As of December 31, 2011, assets under management (AUM) totaled $489.5 billion, an increase of $36.0 billion from $453.5 billion as of September 30, 2011. The increase was attributable to net cash inflows of $1.1 billion, and market appreciation and income of $34.9 billion.

Year-end AUM of $489.5 billion increased $7.5 billion from $482.0 billion at the end of 2010. Of this amount, $289.4 billion includes in T. Rowe Price mutual funds distributed in the United States and $200.1 billion in other managed investment portfolios. Net cash inflows from investors of $14.1 billion in 2011, including $8.0 billion originating from the target-date retirement portfolios, were offset by $6.6 billion in market depreciation and income not reinvested. Year-end assets in the target-date retirement portfolios were $66.9 billion, including $62.9 billion in the target-date retirement funds and $4.0 billion in the target-date retirement trusts.

Average mutual fund AUM was $285.5 billion in 4Q11, an increase of 5.0% from the average in 4Q10. Money market fees voluntarily waived by the company, to maintain positive yield for fund investors in 4Q11, were $10.4 million compared with $6.7 million in 4Q10. During 2011, T. Rowe Price waived $36.4 million in such fees, compared with $25.1 million recorded in the prior-year. Mutual fund assets as of December 31, 2011 increased $22.8 billion from the end of September 2011 to $289.4 billion.

Net inflows during 4Q11 were $2.2 billion, including $1.5 billion originating in the target-date retirement funds which are invested in other T. Rowe Price funds. Bond funds added $1.9 billion, while the stock and blended asset funds added $0.3 billion of net new flows, which includes the net inflows originating from the target-date retirement funds. Higher market valuations and income increased the mutual fund assets under management by $20.6 billion during the quarter.

Although there is no impact on the company’s total AUM, approximately $1.8 billion in assets were transferred from sponsored mutual funds in January 2012 to its other managed investment portfolios, primarily the target-date retirement trusts. T. Rowe Price expects that additional transfers are likely to occur in the future.

Capital

According to the firms, the strong capital position gives the company substantial financial flexibility to withstand volatile markets while continuing to take advantage of opportunities that will position it properly along with its clients for the future. T. Rowe Price remains debt free with ample liquidity including cash and mutual fund investment holdings of $1.7 billion.

During 2011, the company spent $479.7 million to repurchase 8.7 million shares of common stock and invested $82.3 million in capitalized technology and facilities. These cash expenditures are funded from available liquid resources. The company is planning the 2012 capital expenditures of about $100.0 million for property and equipment additions, which it expects to fund with operating resources.

Dividend

On February 23, 2012, T. Rowe Price announced that its Board of Directors had declared a quarterly dividend of $0.34 per share. The dividend will be paid on March 29, 2012 to stockholders of record as on March 15, 2012. The quarterly dividend rate represents a 10.0% increase over the previous quarterly dividend rate of $0.31 per share. This marked the 26th consecutive year of annual dividend hike, since the company's initial public offering (IPO).

On October 17, 2011, T. Rowe Price announced that its Board of Directors had declared a quarterly dividend of $0.31 per share. The dividend was paid on December 28, 2011 to stockholders of record as on December 14, 2011.