01—Abstract
Summary
Summary of the 10-K filed February 23, 2018. Cited figures are marked; the original filing is the authoritative source.
Ameriprise Financial, Inc. (AMP) reported robust performance in its 2017 Form 10-K, highlighting significant growth in assets under management and administration (AUM/AUA), which reached $897 billiona by year-end.
The company's strategic focus on its core segments, Advice & Wealth Management and Asset Management, continues to drive results, with the Advice & Wealth Management segment experiencing particularly strong growth in wrap account assets, fueled by net inflows and market appreciation. The company demonstrated an increase in pretax income driven by positive market movements, favorable client activity, and effective management of expenses across its diversified business lines, including Annuities and Protection. Despite ongoing market volatility and a dynamic regulatory environment, Ameriprise Financial maintained a strong financial position and returned capital to shareholders through dividends and share repurchposes, underscoring its commitment to enhancing shareholder value.
02—Key points
Key Highlights
- Total assets under management and administration (AUM/AUA) grew by 14% to $897 billion as of December 31, 2017, up from $787.4 billion at the end of 2016, indicating strong client asset growth.
- The Advice & Wealth Management segment saw a significant increase in operating earnings, up 28% year-over-year, driven by a 19% rise in average advisory wrap account assets, reflecting strong client retention and acquisition.
- Asset Management segment operating earnings increased by 19%, primarily due to market appreciation, improved revenue from CLO unwinds, and higher performance fees, demonstrating effective investment management.
- Annuities segment operating earnings more than doubled, increasing by 116% to $710 million, primarily driven by the positive impact of unlocking, equity market appreciation, and favorable market performance on deferred acquisition costs and reserves.
- The company repurchased approximately 9.9 million shares of common stock for $1.3 billion during 2017, reflecting a commitment to returning capital to shareholders and managing its capital structure effectively.
- Total net revenues increased by 3% to $12.0 billion in 2017, supported by growth in management and financial advice fees, partially offset by decreases in net investment income and premiums.
- The company reported diluted earnings per share of $9.44 for 2017, an increase from $7.81 in 2016, indicating improved profitability.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 23, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $12.18B$11.84B | +2.9% |
| Operating Expenses | $9.92B$10.21B | −2.9% |
| Operating Income | $1.48B$1.31B | +12.6% |
| Net Income | $1.48B$1.31B | +12.7% |
| EPS (Basic) | $9.60$7.90 | +21.5% |
| EPS (Diluted) | $9.44$7.81 | +20.9% |
| Shares Outstanding (Basic) | 154.10M166.30M | −7.3% |
| Shares Outstanding (Diluted) | 156.70M168.20M | −6.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of Ameriprise Financial's revenue growth in 2017?
Ameriprise Financial's total net revenues increased by 3% to $12.0 billion in 2017. This growth was primarily driven by a 11% increase in management and financial advice fees, which rose to $6.4 billion, reflecting higher assets under management and administration, increased client activity, and favorable market appreciation. This was partially offset by decreases in net investment income and premiums.
How did the company's key business segments perform in terms of operating earnings?
Ameriprise Financial's segments showed strong operating performance. Advice & Wealth Management operating earnings increased by 28% to $1.16 billion. Asset Management operating earnings rose by 19% to $740 million. The Annuities segment saw a significant increase of 116% in operating earnings, reaching $710 million. The Protection segment's operating earnings decreased by 18% to $216 million. The Corporate & Other segment reported an operating loss of $426 million, which widened from the previous year.
What is the company's strategy for returning capital to shareholders?
Ameriprise Financial returned capital to shareholders through a combination of dividends and share repurchases. The company paid regular quarterly dividends totaling $502 million in 2017. Additionally, it repurchased approximately 9.9 million shares of its common stock for $1.3 billion during 2017, demonstrating its commitment to enhancing shareholder value.
06—Continue