10. Presentation by T. Rowe Price Investment Services (Large Value

Transcription

10. Presentation by T. Rowe Price Investment
Services (Large Value) - Annual Performance
Review as of December 31,2010
10
U.S. Large-Cap Value Strategy
Presentation To:
Mark S. Finn, CFA, CPA
Portfolio Manager
410-345-7660
mark_finn@troweprice.com
John D. Linehan, CFA
Director of U.S. Equity
410-345-4605
john_linehan@troweprice.com
13 April 2011
William D. Nolan
Portfolio Specialist
410-345-4817
bill_nolan@troweprice.com
John D. Plowright, CFA
Institutional Client Service Executive
415-772-1117
john_plowright@troweprice.com
United States
100 East Pratt Street
Baltimore, MD 21202
United States
+1.410.345.2000
United Kingdom
60 Queen Victoria Street
London, EC4N 4TZ
United Kingdom
+44.20.7651.8200
Denmark
Lautrupsgade 7
DK-2100 Copenhagen Ø
Denmark
+45.33.36.05.00
Singapore
290 Orchard Road
14-04 Paragon
Singapore 238859
+65.6836.8987
Luxembourg
35 Boulevard Prince Henri
L-1724 Luxembourg
Grand Duchy of Luxembourg
+352.27.47.251
Hong Kong
1 Connaught Place
Room 2101-2120
Jardine House, 21st Floor
Central Hong Kong
+852.2536.7800
Australia
Level 50, Governor Phillip Tower
1 Farrer Place, Suite 50B
Sydney NSW 2000
Australia
+61.2.8667.5700
the Netherlands
Strawinsklylaan 1047
1077 XX Amsterdam
the Netherlands
+31.20.333.62.00
Dubai International Financial Centre
P.O. Box 482023
The Gate, Level 15, Office 24
Dubai
United Arab Emirates
+971.4.4019266
Switzerland
Dreikoenigstrasse 31a
8002 Zurich
Switzerland
+41.44.208.3905
Argentina
Carlos Pellegrini 1149
Piso 12 Buenos Aires C1009ABW
Argentina
+54.11.4394.4089
Japan
NBF Hibiya Bldg, 20th Floor
1-7, Uchisaiwai - cho 1 - chome
Chiyoda-ku Tokyo 100-0011
Japan
+81.3.3504.1810
Canada
Brookfield Place - TD Canada Trust Tower
161 Bay Street, Suite 2700
Toronto, ON M5J 2S1
Canada
+1.416.572.2580
Issued in the USA by T. Rowe Price Associates, Inc., 100 East Pratt Street, Baltimore, MD, 21202, which is regulated by the U.S. Securities and Exchange Commission.
The material is not intended to be a solicitation for any product or service not available to U.S. investors, including the T. Rowe Price Funds SICAV, and may be
distributed only to institutional investors.
Issued in Japan by T. Rowe Price International Ltd, Tokyo Branch (“TRPILTB”) (KLFB Registration No. 445 (Financial Instruments Service Provider), JSIAA Membership No.
011-01162),located at NBF Hibiya Building 20F, 1-7, Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo 100-0011. This material is intended for use by professional investors
only and may not be disseminated without the prior approval of TRPILTB.
Issued in Canada by T. Rowe Price (Canada), Inc. T. Rowe Price (Canada), Inc. enters into written delegation agreements with affiliates to provide investment
management services. T. Rowe Price (Canada), Inc. is not registered to provide investment management business in all Canadian provinces. Our investment
management services are only available to select clients in those provinces where we are able to provide such services. This material is intended for use by accredited
investors only.
Issued in Australia by T. Rowe Price International Ltd (“TRPIL”), Level 50, Governor Phillip Tower, 1 Farrer Place, Suite 50B, Sydney, NSW 2000, Australia. TRPIL is exempt
from the requirement to hold an Australian Financial Services license (“AFSL”) in respect of the financial services it provides in Australia. TRPIL is authorised and
regulated by the UK Financial Services Authority (the “FSA”) under UK laws, which differ from Australian laws. This material is not intended for use by Retail Clients, as
defined by the FSA, or as defined in the Corporations Act (Australia), as appropriate.
Issued in New Zealand by T. Rowe Price International Ltd (“TRPIL”). TRPIL is authorised and regulated by the UK Financial Services Authority under UK laws, which differ
from New Zealand laws. This material is intended only for use by persons who are not members of the public, by virtue of section 3(2)(a)(ii) of the Securities Act 1978
and is not intended for public distribution nor as a solicitation for investments from members of the public. This material may not be redistributed without prior
written consent from TRPIL.
Issued outside of the USA, Japan, Canada, Australia, and New Zealand by T. Rowe Price International Ltd, 60 Queen Victoria Street, London EC4N 4TZ, which is
authorised and regulatedby the UK Financial Services Authority (the “FSA”). This material is not intended for use by Retail Clients, as defined by the FSA.
T. Rowe Price, Invest With Confidence and the Bighorn Sheep logo are registered trademarks of T. Rowe Price Group, Inc. in the United States, European Union,
Australia, Canada, Japan, and other countries. This material was produced in the United Kingdom.
Table of Contents
Section A:
Company Overview
Section B:
Investment Discipline and Process
Section C:
Market Overview
Section D:
Performance Review
Section E:
Portfolio Review and Characteristics
Section F:
Fee Schedule
Section G:
Additional Information and Disclosures
Section H:
Performance Statistics Glossary
Section I:
Biographical Backgrounds
91083 (5/2010)
Section A:
Company Overview
1
T. Rowe Price — Presenters
Portfolio Management
Vice President — Portfolio Manager
• 20 years investment experience;
• 20 years with T. Rowe Price.
Director of U.S. Equity
Vice President — Director of U.S. Equity and Portfolio Manager
• 21 years of investment experience;
William D. Nolan
Vice President — Portfolio Specialist
• 19 years investment experience;
• 1 year with T. Rowe Price.
Client Service
John Plowright, CFA
Vice President — Institutional Client Service Executive
• 19 years experience in fixed income and institutional client service;
2
T. Rowe Price Update
As of 31 Dec 2010
Figures Shown in U.S. Dollars
Long Tenure Perpetuates Our Philosophy and Investment Approach
Continued Investment in Our Global Research Team
400
300
330
Portfolio Manager Average Tenure
$500
14 years
339
$400
Portfolio Manager Average Investment Experience
256
237
250
200
3852
$300
202
191
$200
150
19 years
Billions
Investment Professionals
350
PMs, PM/Analysts, Portfolio Specialists
Analysts, Associate Analysts, Specialty Analysts
All Others
285
Total Assets Under Management1
Management Committee Average Tenure
20 years
100
Management Committee Average Investment Experience
$100
50
0
25 years
2003
2004
2005
2006
2007
2008
2009
2010
$0
0
5
10
15
20
25
• Financial Strength and Strategic Investment:
- Strong balance sheet with $1.6 billion in cash and no outstanding long-term debt
- Steady growth in global assets, with a compound annual growth rate of 11.2% in total AUM over 10 years
- Diversity of assets: U.S. Equity 60.2%, Non-U.S. Equity 14.6%, U.S. Fixed Income 21.1%, and Non-U.S. Fixed Income 4.1%
• Measured Growth of our Investment Team in 2010:
- Fixed Income hired 1 associate portfolio manager, 6 quantitative analysts, 5 credit analysts (2 in the U.S., 2 in London,
and 1 in Hong Kong), 2 traders, and 2 trading assistants
- Equity hired 1 portfolio manager in Australia, 1 portfolio specialist in London, 6 analysts in the U.S., 2 analysts in Singapore,
1 analyst in Hong Kong, and 5 analysts in London
- 9 Equity and 2 Fixed Income 2010 MBA interns were located in Baltimore, Hong Kong, London, and Singapore,
and 7 of the 11 interns received full-time offers
- Expanded investment management and research capabilities in Sydney and Hong Kong offices
- Opened a representative office in the Dubai International Financial Centre (DIFC) to serve clients based in the Middle East
The combined assets under management of the T. Rowe Price group of companies as of 31 December 2010. The T. Rowe Price group of companies
includes T. Rowe Price Associates, Inc., T. Rowe Price International, Inc., T. Rowe Price Global Investment Services Limited, and T. Rowe Price (Canada), Inc.
2
76 portfolio managers, 20 portfolio manager/analysts, 123 research analysts/Credit Analysts, 24 quantitative analysts, 11 asset allocation analysts,
4 investment risk management analysts, 2 distribution management specialist/analysts, 23 associate analysts, 16 portfolio specialist/generalists,
2 specialty analysts, 54 traders, 2 economists, 20 portfolio modeling associates, and 8 management associates.
1
5
3
T. Rowe Price Perspectives and Research
As of 31 Dec 2010
Institutional Website Content
• Investment Dialogues/Viewpoints:
- Scott Berg, Global Large-Cap Equity Strategy portfolio manager, on Emerging Markets Equities
- China: Investing for the Long-Term Structural Story
• Web Videos:
- Fixed Income portfolio managers Steve Huber and Mike Conelius outlook for 2011
- Equity portfolio managers David Giroux’s and Ray Mills’ views on sustainability of the market rally in 2011
- Chief Economist Alan Levenson’s views on economic momentum in 2011
• Select 2011 Outlook Commentary from T. Rowe Price Press Briefing:
- William Stromberg, Director of Global Equity and Global Equity Research
- Today’s scary macro environment contrasts with an encouraging micro environment. The result is a mixed but largely positive outlook
for 2011.
- Corporations will remain fiscally disciplined — but we expect some catch-up capital spending.
- Corporate earnings have been resilient — but growth will be harder to come by.
- Alan Levenson, Chief Economist on U.S. Economy
- The economic recovery is poised to keep moving forward, despite the lingering restraints from the financial crisis.
- Although mortgages still pose a risk, relative stability in house prices suggests pressures are easing.
- An inflation trough is coming into view.
- Larry Puglia, U.S. Large-Cap Core Growth Portfolio Manager on U.S. Equities
- U.S. large-cap stock valuations are reasonable; however, small-caps may face some valuation risks.
- Companies generating consistent growth could become more rare and valuable in a lackluster environment.
- Robert Smith, International Growth Portfolio Manager on International Equities
- Valuations of high-quality companies in developed markets are reasonable but not super-compelling.
- Valuations in emerging markets are a bit high but fair, given the superior growth expectations.
- Tim Parker, Natural Resources Portfolio Manager on Commodities
- Natural resources stocks do not fully reflect the sector’s positive long-term fundamentals.
- Natural resources demand from emerging markets is strong, driven by industrialization and domestic consumption.
- Steve Huber, Fixed Income Portfolio Manager on Fed Policy and the U.S. Dollar
- Federal Reserve policy likely will keep short-term interest rates near zero through 2011.
- The 30-year decline in interest rates may be ending, despite the slow-growth outlook.
- The dollar likely will continue to depreciate over the long term.
Visit our institutional website at troweprice.com/institutional for news and updates.
6
4
Assets Under Management
U.S. Large-Cap Value Assets:
U.S. Large-Cap Value Strategy:
$51.1 Billion1
$5.5 Billion
As of 31 Dec 2010
U.S. Value Strategy
28.4%
U.S. Large-Cap Value
Strategy
10.8%
Value Strategy
Large Cap Value Taxable
Large Cap Equity Incom
U.S. Large-Cap Value
Taxable Strategy
0.1%
Large Cap Value Strateg
U.S. Large-Cap Equity
Income Strategy
60.7%
1
The combined U.S. large-cap value assets of the T. Rowe Price group of companies.
5
Large-Cap Value Investment Team
As of 31 Dec 2010
Portfolio Management Team
Stability | Depth | Collaboration
Portfolio Manager
Brian C. Rogers, CFA, CIC
Portfolio Manager
• 21 years of investment
experience;
- BA, Amherst College
- MBA, Stanford University
experience;
- AB, Harvard College
- MBA, Harvard Business
School
Portfolio Manager
William Nolan
experience;
experience;
• 20 years with T. Rowe Price. • 1 year with T. Rowe Price.
- BS, Johns Hopkins
- BS, University of Delaware
University
Equity Research Team
123 Research Professionals | Industry Specialists1
Extensive collaboration among investment professionals enhances idea generation.
1
9 portfolio managers/analysts, 85 research analysts, 23 associate research analysts, 4 quantitative analysts, and 2 specialty analysts.
7
6
Representative U.S. Client List
31 Dec 2010
As of December
31, 2010
Corporate
3M
ABB, Inc.
Avaya, Inc.
BASF
Becton, Dickinson & Co.
Bureau of National Affairs, Inc.
Cargill, Inc.
Carpenter Technology Corporation
Caterpillar, Inc.
Dow Corning Corporation
Entergy Services, Inc.
GlaxoSmithKline
Goodrich Corporation
Invensys, Inc.
ITT Industries, Inc.
J.C. Penney Company, Inc.
Kaman Corporation
Merck & Co., Inc.
National Grid
Owens Corning Corporation
Pitney Bowes, Inc.
Public Service Company of
New Mexico
Raytheon Company
The Reader’s Digest
Association, Inc.
Saint-Gobain Corporation
Textron, Inc.
Union Pacific Corp.
The Williams Companies
Public
Nonprofit
Alaska Permanent
Fund Corporation
Alaska Retirement
Management Board
Arlington County Employees’
Retirement System
Commonwealth of Massachusetts
Deferred Compensation Plan
Dallas Employees’ Retirement Fund
Delaware Public Employees’
Retirement System
Hawaii Employees’
Retirement System
Illinois Teachers’
Retirement System
Imperial County Employees’
Retirement System
Maryland State Retirement &
Pension System
Massachusetts Pension
Reserves Investment
Minnesota State Board of Investment
Nebraska State Investment Council
New York City Deferred Compensation
New York City Retirement System
Public Employees’ Retirement System
of Idaho
Public Employees’ Retirement System
of Mississippi
Texas Tomorrow Funds
Vermont State Retirement System
Virginia Retirement System
Alfred I. duPont Testamentary Trust
University of Arkansas
Foundation, Inc.
Baycare Health System
Board of Pensions of the Presbyterian
Church (U.S.A.)
Brooklyn College Foundation
Charles A. Frueauff Foundation, Inc.
The Church Foundation
Colby College
Dartmouth College
Evangelical Lutheran Church
in America
Franciscan Missionaries of Our Lady
Health System, Inc.
Goucher College
The Henry Luce Foundation, Inc.
Jewish Foundation of Cincinnati
John A. Hartford Foundation, Inc.
Knights of Columbus
Lincoln Center for the Performing
Arts, Inc.
Lucile Packard Foundation
Meyer Memorial Trust
Museum of Fine Arts, Boston
New Church Investment Fund
Presbyterian College
Richard King Mellon Foundation
Sisters of Mercy of North
Carolina Foundation
Swarthmore College
The Walters Art Museum
Wheaton College
William T. Grant Foundation
Taft-Hartley
Greyhound Amalgamated Trusts
IAM National Pension Fund
Operating Engineers, Local #18
Plumbers and Pipefitters, Local #74
The clients listed represent a sample
based on asset size and those who have
given their approval for inclusion in these
materials. The clients have not been
selected based on the performance of
their accounts. Not all clients are invested
in the same strategy and the inclusion of
a client does not constitute an
endorsement of the investment
management services provided by any of
the T. Rowe Price companies.
3
7
Your Institutional Team
Los Angeles Department of Water and Power
Primary Contact:
Institutional Client Service Executive
Phone: 415-772-1117 Fax: 415-772-1111
E-mail: john_plowright@troweprice.com
Serves as your main point of contact and provides
a link to the resources of T. Rowe Price.
Conducts portfolio reviews, coordinates reporting,
and gets answers to your questions.
Secondary Contact:
David B. Orlando
Instituational Client Service Executive
Phone: 415-772-1103 Fax: 415-772-1111
E-mail: david_orlando@troweprice.com
Available to address your questions and concerns
when your primary contact is unavailable.
Operations:
Anne Momberger
Institutional Client Operations Manager
Phone: 410-345-2268 Fax: 410-345-2829
E-mail: anne_momberger@troweprice.com
Addresses contributions and distributions to and
from your account, works closely with your primary
client service contact and investment support to
resolve operational issues, and coordinates review of
legal agreements.
Your client service team is your partner in getting you the information you need.
8
Section B:
Investment Discipline and Process
9
Equity Research Team
Director of Global
Equity Research
Technology
Kamran Baig
Media/Telecom
Nalin Yogasundram
Thomas H. Watson
Alison Yip
Medtech, Dental, Orthopedic
Daniel Martino, CFA1
Also has portfolio
Also
has portfolio
management
responsibilities.
2 management responsibilities.
9 portfolio manager/analysts,
2
985portfolio
researchmanager/analysts,
analysts, 23
85
research
analysts,
23
associate
research
analysts,
associate
research
analysts,
4 quantitative
analysts,
and
42 quantitative
analysts,
and
specialty analysts
as of
231specialty
analysts
December
2010.as of
December 31, 2010.
1
Natural
Resources
Hospital Supply, Life Sciences
and Ophthalmology
Rouven Wool-Lewis, Ph.D.
Health Care Services
David M. Lee, CFA1
Eric C. Moffett
Jason Polun, CFA
Hwee Jan Ng, CFA
Kathryn Mongelli
Money Center Banks, Specialty
Finance
Mitchell Todd, CA
Christopher T. Fortune
Sridhar Nishtala
European Banks
Telecom Services & Cable
Japan Telecom Services
Real Estate
Asia Ex-Japan Financials
Ian C. McDonald, CFA
Asia Ex-Japan Real Estate
Europe Media, Telecom Services
Frederick Rizzo, CFA
Credit Card Processors
Gabriel Solomon
Asia Telecom Services
Europe Insurance/Financials
Eric L. Veiel, CFA1
Life Insurance, Asset Managers,
Investment Banks
Marta Yago
Yoichiro Kai
Canadian Insurance Companies; Asia Ex-Japan Insurance
Exchanges
Daniel Flax
Andrew Fones
Inigo Mijangos
Joshua B. Nelson
Clark R. Shields
Paulina Amieva
Archibald Ciganer, CFA
Michael Lasota
Robert T. Quinn, Jr.
Jonty Starbuck, CFA
Information Technology,
Consulting, Market Research
Payroll Processors, Staffing,
Education
Multi-line, P&C Insurance
Europe Business Services
Francisco M. Alonso
Japan Food & Beverage, Tobacco, Cruise Lines, Commercial
Home Personal Care, Retail
Brokers, Lodging
Ira W. Carnahan, CFA
Barry Henderson
Peter J. Bates, CFA
Jonathan Chou
Payroll Processors, Staffing,
Education
Jessie Ding
Soft Goods, Hard Goods,
Discount Stores, Textiles, Apparel Consumer Discretionary
Ian C. McDonald, CFA
Food, Beverage, Tobacco,
Personal Care, Cosmetics,
Conglomerates (Multi-Cap)
Soft Goods, Toys, Nutrition, Diet Hard Goods, Discount Stores,
and Direct Sellers, Outdoor
Gaming
Equipment
Sridhar Nishtala
European Retail and Luxury Goods
Amit Seth
Asia Ex-Japan Conglomerates,
Retail, Food & Beverage, Tobacco, Branded Apparel, Footwear
Home Personal Care, Leisure &
Gaming
Environmental Services,
Railroads, Industrial
Manufacturing, Agriculture
Equipment, Capital Goods, Mega
Conglomerates
Automobile Manufacturers,
Distributors
Jin Jeong
Europe Capital Goods, Auto
Jeremy Kokemor
Andrew Davis
Lillian Y. Li, CFA
Haider Ali
Vitaliy Elbert
Steven D. Krichbaum
Martin Baylac
Latin America Generalist
José Costa Buck1
Jeneiv Shah, CFA
Airlines
Curt J. Organt, CFA
Japan Industrial Manufacturing
Shawn T. Driscoll
Emerging Europe, Middle East,
and Africa Generalist
David L. Rowlett, CFA
Sridhar Nishtala
Asia Ex-Japan Infrastructure
Asia Ex-Japan Infrastructure
Shinwoo Kim
Ulle Adamson, CFA
Susanta Mazumdar1
Small- and Mid-Cap Generalist,
Distribution
Japan Utilities
Sebastian Schrott
Housing
Small- Mid-Cap Metals
Asia Ex-Japan Oil and Gas, Bulk
Metals & Mining
Commodities, Non-ferrous Metals Mark S. Finn, CFA, CPA1
Ryan N. Burgess
Utilities - Electric & Power
Chemicals, Utilities
Generation, Coal
10
Taymour R. Tamaddon, CFA
Jason Nogueira, CFA
Hari Balkrishna
Paul D. Greene
Exploration & Production,
Coal, Engineering & Construction
Regional
Generalists
Asia Ex-Japan Generalist
Wenli Zheng
Railroads
1
Graham M. McPhail
Alternative Energy
Christopher Whitehouse
Transport
31 Dec 2010
AsAsofofDecember
31, 2010
Software
Internet Infrastructure, Cable,
Canadian Telecom Services
Latin America Retail
Industrials
U.S. Pharmaceuticals & Biotech
Japan Generalist
Semiconductors & Equipment
Justin P. White
Japan Financials/Real Estate
Kes Visuvalingam, CFA
Kris H. Jenner, MD, D. Phil1
Small- and Mid-Cap Generalist
Hiroaki Owaki, CFA
Japan Internet, Media &
Advertising
Real Estate
Director of Equity
Research, Asia
Andrew R. Hyman, MD
O.U.S. Pharmaceutical
Financial Services Nina Jones, CPA
Consumer/Retail
Small-Cap Generalist
O.U.S. Biotech, Medtech,
Pharmaceuticals
Banks (Smaller)/Thrifts
Business Services
PC Hardware, Storage
Melissa Gallagher, Ph.D.
Europe Banks
Director of Equity
Research, North America
Jason B. Polun, CFA
Joshua K. Spencer, CFA
Hiroaki Owaki, CFA
Advertising, Diversified Media,
Radio, TV, Publishing
Director of Equity
Charles G. Pepin
Shalin Mody
Rhett K. Hunter
Mark Bussard, MD
Health Care
Director of Equity
Anna M. Dopkin, CFA
Daniel Flax
David J. Eiswert, CFA1
Software
U.S. & Europe Communications
Equipment
William J. Stromberg, CFA
Director of Equity
Research, EMEA and
Latin America
Kennard W. Allen1
Energy Services
Small-Cap Utilities
Ben Landy
Austin M. Powell, CFA
Susanta Mazumdar1
Global Energy Majors,
Heather K. McPherson, CPA1 Exploration and Production,
Refining
Paper, Forest Products
Rick de los Reyes1
Inigo Mijangos
Utilities
Metals & Mining
Timothy E. Parker, CFA
1
Transaction Processors, Financial
Services Related, Other
Europe Food, Beverage, Tobacco,
Personal Care, Gaming, Lodging
Ashley R. Woodruff, CFA
Restaurants, Supermarkets
Eunbin Song
Steel, Shipbuilding, E&C, Power
Equipment, Tech Materials
Eastern Europe Autos, Transport, Kwame Webb, CFA
Trucking, Airlines, Air Freight,
Airlines
Logistics (Small-Cap)
John C. A. Sherman
Aerospace and Defense, Transport, Christopher Yip, CFA
Asia Ex-Japan Industrial
Logistics
Manufacturing
Clark R. Shields
Wenli Zheng
Air Freight, Logistics
Asia Ex-Japan Power Equipment
Aerospace and Defense
Craig Pennington
Asia Ex-Japan Utilities
European Real Estate,
Asset Managers and Brokerage
Firms, Rating Agencies
Naoto Saito
Energy Service, Exploration and Japan Energy, Chemicals,
Production, Global Energy Majors Trading Companies
Ami Shah
Europe Utilities
Jeneiv Shah, CFA
Eastern Europe Mid-Cap Oils
John C. A. Sherman
Chemicals
John Williams
Energy
Nalin Yogasundram
Alternative Energy
Fertilizer, Industrial Gases
Simon Cheng, CFA
Mark Lawrence, CFA
Joseph Rohm1
Greater China Small-Cap Generalist Middle East and Africa Generalist Emerging Europe, Middle East,
Sebastien Mallet
Uebe Rezeck Filho
Europe Small-Cap Generalist
Francisco Sersale
Ben Griffiths, CFA
Leigh Innes, CFA1
Emerging Europe, Middle East
Miki Takeyama, CMA
Japan Small- and Mid-Cap
Generalist
123 Equity Research Professionals worldwide.2
Sindee Tan, CFA
Verena Wachnitz, CFA
Hiroshi Watanabe, CFA
Japan Small- and Mid-Cap
Generalist
Equity Research
• Research is the lifeblood of our organization
- Investment idea generation
- Professional development: focused mentoring effort nurtures investment talent — career analyst or portfolio
management track
• Fundamental approach to research — analysts are industry specialists across capitalization and style
- Understanding impact of all competitors within an industry group is key to assessing the outlook for any
individual company
- Ideas leveraged across styles as valuation opportunities arise
• Formal and informal communication channels foster a collaborative research approach
- Multiple signaling tools communicate analysts’ conviction and urgency — company rankings, blue sheets,
analyst portfolios, and weekly meetings
- Ongoing informal interaction between the portfolio managers and analysts is also central to the process
• Rigorous performance and contribution review drives compensation
- Key retention tools include performance-based bonus and equity participation
Extensive analyst interaction across industry groups, sectors, and asset classes
promotes a broad perspective and timely decision-making.
11
5
Value Distortions and Investor Psychology
Large-cap companies are at times inefficiently priced
Stock Price
Mispriced
Intrinsic Value
Mispriced
Controversy causes
investor anxiety
Resolution restores
investor confidence
Corrective strategies implemented
Time
11
12
Investment Philosophy and Approach
• Focus on relative value relationships to opportunistically identify attractively valued companies
• Fundamental research is key to uncovering companies with potential for stock price mean reversion
• A long-term orientation allows for the full exploitation of valuation anomalies
• Diversified portfolios help to manage portfolio risk profile
13
12
Investment Process
Universe
Market Caps Generally Greater than $5B
Initial Screening
•
Relative Valuation Filter
•
Analyst Research
Investment Candidates
Compelling valuation relative to historic norms
Quantitative Analysis
Fundamental Analysis
•
Evaluate company projections
and financial outlook
•
In-depth financial statement
and relative valuation analysis
•
Assess the potential for change
in investment sentiment
•
Are current issues facing the
company correctable?
•
Use absolute valuation metrics
to confirm investment appeal
•
Assess competitive positioning,
quality of assets and management
Balance Valuation Appeal and Quality of Company
Portfolio Construction (70-80 stocks)
13
14
Qualitative Dynamics
Investment Process
Buy Criteria
• Identify candidate companies whose earnings and dividend streams appear mispriced
• Integrate fundamental research assessment
- Focus on improving financial outlook
• Apply qualitative overlay
- Potential for improved investor perception
• Verify relative valuation anomalies through quantitative analysis
- Focus on relevant valuation metrics
• Balance valuation analysis versus qualitative overlay
Sell Criteria
• Upside achieved — valuation gap narrows
• Significant change in fundamental assessment
• Deterioration in financial strength
15
14
Portfolio Construction
U.S. Large-Cap Value Representative Portfolio1
As of 31 Dec 2010
Number of Holdings
30
U.S. Large-Cap Value Representative Portfolio1
20
10
0
0.00-0.50%
0.51-1.00%
1.01-1.50%
1.51-2.00%
>2.01%
Concentrated positions are avoided to control portfolio risk profile.
1
15
16
The representative portfolio is an account in the composite we believe most closely reflects current portfolio management style for the strategy. Performance
is not a consideration in the selection of the representative portfolio. The characteristics of the representative portfolio shown may differ from those of the
composite and of the other accounts in the composite. Information regarding the representative portfolio and the other accounts in the composite is available
upon request.
Supplemental information.
Portfolio Construction
Diversified Portfolio Structure
• 70-80 stock portfolio
• Individual position sizes range to 5% — average position size of 1% to 2%
• Sector weights will typically vary from 0.5X to 2.0X of primary value sectors of
the S&P 500 Index and of the primary sectors of the Russell 1000 Value Index
• Reserves will range from 0% to 2%
17
16
Client Objective
Retirement Plan:
Total Assets = $433,425,674
As of 28 Feb 2011
Inception Date: 1 Oct 2004
Inception Amount: $248,180,297
Health Benefits Plan:
Total Assets = $62,319,621
As of 28 Feb 2011
Inception Date: 15 Sep 2009
Inception Amount: $41,982,244
Objective
• The objective is to provide substantial dividend income as well as long-term capital appreciation through investments
in common stocks of established companies.
Mandate
• U.S. Large-Cap Value: Separately Managed Portfolio
Strategy Assets as of 31 Dec 2009: $5.5 Billion
Benchmark
• Russell 1000 Value Index
Investment Guidelines
• Cash will not exceed 5% of portfolio.
• No more than 5% of the portfolio or 125% of a security’s index weighting shall be invested in a single issuer.
• No single issue shall represent more than 10% of the portfolio.
• Shares may not be purchased in the portfolio if T. Rowe Price holds on aggregate more than 10% of that issuer’s
outstanding shares.
18
Section C:
Market Overview
19
Wide Divergence Between Sector Performance
Russell 1000 Value Index Sector Performance
From 1 Jan 2000 to 31 Dec 2003
From 31 Dec 2003 to 31 Dec 2010
Consumer Staples
s
Financials
s
33.6
Health Care
e
32.4
29.5
Industrials and Bus. Servs.s.
42.5
28.7
Energy
y
Utilities
s
86.5
Materials
s
75.4
57.1
42.4
23.1
7.5
-7.2
-36.2
-100
-75
-50
-25
0
25
50
75
100
-28.5
183.0
Consumer Discretionary y
29.2
Information Technology y
24.6
Telecom Services
-57.2
97.2
50.2
.
-100
-50
0
Percent
50
100
150
200
250
Percent
Performance differentials among sectors have been large.
Sources: Wilshire, T. Rowe Price.
T. Rowe Price uses the MSCI/S&P Global Industry Classification Standard (GICS) for sector and industry reporting. Each year, MSCI and S&P make changes to the
GICS
structure.
The last change occurred on 1 July 2010. T. Rowe Price will adhere to all future updates to GICS for prospective reporting.
Sample
Footnote.eps
20
Q4 2010 Global Equity Markets Overview
As of 31 Dec 2010
U.S. stocks rose briskly in Q4 2010:
Markets. U.S. stocks rallied in the fourth quarter, closing near their highest levels of the year. The S&P 500 Index rose
10.8% for the quarter and 15% for the year. Equities were buoyed by the Federal Reserve’s implementation of a second
round of quantitative easing (QE2), the economy’s reacceleration from its mid-year pause, and the extension of the Bush-era
tax cuts. The S&P500 Index has now risen 86% since the March 2009 low.
Stock Sectors. Each S&P 500 sector rose in Q4 and 6 of the 10 sectors delivered double digit returns with Energy (+21%)
and Materials (+19.%) leading the way – benefiting from rising commodities prices. Health Care (+4%) and Utilities (+1%)
lagged as they have done throughout this bull market. .
Economy. Inflation remains subdued, with consumer prices rising only 0.1% in November. Consumers are beginning to feel
a bit more optimistic about their job prospects and the direction of the economy. The government reported that the U.S.
economy grew at an annualized rate of 2.6% in the third quarter, slightly faster than was previously estimated. The
unemployment rate remained stubbornly high at 9.8%.
Fiscal and Monetary Policy. Fiscal and monetary policy remained expansionary. QE2, the extension of existing tax rates,
and passage of a payroll tax cut were each designed to bolster confidence and foster growth.
International stocks also advanced in Q4 2010:
Markets. International markets also advanced in Q4 - but by less than in the U.S. Japan rose 12%, the MSCI Emerging
Markets Index rose 7% while developed markets, as measured by the MSCI EAFE Index, gained 7%. In the past three
months, developed stocks in Europe have lagged other regions due to investor concerns about the European debt crisis.
Economies. Euro-zone growth began to struggle as the debt crisis reasserted. Government bond yields have soared in
many countries within the euro-zone, and the major credit agencies signaled that Spain, Portugal, and possibly Belgium face
near-term credit ratings downgrades. Emerging market economies remained very strong – especially the large growth
engines of China and India. The central banks of both countries have raised interest rates and bank reserve requirements to
try and reduce budding speculation and inflation.
Currency and Commodities. The U.S. dollar reversed trend and gained against most major currencies in Q4, climbing
almost 7% versus the Euro. Commodities prices rose again during Q4 as investors continued to buy hard assets in
anticipation of a possible spike in inflation down the road. Gold continued to rally, ending the quarter near record levels.
21
2010 — A Roller Coaster Year
As of 31 Dec 2010
S&P 500 and the 10-Year Treasury Yield
4.5
1400
November
General Motors IPO
1300
November
European fears returned, this
time centred on Ireland
4
1200
S&P 500
March
Health care
reform bill
passed
1000
April
Rig explosion
and oil spill in the
Gulf of Mexico
900
May
Bailout
package for
Greece
announced
800
700
July
Financial
reform bill
passed
November
Quantitative Easing 2
announced
3.5
3
10-Year Treasury Yield
1100
2.5
S&P 500
10 Year Treasury Yield
600
Dec-09
Sources: Factset, Standard & Poor’s.
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
2
Dec-10
22
U.S. Equities Total Return Performance By Style and Capitalization
As of 31 Dec 2010
By Style
Growth outperformed value for quarter and year
By Market Capitalization
Small-caps lead for the year
Total Return (%)
Total Return (%)
35
Quarter
30
One Year
One Year
30
29.1
26.9
25.5
25
26.4
24.8
25
24.5
20
20
15
16.1
15.4
15.5
12.2
17.1
16.7
11.8
10.5
10
10
5
5
0
RUSSELL
1000
VA LUE
23
15
14.0
RUSSELL
M ID CA P
VA LUE
Source: T. Rowe Price.
RUSSELL
2000
VA LUE
RUSSELL
1000
GROWTH
RUSSELL
M ID CA P
GROWTH
RUSSELL
2000
GROWTH
0
RUSSELL 1000
RUSSELL MIDCAP
RUSSELL 2000
U.S. Equities Total Return Performance By Sector
As of 31 Dec 2010
S&P 500 Sector Returns
30%
27.7%
25%
26.7%
22.1%
Total Return %
20.5%
19.0%
20%
14.1%
15%
15.1%
12.1%
10.2%
10%
5.5%
5%
2.9%
itie
s
Ut
il
ar
e
C
He
al
th
St
ap
le
s
s
Se
rv
ice
m
Co
ns
um
er
at
io
n
In
fo
rm
12 Months
Te
le
co
m
Te
ch
no
lo
gy
na
nc
ia
ls
Fi
Sv
Bu
s
&
ria
ls
In
du
st
Di
sc
Co
ns
um
er
cs
re
t io
na
ry
at
er
ia
ls
M
En
er
gy
0%
S&P 500 12 Months
S
Sources: T. Rowe Price and Wilshire.
24
Commodities Rise. Credit Spreads Narrow. Volatility Subsides.
As of 28 Feb 2011
800
CRB Spot Price Index
800
22
700
700
Spread Ͳ BAA Corporate Bond / US TͲBond 10 YR
Spread Ͳ Hi Yield Corporate Bond / US TͲBond 10 YR
20
Baa and High Yield
credit spreads
continue to narrow
in Q1.
18
Commodity
prices continue
to rise in Q1.
600
500
600
500
400
300
300
200
100
200
'02
'03
'04
'05
CBOE VIX Volatility Index
'06
'07
'08
'09
'10
'11
70
60
90
80
70
40
40
30
30
18.35
10
0
0
Source: Factset.
8
6
6
4
4
2
2
0
'0 5
'06
'07
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
0
112
112
108
108
104
'0 8
'09
'10
'11
104
USD has started
to slide again in
Q1.
100
96
92
92
88
88
84
84
80
80
76
76
72
72
20
10
'04
12
10
96
50
'03
14
8
100
50
'0 2
16
10
60
20
25
100
18
US $ Trade Wtd Ͳ Major Currency
Volatility Index
continues to be at
more normal
levels.
80
14
Last 10 Years
Max: 80.86 (20ͲNOVͲ08), Min: 9.89 (24ͲJANͲ07), Last: 18.35 (28ͲF EBͲ11)
90
16
12
400
22
20
68
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
68
Equity Valuations Still Reasonably Attractive.
As of 28 Feb 2011
24
S&P 500 Index with Operating EPS (SPX) Price / YearͲForward EPS
Price to Est. EPS
S&P 500: 1,327
2011E Consensus
EPS $94.87
22
20
18
24
22
20
16
14
14
12
12
10
10
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
8
S&P 500 Index (SPX) Price / YearͲForward EPS Ͳ Scale Inverted (Left)
US Treasury Bond 10 Yr (%) (Right)
6.3
10
Price to Est. Cash Flow
16
16
14
14
12
12
10
10
8
8
6
6
4
4.5
'01
'02
'03
'04
'05
'06
'07
'08
'09
4
'10
S&P 500 Index with Operating EPS (SPX) Price / Book Value
4.5
4
5.6
14
3.5
16
3.5
4.9
18
3
20
22
3
4.2
2.5
24
26
2.5
3.5
2
28
30
Earnings Yield vs.
Treasury Yield
32
34
Source: Factset.
18
4
12
36
S&P 500 Index with Operating EPS (SPX) Price / Cash Flow
18
16
8
18
2.8
2.1
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
2
Price-to-Book
1.5
1
'02
'03
'04
'05
'06
'07
1.5
'08
'09
'10
'11
1
26
Cyclical Sectors Have Rebounded With Recovery, Ex-Housing
As of 30 Nov 2010
27
Source: JPMorgan Asset Management.
Consumer Confidence Still Below Average, But Recovering
As of 31 Dec 2010
Source: JPMorgan Asset Management.
28
Summary and Outlook: Economies, Earnings, and Markets
As of 31 Dec 2010
¾ U.S. Consensus expects gradual strengthening of the U.S. economy (+3.0-3.5% real GDP) with
resilient EPS growth (+9-11% for S&P500 Index). This seems reasonable with long term
deleveraging and cost-cutting headwinds offset by renewed stimulus. Watching financial stocks for
signs of increasing loan demand and lessening credit issues. Profit margins are already high and
can improve but at a diminishing rate. Valuations look reasonable but less compelling after an 86%
run in 22 months. M&A expected to be robust. 2012 earnings expectations will become
increasingly important to stocks as 2011 progresses.
¾ Europe and Japan remain dogged by large structural deficits and aging demographics but are
cyclically improving and benefiting from emerging market exposure. Expect positive but sub-par
earnings growth. Markets look cheap in aggregate but investors are paying up for growth stocks
more so than in the U.S. Our portfolios remain generally underweight.
¾ Emerging market economies (China, India, Brazil…) could slow as central banks apply brakes
but we still expect robust growth (+7-9%) to carry the global economy. Markets are digesting
central banks’ attempts to slow things down and keep inflation in check. Most believe they will
succeed. Our portfolios remain overweight EM but many pm’s expect some choppiness until it
becomes clear that inflation is under control. Long term bulls on EM despite vast outperformance
over last 10 years.…
29
Large-Cap Value Outlook
As of 31 Dec 2010
Cautiously optimistic
Valuations still reasonable, but less compelling than at the start of 2010
Finding value in:

Sectors that have lagged (Health Care, Consumer Staples, Utilities)

Select cyclical names (General Motors, Vulcan Materials, Boeing)
Need economic growth to sustain rally
30
Section D:
Performance Review
31
Compliance Certificate
32
Compliance Certificate
33
Total Return Performance
Periods Ended 28 Feb 2011
Annualized
Quarter-toDate
One
Year
Three
Years
7.15%
22.93%
3.39%
4.28%
6.32%
Los Angeles Department of Water and Power — Retirement Plan (Net of Fees)
7.09
22.53
3.05
3.93
5.96
Russell 1000 Value Index
6.03
22.16
0.22
1.57
4.61
Value Added (Net of Fees)
1.06
0.37
2.83
2.36
1.35
Quarter-toDate
One
Year
Since Client
Inception
15 Sep 2009
Los Angeles Department of Water and Power — Health Benefits Plan (Gross of Fees)
7.34
22.87
19.88%
Los Angeles Department of Water and Power — Health Benefits Plan (Net of Fees)
7.28
22.47
19.48
6.03
22.16
18.77
1.25
0.31
0.71
Sample
Footnote.eps
1 October
2004 through 31 December 2004.
1
Since Client
Inception
1 Oct 2004
Los Angeles Department of Water and Power — Retirement Plan (Gross of Fees)
Annualized
34
Five
Years
Calendar Years
20041
2005
2006
2007
2008
2009
2010
9.07%
6.13%
22.39%
2.87%
-35.53%
27.96%
14.98%
8.97
5.78
21.98
2.53
-35.77
27.55
14.61
10.38
7.05
22.25
-0.17
-36.85
19.69
15.51
-1.41
-1.27
-0.27
2.70
1.08
7.86
-0.90
20092
2010
Calendar Years
1
2
5.71%
14.76%
5.60
14.39
4.89
15.51
0.71
-1.12
1 October 2004 through 31 December 2004.
15 September 2009 through 31 December 2009.
35
Los Angeles Department of Water and Power — Retirement Plan
Since Account Inception1 through 28 Feb 2011
Percent
100
75
50
25
0
-25
-50
10/04 12/04
36
Sample
Footnote.eps
1 October
2004.
1
12/05
12/06
12/07
12/08
12/09
12/10 2/11
Los Angeles Department of Water and Power — Health Benefits Plan
Since Account Inception1 through 28 Feb 2011
Percent
40
30
20
10
0
-10
9/09
1
15 September 2009.
12/09
12/10
2/11
37
Attribution Analysis
Los Angeles Department of Water and Power vs. Russell 1000 Value Index — Retirement Plan
One Year Ended 28 Feb 2011
5
Total Value Added
Value Added from
Stock Selection
Value Added - Percent
Value Added from
Sector Weight
4
3
2
1
0
-1
-2
-3
Total
Over (Under) Weight
Energy
Financials
Consumer
Discretionary
Consumer
Staples
Telecom
Services
Health Care
Materials
Information
Technology
Utilities
Industrials &
Bus. Servs.
--
3.8
-6.3
5.1
-2.6
-1.8
-3.7
0.6
2.0
-2.1
5.0
Portfolio Weight (Ending)
100.0
17.3
21.4
13.2
6.8
3.0
8.4
3.8
7.4
4.5
14.3
Index Weight (Ending)
100.0
13.5
27.7
8.1
9.4
4.8
12.1
3.2
5.5
6.6
9.3
Portfolio Performance
23.2
45.1
17.1
36.0
12.6
28.3
3.5
30.3
18.9
5.8
18.7
Index Performance
22.0
45.6
16.2
35.1
12.1
29.5
6.4
36.2
22.1
17.8
29.0
Numbers may not add to 100% due to rounding; all numbers are percentages.
Analysis represents the equity-only performance of the portfolio as calculated by the Wilshire Atlas attribution model, and is exclusive of cash, trusts, mutual
funds, de-listed securities and other non-equity holdings. Returns will not match official TRP performance because Wilshire uses different pricing and exchange
rate sources and does not capture intra-day trading or fair-value pricing. Returns in U.S. dollars.
Source: Wilshire Atlas, MSCI/S&P GICS Sectors; Analysis by T. Rowe Price Associates, Inc. T. Rowe Price uses the MSCI/S&P Global Industry Classification Standard
(GICS) for sector and industry reporting. Each year, MSCI and S&P make changes to the GICS structure. The last change occurred on 1 July 2010. T. Rowe Price
will adhere to all future updates to GICS for prospective reporting.
Figures are shown gross of fees.
Past performance cannot guarantee future results.
38
Performance Attribution
Los Angeles Department of Water and Power — Significant Absolute Contributors
Stock
1
39
% of
Portfolio
Industry
Company Description1
Chevron
5.0%
Oil, Gas, and
Consumable Fuels
Chevron Corporation is an integrated energy company with operations in countries located
around the world.
ExxonMobil
4.6
Oil, Gas, and
Consumable Fuels
Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a
worldwide basis.
Time Warner Cable
2.9
Media
Time Warner Cable Inc. offers cable television subscription services.
Weyerhaeuser
2.4
Real Estate Investment
Trusts (REITs)
Weyerhaeuser Company is an integrated forest products company with offices or
operations worldwide.
Baker Hughes
2.3
Energy Equipment
and Services
Baker Hughes Incorporated supplies reservoir-centered products, services, and systems to the
worldwide oil and gas industry.
GE
2.2
Industrial Conglomerates
General Electric Company is a diversified technology, media and financial services company.
Time Warner
2.2
Media
Time Warner Inc. is a media and entertainment company.
Honeywell International
1.0
Honeywell International Inc. is a diversified technology and manufacturing company with
operations around the world.
Union Pacific
1.6
Road and Rail
Union Pacific Corporation is a rail transportation company.
IBM
2.1
IT Services
International Business Machines Corporation (IBM) provides computer solutions through the
use of advanced information technology.
Source: Bloomberg.
The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for the portfolio, and no
assumptions should be made that the securities identified and discussed were or will be profitable.
The information shown does not reflect any ETFs that may be held in the portfolio.
Performance Attribution
Los Angeles Department of Water and Power — Significant Absolute Detractors
Stock
1
% of
Portfolio
Industry
Bank of America
2.5%
Diversified Financial Services Bank of America Corporation accepts deposits and offers banking, investing, asset
management, and other financial and risk-management products and services.
Merck
2.0
Pharmaceuticals
Merck & Co., Inc. is a global pharmaceutical company that discovers, develops,
manufactures, and markets a broad range of human and animal health products.
Raytheon
1.3
Raytheon Company operates in defense, homeland security and other
government markets.
Microsoft
2.3
Software
Microsoft Corporation develops, manufactures, licenses, sells, and supports
software products.
Southwest Airlines
1.5
Airlines
Southwest Airlines Co. is a domestic airline that provides primarily short-haul, highfrequency, point-to-point service.
Amgen
0.8
Biotechnology
Amgen Inc. discovers, develops, manufactures, and markets human therapeutics
based on cellular and molecular biology.
H&R Block
0.9
Diversified Consumer Services
H&R Block, Inc. provides a wide range of financial products and services through
its subsidiaries.
Medtronic
0.0
Health Care Equipment
and Supplies
Medtronic, Inc. develops therapeutic and diagnostic medical products.
NRG Energy
1.1
Independent Power
NRG Energy, Inc. owns and operates a diverse portfolio of power-generating
Producers and Energy Traders facilities, primarily in the United States.
Avon
0.8
Personal Products
Avon Products, Inc. manufactures and direct sells beauty and related products.
Source: Bloomberg.
40
Total Relative Performance
Value Added in Los Angeles Department of Water and Power vs. Russell 1000 Value Index —
Rolling Three-Year Periods (Annualized Gross of Fees)
Calculated Monthly from 1 Oct 2004 to 28 Feb 2011
Percentage Points
12
Value Added vs. Russell 1000 Value Index
10
8
6
4
2
0
-2
9/07
41
12/07
12/08
12/09
12/10 2/11
Each bar measures the difference in performance between the portfolio and the benchmark for a three-year annualized period.
Figures shown gross of fees. Returns would have been lower as the result of the deduction of applicable fees. Past performance cannot guarantee future results.
Total Relative Performance
Three-Year Rolling Returns (Annualized Gross of Fees) —
Los Angeles Department of Water and Power vs. Russell 1000 Value Index
Calculated Monthly from 1 Oct 2004 to 28 Feb 2011
-60
-50
-40
-30
-20
Percent
60
-10
0
50
Portfolio Outperformance
40
30
20
Portfolio Underperformance
10
-10
10
20
30
40
50
60
-20
-30
-40
-50
-60
Each point represents the performance of the portfolio and its benchmark for a three-year annualized period. Points above the diagonal represent
outperformance relative to the benchmark. Points below the diagonal represent relative underperformance.
Figures shown gross of fees. Returns would have been lower as the result of the deduction of applicable fees. Past performance cannot guarantee future results.
42
Section E:
Portfolio Review and Characteristics
43
Style Consistency
Zephyr StyleADVISOR: T. Rowe Price Associates, Inc.
Zephyr StyleADVISOR: T. Rowe Price Associates, Inc.
36-Month Moving Windows, Computed Monthly
October 2004 through February 2011
Large
Value
Large
Growth
Zephyr Size Coordinate
Russell 1000 Value
Russell 1000 Growth
1
LA DEPT OF WATER AND POWER
EMPLOYEES RETIREMENT PLAN - LCV
0
Russell 1000 Value
Russell Generic Corners
-1
Russell 2000 Value
Russell 2000 Growth
Small
Growth
Small
Value
-1
0
1
Zephyr Style Coordinate
Zephyr StyleADVISOR performs a constrained quadratic optimization to determine the portfolio’s (style, size) coordinate relative to the indices shown. This
rolling window analysis displays the smaller data points to represent the oldest time period and larger data points to represent the most recent time period.
T. Rowe Price Associates, Inc., and Zephyr Associates, Inc., are not affiliated companies.
44
10 Largest Absolute Portfolio Holdings
As of 28 Feb 2011
Market Capitalization Shown in U.S. Dollars
Company
% of
Portfolio
Market
Capitalization
(Millions)
Chevron
5.0%
$208,273
ExxonMobil
4.6
425,854
worldwide basis.
JPMorgan Chase
3.2
182,572
JPMorgan Chase & Co. provides global financial services and retail banking.
Time Warner Cable
2.9
24,786
Bank of America
2.5
144,631
Bank of America Corporation accepts deposits and offers banking, investing, asset
management, and other financial and risk-management products and services.
Weyerhaeuser
2.4
13,090
Pfizer
2.4
153,828
3M
2.4
65,650
Microsoft
2.3
223,335
Baker Hughes
2.3
30,854
Total
1
around the world.
Pfizer Inc. is a research-based, global pharmaceutical company that discovers, develops,
manufactures, and markets medicines for humans and animals.
3M Co. conducts operations in electronics, telecommunications, industrial, consumer and
office, health care, safety, and other markets.
Microsoft Corporation develops, manufactures, licenses, sells, and supports
software products.
Baker Hughes Incorporated supplies reservoir-centered products, services, and systems to
the worldwide oil and gas industry.
30.1%
Source: Bloomberg.
Numbers may not total due to rounding.
45
Significant Portfolio Overweights
Los Angeles Department of Water and Power Relative to the Russell 1000 Value Index
As of 28 Feb 2011
1
46
10 Largest
Overweights
% of
Portfolio
ExxonMobil
4.6%
0.5%
4.1%
worldwide basis.
Time Warner Cable
2.9
0.4
2.5
3M
2.4
0.0
2.4
3M Co. conducts operations in electronics, telecommunications, industrial, consumer and
office, health care, safety, and other markets.
Weyerhaeuser
2.5
0.2
2.3
Chevron
5.0
2.9
2.1
around the world.
IBM
2.1
0.0
2.1
International Business Machines Corporation (IBM) provides computer solutions through the
use of advanced information technology.
Baker Hughes
2.3
0.3
2.0
Baker Hughes Incorporated supplies reservoir-centered products, services, and systems to the
worldwide oil and gas industry.
Home Depot
1.9
0.0
1.9
The Home Depot, Inc. is a home improvement retailer that sells building materials and home
improvement products.
Time Warner
2.2
0.5
1.7
Time Warner Inc. is a media and entertainment company.
Illinois Tool Works
1.7
0.0
1.7
Illinois Tool Works Inc. designs and manufactures fasteners and components, equipment and
consumable systems, and a variety of specialty products and equipment.
Source: Bloomberg.
% of
Index Difference Company Description1
Significant Portfolio Underweights
Los Angeles Department of Water and Power Relative to the Russell 1000 Value Index
As of 28 Feb 2011
10 Largest
Underweights
1
% of
Portfolio
% of
Index Difference Company Description1
Berkshire Hathaway
0.0%
2.2%
-2.2%
Berkshire Hathaway Inc. is a holding company owning subsidiaries in a variety of
business sectors.
Verizon
Communications
0.0
1.5
-1.5
Verizon Communications Inc. is an integrated telecommunications company that provides wire
line voice and data services, wireless services, Internet services, and published
directory information.
Wells Fargo
0.8
2.3
-1.5
Wells Fargo & Company is a diversified financial services company providing banking,
insurance, investments, mortgage, leasing, credit cards, and consumer finance.
Procter & Gamble
1.2
2.5
-1.3
The Procter & Gamble Company manufactures and markets consumer products in countries
throughout the world.
Walt Disney
0.0
1.3
-1.3
The Walt Disney Company is an entertainment company that conducts operations in media
networks, studio entertainment, theme parks and resorts, consumer products, and
interactive media.
Occidental Petroleum
0.0
1.0
-1.0
Occidental Petroleum Corporation explores for, develops, produces, and markets crude oil and
natural gas.
Citigroup
0.6
1.5
-0.9
Citigroup Inc. is a diversified financial services holding company that provides a broad range of
financial services to consumer and corporate customers around the world.
Kraft Foods
0.0
0.8
-0.8
Kraft Foods Inc. is a food and beverage company.
UnitedHealth Group
0.0
0.7
-0.7
UnitedHealth Group Incorporated owns and manages organized health systems in the United
States and internationally.
Apache
0.0
0.7
-0.7
Apache Corporation is an independent energy company.
Source: Bloomberg.
47
Recent Portfolio Changes
Year to Date Ended 28 Feb 2011
Major Purchases
1
2
48
% of
Portfolio
Allstate
0.7%
The Allstate Corporation, through its subsidiaries, provides property-liability insurance, as well as
other types of insurance in the United States and Canada.
Boeing2
0.4
The Boeing Company, together with its subsidiaries, develops, produces, and markets commercial jet
aircraft, as well as provides related support servic
Cisco Systems2
0.4
Cisco Systems, Inc. supplies data networking products for the Internet.
AT&T
2.1
AT&T Inc. is a communications holding company.
3M
2.4
3M Co. conducts operations in electronics, telecommunications, industrial, consumer and office,
health care, safety, and other markets.
Avon
0.8
Avon Products, Inc. manufactures and direct sells beauty and related products.
PepsiCo2
0.2
PepsiCo, Inc. operates worldwide beverage, snack and food businesses.
Kellogg
0.9
Kellogg Company manufactures and markets ready-to-eat cereal and other convenience foods.
Johnson & Johnson
2.3
Johnson & Johnson manufactures health care products and provides related services for the
consumer, pharmaceutical, and medical devices and diagnostics markets.
Southwest Airlines
1.6
Southwest Airlines Co. is a domestic airline that provides primarily short-haul, high-frequency,
point-to-point service.
Source: Bloomberg.
New holding.
Recent Portfolio Changes
Year to Date Ended 28 Feb 2011
Major Sales
1
2
% of
Portfolio
Newell Rubbermaid
0.1%
Newell Rubbermaid Inc. manufactures and markets branded consumer products which are sold
through a variety of retail and wholesale distribution channels.
Bank of New York Mellon
0.1
Bank of New York Mellon Corporation (BNY Mellon) is a global financial services company.
Honeywell International
1.0
Honeywell International Inc. is a diversified technology and manufacturing company with operations
around the world.
Ameriprise Financial
0.2
Ameriprise Financial, Inc. is a financial planning and services firm.
Home Depot
1.9
The Home Depot, Inc. is a home improvement retailer that sells building materials and home
improvement products.
Philip Morris International
0.7
Philip Morris International Inc., through its subsidiaries, affiliates and their licensees, produces, sells,
distributes, and markets a wide range of branded cigarettes and tobacco products in markets outside
of the United States of America.
Lockheed Martin
0.7
Lockheed Martin Corporation is a global security company that primarily researches, designs,
develops, manufactures, and integrates advanced technology products and services.
Dell
0.9
Dell Inc. offers a wide range of computers and related products.
CA
0.2
CA, Inc. designs, develops, markets, licenses, and supports standardized computer software products.
Sunoco2
0.0
Sunoco, Inc. is a petroleum refiner and marketer and chemicals manufacturer with interests in
logistics and cokemaking.
Source: Bloomberg.
Eliminated.
49
Sector Diversification
As of 28 Feb 2011
Consumer
Discretionary
Industrials and
Business Services
Energy
Information
Technology
Materials
Telecommunication
Services
Utilities
Consumer Staples
Health Care
Financials
-10
-5
0
5
10
15
20
25
30
Percent
Over/Underweighting
T. Rowe Price uses the MSCI/S&P Global Industry Classification Standard (GICS) for sector and industry reporting. Each year, MSCI and S&P make changes to the
GICS structure. The last change occurred on 1 July 2010. T. Rowe Price will adhere to all future updates to GICS for prospective reporting.
50
Portfolio Characteristics
As of 28 Feb 2011
Market Capitalization Shown in U.S. Dollars
1
Los Angeles
Department of
Water and Power
Russell 1000
Value Index
Projected Earnings Growth Rate1
10.3%
9.0%
Price to Earnings
12 Months Forward1
12 Months Trailing
12.7X
16.1X
13.0X
16.3X
Return on Equity (Last 12 Months)
17.6%
12.9%
Price to Book
2.1X
1.8X
Long-Term Debt as % of Capitalization
35.6%
35.6%
Unweighted Median Market Capitalization (Millions)
$28,508
$5,161
Investment Weighted Median Market Capitalization (Millions)
$46,847
$39,493
Investment Weighted Average Market Capitalization (Millions)
$95,607
$74,902
Number of Holdings
82
665
20 Largest Holdings
50.2%
35.9%
Turnover (Last 12 Months)
17.6%
N/A
Source: IBES.
Statistics are Investment Weighted Median unless otherwise noted.
51
Full Portfolio Holdings
Los Angeles Department of Power and Water — Retirement Plan
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61
Performance Statistics
Risk/Return Characteristics
Three Years Ended 28 Feb 2011
Average Annual
Return (%) 4
Los Angeles Department of
Water and Power
2
●
0
-2
-4
21
25
23
Average Annual
Standard Deviation (%)
Three Years
Los Angeles Department
Russell 1000
of Water and Power
Value Index
Annualized Total Return
3.39%
0.22%
22.83%
23.06%
Historical Tracking Error
2.72%
0.00%
Beta
0.98
1.00
R-Squared
0.99
1.00
Alpha
3.15%
0.00%
Sharpe Ratio
0.12
-0.01
Information Ratio
1.16
0.00
Annualized Standard Deviation
62
Statistics based on monthly gross returns. Returns would have been lower as the result of the deduction of applicable fees. Past performance cannot guarantee
future results.
Performance Statistics
Risk/Return Characteristics
Five Years Ended 28 Feb 2011
Average Annual
Return (%) 6
Los Angeles Department of
Water and Power
4
2
●
0
-2
17
Average Annual
21 Standard Deviation (%)
19
Five Years
Los Angeles Department
Russell 1000
of Water and Power
Value Index
Annualized Total Return
4.28%
1.57%
18.65%
18.83%
Historical Tracking Error
2.53%
0.00%
Beta
0.98
1.00
R-Squared
0.98
1.00
Alpha
2.65%
0.00%
Sharpe Ratio
0.11
-0.03
Information Ratio
1.06
0.00
Annualized Standard Deviation
Statistics based on monthly gross returns. Returns would have been lower as the result of the deduction of applicable fees. Past performance cannot guarantee
future results.
63
Section F:
Fee Schedule
64
Fee Schedule
City of Los Angeles Department of Water and Power Employees’ Retirement Plan —
First $20 Million
50 Basis Points
Next $30 Million
40 Basis Points
When Assets Exceed $50 Million, the Fee is a Flat 40 Basis Points on All Assets
When Assets Exceed $200 Million, the Fee is a Flat 35 Basis Points on All Assets1
When Assets Exceed $250 Million, the Fee on the portion of the assets above $250 Million is 30 Basis Points1
1
A transitional credit is applied to the fee schedule as assets approach or fall below the breakpoint.
65
Section G:
Additional Information and Disclosures
66
U.S. Large-Cap Value Composite
Periods Ended 31 Dec 2010
Annualized
Three
Months
One
Year
Two
Years
Three
Years
Four
Years
Five
Years
U.S. Large-Cap Value Composite (Gross of Fees)
10.74%
13.97%
21.04%
-2.10%
-1.00%
3.20%
5.45%
5.01%
U.S. Large-Cap Value Composite (Net of Fees)1
10.61
13.41
20.44
-2.59
-1.49
2.69
4.93
4.49
10.54
15.51
17.58
-4.42
-3.38
1.28
4.14
3.26
0.20
-1.54
3.46
2.32
2.38
1.92
1.31
1.75
S&P 500 Index
10.76
15.06
20.63
-2.86
-0.83
2.29
3.85
1.41
Value Added3
-0.02
-1.09
0.41
0.76
-0.17
0.91
1.60
3.60
Value Added2
Seven
Years
Ten
Years
Net of fees performance reflects the deduction of the highest applicable management fee (“Model Net Fee”) that would be charged based on the fee schedule
appropriate to you for this mandate, without the benefit of breakpoints. Please be advised that the composite may include other investment products that are
subject to management fees that are inapplicable to you but are in excess of the Model Net Fee. Therefore, the actual performance of all the portfolios in the
composite on a net fee basis will be different and may be lower than the Model Net Fee performance. However, such Model Net Fee performance is intended
to provide the most appropriate example of the impact management fees would have by applying management fees relevant to you to the gross performance
of the composite. Past performance cannot guarantee future results.
2
Value Added is shown as U.S. Large-Cap Value Composite (Gross of Fees) minus Russell 1000 Value Index.
3
Value Added is shown as U.S. Large-Cap Value Composite (Gross of Fees) minus S&P 500 Index.
1
67
Supplemental information. See “GIPS® Disclosure” for additional performance information.
21
GIPS® Disclosure
U.S. Large-Cap Value Composite
Period Ended December 31, 2010
Figures Shown in U S Dollar
Gross Annual Returns (%)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
-0.09
-13.86
30.68
16.91
5.94
21.87
2.39
-35.96
28.54
13.97
Net Annual Returns (%)¹
-0.59
-14.30
30.04
16.33
5.41
21.27
1.88
-36.29
27.91
13.41
Russell 1000 Value Index (%)²
-5.59
-15.52
30.03
16.49
7.05
22.25
-0.17
-36.85
19.69
15.51
S&P 500 Index (%)²
15.06
-11.89
-22.10
28.68
10.88
4.91
15.79
5.49
-37.00
26.46
Composite Dispersion
1.90
0.16
0.19
N/A
0.10
0.25
0.48
0.56
0.50
0.38
Comp. Assets (Millions)
299.6
259.4
349.5
900.1
926.8
2,341.9
1,684.6
1,407.6
3,156.0
4,567.3
# of Accts. in Comp.
Total Firm Assets (Billions)
6
6
7
11
13
21
17
18
21
25
130.4
121.1
165.9
212.2
244.4
294.8
341.2
244.5
340.3
415.5
¹Reflects deduction of highest applicable fee schedule without benefit of breakpoints. Investment return and principal value will vary. Past performance cannot guarantee future results. See below for further information
related to net of fee calculations.
²Primary benchmark is Russell 1000 Value Index and secondary benchmark is S&P 500 Index.
T. Rowe Price Associates, Inc. ("TRPA") has prepared and presented this report in compliance with Global Investment Performance Standards (GIPS®). TRPA has been verified for the 10-year period ended June 30, 2010 by KPMG
LLP. A copy of the verification report is available upon request.
TRPA is a U.S. registered investment management firm and holds itself out as such to potential clients for GIPS purposes. TRPA further defines itself under GIPS as a discretionary investment manager providing services primarily
to institutional clients with regard to various mandates, including all U.S. and certain global strategies of T. Rowe Price Global Investment Services Limited (“TRPGIS”), an investment manager registered with the FSA and other
regulatory bodies, but excluding the services of the Stable Asset Management group and the Private Asset Management group. The TRPGIS strategies were included in the TRPA firm definition effective January 1, 2009 as a
result of an internal reorganization. Management believes this change represents the most appropriate Firm definition. The firm has not included any non-fee paying portfolios in its composites. Non-fee paying portfolios are
included under the firm’s total assets. The minimum asset level for equity portfolios to be included in composites is $5 million. Prior to January 2002, the minimum asset level for composite inclusion was $1 million. The
minimum asset level for fixed income and asset allocation portfolios to be included in composites is $10 million. Prior to October 2004, the minimum asset level for composite inclusion was $5 million, and prior to January 2002,
the minimum asset level for composite inclusion was $1 million. Valuations are computed and performance reported in U.S. dollars.
Gross performance returns are presented before management and all other fees, where applicable, but after trading expenses. Net of fees performance reflects the deduction of the highest applicable management fee ("Model
Net Fee") that would be charged based on the fee schedule appropriate to you for this mandate, without the benefit of breakpoints. Please be advised that the composite may include other investment products that are subject
to management fees that are inapplicable to you but are in excess of the Model Net Fee. Therefore, the actual performance of all the portfolios in the composite on a net fee basis will be different, and may be lower, than the
Model Net Fee performance. However, such Model Net Fee performance is intended to provide the most appropriate example of the impact management fees would have by applying management fees relevant to you to the
gross performance of the composite. Gross and net performance returns are presented net of nonreclaimable withholding taxes. Dispersion is measured by the standard deviation across asset-weighted portfolio returns
represented within a composite for the full year. Dispersion is not calculated for the composites in which there are five or fewer portfolios. Supplemental performance history may be presented. Additional information regarding
the firm's policies and procedures for calculating and reporting performance results is available upon request.
Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Withholding taxes, whether or not refundable, are accrued for equity securities at the time of dividend accrual and,
where applicable, are accrued daily for fixed income securities. Where capital gains taxes apply, aggregate security value is reduced to net realizable value, considering holding periods, potential loss carry-forwards, and other
relevant factors that may vary from country to country.
Some accounts may trade futures and options, potentially high-risk derivatives. Futures and options contracts may be bought or sold for any number of reasons, including managing exposure to changes in securities prices and
foreign currencies, as an efficient means of adjusting overall exposure to certain markets, in an effort to enhance income, as a cash management tool, or to protect the value of portfolio securities. Purchases and sales of futures
and options are only affected in accordance with individual client portfolio guidelines and generally represent less than 10% of a portfolio.
Benchmarks are taken from published sources and may have different calculation methodologies, pricing times, and foreign exchange sources from the composite.
Composite policy requires the temporary removal of any portfolio incurring a client initiated significant cash inflow or outflow greater than or equal to 10% of portfolio assets. The temporary removal of such an account occurs
at the beginning of the measurement period in which the significant cash flow occurs and the account re-enters the composite on the last day of the current month after the cash flow. Additional information regarding the
treatment of significant cash flows is available upon request.
These results are intended to be used in the institutional market only. Consultants are advised to use this data in accordance with SEC guidelines. Past performance does not guarantee future results. Investment return and
principal will vary.
Where lawfully permitted, persons may access T. Rowe Price mutual fund information and T. Rowe Price Funds SICAV information at www.troweprice.com. A complete list and description of all of the Firm's composites and/or a
presentation that adheres to the GIPS® standards are available upon request. This material is not to be distributed or disseminated without the express written consent of TRPA.
A portfolio management change occurred effective February 24, 2010. There were no changes to the investment program or strategy related to this composite.
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Monitoring and Risk Management Elements
• Equity Steering Committee Oversight
- Periodic review by senior investment professionals promotes consistency of the strategy’s investment process and
portfolio construction.
• Quantitative Risk Management Tools
- Wilshire Variance Analysis enables portfolio managers to review performance attribution versus benchmarks from
a holdings-based perspective.
- Barra risk analysis provides managers with a common risk factor tool to analyze their strategy versus a benchmark.
- Zephyr returns-based style analysis allows portfolio managers to analyze the style and size consistency of their
strategy versus a benchmark.
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Section H:
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Alpha – A measure of a strategy’s risk-adjusted performance. Alpha represents the difference between a strategy’s actual returns and its expected performance, given its
level of risk as measured by beta. The difference is expressed as an annualized percentage.
Beta – A measure of the market risk of a strategy showing how responsive the strategy is to a given market index, such as the S&P 500 Index
(an index for equity strategies) or the Barclays Capital Government/Corporate Bond Index (an index for fixed income strategies). By definition, the beta of the benchmark
index is 1.00. A strategy with a 1.10 beta is expected to perform 10% better than the index in up markets and 10% worse in down markets. Usually, higher betas represent
riskier investments.
Earnings Growth Rate (Current Fiscal Year) – Measures the annualized percent change in earnings per share from the prior fiscal year to the current fiscal year.
Historical Tracking Error – Standard deviation of the strategy’s excess return over the market benchmark.
Information Ratio – A measure of the significance or quality of alpha. It is defined as the ratio of alpha to the standard deviation of alpha.
A larger number is better – either a very strong alpha score or a consistent alpha with low standard deviation.
Market Capitalization – A measure of a company’s total value and is equal to the total dollar value of all outstanding shares.
Median – Represents the midpoint of market capitalization of stocks in a portfolio where 50% of holdings are above the value.
Investment-Weighted Median – Represents the breakpoint where 50% of the weights are above the value.
Investment-Weighted Average – Sum of each holding’s market capitalization multiplied by its weight in the portfolio.
Price to Book Ratio – Used to compare a stock’s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value
(book value is simply total assets minus intangible assets and liabilities).
Price-to-Earnings Ratio (12 Months Forward) – P/E is a valuation measure calculated by dividing the price of a stock by the analysts’ forecast of the next 12 months expected
earnings. The ratio is a measure of how much investors are willing to pay for the company’s future earnings. The higher the P/E, the more investors are paying for a company’s
earnings growth in the next 12 months.
Price-to-Earnings Ratio (Current Fiscal Year) – P/E is a valuation measure calculated by dividing the price of a stock by its reported earnings per share from the latest fiscal year.
The ratio is a measure of how much investors are willing to pay for the company’s earnings. The higher the P/E, the more investors are paying for a company’s current earnings.
Price-to-Earnings Ratio (Next Fiscal Year) – P/E is a valuation measure calculated by dividing the price of a stock by its estimated earnings for the next fiscal year. The ratio is a
measure of how much investors are willing to pay for the company’s future earnings. The higher the P/E, the more investors are paying for the company’s expected earnings
growth in the next fiscal year.
Projected Earnings Growth Rate (IBES) – A company’s expected earnings per share growth rate for a given time period based on the forecast from the Institutional Broker’s
Estimate System, which is commonly referred to as IBES.
Return on Equity (Current Fiscal Year) – ROE is a valuation measure calculated by dividing the company’s current fiscal year net income by shareholders’ equity (i.e., the company’s
book value). Return on equity measures how much a company earns on each dollar that common stock investors have put into the company. It indicates how effectively and
efficiently a company and its management are using stockholder investments.
R-Squared – Measures the percentage of a strategy’s movement that is explained by movements in the benchmark index. R-Squared helps indicate the accuracy of a strategy’s
alpha and beta.
Sharpe Ratio – A risk-adjusted measure, which is calculated using standard deviation and excess return to determine reward per unit of risk.
The higher the Sharpe ratio, the better the strategy’s historical risk-adjusted performance.
Standard Deviation – Indicates the volatility of a strategy’s total returns as measured against its mean performance. Unlike alpha, beta, and R-Squared, which are compared with
a benchmark index, standard deviation is strategy-specific. In general, the higher the standard deviation, the greater the volatility or risk.
Turnover – A measurement of how frequently assets within a fund are bought and sold by the managers.
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1
Section I:
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Mark Finn is the portfolio manager of the Value Strategy. He is also a co-manager of the U.S. Large-Cap Value Strategy and
is a member of the U.S. Structured Research Strategy team. Mr. Finn is a vice president of T. Rowe Price Group, Inc.
Mr. Finn has 20 years of investment experience, all of which have been with T. Rowe Price. From 2005 to 2009, Mr. Finn
was an equity research analyst specializing in electric power generation, utilities, and coal. Prior to this, he was an analyst
in T. Rowe Price's Fixed Income Division, where he also covered utilities and power generation. From 1998 to 2001, Mr. Finn
worked with the T. Rowe Price Recovery Fund team, where he evaluated financially distressed companies. Mr. Finn began
his career with T. Rowe Price in 1990 in the Finance Division, where he served as controller of T. Rowe Price Investment
Services, Inc., and as the principal accounting officer for the T. Rowe Price Realty Income Funds. Prior to joining the firm, he
had five years of auditing experience with Price Waterhouse LLP, where he worked on engagements for both public and
private companies.
Mr. Finn earned a B.S. from the University of Delaware and has obtained the Chartered Financial Analyst designation and
the Certified Public Accountant accreditation.
John D. Linehan is head of the T. Rowe Price Equity Division, chairman of the Equity Steering Committee, and a member of
the firm’s Management Committee. He is also portfolio manager of the U.S. Large-Cap Value Strategy in the U.S. Equity
Division. Mr. Linehan is a vice president of T. Rowe Price Group, Inc.
Mr. Linehan has 21 years of investment experience, 12 of which have been at T. Rowe Price. He started at the firm in 1998
as an equity analyst covering the paper and forest products and airline industries. Between 1990 and 1996, he was an
executive in the oil trading and consulting industry, first as vice president and managing director for Delaney Petroleum,
then as vice president and managing director for E.T. Petroleum. He began his investment career in 1987 while at Bankers
Trust NY Corporation, where he served as an associate in mortgage-backed securities trading.
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Mr. Linehan attended Amherst College, where he earned a B.A. in economics. He earned an M.B.A. from Stanford University
Graduate School of Business. While at Stanford, he was the Henry Ford II Scholar, an Arjay Miller Scholar, and the winner of
the Alexander A. Robichek Award in finance. He also has earned the Chartered Financial Analyst designation.
William D. Nolan
William D. Nolan is a portfolio specialist in the U.S. Equity Division of T. Rowe Price. He acts as a proxy for equity portfolio
managers with institutional clients, consultants, and prospects. Mr. Nolan supports T. Rowe Price's large-cap value
strategies, focusing on the Equity Income and Value Strategies. He is a vice president of T. Rowe Price Associates, Inc.
Mr. Nolan has 19 years of investment experience. Before joining the firm, he was most recently a managing director of
institutional equity sales for Wachovia Corporation where he also served as director of institutional research marketing.
Prior to this, Mr. Nolan was director of equity institutional sales for Alex Brown and was the Washington, D.C., branch
manager in the National Accounts Division of IBM.
Mr. Nolan earned a B.S. in social and behavioral sciences from Johns Hopkins University
John Plowright is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc. He is a client service
executive for Global Investment Services, the organization responsible for the firm’s institutional business worldwide.
John has 19 years of investment experience, six of which have been at T. Rowe Price. Before joining T. Rowe Price in 2004,
he was a director of client services with RCM Capital Management, and prior to that, he was a director and fixed-income
specialist with RCM Capital Management.
John earned a B.A. in religion from the Earlham College, cum laude, and a master’s degree in international management
from American Graduate School of International Management. John has earned the Chartered Financial Analyst
designation and is a Series 7 and 63 registered representative.
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