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Waddell & Reed Financial, Inc. Reports Fourth Quarter Results
Overland Park, KS, Jan. 31, 2017 Waddell & Reed Financial, Inc. (NYSE: WDR) today reported fourth quarter 2016 net income1 of $22.4 million, or $0.27 per diluted share, compared to net income of $53.8 million, or $0.65 per diluted share, during the prior quarter and net income of $62.9 million, or $0.76 per diluted share, during the fourth quarter of 2015. Net income for the year ended December 31, 2016 was $146.9 million, or $1.78 per diluted share, compared to net income of $245.5 million, or $2.94 per diluted share, for the year ended December 31, 2015.
Fourth quarter 2016 net income, adjusted for certain charges, was $40.0 million, or $0.48 per diluted share, compared to net income, adjusted for certain charges, of $53.3 million, or $0.64 per diluted share, during the third quarter of 2016. For the year ended December 31, 2016, net income, adjusted for certain charges, was $177.1 million, or $2.14 per diluted share. A detailed schedule reconciling non-GAAP financial measures to GAAP net income and earnings per diluted share is provided in the Adjusted Results tables at the end of this release.
Flow pressure lessened during the quarter with net outflows of $4.4 billion comparing favorably to both the prior quarter and to the fourth quarter of 2015. Sales rose every month during the quarter, improving 8% compared to the third quarter. However, sales for the year remain at a multi-year low and, while we have made progress, there remains a need for continued improvement. Assets under management ended the year at $81 billion, declining 5% during the quarter and 23% compared to December 31, 2015.
We successfully implemented a cost reduction program in 2016, which led to a 9% year-over-year reduction in operating costs. Several charges were incurred during the year, which added $48 million to 2016 operating costs, making our anticipated run-rate for 2017 even more favorable. These costs included severance charges, a pension settlement charge, and the impairment of intangible assets, and were partly offset by a curtailment gain on our post-retirement medical benefit plan. We also incurred costs for the implementation of Project E and costs for the implementation of the Department of Labors fiduciary standard rule, which will continue into 2017 but then subside.
Our entire organization is committed to strengthening our competitive position during this period of unprecedented change in our industry, said Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc. We are focused on all aspects of our business, including organizational structure, operational efficiencies, product offerings, and fee levels.
The following information was filed by Waddell Reed Financial Inc (WDR) on Tuesday, January 31, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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