T. Rowe Price EMERGING MARKETS BONDS The Strength of T. Rowe Price s Investment Expertise in Emerging Markets Bonds T. Rowe Price has established a position as one of the leading franchises among asset managers investing in emerging markets. The firm has been involved in these markets within its broader fixed income portfolios since the 1980s, with a dedicated emerging markets debt mandate being launched in 1994. Our comprehensive coverage of emerging market debt includes sovereign, quasi-sovereign and corporate debt, with products focused on both dollar-denominated and local currency denominated bonds. Our flagship emerging markets debt strategy adds diverse sources of alpha through opportunistic, non-index investment among frontier markets, corporate debt, local bonds, and foreign currency exposure. The table below indicates the relative and absolute performance of our strategies. Emerging Markets Performance (31 Mar 2011) Figures shown in U.S. Dollars Annualized 10 Years or 3 Months 1 Year 3 Years 5 Years Since Inception Inception Date Emerging Markets Bond Strategy Emerging Markets Bond Composite (Gross of Fees) 1.69% 10.88% 9.85% 9.06% 12.65% 31 Dec 1995 Emerging Markets Bond Composite (Net of Fees) 1 1.56 10.33 9.31 8.52 12.09 Benchmark 2 1.02 8.65 8.70 8.26 10.05 Value Added (Gross of Fees) 4 0.67 2.23 1.15 0.80 2.60 Emerging Local Markets Bond Strategy Emerging Local Markets Bond Composite (Gross of Fees) 2.85 11.47 8.23 7.91 30 Sep 2007 Emerging Local Markets Bond Composite (Net of Fees) 1 2.73 10.92 7.69 7.37 Benchmark 3 2.86 11.91 8.78 9.41 Value Added (Gross of Fees) 4-0.01-0.44-0.55-1.50 1 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 Effective 1 January 2003, the benchmark for the composite was changed to JPMorgan Emerging Markets Bond Index Global. Prior to 1 January 2003, the benchmark was JPMorgan Emerging Markets Bond Index Plus. The benchmark change was made because the firm viewed the new benchmark to be a better representation of the investment strategy of the composite. Historical benchmark representations have not been restated. 3 Effective 1 January 2011, the benchmark for the composite was changed to JPMorgan Government Bond Index Emerging Markets Global Diversified. Prior to 1 January 2011, the benchmark was the JPMorgan Government Bond Index Emerging Markets Broad Diversified. The benchmark change was made because the firm viewed the new benchmark to be a better representation of the investment strategy of the composite. Historical benchmark representations have not been restated. 4 Value Added figures represent composite performance (gross of fees) versus the respective index performance for that composite.
Emerging Markets Bond Investment Team Portfolio Manager Location Responsibility Years with T. Rowe Price Years of Investment Experience Michael Conelius, CFA Baltimore Emerging Markets Bond Strategy 22 22 Ian Kelson London Head of Global Fixed Income 10 29 Andrew Keirle* London Emerging Local Markets Bond Strategy 5 14 Christopher Rothery* London Emerging Local Markets Bond Strategy 16 23 Portfolio Manager Experience The experience and tenure of our team is invaluable in our ability to gain insight into emerging markets. With 22 years of experience, Lead Portfolio Manager Mike Conelius is among the most-tenured portfolio managers within this space. Our Head of Global Fixed Income, Ian Kelson, provides additional portfolio oversight. Ian holds 29 years of experience investing in international debt products and formerly managed emerging market debt portfolios. Both Andrew Keirle and Chris Rothery, senior global fixed income portfolio managers, are co-leads for the Emerging Local Markets Bond Strategy, where currency positions and country allocation are prime drivers of performance. Emerging Markets Sovereign Research Coverage Portfolio Manager Location Responsibility Years with T. Rowe Price Years of Investment Experience Roy Adkins Baltimore Africa and Middle East 2 10 Mike Oh, CFA Baltimore Latin America 6 9 Julie Salsbery Baltimore Eastern Europe 13 18 Andrew Keirle* London Central Europe 5 14 Christopher Kushlis, CFA London Brazil and Southeast Asia 3 10 Cindy Lau, CFA* London North Asia 2 7 Christopher Rothery* London China and India 16 23 Ju Yen Tan* London Middle East 6 14 Emerging Markets Corporate Research Coverage Portfolio Manager Location Responsibility Years with T. Rowe Price Years of Investment Experience Steven E. Boothe, CFA* Baltimore Media/Telecom 11 13 Steven G. Brooks, CFA Baltimore Consumer Staples, Retail, Transportation 16 26 Michael F. Connelly, CFA Baltimore Consumer Discretionary and Staples 5 10 Carson Dickson, CFA, CPA Baltimore Industrials, Materials, Consumer 3 5 Justin T. Gerbereux, CFA* Baltimore Autos, Energy 7 11 Andrew P. Jamison, CPA Baltimore Materials 1 2 Paul M. Massaro, CFA* Baltimore Media/Telecom 7 10 Samy B. Muaddi, CFA Baltimore Financials 5 5 Brian M. Ropp, CPA Baltimore Energy 9 15 Evan S. Shay Baltimore Industrials 4 4 Walter P. Stuart III, CFA Baltimore Utilities, Materials 13 16 Kimberly A. Stokes Baltimore Energy, Utilities 5 11 Lauren M. Taylor Baltimore Materials 1 4 Siby Thomas Baltimore Latin America Generalist 1 1 Carolyn Hoi Che Chu, CPA Hong Kong Asia Generalist <1 13 Michael Della Vedova London European High Yield Generalist 1 14 Michael Lambe, CFA London Energy, Utilities 12 12 Christopher C. Loop, CFA London Industrials, Media/Telecom 8 16 Howard Woodward, CFA* London Consumer-Autos, Retail and Services 11 11 *Also has analyst responsibilities. 2 EMERGING MARKETS BONDS
Analysts Portfolio managers leverage the work done by 27 sovereign and corporate credit analysts, based in Baltimore, London, and Hong Kong. Our corporate debt analysts work closely with their internal equity counterparts to develop and maintain a comprehensive viewpoint of each company within their shared coverage, while our sovereign analysts regularly collaborate with developed market macro analysts in order to better identify global trends. Our analysts are responsible for idea generation, detailed models and analysis, and an internal credit rating all shared on a globally accessible database. Summary and Philosophy We believe that proprietary, fundamental research is the key driver of value-added active management and that our approach can help uncover and exploit pricing inefficiencies within emerging markets. Our philosophy is based on the following tenets: Fundamental research is the key driver to our approach, utilizing our dedicated team of analysts and a high-quality proprietary research platform. We focus on long-term opportunities through the review of strategic themes that are the sources of value add and seek to identify changes in credit quality of both companies and countries. We seek to exploit evolving investment opportunities as this asset class continues to mature and evolve, largely through collaboration with our global corporate bond and equity research teams. Systematic risk management is employed through predefined limits on various sectors, as well as via risk assessment based on proprietary models. In summary, we believe that our proven investment expertise in emerging markets identifies improving credit stories and pricing inefficiencies across the emerging markets debt space. We believe that this will help our emerging markets bond strategies as we strive to produce solid absolute and relative returns for our clients in the future. EMERGING MARKETS BONDS 3
GIPS Disclosure for Select Composites Emerging Markets Bond Composite Period Ended March 31, 2011 Figures Shown in U S Dollar 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD 2011 Gross Annual Returns (%) 10.67 10.79 27.42 16.13 18.47 12.54 6.83-16.87 36.28 14.38 1.69 Net Annual Returns (%)¹ 10.12 10.24 26.80 15.56 17.88 11.98 6.30-17.30 35.62 13.82 1.56 Benchmark (%)² -0.79 14.24 25.66 11.73 10.73 9.88 6.28-10.91 28.18 12.04 1.02 Composite 3-Yr St. Dev. 10.78 11.06 10.32 10.01 7.75 6.80 6.02 12.85 13.95 14.21 14.18 Benchmark 3-Yr St. Dev. 12.38 12.74 12.07 11.05 7.41 6.45 5.07 11.56 12.26 12.58 12.59 Composite Dispersion N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Comp. Assets (Millions) 155.6 211.1 252.3 277.9 475.4 618.5 696.8 562.4 1,865.1 2,731.2 2,922.2 # of Accts. in Comp. 1 1 1 1 1 1 1 2 2 2 2 Total Firm Assets (Billions) 153.9 138.6 188.0 234.7 268.9 333.8 397.5 275.7 395.2 485.0 N/A 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 Please related to see net page of fee 5 calculations. for full GIPS disclosure. ²Effective January 1, 2003, the benchmark for the composite was changed to J.P. Morgan Emerging Markets Bond Index Global. Prior to January 1, 2003, the benchmark was the J.P. Morgan Emerging Markets Bond Index Plus. The benchmark change was made because the firm viewed the new benchmark to be a better representation of the investment strategy of the composite. Historical benchmark representations have not been restated. Composite policy requires the temporary removal of any portfolio incurring a client initiated significant cash inflow or outflow greater than or equal to 15% 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. Emerging Local Markets Bond Composite Period Ended March 31, 2011 Figures Shown in U S Dollar 2007² 2008 2009 2010 YTD 2011 Gross Annual Returns (%) 2.27-9.59 20.40 13.96 2.85 Net Annual Returns (%)¹ 2.14-10.05 19.81 13.40 2.73 Benchmark (%)³ N/A -2.60 15.98 14.15 2.86 Composite 3-Yr St. Dev. N/A N/A N/A 15.49 15.54 Benchmark 3-Yr St. Dev. N/A N/A N/A 12.89 12.98 Composite Dispersion N/A N/A N/A N/A N/A Comp. Assets (Millions) 10.6 9.5 11.3 17.6 13.1 # of Accts. in Comp. 1 1 1 1 1 Total Firm Assets (Billions) 397.5 275.7 395.2 485.0 N/A 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. Please ²September see 30, page 2007 5 for through full December GIPS disclosure. 31, 2007. ³Effective January 1, 2011, the benchmark for the composite was changed to J.P. Morgan Government Bond Index - Emerging Markets Global Diversified. Prior to January 1, 2011, the benchmark was the J.P. Morgan Government Bond Index - Emerging Markets Broad Diversified. The benchmark change was made because the firm viewed the new benchmark to be a better representation of the investment strategy of the composite. Historical benchmark representations have not been restated. 4 EMERGING MARKETS BONDS
GIPS Disclosure for Select Composites Emerging Markets Bond Composite Emerging Local Markets Bond Composite Effective January 1, 2011, the GIPS firms known as T. Rowe Price Associates, Inc. ( TRPA ) and T. Rowe Price International, Inc. ( TRPI ) were merged into a single GIPS firm and redefined to now be known as T. Rowe Price ( TRP ). TRP has prepared and presented this report in compliance with Global Investment Performance Standards (GIPS ). TRPA and TRPI have been independently verified for the 10-year period ended June 30, 2010 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Services Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S., international, and global strategies but excluding the services of the Private Asset Management group. The minimum asset level for equity portfolios to be included in composites is $5 million and prior to January 2002 the minimum 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 was $5 million; and prior to January 2002 the minimum 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 that would be charged based on the fee schedule appropriate to you for this mandate, without the benefit of breakpoints. Gross and net performance returns are presented net of nonreclaimable withholding taxes on dividends, interest income, and capital gains. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. 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. Some portfolios may trade futures and options, potentially high-risk derivatives which 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. The firm's list of composite descriptions and/or a presentation that adheres to the GIPS standards are available upon request. EMERGING MARKETS BONDS 5
Fee Schedules for Select Composites As of 31 Mar 2011 Figures shown in U.S. Dollars Emerging Markets Bond Composite. The Emerging Markets Bond Composite seeks current income and capital appreciation primarily through investment in fixed income securities issued by emerging nations. The strategy may invest in low rated bonds, including those in default, when market conditions warrant. Absolute weightings in the Emerging Markets Bond Composite will generally be higher in the larger markets of Brazil, Mexico, and Russia than absolute weightings in the Emerging Markets Diversified Bond Composite. (Created December 1994) Fee Schedule First $50 million 50 basis points Next $50 million 45 basis points Next $150 million 40 basis points Above $250 million 37.5 basis points Minimum separate account size $50 million. Emerging Local Markets Bond Composite. The Emerging Local Markets Bond Composite seeks to maximize total return by investing primarily in a widely diversified, global portfolio of bonds and other fixed and floating rate securities issued by governments, government agencies, supra-national and corporate issuers established, or conducting the predominant part of their business activity, in the economically emerging countries of Latin America, Asia, Europe, Africa and the Middle East. The composite's emphasis will be on investing in securities denominated in the currencies of the respective emerging countries. (Created September 2007) Fee Schedule First $50 million 50 basis points Next $50 million 45 basis points Next $150 million 40 basis points Above $250 million 37.5 basis points Minimum separate account size $50 million. 6 EMERGING MARKETS BONDS
Important Information y 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 in the Dubai International Financial Centre by T. Rowe Price International Ltd ( TRPIL ), 60 Queen Victoria Street, London EC4N 4TZ, which is authorised and regulated by the UK Financial Services Authority (the FSA ). This material is communicated on behalf of TRPIL by the TRPIL Representative Office which is regulated by the Dubai Financial Services Authority ( DFSA ) as a Representative Office. This material is not intended for use by Retail Clients, as defined by the FSA and DFSA. Retail Clients should not act upon information contained within this material. Issued in Hong Kong by T. Rowe Price Hong Kong Limited ( TRPHK ), 21/F, Jardine House, 1 Connaught Place, Central, Hong Kong, a Hong Kong limited company regulated by the Securities & Futures Commission. This material is intended for use by professional investors only and may not be redistributed without the prior approval of TRPHK. Issued outside of the USA, Japan, Canada, Australia, New Zealand, DIFC, and Hong Kong 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. This material is provided for informational purposes only and is not intended to be a solicitation for any T. Rowe Price products or services. Recipients are advised that T. Rowe Price shall not offer any products or services without an appropriate license or exemption from such license in the relevant jurisdictions. This material may not be redistributed without prior written consent from T. Rowe Price. The contents of this material have not been reviewed by any regulatory authority in any jurisdiction where this presentation is being made or by any other regulatory authority. This material does not constitute investment advice and should not be exclusively relied upon. Investors will need to consider their own circumstances before making an investment decision. 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. 104693 (03/2011) EMERGING MARKETS BONDS 7