01—Abstract
Summary
Summary of the 10-K filed March 2, 2009. Cited figures are marked; the original filing is the authoritative source.
Ameriprise Financial Inc. (AMP) reported a net loss of $38 milliona on net revenues of $7.0 billion for the fiscal year ended December 30, 2008.
This marks a significant downturn from the $814 millionb net income reported in the prior year, largely driven by unprecedented market volatility and credit crises that impacted all segments of the business, particularly net investment income which saw a 59% decline. Despite the challenging economic environment, Ameriprise maintained strong client and advisor retention rates, with 94% and 92% respectively. The company also completed strategic acquisitions of H&R Block Financial Advisors, J. & W.
Seligman & Co., and Brecek & Young Advisors, Inc. during the fourth quarter of 2008, aiming to strengthen its retail distribution and asset management capabilities. However, the company temporarily suspended its stock repurchase program due to prevailing market conditions. Investors should note the significant decline in total owned, managed, and administered assets from $479.8 billion to $372.1 billionc, reflecting market depreciation.
02—Key points
Key Highlights
- Net loss of $38 million in 2008, a substantial decrease from $814 million net income in 2007.
- Net revenues decreased by 19% to $7.0 billion, significantly impacted by market volatility and credit crises.
- Total owned, managed, and administered assets declined by 22% to $372.1 billion due to market depreciation.
- Completed acquisitions of H&R Block Financial Advisors, J. & W. Seligman & Co., and Brecek & Young Advisors to bolster distribution and asset management.
- Maintained strong client retention (94%) and advisor retention (92%).
- Temporarily suspended stock repurchase program due to market conditions.
- Significant increase in amortization of deferred acquisition costs (DAC) by 69% due to market impacts.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2008filed March 2, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $7.10B$8.76B | −18.9% |
| Operating Expenses | $7.34B$7.50B | −2.1% |
| Net Income | -$36.00M$814.00M | −104.4% |
| EPS (Basic) | $-0.16$3.45 | −104.6% |
| EPS (Diluted) | $-0.16$3.39 | −104.7% |
| Shares Outstanding (Basic) | 222.30M236.20M | −5.9% |
| Shares Outstanding (Diluted) | 224.90M239.90M | −6.3% |
05—Questions
Frequently Asked Questions
What was Ameriprise Financial's overall financial performance in 2008?
Ameriprise Financial reported a net loss of $38 million for the fiscal year ended December 30, 2008, a significant decline from a net income of $814 million in 2007. This was primarily due to adverse market conditions, including equity market declines and credit crises, which reduced net revenues by 19% to $7.0 billion.
How did the market downturn affect Ameriprise's assets under management?
The company's total owned, managed, and administered assets decreased by 22% from $479.8 billion at the end of 2007 to $372.1 billion at the end of 2008. This decline was largely attributed to an 38% decrease in the S&P 500 Index and widened credit spreads.
What strategic actions did Ameriprise take in 2008?
Ameriprise Financial completed several strategic acquisitions in the fourth quarter of 2008, including H&R Block Financial Advisors, J. & W. Seligman & Co., and Brecek & Young Advisors, to expand its retail distribution and asset management businesses. The company also stated it had temporarily suspended its stock repurchase program due to the challenging market environment.
What is the outlook for Ameriprise given the 2008 results?
The company acknowledged the persistent challenging business climate. Its strategic objectives remain focused on leadership in financial planning for mass affluent and affluent clients, strengthening its advisor platform, and capturing greater assets and protection in force. However, the company cautioned that its financial condition and results could continue to be adversely affected by market fluctuations and economic factors.
06—Continue