For T. Rowe Price shareholders, 2006 was one good year.

James A. C. Kennedy, president and chief executive officer, said the Baltimore-based firm delivered “strong results,” riding a tailwind from the U.S. and global markets for the last four years.

Net operating income rose 20 percent for 2006 from 2005, to a total of $787 million. Shareholder earnings topped out at $1.90 per share, another 20 percent rise from 2005’s number.

Kennedy called the company a “dividend champion,” as the company has raised its shareholder payout every year since the company went public in 1986.

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Frank Smor, a Baltimore resident and longtime investor and client of the company, said its performance is consistently terrific. “Always, from day one, I’ve thought so,” he said.

Although on the heels of a profitable year, Kennedy cautioned that the first quarter of 2007 could be choppy.

“Rising energy prices, a stretched U.S. consumer, and global banks raising rates and tapping brakes will dampen growth rates,” Kennedy said.

That will show as moderated growth in the company, but the “markets will continue to grow, and we’ll do okay,” he said.

For 2006, assets under management grew by $65 billion, with $37 billion from market appreciation and $28 billion from record cash flow.

Kennedy attributed the company’s 20 percent rise in operating expenses, about $171 million, to a new accounting rule enacted in 2006 and to a 5.4 percent rise in employment at the company.

Stockholders elected nine people to the board of directors. In December 2006, George Roche, who served on the board since 1980 and as chairman since 1997, retired, reducing the board number from 10.

“The new generation of leadership will continue the successful tradition, too,” Smor said.

T. Rowe Price’s investments touch the community as well. Its TRP Foundation, established in 1981, has contributed $32 million and supported 825 charitable organizations since 1997.

kprahlad@baltimoreexaminer.com