		Level 2
Assets
Cash equivalents	$	2.8	$	—		$	6.3	$	—
Equity securities	475.2		376.5			452.3		285.4
Fixed income securities	—		1,002.5			—		1,173.5
Other investments	0.4		30.9			1.6		23.4
	$	478.4	$	1,409.9		$	460.2	$	1,482.3

Liabilities	$	(0.3)	$	(5.1)		$	(1.7)	$	(14.5)

NOTE 7 – LEASES.

All of our leases are operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities.

At December 31, 2025, the weighted-average remaining lease term on our leases is 11.9 years and the weighted-average discount rate used to measure the lease liabilities is 4.0%.

Operating lease expense was $56.0 million in 2025, $42.2 million in 2024, and $52.4 million in 2023. Charges related to our operating leases that are variable, including certain maintenance charges and other management-related costs, and not included in the measurement of the lease liabilities, were $19.4 million in 2025, $14.1 million in 2024, and $11.2 million in 2023. We made lease payments of $53.0 million during 2025, $59.6 million during 2024, and $42.4 million during 2023.

Our future undiscounted cash flows related to our operating leases, and the reconciliation to the operating lease liability as of December 31, 2025, are as follows:


(in millions)	2025

2026	$	56.0
2027	56.0
2028	51.6
2029	42.8
2030	40.4
Thereafter	317.2
Total future undiscounted cash flows	564.0
Less: imputed interest to be recognized in lease expense	(116.8)
Operating lease liabilities, as reported	$	447.2

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NOTE 8 – PROPERTY, EQUIPMENT AND SOFTWARE.

Property, equipment and software at December 31 consists of:


(in millions)	2025		2024
Computer and communications software and equipment	$	1,847.9	$	1,680.3
Buildings and improvements	466.1		493.2
Leasehold improvements	407.1		414.0
Furniture and other equipment	252.4		225.3
Land	22.5		25.7

	2,996.0		2,838.5
Less accumulated depreciation and amortization	2,150.7		1,861.5
Total	$	845.3	$	977.0

Compensation and related costs attributable to the development of computer software for internal use, totaling $168.7 million in 2025, $182.0 million in 2024, and $156.1 million in 2023, have been capitalized.

In the fourth quarter of 2025, we executed several initiatives as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. These actions included a decision to exit two buildings, with plans to dispose of the properties in 2026, resulting in accelerated depreciation equal to their carrying value of $92.3 million as of December 31, 2025. We also recorded impairments on additional real estate holdings to align their carrying values with prevailing market conditions as a result of being held for sale as of December 31, 2025. In aggregate, these actions resulted in charges of $127 million in the fourth quarter of 2025, which were recognized in the restructuring charge of the consolidated statements of income.

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS.

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



(in millions)	2025		2024
Goodwill	$	2,642.8	$	2,642.8
Indefinite-lived intangible assets - trade name	86.0		86.0
Indefinite-lived intangible assets - investment advisory agreements	62.3		65.6
Definite-lived intangible assets - investment advisory agreements	125.9		216.5
Total	$	2,917.0	$	3,010.9

We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis in the fourth quarter using a fair value approach. We did not record any impairment charges for goodwill for the years ended December 31, 2025, 2024, or 2023.

We recognized impairments of indefinite-lived intangibles of $3.3 million in 2025, $31.1 million in 2024, and no impairments in 2023. The $3.3 million impairment in 2025 was attributable to investment advisory agreements while the $31.1 million impairment in 2024 was attributable to the trade name. The impairments in 2025 and 2024 were the result of reduced growth expectations for both management and incentive fees.

Definite-lived investment advisory agreement intangible assets consisted of the following at December 31 :


(in millions)	2025		2024
Gross carrying amount	$	613.9	$	613.9
Accumulated amortization & impairments	(488.0)		(397.4)
Net carrying amount	$	125.9	$	216.5

Remaining weighted-average estimated useful life in years	2.8		3.7

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Amortization and impairment expense for the definite-lived investment advisory agreement intangible assets was $90.6 million in 2025, $108.1 million in 2024, and $122.5 million in 2023, respectively. We recognized insignificant impairments of definite-lived intangibles in 2025, 2024, and 2023. Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the remaining years is as follows:


(in millions)	2025
2026	$	54.6
2027	39.1
2028	11.8
2029	8.8
2030 and after	11.6
	$	125.9

NOTE 10 – INCOME TAXES.

Income before income taxes for each of the past three years was earned almost entirely in the United States.

INCOME TAX PROVISION.

The provision for income taxes consists of:


(in millions)	2025		2024		2023
Current income taxes
U.S. federal	$	434.5	$	634.7	$	554.0
State and local	91.2		112.4		68.1
Foreign	44.7		24.7		23.9
Deferred income taxes (benefits)	96.8		(88.0)		8.6
Total	$	667.2	$	683.8	$	654.6

In 2025 and 2023, stock-based compensation plans activity increased income tax expense by $3.2 million and $3.4 million, respectively. In 2024, stock-based compensation plans activity decreased income tax expense by $4.5 million. These income tax impacts were recognized in the income tax provision.

The following table reconciles the statutory federal income tax rate to our effective income tax rate.


	2025				2024				2023
	Amount		Percent		Amount		Percent		Amount		Percent
Statutory U.S. federal income tax rate	$	603.8	21.0	%	$	592.1	21.0	%	$	523.0	21.0	%
U.S. federal
Net income (loss) attributable to redeemable non-controlling interests(1)	(25.5)		(0.9)		(7.5)		(0.3)		(9.9)		(0.4)
Net excess tax benefits from stock-based compensation plans activity	1.4		—		(4.0)		(0.1)		2.8		0.1
Other	(0.7)		—		(0.5)		(0.1)		(7.8)		(0.3)
State and local income taxes, net of federal effect	58.2		2.1		79.9		2.9		55.8		2.3

Foreign tax effects

United Kingdom: changes in valuation allowances	13.1		0.4		10.8		0.4		81.1		3.3

Other	16.9		0.6		13.0		0.5		9.6		0.3

Effective income tax	$	667.2	23.2	%	$	683.8	24.3	%	$	654.6	26.3	%

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

In each of 2023, 2024, and 2025, more than 50% of our state and local tax expense was attributable to a concentrated group of jurisdictions. For 2023 and 2025, these jurisdictions were Maryland, California, New York City, and New Jersey, and for 2024 they were Maryland, California, New York City, and New York State.

Deferred income taxes (benefits) arise from temporary differences between taxable income for financial statement and income tax return purposes. The deferred income taxes (benefits) recognized as part of our provision for income taxes is related to:


(in millions)	2025		2024		2023
Property, equipment and software	$	149.8	$	(60.3)	$	(43.2)
Accrued, deferred, and long-term incentive compensation	(20.0)		(14.2)		(28.6)
Operating lease assets	33.9		(1.7)		(6.3)
Operating lease liabilities	(41.7)		5.0		3.8
Acquisition-related liabilities	(13.5)		(9.8)		0.6

Acquired investments	(5.3)		(27.9)		(19.5)
Unrealized gains (losses) recognized in non-operating income	16.6		16.8		43.8
Net operating losses	(15.8)		(11.2)		(31.5)
Change in valuation allowances	11.2		16.1		86.4



Other	(18.4)		(0.8)		3.1
Total net deferred income taxes (benefits)	$	96.8	$	(88.0)	$	8.6

DEFERRED TAX ASSETS (LIABILITIES).

The net deferred tax assets recognized in our consolidated balance sheets in other assets as of December 31 relate to the following:


(in millions)	2025		2024
Deferred tax assets
Accrued, deferred, and long-term incentive compensation	$	337.7	$	317.7
Operating lease liability	81.5		39.8
Acquired investments	71.7		66.4
Net operating loss carry-forwards	64.8		53.7





Property, equipment and software	—		90.9
Other	27.0		12.9
Total deferred tax assets	582.7		581.4
Valuation allowances	(130.1)		(118.9)
Total deferred tax assets, net of valuation allowances	452.6		462.5

Deferred tax liabilities

Operating lease assets	(75.0)		(41.1)
Unrealized gains (losses) recognized in non-operating income	(66.6)		(50.0)
Acquisition-related liabilities	(64.0)		(77.5)

Property, equipment and software	(58.9)		—



Other	—		(15.9)
Total deferred tax liabilities	(264.5)		(184.5)
Net deferred tax assets	$	188.1	$	278.0

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We had operating loss carryforwards before tax of $211.2 million at December 31, 2025 and $220.0 million at December 31, 2024. The decrease in operating loss carryforwards from 2024 is primarily related to operating income generated from our Hong Kong subsidiary. Almost all of the operating loss carryforwards are attributable to the United Kingdom and do not expire. However, the amount of annual profits that can be relieved by losses carried forward is limited to 50%, subject to an annual allowance of GBP 5 million per group.

We consider the need for valuation allowances against our deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. The valuation allowances total $130.1 million at December 31, 2025 and $118.9 million at December 31, 2024. The increase of $11.2 million in the valuation allowances was due to the uncertainty of generating sufficient taxable income in future periods in certain foreign jurisdictions. Any additional or reversal of valuation allowances in future periods will be dependent on the generation of sufficient taxable income. The future change in the valuation allowance could materially increase or decrease our income tax expenses in future periods.

We intend to repatriate earnings of T. Rowe Price foreign subsidiaries to the U.S. in an amount not to exceed these subsidiaries' previously taxed earnings and profits (PTEP), which are estimated to be approximately $1,138 million at December 31, 2025. These earnings as well as our pro rata share of the earnings of foreign corporations in which T. Rowe Price owns 10% or more were subject to the repatriation tax enacted with the U.S. tax reform and are treated as PTEP. As such, we did not record a deferred tax liability with respect to the U.S. federal or foreign withholding taxes as the PTEP should not be taxed in these jurisdictions.

OTHER DISCLOSURES.

The following table summarizes the net income taxes paid:


(in millions)	2025		2024		2023
U.S. federal taxes	$	469.8	$	610.5	$	529.4
All other jurisdictions	125.6		112.7		102.6
Total taxes paid	$	595.4	$	723.2	$	632.0

Other assets include tax refund receivables of $50.2 million at December 31, 2025, and $52.4 million at December 31, 2024.

UNRECOGNIZED TAX BENEFITS.

The following table summarizes the changes in our unrecognized tax benefits.


(in millions)	2025		2024		2023
Balance at beginning of year	$	43.0	$	42.7	$	35.4
Changes in tax positions related to
Current year	2.5		4.2		7.8
Prior years	(18.1)		(2.9)		0.5
Expired statute of limitations	(1.3)		(1.0)		(1.0)
Balance at end of year	$	26.1	$	43.0	$	42.7

The decrease of unrecognized tax benefits related to prior years is due to the settlements of certain state tax benefits. If recognized, these unrecognized tax benefits would affect our effective tax rate; however, we do not expect that unrecognized tax benefits for tax positions taken with respect to 2025 and prior years will significantly change in 2026. As of January 2026, the U.S. Internal Revenue Service (IRS) has concluded examinations related to federal tax obligations through the year 2023.

A net interest payable related to our unrecognized tax benefits of $5.6 million at December 31, 2025, and $8.6 million at December 31, 2024, are recognized in our consolidated balance sheets. Our accounting policy with

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respect to interest and penalties arising from income tax settlements is to recognize them as part of our provision for income taxes. Interest recognized as part of our provision for income taxes was not material.

NOTE 11 – STOCKHOLDERS' EQUITY.

SHARE REPURCHASES.

The Board of Directors has authorized the future repurchase of up to 12,201,846 common shares as of December 31, 2025.

Accounts payable and accrued expenses includes liabilities of $6.9 million at December 31, 2025 for common stock repurchases that settled during the first week of January 2026 and 2025 stock repurchase excise tax obligations that will impact cash flows in the first half of 2026.

RESTRICTED CAPITAL.

Our consolidated stockholders' equity at December 31, 2025 includes about $396 million that is restricted as to use by various regulations and agreements arising in the ordinary course of our business.

NOTE 12 – LONG-TERM INCENTIVE COMPENSATION.

SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.

At December 31, 2025, a total of 14,000,868 shares of unissued common stock were authorized for issuance under our stock-based compensation plans. Additionally, a total of 2,446,539 shares are authorized for issuance under a plan whereby substantially all employees may acquire common stock through payroll deductions at prevailing market prices.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during 2025.


	Options	Weighted- average exercise price		Weighted-average remaining contractual term in years
Outstanding at December 31, 2024	661,377	$	73.76

Exercised	(642,149)	$	73.89

Expired	(1,560)	$	79.71
Outstanding and exercisable at December 31, 2025	17,668	$	68.49	0.6

There was no stock option-based compensation expense in 2025, 2024, or 2023.

The total intrinsic value of options exercised was $21.2 million in 2025, $27.7 million in 2024, and $30.6 million in 2023. At December 31, 2025, the aggregate intrinsic value of in-the-money options outstanding was $0.6 million.

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RESTRICTED STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted stock units during 2025.


	Restricted stock units	Weighted- average fair value
Nonvested at December 31, 2024	6,001,579	$	124.73
Time-based grants	1,969,573	$	104.97
Performance-based grants	93,062	$	105.05
Vested (value at vest date was $184.6 million)	(1,783,965)	$	134.70

Forfeited	(361,897)	$	125.45
Nonvested at December 31, 2025	5,918,352	$	114.80

Nonvested at December 31, 2025 includes performance-based restricted stock units of 384,080. These nonvested performance-based restricted stock units include 33,422 units for which the performance period has lapsed, and the performance threshold has been met.

Compensation and related costs includes expenses for stock-based awards of $216.9 million in 2025, $247.3 million in 2024, and $265.6 million in 2023.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the requisite service period of the stock-based awards outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met and adjustments for actual forfeitures.


(in millions)
First quarter 2026	$	53.4
Second quarter 2026	49.0
Third quarter 2026	43.3
Fourth quarter 2026	37.6
2027	81.2
2028 through 2031	61.9
Total	$	326.4

RESTRICTED FUND UNITS.

We granted restricted fund units valued you at $102.2 million in December 2025 and $103.3 million in December 2024. Below is a roll forward of the restricted fund units liability, which is reported in deferred compensation liabilities on the consolidated balance sheet.


(in millions)	2025		2024
Balance at beginning of year	$	14.7	$	—
Amortization of grant date value	54.6		14.8
Amortization of market appreciation (depreciation)	7.9		(0.1)
Forfeitures	(0.1)		—
Settlements	(22.4)		—
Balance at end of year	$	54.7	$	14.7

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The following table presents the compensation expense to be recognized over the requisite service period of the restricted fund units outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants, changes in the market value of the restricted fund units, which is based on selected hypothetical investments and adjustments for actual forfeitures. The grants outstanding will vest by 2030.


(in millions)
First quarter 2026	$	19.3
Second quarter 2026	18.4
Third quarter 2026	17.8
Fourth quarter 2026	14.4
2027	35.4
2028 through 2030	31.8
Total	$	137.1

NOTE 13 – EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation of net income attributable to T. Rowe Price Group to net income allocated to our common stockholders and the weighted-average shares that are used in calculating the basic and diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution reflects the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested.


(in millions)	2025		2024		2023
Net income attributable to T. Rowe Price Group	$	2,087.1	$	2,100.1	$	1,788.7
Less: net income allocated to outstanding restricted stock and stock unit holders	50.6		55.8		44.4
Net income allocated to common stockholders	$	2,036.5	$	2,044.3	$	1,744.3

Weighted-average common shares
Outstanding	220.0		222.8		224.1
Outstanding assuming dilution	220.3		223.3		224.8

For the past three years, no stock options have been excluded from the calculation of diluted earnings per common share they would not be anti-dilutive.

NOTE 14 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS.

The following table presents the impact of the components of other comprehensive income or loss on deferred tax benefits (income taxes).


(in millions)	2025		2024		2023
Net deferred tax benefits (income taxes) on:
Currency translation adjustments	$	(2.8)	$	3.7	$	(2.0)

Reclassification adjustment recognized in the provision for income taxes upon deconsolidation of investment products	1.4		—		0.1







Total net deferred tax benefits (income taxes)	$	(1.4)	$	3.7	$	(1.9)

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



(in millions)	Equity method investments		Consolidated investment products - variable interest entities		Total currency translation adjustments
Balances at December 31, 2022	$	(50.5)	$	(2.5)	$	(53.0)



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


Net deferred tax benefits (income taxes)	0.2		(2.1)		(1.9)
Other comprehensive income (loss)	(1.4)		6.9		5.5
Balances at December 31, 2023	(51.9)		4.4		(47.5)
Other comprehensive income (loss) before reclassifications	0.7		(9.0)		(8.3)
Reclassification adjustments recognized in non-operating income	—		0.4		0.4
Other comprehensive income (loss) before income taxes	0.7		(8.6)		(7.9)
Net deferred tax benefits (income taxes)	1.7		2.0		3.7
Other comprehensive income (loss)	2.4		(6.6)		(4.2)
Balances at December 31, 2024	(49.5)		(2.2)		(51.7)



Other comprehensive income (loss) before reclassifications	(9.3)		15.0		5.7
Reclassification adjustments recognized in non-operating income	—		(3.1)		(3.1)
Other comprehensive income (loss) before income taxes	(9.3)		11.9		2.6
Net deferred tax benefits (income taxes)	1.4		(2.8)		(1.4)
Other comprehensive income (loss)	(7.9)		9.1		1.2

Balances at December 31, 2025	$	(57.4)	$	6.9	$	(50.5)

The other comprehensive income (loss) in the table above excludes net gains of $9.8 million in 2025, net losses of $5.0 million in 2024, and net gains of $12.7 million in 2023 of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated investment products.

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NOTE 15 – SEGMENT REPORTING.

We have one reportable segment: investment management services. We derive our revenue and net income globally and manage business activities on a consolidated basis.

We largely derive our revenues and net income from investment advisory services provided to individual and institutional investors. We also provide certain administrative services, including mutual fund transfer agent, fund and product accounting, distribution, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; and other advisory services. Our revenues and net income depend largely on the total value and composition of our assets under management, as such, the consideration for our services is generally variable and recognized over time.

Our chief operating decision maker (CODM) is the chief executive officer. The CODM utilizes consolidated net income attributable to T. Rowe Price Group as reported on the consolidated statements of income and certain non-GAAP metrics to assess performance and allocate resources. Based on these metrics, the CODM decides either to reinvest profits into the business based on our strategic priorities and/or return cash to stockholders through dividends and share repurchases.

We determined there are no significant segment expenses that require a separate disclosure, as the major categories of expenses regularly reviewed by the CODM to manage operations are disclosed in the consolidated statements of income. Quarterly reviews of expenses highlight those influenced by financial markets, such as distribution and servicing costs, as well as those that are both qualitatively and quantitatively significant. The measure of segment assets is reported on the consolidated balance sheet as total assets.

NOTE 16 – COMMITMENTS AND CONTINGENCIES.

COMMITMENTS.

T. Rowe Price Group has committed $287 million for investment in future OHA product launches through 2026.

CONTINGENCIES.

Contingent Consideration

As part of the purchase consideration for our acquisition of OHA in December 2021, there is contingent

consideration in the amount of up to $900 million, payable in cash, that may be due as part of an earnout payment in 2026 and 2027 upon satisfying or exceeding certain defined revenue targets. These defined revenue targets will be evaluated on a cumulative basis from 2022 through 2026. About 22% of the earnout is conditioned upon continued service with T. Rowe Price Group and was excluded from the purchase consideration and deemed compensatory. The fair value of the earnout is remeasured each reporting period and was valued at zero as of December 31, 2025 and December 31, 2024.

Value Creation

In addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain employees of OHA will receive incentive payments equal to 10% of the appreciated value of the OHA business on the fifth anniversary of the acquisition date, subject to an annualized preferred return to T. Rowe Price. This arrangement is treated as a post-combination compensation expense. This arrangement will be remeasured at fair value at each reporting date and recognized over the related service period. For the year ended December 31, 2025, 2024, and 2023, the amounts recognized as part of compensation expense in our consolidated statements of income were immaterial.

Other

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.

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NOTE 17 – RESTRUCTURING CHARGE.

As separately disclosed in the consolidated statements of income, we recognized a restructuring charge of $177.3 million in 2025, related to actions taken under a broad and ongoing expense management program, which is designed to reduce expense growth and realign resources to support investment in existing and future capabilities. The charge includes accelerated depreciation and impairment charges related to certain owned real estate of $127.3 million as well as $50 million of compensation‑related costs, primarily severance. At December 31, 2025, we had $26.4 million accrued in accrued compensation and related costs. See Note 8 – Property, equipment, and software for additional details on the accelerated depreciation and impairment charges.

NOTE 18 – OTHER DISCLOSURES.

RETIREMENT PLANS.

Compensation and related costs includes expense recognized for our defined contribution retirement plans of $170.6 million in 2025, $162.0 million in 2024, and $152.5 million in 2023.

SUPPLEMENTAL SAVINGS PLAN.

The supplemental savings plan provides certain senior officers the opportunity to defer payment on up to 50% of their annual cash incentive, limited to $2 million annually. The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from a list of T. Rowe Price products. The officer must specify if they would like to receive payment as a lump sum or up to ten annual installments upon separation of service. Additionally, the officer may elect to receive a lump sum payment while still employed in as little as five years.

Below is a roll forward of the supplement savings plan liability which is reported in deferred compensation liabilities on the consolidated balance sheets.


(in millions)	2025		2024
Balance at beginning of the year	$	1,006.0	$	895.0
Deferrals (including taxes)	68.2		53.4
Market appreciation (depreciation), including foreign currency gains (losses)	128.6		104.3
Distributions	(80.7)		(46.7)
Balance at end of the year	$	1,122.1	$	1,006.0

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

T. Rowe Price Group, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of T. Rowe Price Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 13, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the completeness and accuracy of assets under management data used in the calculation of investment advisory fee revenue

As discussed in Note 1 to the consolidated financial statements, the Company recognizes fees for its investment advisory agreements based on a percentage of its assets under management (AUM). AUM data represents a significant input to the calculation of investment advisory fees. The Company recognized $6.6 billion in investment advisory fees during the year ended December 31, 2025, which included revenue related to T. Rowe U.S. mutual funds (Funds).

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We identified the evaluation of the completeness and accuracy of AUM data for the Funds as a critical audit matter as AUM data is transmitted through multiple information technology (IT) systems used in the calculation of investment advisory fee revenue. Given the Company’s use of multiple IT systems, the nature and extent of audit effort involved in performing procedures to evaluate the completeness and accuracy of AUM data required the use of IT professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address the critical audit matter. We evaluated the design and tested the operating effectiveness of certain controls over the Company’s revenue processes, including manual controls over the completeness and accuracy of AUM data. We involved IT professionals with specialized skills and knowledge, who assisted in the testing of general IT controls and the interface of data between multiple IT systems used to maintain AUM data. To assess the AUM data, we (1) compared AUM used in the calculation of a sample of investment advisory fees to the source IT systems, and (2) for a selection of Funds, compared AUM on select dates from the source IT system to the audited Fund financial statements.

/s/ KPMG LLP

We have served as the Company’s auditor since 2001.

Baltimore, Maryland

February 13, 2026

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