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

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 [email protected]

John D. Linehan, CFA Director of U.S. Equity 410-345-4605 [email protected]

13 April 2011

William D. Nolan Portfolio Specialist 410-345-4817 [email protected]

John D. Plowright, CFA Institutional Client Service Executive 415-772-1117 [email protected]

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 Mark S. Finn, CFA, CPA Vice President — Portfolio Manager • 20 years investment experience; • 20 years with T. Rowe Price.

Director of U.S. Equity John D. Linehan, CFA Vice President — Director of U.S. Equity and Portfolio Manager • 21 years of investment experience; • 12 years with T. Rowe Price.

Portfolio Specialist 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; • 6 years with T. Rowe Price. 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 Figures Shown in U.S. Dollars

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

U.S. Large-Cap Value Strategy Portfolio Management Team Stability | Depth | Collaboration

John D. Linehan, CFA Portfolio Manager

Brian C. Rogers, CFA, CIC Portfolio Manager

• 21 years of investment experience; • 12 years with T. Rowe Price. - BA, Amherst College - MBA, Stanford University

• 31 years of investment experience; • 28 years with T. Rowe Price. - AB, Harvard College - MBA, Harvard Business School

Mark S. Finn, CFA, CPA Portfolio Manager

William Nolan Portfolio Specialist

• 19 years of investment • 20 years of investment 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: John D. Plowright, CFA Institutional Client Service Executive Phone: 415-772-1117 Fax: 415-772-1111 E-mail: [email protected]

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: [email protected]

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: [email protected]

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

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

Archibald Ciganer, CFA

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

Archibald Ciganer, CFA 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

Latin America Generalist

10

Taymour R. Tamaddon, CFA

Jason Nogueira, CFA

Health Care Services

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

Archibald Ciganer, CFA

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 Research, North America Charles G. Pepin

Shalin Mody

Rhett K. Hunter

Mark Bussard, MD

Health Care

Director of Equity Research, North America 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 and Africa Generalist Uebe Rezeck Filho Europe Small-Cap Generalist Europe Small-Cap Generalist Francisco Sersale Ben Griffiths, CFA Leigh Innes, CFA1 Latin America Generalist Europe Small-Cap Generalist Emerging Europe, Middle East Miki Takeyama, CMA and Africa Generalist Japan Small- and Mid-Cap Generalist

123 Equity Research Professionals worldwide.2

Sindee Tan, CFA

Europe Small-Cap Generalist

Verena Wachnitz, CFA Latin America Generalist

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 U.S. Large-Cap Value Strategy

• 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 U.S. Large-Cap Value Strategy

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 Los Angeles Department of Water and Power 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 Figures Shown in U.S. Dollars

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: ƒ

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

ƒ

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 Figures Shown in U.S. Dollars

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

Russell 1000 Value Index

6.03

22.16

18.77

Value Added (Net of Fees)

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

Total Return Performance

Calendar Years 20041

2005

2006

2007

2008

2009

2010

Los Angeles Department of Water and Power — Retirement Plan (Gross of Fees)

9.07%

6.13%

22.39%

2.87%

-35.53%

27.96%

14.98%

Los Angeles Department of Water and Power — Retirement Plan (Net of Fees)

8.97

5.78

21.98

2.53

-35.77

27.55

14.61

Russell 1000 Value Index

10.38

7.05

22.25

-0.17

-36.85

19.69

15.51

Value Added (Net of Fees)

-1.41

-1.27

-0.27

2.70

1.08

7.86

-0.90

20092

2010

Calendar Years

1 2

Los Angeles Department of Water and Power — Health Benefits Plan (Gross of Fees)

5.71%

14.76%

Los Angeles Department of Water and Power — Health Benefits Plan (Net of Fees)

5.60

14.39

Russell 1000 Value Index

4.89

15.51

Value Added (Net of Fees)

0.71

-1.12

1 October 2004 through 31 December 2004. 15 September 2009 through 31 December 2009.

35

Total Return Performance Los Angeles Department of Water and Power — Retirement Plan Since Account Inception1 through 28 Feb 2011 Figures Shown in U.S. Dollars

Percent 100

75

Los Angeles Department of Water and Power — Retirement Plan (Gross of Fees) Los Angeles Department of Water and Power — Retirement Plan (Net of Fees) Russell 1000 Value Index

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

Total Return Performance Los Angeles Department of Water and Power — Health Benefits Plan Since Account Inception1 through 28 Feb 2011 Figures Shown in U.S. Dollars

Percent 40 Los Angeles Department of Water and Power — Health Benefits Plan (Gross of Fees) Los Angeles Department of Water and Power — Health Benefits Plan (Net of Fees) Russell 1000 Value Index 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 Figures Shown in U.S. Dollars

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 One Year Ended 28 Feb 2011

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

Aerospace and Defense

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 One Year Ended 28 Feb 2011

Stock

1

% of Portfolio

Industry

Company Description1

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

Aerospace and Defense

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. 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.

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 Figures Shown in U.S. Dollars 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 Figures Shown in U.S. Dollars

-60

-50

-40

-30

-20

Los Angeles Department of Water and Power

Percent 60

-10

0

50

Portfolio Outperformance

40 30 20 Portfolio Underperformance 10

-10

10

20

30

40

50

60

Russell 1000 Value Index

-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 Los Angeles Department of Water and Power 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

Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a 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

Weyerhaeuser Company is an integrated forest products company with offices or operations worldwide.

Pfizer

2.4

153,828

3M

2.4

65,650

Microsoft

2.3

223,335

Baker Hughes

2.3

30,854

Total 1

Company Description1 Chevron Corporation is an integrated energy company with operations in countries located around the world.

Time Warner Cable Inc. offers cable television subscription services.

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. 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. 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%

Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a worldwide basis.

Time Warner Cable

2.9

0.4

2.5

Time Warner Cable Inc. offers cable television subscription services.

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

Weyerhaeuser Company is an integrated forest products company with offices or operations worldwide.

Chevron

5.0

2.9

2.1

Chevron Corporation is an integrated energy company with operations in countries located 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. Numbers may not total due to rounding.

% 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. Numbers may not total due to rounding.

47

Recent Portfolio Changes Los Angeles Department of Water and Power Year to Date Ended 28 Feb 2011

Major Purchases

1 2

48

% of Portfolio

Company Description1

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. The information shown does not reflect any ETFs that may be held in the portfolio. Numbers may not total due to rounding.

Recent Portfolio Changes Los Angeles Department of Water and Power Year to Date Ended 28 Feb 2011

Major Sales

1 2

% of Portfolio

Company Description1

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. The information shown does not reflect any ETFs that may be held in the portfolio. Numbers may not total due to rounding.

49

Sector Diversification Los Angeles Department of Water and Power 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 Los Angeles Department of Water and Power Russell 1000 Value Index 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 Los Angeles Department of Water and Power 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

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