T. Rowe Price Group, Inc. (NASDAQ:TROW) Files An 8-K Other Events
Item 8.01. Other Events.

On December 22, 2017, a comprehensive U.S. tax reform bill originally known as the "Tax Cuts and Jobs Act" ("Tax Reform") was enacted into law. T. Rowe Price Group, Inc. (the "Firm") is required to recognize the effect of the Tax Reform in its 2017 financial statements, even though the effective date of the law for most provisions is January 1, 2018.

Based on information currently available, the Firm’s 2017 financial statements will include a one-time charge to net earnings of approximately $71 million ($0.28 in diluted earnings per share) to reflect the remeasurement of the Firm's deferred tax assets and liabilities and the recognition of a tax liability for the mandatory deemed repatriation of the Firm's foreign sourced net earnings. The resulting increase in the Firm's 2017 effective tax rate from this charge is expected to be offset in part by higher than expected tax benefits related to the exercise of stock options and vesting of restricted stock, and net income attributable to redeemable non-controlling interests. Thus, the Firm estimates its effective tax rate will increase to approximately 37%, compared with 35.9% disclosed in its third quarter 2017 earnings release.

The Firm estimates that the reduction in the U.S. corporate tax rate (from 35% to 21%) in 2018, combined with other miscellaneous tax changes that affect certain tax deductions, will result in a lower 2018 effective tax rate in the range of 24.0% to 27.0%. The Firm’s 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 the Firm’s stock price and timing of option exercises.The rate will also be impacted by changes in our consolidated investment products that are driven by market fluctuations and changes in the proportion of their net income that is attributable to non-controlling interests, which is not taxable to the Firm.

The Firm continues to evaluate the impact of the Tax Reform that might result in changes to its estimates and expectations due to changes in the Firm's interpretations of the law changes, assumptions used, and additional guidance that may be issued.

Information included within this report contains certain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report includes statements relating to the expected impact of Tax Reform, the expected change to the Firm's net earnings and earnings per share, and the Firm's estimated effective tax rate. Forward-looking statements speak only as of the date on which they are made, and, except as required by law, 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. Actual results may differ materially from those in forward-looking statements because of various factors including, but not limited to, those discussed in Item 1A, Risk Factors, of our Form 10-K Annual Report for 2016.

About T. Rowe Price Group, Inc. (NASDAQ:TROW)

T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services to individual and institutional investors in the sponsored T. Rowe Price mutual funds distributed in the United States and other investment portfolios. It operates through investment advisory business segment. Its assets under management are accumulated from a client base across over four primary distribution channels, including third-party financial intermediaries that distribute its managed investment portfolios in the United States and other countries; individual the United States investors on a direct basis; the United States defined contribution retirement plans, and institutional investors across the globe. It manages assets, including the United States and international stock, blended asset, bond and money market mutual funds, and other investment portfolios. The Company offers advisory services, distribution management and administrative services.