Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW.

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

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 affect our revenues and results of operations.

We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.

The investment management industry has been evolving and industry participants are facing challenging trends including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.

MARKET TRENDS.

Major stock indexes declined in the first quarter of 2025. Early optimism about the incoming Trump administration’s likely business-friendly policies faded amid concerns that President Trump’s tariffs on imports from major trading partners would lead to higher prices of goods sold in the U.S. and contribute to inflation pressures. Investors were also concerned that some weaker-than-expected economic data and reports from various retailers warning about slowing sales or decreased consumer spending would translate into slower economic growth, if not a recession. As the quarter ended, investors were bracing for President Trump to impose “reciprocal” tariffs in early April on countries that already have tariffs or other trade barriers on imports from the U.S.

Developed non-U.S. equity markets strongly outperformed U.S. shares in U.S. dollar terms. In Europe, equity markets were mostly positive in dollar terms, helped by expectations for eurozone spending on defense and infrastructure to increase, particularly in Germany. Developed Asian markets were mixed in dollar terms, with Japanese stocks adding only about 0.5%.

Emerging equity markets rose but trailed stocks in developed non-U.S. markets in U.S. dollar terms. In emerging Asia, markets were mostly negative in dollar terms, but Chinese shares were lifted in part by hopes that fiscal and monetary stimulus would lead to increased consumption and stronger economic growth. In Latin America and in the emerging Europe, Middle East, and Africa (EMEA) region, markets were mostly positive in dollar terms.

Returns of several major equity market indexes were as follows:

Index						3/31/2025
S&P 500 Index						(4.3)%
NASDAQ Composite Index(1)						(10.4)%
Russell 2000 Index						(9.5)%
MSCI EAFE (Europe, Australasia, and Far East) Index						7.0%
MSCI Emerging Markets Index						3.0%

(1) Returns exclude dividends

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Global bond returns were mostly positive in the first quarter of 2025. In the U.S., Treasury bill yields were little changed as the Federal Reserve held short-term interest rates steady due to inflation remaining above its 2% long-term goal. Intermediate- and long-term U.S. Treasury yields declined, however, amid concerns about slowing economic growth. The 10-year U.S. Treasury note yield decreased from 4.58% to 4.23% in the first quarter.

In the U.S. investment-grade universe, sector performance was broadly positive. Mortgage-backed and Treasury securities performed best, but corporate bonds and non-agency commercial mortgage-backed securities also did well. Asset-backed securities lagged with milder gains. Tax-free municipal bonds trailed the broad taxable bond market, as intermediate-term yields fell less than comparable Treasury yields, and as long-term muni yields increased during the quarter. High yield corporate bonds produced modest gains but underperformed investment-grade bonds.

Bonds in developed non-U.S. markets produced positive returns in U.S. dollar terms; returns to U.S. investors were enhanced by stronger non-U.S. currencies versus the dollar. In Europe, longer-term bond yields increased in various countries, particularly in March, in response to the German government’s plans to ramp up infrastructure and defense spending. The European Central Bank reduced interest rates twice during the quarter, while the Bank of England reduced its benchmark interest rate once. In Japan, long-term government bond yields rose steadily for most of the quarter, to levels unseen in about 16 years, in anticipation of tighter monetary policy later this year. However, yields retraced some of their increase in late March amid concerns that economic growth will slow in response to U.S. tariffs on Japanese automobiles and other exports. Emerging markets bonds produced positive returns in U.S. dollar terms. Bonds denominated in local currencies generally outperformed dollar-denominated bonds in U.S. dollar terms, as most developing markets currencies appreciated versus the dollar.

Returns of several major bond market indexes were as follows:

Index						3/31/2025
Bloomberg U.S. Aggregate Bond Index						2.8%
JPMorgan Global High Yield Index						0.9%
Bloomberg Municipal Bond Index						(0.2)%
Bloomberg Global Aggregate Ex-U.S. Dollar Bond Index						2.5%
JPMorgan Emerging Markets Bond Index Plus						2.1%
ICE Bank of America U.S. High Yield Index						0.9%
S&P UBS Leveraged Loan Index						0.6%

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ASSETS UNDER MANAGEMENT.

Assets under management ended the first quarter of 2025 at $1,566.3 billion, a decrease of $40.3 billion from December 31, 2024. The decrease in assets under management during the first quarter of 2025 was driven by market depreciation of $31.7 billion and net cash outflows of $8.6 billion.

The following table details changes in our assets under management, by asset class, during the first quarter of 2025:

			Three months ended 3/31/2025
(in billions)			Equity						Fixed income, including money market						Multi-asset**(1)**						Alternatives**(2)**						Total
Assets under management at beginning of period			$	829.7					$	188.1					$	536.0					$	52.8					$	1,606.6
Net cash flows prior to manager-driven distributions			(19.2)						5.4						5.5						0.4						(7.9)
Manager-driven distributions			—						—						—						(0.7)						(0.7)
Net cash flows			(19.2)						5.4						5.5						(0.3)						(8.6)
Net market appreciation (depreciation) and income(3)			(37.1)						2.2						2.9						0.3						(31.7)
Change during the period			(56.3)						7.6						8.4						—						(40.3)
Assets under management at March 31, 2025			$	773.4					$	195.7					$	544.4					$	52.8					$	1,566.3

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

(2) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed/distressed, non-investment grade CLOs, special situations, business development companies, or that have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $17.1 billion at March 31, 2025 and are not reflected in fee basis AUM above.

(3) Includes net distributions not reinvested for the first quarter of 2025 of $0.5 billion.

Investment advisory clients outside the United States account for 8.7% of our assets under management at March 31, 2025 and 8.8% at December 31, 2024.

Assets under management in our target date retirement portfolios, which are included in the multi-asset totals shown above, were $484.2 billion at March 31, 2025, compared with $475.6 billion at December 31, 2024. Net flows into these portfolios were $6.3 billion in the first quarter of 2025.

We also provide strategic investment advice solutions to certain portfolios. These advice solutions, primarily overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery. As of March 31, 2025, total assets in these solutions were $566 billion, of which $551 billion are included in our reported assets under management in the table above.

We provide participant accounting and plan administration for retirement plans that primarily invest in the firm's U.S. mutual funds, collective investment trusts and funds outside of the firm's complex. As of March 31, 2025, our assets under administration were $280 billion, of which $158 billion are assets we manage.

INVESTMENT PERFORMANCE.****(1)

Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, mutual fund performance against passive peers, and composite performance against benchmarks. The following tables present investment performance for the one-, three-, five-, and 10-years ended March 31, 2025. Past performance is not a reliable indicator of future performance.

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% of U.S. mutual funds that outperformed Morningstar median**(2),(3)**
						1 year						3 years						5 years						10 years
Equity						56%						57%						58%						67%
Fixed Income						64%						50%						65%						62%
Multi-Asset						62%						75%						72%						76%
All Funds						61%						61%						65%						68%
% of U.S. mutual funds that outperformed passive peer median**(2),(4)**
						1 year						3 years						5 years						10 years
Equity						37%						53%						55%						50%
Fixed Income						55%						52%						77%						62%
Multi-Asset						16%						63%						71%						55%
All Funds						34%						56%						66%						55%
% of composites that outperformed benchmarks**(5)**
						1 year						3 years						5 years						10 years
Equity						22%						40%						34%						58%
Fixed Income						59%						39%						68%						75%
All Composites						38%						39%						48%						64%

AUM Weighted Performance
% of U.S. mutual funds AUM that outperformed Morningstar median**(2),(3)**
						1 year						3 years						5 years						10 years
Equity						69%						69%						60%						86%
Fixed Income						74%						62%						72%						79%
Multi-Asset						34%						91%						92%						94%
All Funds						61%						73%						68%						87%
% of U.S. mutual funds AUM that outperformed passive peer median**(2),(4)**
						1 year						3 years						5 years						10 years
Equity						41%						50%						39%						49%
Fixed Income						53%						57%						92%						73%
Multi-Asset						7%						91%						95%						94%
All Funds						34%						60%						57%						61%
% of composites AUM that outperformed benchmarks**(5)**
						1 year						3 years						5 years						10 years
Equity						24%						41%						35%						48%
Fixed Income						72%						35%						71%						54%
All Composites						33%						40%						41%						49%

As of March 31, 2025, 83 of 142 (58.5%) of the firm's rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars(6). In addition, 66%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended March 31, 2025 with an overall rating of 4 or 5 stars.

(1) The investment performance reflects that of T. Rowe Price U.S. mutual funds and composites AUM.

(2) Source: © 2025 Morningstar, Inc. All rights reserved. The information contained herein: 1) is proprietary to Morningstar and/or its content providers; 2) may not be copied or distributed; and 3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, U.S. mutual funds with an operating history of less than one year, T. Rowe Price passive funds, and T. Rowe Price U.S. mutual funds that are clones of other funds. The top chart reflects the percentage of T. Rowe Price U.S. mutual funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price U.S. mutual funds AUM that has outperformed for the time periods indicated. Total U.S. Mutual Fund AUM included for this analysis includes $307B for 1 year, $300B for 3 years, $299B for 5 years, and $298B for 10 years.

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(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, mutual funds with an operating history of less than one year, mutual funds with fewer than three peers, T. Rowe Price passive mutual funds, and T. Rowe Price mutual funds that are clones of other funds. This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price mutual funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price mutual funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $290B for 1 year, $284B for 3 years, $245B for 5 years, and $237B for 10 years.

*(5)*Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,391B for 1 year, $1,385B for 3 years, $1,380B for 5 years, and $1,338B for 10 years.

(6) The Morningstar Rating™ for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars to the top 32.5% of all funds (of the 32.5%,10% get 5 stars and 22.5% get 4 stars). The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund’s 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics.

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RESULTS OF OPERATIONS.

The following table and discussion sets forth information regarding our consolidated financial results for the first quarter of 2025 and 2024 on a U.S. GAAP basis and a non-GAAP basis. The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any.

			Three months ended												Q1 2025 vs. Q1 2024
(in millions, except per-share data)			3/31/2025						3/31/2024						$ change						% change**(1)**
U.S. GAAP basis
Investment advisory fees(2)			$	1,598.4					$	1,536.4					$	62.0					4.0		%
Performance-based advisory fees(2)			$	10.4					$	17.6					$	(7.2)					(40.9)		%
Capital allocation-based income(3)			$	(1.2)					$	47.1					$	(48.3)					n/m
Net revenues			$	1,763.9					$	1,750.2					$	13.7					0.8		%
Operating expenses			$	1,167.6					$	1,163.6					$	4.0					0.3		%
Net operating income			$	596.3					$	586.6					$	9.7					1.7		%
Non-operating income (loss)			$	70.7					$	188.9					$	(118.2)					n/m
Net income to T. Rowe Price Group			$	490.5					$	573.8					$	(83.3)					(14.5)		%
Diluted earnings per common share			$	2.15					$	2.49					$	(0.34)					(13.7)		%
Weighted average common shares outstanding assuming dilution			222.6						224.2						$	(1.6)					(0.7)		%
Adjusted basis**(4)**
Operating expenses			$	1,135.1					$	1,071.4					$	63.7					5.9		%
Operating expenses, excluding accrued carried interest related compensation			$	1,131.2					$	1,052.9					$	78.3					7.4		%
Net operating income			$	640.6					$	692.4					$	(51.8)					(7.5)		%
Non-operating income (loss)			$	35.5					$	28.5					$	7.0					24.6		%
Net income to T. Rowe Price Group			$	509.3					$	548.5					$	(39.2)					(7.1)		%
Diluted earnings per common share			$	2.23					$	2.38					$	(0.15)					(6.3)		%
Assets under management (AUM) (in billions)
Average AUM			$	1,620.3					$	1,484.4					$	135.9					9.2		%
Ending AUM			$	1,566.3					$	1,542.2					$	24.1					1.6		%
Investment advisory annualized effective fee rate (EFR) (in bps)
EFR without performance-based fees			40.0						41.6						$	(1.6)					(3.8)		%
EFR with performance-based fees			40.3						42.1						$	(1.8)					(4.3)		%

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

(2) In the first quarter of 2024, performance-based advisory fees were included in investment advisory fees.

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

(4) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management’s Discussion and Analysis.

Results Overview - Quarter ended March 31, 2025

Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, services, and other fees; and capital allocation-based income. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,763.9 million in the first quarter of 2025, a 0.8% increase compared to $1,750.2 million in the 2024 quarter. The increase was primarily driven by a 4.0% increase in investment advisory fee revenue as average assets under management increased 9.2%. This increase was nearly offset by a $48.3 million decline in capital allocation-based income (change in accrued carried interest) earned from certain affiliated funds.

Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows. As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner. Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.

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

Operating expenses on a U.S. GAAP basis were $1,167.6 million in the first quarter of 2025, a 0.3% increase over the comparable 2024 period. On a non-GAAP basis, operating expenses were $1,135.1 million, a 5.9% increase over the comparable 2024 period.

In comparison to the first quarter of 2024, higher costs across compensation and related benefits and other expense categories were nearly offset by the change in the market-related impacts on the deferred compensation liabilities. As noted above, we remove the market-related impacts on the deferred compensation liabilities in our non-GAAP operating expenses measures as the liabilities are economically hedged.

Operating margin in the first quarter of 2025 was 33.8% on a U.S. GAAP basis, compared to 33.5% earned in the first quarter of 2024. The increase in our U.S. GAAP operating margin for the first quarter of 2025 compared to the 2024 period was driven by net revenue growth outpacing operating expense growth primarily due to higher investment advisory fee revenue and market-related reductions in deferred compensation liabilities.

Diluted earnings per share was $2.15 for the first quarter of 2025 compared to $2.49 for the first quarter of 2024. The decrease was primarily driven by lower investment gains compared to the 2024 period.

On a non-GAAP basis, diluted earnings per share was $2.23 for the first quarter of 2025 as compared to $2.38 for the first quarter of 2024. The decrease was primarily due to lower adjusted operating income and a higher adjusted effective tax rate compared to the 2024 period.

Net revenues

			Three months ended												Q1 2025 vs. Q1 2024
(in millions)			3/31/2025						3/31/2024						$ change						% change**(1)**
Investment advisory fees**(2)**
Equity			$	959.2					$	932.5					$	26.7					2.9		%
Fixed income, including money market			103.6						100.2						3.4						3.4		%
Multi-asset			454.7						429.7						25.0						5.8		%
Alternatives			80.9						74.0						6.9						9.3		%
			1,598.4						1,536.4						62.0						4.0		%
Performance-based advisory fees**(2)**			10.4						17.6						(7.2)						(40.9)		%
Capital allocation-based income
Change in accrued carried interest			9.2						59.5						(50.3)						n/m
Acquisition-related amortization and impairments			(10.4)						(12.4)						2.0						(16.1)		%
			(1.2)						47.1						(48.3)						n/m
Administrative, distribution, services, and other fees
Administrative fees			134.7						127.4						7.3						5.7		%
Distribution and servicing fees			21.6						21.7						(0.1)						(0.5)		%
			156.3						149.1						7.2						4.8		%
Net revenues			$	1,763.9					$	1,750.2					$	13.7					0.8		%
Average AUM (in billions):
Equity			$	826.3					$	770.4					$	55.9					7.3		%
Fixed income, including money market			191.6						169.5						22.1						13.0		%
Multi-asset			549.7						497.0						52.7						10.6		%
Alternatives			52.7						47.5						5.2						10.9		%
Average AUM			$	1,620.3					$	1,484.4					$	135.9					9.2		%
Investment advisory annualized effective fee rate (bps)			40.3						42.1						(1.8)						(4.3)		%
Investment advisory annualized effective fee rate excluding performance-based fees (bps)			40.0						41.6						(1.6)						(3.8)		%

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

(2) In the first quarter of 2024, performance-based advisory fees were included in investment advisory fees.

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Investment advisory fees in the first quarter of 2025 increased 4.0% over the comparable 2024 quarter as average assets under management increased $135.9 billion, or 9.2%, to $1,620.3 billion.

The average annualized effective fee rate earned for the first quarter of 2025 declined from the comparable 2024 period as client flows and transfers led to a mix shift in assets under management toward lower fee asset classes and products.

Performance-based advisory fees in the first quarter of 2025 were in equity and alternative strategies, while they were primarily equity in the 2024 period.

Capital allocation-based income decreased net revenues by $1.2 million in the first quarter of 2025 compared with an increase in net revenue of $47.1 million in the 2024 quarter. The decrease over prior year was largely driven by a decline in the accrued carried interest allocation from investments in affiliated investment funds compared with the 2024 period. The decline was due to lower overall market returns. The firm realized carried interest of $43.1 million in the first quarter of 2025 compared to $52.7 million in the 2024 period.

A portion of the capital allocation-based income is passed through to certain associates as compensation and the related expense recognized in compensation and related costs with the unpaid amount reported as non-controlling interest on the unaudited consolidated balance sheets.

Administrative, distribution, services, and other fees in the first quarter of 2025 were $156.3 million, an increase of $7.2 million, or 4.8%, from the comparable 2024 quarter. The increase in the first quarter was primarily due to higher reimbursable costs associated with the firm's U.S. mutual funds, and non-discretionary advisory services. The reimbursable costs from the firm’s U.S. mutual funds are offset by expenses recognized in product and recordkeeping costs.

Our net revenues reflect the elimination of advisory and administrative fee revenue earned from our consolidated

investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the first quarter, we eliminated net revenue of $1.4 million in 2025 and $1.2 million in 2024.

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Operating expenses

			Three months ended												Q1 2025 vs. Q1 2024
(in millions)			3/31/2025						3/31/2024						$ change						% change**(1)**
Compensation, benefits and related costs			$	657.9					$	629.3					$	28.6					4.5		%
Acquisition-related retention agreements			14.2						13.5						0.7						5.2		%
Capital allocation-based income compensation			(0.4)						13.2						(13.6)						n/m
Deferred compensation liabilities			(7.2)						53.0						(60.2)						n/m
Total compensation and related costs			664.5						709.0						(44.5)						(6.3)		%
Distribution and servicing			93.6						81.9						11.7						14.3		%
Advertising and promotion			26.1						25.3						0.8						3.2		%
Product and recordkeeping related costs			83.8						75.0						8.8						11.7		%
Technology, occupancy, and facility costs			167.6						149.9						17.7						11.8		%
General, administrative, and other			103.3						92.6						10.7						11.6		%
Acquisition-related amortization and impairment costs			28.7						29.9						(1.2)						(4.0)		%
Total operating expenses			$	1,167.6					$	1,163.6					$	4.0					0.3		%
Total adjusted operating expenses (2)			$	1,135.1					$	1,071.4					63.7						5.9		%

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

(2) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management’s Discussion and Analysis.

Compensation, benefits, and related costs were $657.9 million in the first quarter of 2025, an increase of $28.6 million, or 4.5%, compared to the 2024 quarter. The increase was primarily due to higher salaries, employee benefits, and a higher interim bonus accrual. We award base salary increases in January of each year.

The firm employed 8,084 associates at March 31, 2025, a decrease of 0.9% from the end of 2024, and an increase of 2.6% from March 31, 2024.

Distribution and servicing costs were $93.6 million in the first quarter of 2025, an increase of $11.7 million, or 14.3%, compared to $81.9 million recognized in the 2024 quarter. The increase was primarily driven by higher average assets under management distributed through intermediaries.

The costs in this expense category include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds, ETFs, and our international products, such as our Japanese ITMs and SICAVs. These costs are offset entirely by the distribution revenue we earn and report in net revenues: 12b-1 revenue is recognized in administrative, distribution, services, and other fees for the Advisor and R share classes of the U.S. mutual funds and investment advisory fee revenue for our international products and ETFs.

Product and recordkeeping related costs were $83.8 million in the first quarter of 2025, an increase of $8.8 million, or 11.7%, compared to $75.0 million in the 2024 quarter. The increase was primarily due to higher reimbursable costs associated with the firm's U.S. mutual funds which is offset by the expected reimbursement recognized in administrative, distribution, services and other fee revenue.

Technology, occupancy, and facility costs were $167.6 million in the first quarter of 2025, an increase of $17.7 million, or 11.8%, compared to $149.9 million recognized in the 2024 quarter. The increase was primarily due to higher costs from the firm's ongoing investment in its technology capabilities, primarily hosted solutions and depreciation. Additionally, the 2024 quarter included a non-recurring cost benefit related to the firm's UK facility. We began occupying our new corporate headquarters in March.

General, administrative, and other expenses were $103.3 million in the first quarter of 2025, an increase of $10.7 million, or 11.6%, compared to $92.6 million recognized in the 2024 quarter. The increase was primarily due to higher professional fees and information services.

Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible assets identified and separately recognized, at fair value, on acquisition date. In the first quarter of 2025, we recognized acquisition-related amortization and impairment costs of $28.7 million, a decrease of $1.2 million, or 4.0%, compared to $29.9 million recognized in the 2024 period. The decrease was primarily driven by lower

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impairment charges related to certain definite-lived intangible assets. Should conditions that led us to recognize the impairment charges deteriorate further, additional impairments may be recognized in future periods.

Non-operating income (loss)

Non-operating income for the first quarter of 2025 was $70.7 million compared to $188.9 million in the 2024 quarter. The following table details the components of non-operating income for both the first quarter of 2025 and 2024.

			Three months ended
(in millions)			3/31/2025						3/31/2024
Net gains (losses) from non-consolidated investment products
Cash and discretionary investments
Dividend income			$	30.4					$	27.8
Market-related gains (losses) and equity in earnings (losses)			4.2						0.2
Total cash and discretionary investments			34.6						28.0
Seed capital investments
Dividend income			0.2						—
Market-related gains (losses) and equity in earnings (losses)			(11.3)						23.5
Total seed capital investments			(11.1)						23.5
Total cash, discretionary, and seed investments			23.5						51.5
Investments used to hedge the deferred compensation liabilities			(10.7)						49.7
Total net gains (losses) from non-consolidated investment products			12.8						101.2
Other investment income			19.1						20.3
Net gains (losses) on investments			31.9						121.5
Net gains (losses) on consolidated investment products			31.9						72.3
Other gains (losses), including foreign currency gains (losses)			6.9						(4.9)
Non-operating income (loss)			$	70.7					$	188.9
Adjusted non-operating income (loss)****(1)			$	35.5					$	28.5

(1) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.

Lower investment gains earned by our investment portfolio during the first quarter of 2025 compared to the 2024 periods were primarily due to lower overall market returns.

The table above shows the net investment income of the underlying portfolios of the consolidated investment products, not just the income from our ownership share. The table below displays how consolidated investment products affected the individual lines of our unaudited consolidated income statements and the portion attributable to our interest.

			Three months ended
(in millions)			3/31/2025						3/31/2024
Operating expenses reflected in net operating income			$	(2.5)					$	(2.3)
Net investment income (loss) reflected in non-operating income			31.9						72.3
Impact on income before taxes			$	29.4					$	70.0
Net income (loss) attributable to our interest in the consolidated investment products			$	14.8					$	50.4
Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors)			14.6						19.6
Impact on income before taxes			$	29.4					$	70.0

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Provision for income taxes

The GAAP effective tax rate for the first quarter of 2025 was 24.3% compared with 23.5% in the first quarter of 2024. The following table reconciles the statutory federal income tax rate to our effective tax rate on a U.S. GAAP basis for the three months ended March 31, 2025 and 2024:

									Three months ended
															3/31/2025						3/31/2024
Statutory U.S. federal income tax rate															21.0		%				21.0		%
State income taxes for current year, net of federal income tax benefits(1)															2.8						2.5
Net (income) losses attributable to redeemable non-controlling interests(2)															(0.5)						(0.5)
Net excess tax benefits from stock-based compensation plans activity															(0.3)						(0.3)
Valuation allowance															0.4						0.5
Other items															0.9						0.3
Effective income tax rate															24.3		%				23.5		%
Adjusted effective tax rate															24.7		%				23.9		%

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

(2) 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.

The adjusted effective tax rate primarily adjusts for the impact of the consolidated investment products, including the net income attributable to the redeemable non-controlling interests. Our adjusted effective tax rate for the first quarter was 24.7% in 2025 compared with 23.9% in 2024. The increase in both the U.S. GAAP and adjusted effective tax rates was primarily due to higher state taxes in the 2025 quarter.

We currently estimate that our effective tax rate for the full year 2025, on a U.S. GAAP basis, will be in the range of 23.5% to 27.5%. On an adjusted basis, the range is 24.0% to 27.0%.

Our effective tax rate will continue to experience volatility in future periods as the tax benefits recognized from stock-based compensation are impacted by market fluctuations in our stock price and the timing of option exercises. The rate also experiences volatility from the changes in deferred tax asset valuation allowances, primarily in foreign jurisdictions, based on the sufficiency of taxable income in future periods. Our U.S. GAAP rate will also be impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity.

NON-GAAP INFORMATION AND RECONCILIATION.

We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about our core operating results. These measures have been established in order to increase transparency for the purpose of evaluating our core business, for comparing current results with prior period results, and to enable more appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.

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The following schedules reconcile certain U.S. GAAP financial measures for the three months ended

March 31, 2025 and 2024.

			Three months ended 3/31/2025
			Operating expenses						Net operating income						Non-operating income (loss)						Provision (benefit) for income taxes**(5)**						Net income attributable to T. Rowe Price Group, Inc.						Diluted earnings per share**(6)**
U.S. GAAP Basis (FS line item)			$	1,167.6					$	596.3					$	70.7					$	161.9					$	490.5					$	2.15
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)			4.3						6.1						—						1.2						4.9						0.02
Acquisition-related retention arrangements(1) (Compensation and related costs)			(14.2)						14.2						—						3.0						11.2						0.05
Intangible assets amortization and impairments(1)			(28.7)						28.7						—						5.9						22.8						0.10
Total acquisition-related			(38.6)						49.0						—						10.1						38.9						0.17
Deferred compensation liabilities(2) (Compensation and related costs)			7.2						(7.2)						10.7						0.7						2.8						0.01
Consolidated investment products(3)			(1.1)						2.5						(31.9)						(3.1)						(11.7)						(0.05)
Other non-operating income(4)			—						—						(14.0)						(2.8)						(11.2)						(0.05)
Adjusted Non-GAAP Basis			$	1,135.1					$	640.6					$	35.5					$	166.8					$	509.3					$	2.23

			Three months ended 3/31/2024
			Operating expenses						Net operating income						Non-operating income (loss)						Provision (benefit) for income taxes**(5)**						Net income attributable to T. Rowe Price Group, Inc.						Diluted earnings per share**(6)**
U.S. GAAP Basis (FS line item)			$	1,163.6					$	586.6					$	188.9					$	182.1					$	573.8					$	2.49
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)			5.3						7.1						—						2.0						5.1						0.02
Acquisition-related retention arrangements(1) (Compensation and related costs)			(13.5)						13.5						—						3.8						9.7						0.04
Intangible assets amortization and impairments(1)			(29.9)						29.9						—						8.3						21.6						0.10
Total acquisition-related			(38.1)						50.5						—						14.1						36.4						0.16
Deferred compensation liabilities(2) (Compensation and related costs)			(53.0)						53.0						(49.7)						0.9						2.4						0.01
Consolidated investment products(3)			(1.1)						2.3						(72.3)						(14.0)						(36.4)						(0.16)
Other non-operating income(4)			—						—						(38.4)						(10.7)						(27.7)						(0.12)
Adjusted Non-GAAP Basis			$	1,071.4					$	692.4					$	28.5					$	172.4					$	548.5					$	2.38

(1) These non-GAAP adjustments remove the impact of acquisition-related amortization and costs, including amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements. We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.

(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in the fourth quarter of 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units. We believe it is useful to offset the non-operating investment income (loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

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(3) This non-GAAP adjustment removes the impact of the consolidated investment products by adding back their operating expenses and subtracting their investment income. The operating expense adjustment represents their operating expenses net of related investment advisory and administrative fees. The adjustment to net income attributable to T. Rowe Price Group, Inc. represents the consolidated investment products' net income, net of redeemable non-controlling interests. We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.

(4) This non-GAAP adjustment removes non-operating income (loss) earned on those investments that are not economic hedges for the deferred compensation liabilities and are not part of the cash and discretionary investment portfolio. We retain gains from cash and discretionary investments in our non-GAAP measures, as they are are considered part of our core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand the firm's core operating results and increases comparability period to period. Additionally, we do not emphasize this portion of non-operating income (loss) when assessing the firm's performance.

(5) The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate. As such, the non-GAAP effective tax rate for the three months ended March 31, 2025 and 2024 was 24.7% and 23.9%, respectively.

(6) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to T. Rowe Price Group, Inc. divided by the weighted-average common shares outstanding assuming dilution. The calculation of adjusted net income allocated to common stockholders is as follows:

			Three months ended
(in millions)			3/31/2025			3/31/2024
Adjusted net income attributable to T. Rowe Price Group, Inc.			$	509.3		$	548.5
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders			12.9			15.2
Adjusted net income allocated to common stockholders			$	496.4		$	533.3

CAPITAL RESOURCES AND LIQUIDITY.

Sources of Liquidity

We have ample liquidity, including cash and investments in T. Rowe Price products, as follows:

(in millions)			3/31/2025						12/31/2024
Cash and cash equivalents			$	2,836.7					$	2,649.8
Discretionary investments			460.4						457.1
Total cash and discretionary investments			3,297.1						3,106.9
Redeemable seed capital investments			1,331.9						1,262.3
Investments used to hedge the deferred compensation liabilities			1,054.4						1,110.9
Total cash and investments in T. Rowe Price products			$	5,683.4					$	5,480.1

Our discretionary investment portfolio is comprised of short duration bond funds, which typically yield higher than money market rates. Our subsidiaries outside the United States held cash and discretionary investments of $644.0 million at March 31, 2025 and $653.9 million at December 31, 2024. Given the availability of our financial resources and cash expected to be generated through future operations, we do not maintain an available external source of additional liquidity.

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

The cash and investment presentation on the unaudited consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item. The following table details how T. Rowe Price Group, Inc.’s interests in cash and investments relate to where they are presented on the unaudited consolidated balance sheet as of March 31, 2025.

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(in millions)			Cash and cash equivalents						Investments						Net assets of consolidated investment products**(1)**						Total
Cash and discretionary investments			$	2,836.7					$	460.4					$	—					$	3,297.1
Seed capital investments			—						556.7						775.2						1,331.9
Investments used to hedge the deferred compensation liabilities			—						1,054.4						—						1,054.4
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group, Inc.			2,836.7						2,071.5						775.2						5,683.4
Investments in affiliated private investment funds(2)			—						647.0						—						647.0
Investments in CLOs			—						51.4						—						51.4
Investment in UTI and other investments			—						470.4						—						470.4
Total cash and investments attributable to T. Rowe Price Group, Inc.			2,836.7						3,240.3						775.2						6,852.2
Redeemable non-controlling interests			—						—						977.2						977.2
As reported on unaudited consolidated balance sheet at March 31, 2025			$	2,836.7					$	3,240.3					$	1,752.4					$	7,829.4

(1) The consolidated investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest. These products generally represent U.S. mutual funds, ETFs, and funds regulated outside the U.S. The $775.2 million represents the total value at March 31, 2025 of our interest in the consolidated investment products. The total net assets of the T. Rowe Price investment products at March 31, 2025 of $1,752.4 million includes assets of $1,794.4 million, less liabilities of $42.0 million as reflected in our unaudited consolidated balance sheets.

(2) Includes $160.4 million of non-controlling interests in consolidated entities held by related parties and cannot sell in order to obtain cash for general operations.

Our unaudited consolidated balance sheet includes the cash, investments, and other assets and liabilities of our consolidated investment products, which includes any redeemable non-controlling interests held by third-party investors. While we can redeem our net interest in these investment products at any time, we cannot directly access or sell their assets for general operations, and their assets are not available to our general creditors. Our interest typically serves as initial seed capital and is reclassified as discretionary when management decides the seed capital no longer needed. We evaluate these discretionary investment products and aim to liquidate our interest without affecting the product or unrelated third-party investors.

Uses of Liquidity

We increased our quarterly recurring dividend per common share in February 2025 by 2.4% to $1.27 per common share from $1.24 per common share. Further, we expended $217.5 million in the first quarter of 2025 to repurchase 2.1 million shares of our outstanding common stock, at an average price of $101.57 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations. While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

Since the end of 2022, we have returned nearly $3.4 billion to stockholders through stock repurchases and regular quarterly dividends, as follows:

(in millions)			Recurring dividend												Stock repurchases						Total cash returned to stockholders
2023			$	1,121.9											$	254.3					$	1,376.2
2024			1,135.2												334.5						1,469.7
Three months ended 3/31/2025			288.8												217.5						506.3
Total			$	2,545.9											$	806.3					$	3,352.2

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2025 to be about $282 million of which 85% is planned for technology initiatives. We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.

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Cash Flows

The following table summarizes the cash flows for the three months ended March 31, 2025 and 2024, that are attributable to T. Rowe Price Group, Inc., our consolidated investment products, and the related eliminations required in preparing the statement.

			Three months ended
			3/31/2025																								3/31/2024
(in millions)			Cash flow attributable to T. Rowe Price Group, Inc.						Cash flow attributable to consolidated investment products						Elims						As reported						Cash flow attributable to T. Rowe Price Group, Inc.						Cash flow attributable to consolidated investment products						Elims						As reported
Cash flows from operating activities
Net income (loss)			$	490.5					$	29.4					$	(14.8)					$	505.1					$	573.8					$	70.0					$	(50.4)					$	593.4
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, amortization and impairments of property, equipment and software			63.6						—						—						63.6						62.6						—						—						62.6
Amortization and impairment of acquisition-related assets and retention agreements			49.0						—						—						49.0						50.8						—						—						50.8
Stock-based compensation expense			50.3						—						—						50.3						58.4						—						—						58.4
Net (gains) losses recognized on investments			(23.1)						—						14.8						(8.3)						(197.4)						—						50.4						(147.0)
Total non-cash adjustments			139.8						—						14.8						154.6						(25.6)						—						50.4						24.8
Net redemptions in T. Rowe Price investment products used to economically hedge deferred compensation liabilities			45.9						—						—						45.9						15.1						—						—						15.1
Net change in trading securities held by consolidated investment products			—						(163.0)						—						(163.0)						—						(158.3)						—						(158.3)
Other changes			95.7						(3.5)						(1.9)						90.3						176.2						(7.4)						(6.5)						162.3
Net cash provided by (used in) operating activities			771.9						(137.1)						(1.9)						632.9						739.5						(95.7)						(6.5)						637.3
Net cash provided by (used in) investing activities			(95.6)						3.7						44.1						(47.8)						(34.4)						(0.1)						25.9						(8.6)
Net cash provided by (used in) financing activities			(489.4)						120.2						(42.2)						(411.4)						(355.2)						106.8						(19.4)						(267.8)
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products			—						0.9						—						0.9						—						(0.8)						—						(0.8)
Net change in cash and cash equivalents during period			186.9						(12.3)						—						174.6						349.9						10.2						—						360.1
Cash and cash equivalents at beginning of year			2,649.8						63.1						—						2,712.9						2,066.6						77.2						—						2,143.8
Cash and cash equivalents at end of period			$	2,836.7					$	50.8					$	—					$	2,887.5					$	2,416.5					$	87.4					$	—					$	2,503.9

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Operating Activities

Operating activities attributable to T. Rowe Price Group, Inc. during the first quarter of 2025 provided cash flows of $771.9 million, an increase of $32.4 million from $739.5 million provided during the 2024 period. The increase was primarily driven by a $165.4 million increase in the add-back for non-cash items as detailed in the table above. This increase to operating cash flows was offset in part by a $83.3 million decrease in net income and by a $80.5 million decrease in cash flows related to timing differences in the cash settlement of our assets and liabilities. Additionally, in 2025, we made $30.8 million more in net redemptions from certain investment products that economically hedge our deferred compensation liabilities as compared to the 2024 period. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying portfolios.

Our interim operating cash flows does not include the cash impact of variable compensation that is accrued throughout the year before being substantially paid out in December.

Investing Activities

Net cash used in investing activities that were attributable to T. Rowe Price Group, Inc. totaled $95.6 million in 2025 compared with $34.4 million in 2024. During 2025, we had net proceeds from the sale of investments of $2.1 million compared to $65.3 million during the 2024 period. In 2025, we decreased our property and equipment expenditures by $20.5 million and increased other investing activity by $18.5 million compared to the 2024 period. We eliminate our capital in our consolidated investment products in preparing our consolidated statements of cash flows. The remaining change in reported cash flows from investing activities of $3.8 million is primarily related to the net cash removed from our unaudited consolidated balance sheet from consolidating and deconsolidating investment products.

Financing Activities

Net cash used in financing activities attributable to T. Rowe Price Group, Inc. totaled $489.4 million in 2025 compared with $355.2 million in 2024. During 2025, we used $215.2 million to repurchase 2.1 million shares compared to $83.1 million to repurchase 0.7 million shares in 2024. The $3.0 million increase in dividends paid in 2025 was a result of the 2.4% increase in our quarterly dividend per share over prior year. The remaining change in reported cash flows from financing activities was primarily attributable to a $9.4 million decrease in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2025.

CRITICAL ACCOUNTING POLICIES.

The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives. Further, significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in our unaudited consolidated balance sheets, the revenues and expenses in our unaudited consolidated statements of income, and the information that is contained in our significant accounting policies and notes to unaudited consolidated financial statements. Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we include currently in our unaudited consolidated financial statements, significant accounting policies, and notes.

There have been no material changes in the critical accounting policies previously identified in our 2024 Annual Report on Form 10-K.

NEWLY-ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

See Note 1 - The Company and Basis of Preparation note within Item 1. Financial Statements for a discussion of newly issued but not yet adopted accounting guidance.

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FORWARD-LOOKING INFORMATION.

From time to time, information or statements provided by or on behalf of T. Rowe Price Group, Inc., including those within this report, may contain certain forward-looking information, including information or anticipated information relating to: our revenues, net income, and earnings per share of common stock; changes in the amount and composition of our assets under management; our expense levels, tax rate, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, and potential transactions; legal or regulatory developments; geopolitical instability; interest rates and currency fluctuations; our expectations regarding financial markets and other industry or market conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price Group, Inc. is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A, Risk Factors, included in our Form 10-K Annual Report for 2024. Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors, including, among other things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management, our introduction of new investment products, and changes in retirement savings trends relative to participant-directed investments and defined contribution plans.

The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and confidence, including changes in sentiment and confidence that may result from U.S. trade policies, market volatility and economic outlook;; the relative investment performance of the T. Rowe Price mutual funds and other managed investment products as compared with competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in implementing our strategy to expand our business; and our ability to attract and retain key personnel. Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees’ net income.

Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising and promotion expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; the pace and level of spending to support key strategic priorities; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; the timing of the assumption of all third party research payments, unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as fund and product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems, as a result of extreme events, cyberattacks or otherwise.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax (including the proposed Maryland sales tax on certain information technology services), and compliance requirements may have a substantial effect on our operations and results, including, but not limited to, effects on costs that we incur and effects on investor interest in investment products and investing in general or in particular classes of mutual funds or other investments.

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