01—Abstract
Summary
Summary of the 10-K filed February 23, 2017. Cited figures are marked; the original filing is the authoritative source.
Ameriprise Financial, Inc. (AMP) delivered a mixed financial performance in 2016, as detailed in their 2017 10-K filing.
The company saw a decrease in net income attributable to Ameriprise Financial by 16% to $1.56 billiona, primarily due to the impact of "unlocking" (changes in valuation assumptions), net outflows in asset management, and a deconsolidation of certain investment entities. Total net revenues also declined by 4% to $11.7 billion, impacted by lower management and financial advice fees, distribution fees, and net investment income. Despite these headwinds, the company highlighted positive trends in its Advice & Wealth Management segment, which saw a 6% increase in operating earnings to $911 million, driven by growth in wrap account assets and higher earnings on brokerage cash.
Assets under management and administration reached $787.4 billionb, a slight increase from the prior year. Ameriprise Financial also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Net income attributable to Ameriprise Financial decreased by 16% to $1.56 billion in 2016.
- Total net revenues decreased by 4% to $11.7 billion.
- Assets under management and administration grew slightly to $787.4 billion.
- The Advice & Wealth Management segment showed strong operating earnings growth of 6% to $911 million.
- The Asset Management segment experienced a significant 18% decrease in operating earnings to $621 million due to net outflows and other factors.
- The Annuities segment's operating earnings dropped by 49% to $329 million, significantly impacted by "unlocking" and lower investment yields.
- Ameriprise Financial repurchased approximately 17.5 million shares of common stock during 2016, returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 23, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $11.84B$12.20B | −3.0% |
| Operating Expenses | $10.21B$10.03B | +1.8% |
| Operating Income | $1.31B$1.69B | −22.1% |
| Net Income | $1.31B$1.56B | −15.9% |
| EPS (Basic) | $7.90$8.60 | −8.1% |
| EPS (Diluted) | $7.81$8.48 | −7.9% |
| Shares Outstanding (Basic) | 166.30M181.70M | −8.5% |
| Shares Outstanding (Diluted) | 168.20M184.20M | −8.7% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Ameriprise Financial's reduced net income in 2016?
The primary drivers for the 16% decrease in net income attributable to Ameriprise Financial in 2016 were the impact of 'unlocking' (changes in actuarial and valuation assumptions), net outflows in the asset management business, and the deconsolidation of certain investment entities. These factors led to a 26% decrease in pretax income.
How did Ameriprise Financial's key segments perform in 2016?
The Advice & Wealth Management segment performed well, with a 6% increase in operating earnings. However, the Asset Management and Annuities segments experienced significant declines in operating earnings, down 18% and 49% respectively. The Protection segment saw a slight decrease in operating earnings, while the Corporate & Other segment reported an increased operating loss.
What is the company's strategy for returning capital to shareholders?
Ameriprise Financial returned capital to shareholders through dividends and share repurchases. They paid regular quarterly dividends totaling $489 million in 2016 and repurchased approximately 17.5 million shares of common stock for $1.7 billion during the year. The company had $929 million remaining under its share repurchase authorization at the end of 2016.
06—Continue