Third quarter 2015 net income(1) per diluted
share was $2.17, operating EPS up 12 percent to $2.35
Third quarter 2015 return on equity excluding
AOCI was 22.0 percentOperating ROE excluding AOCI increased 190 bps
to a record high 24.0 percent
Ameriprise Financial, Inc. (NYSE: AMP) today reported third
quarter 2015 net income(1) of $397 million, or $2.17 per diluted
share. Operating earnings were $429 million, with operating
earnings per diluted share increasing 12 percent to $2.35.
Operating net revenues were $2.9 billion, a decrease of 1
percent compared to last year. Results in the quarter were
negatively impacted by increased equity market volatility, a 7
percent decline in the U.S. equity market in the quarter, and
unfavorable foreign exchange translation.
Operating expenses decreased 1 percent to $2.3 billion,
including a 4 percent decline in general and administrative
expenses reflecting the company’s ongoing expense discipline, as
well as a benefit from unlocking(2).
In the quarter, the company increased its return to shareholders
through share repurchases and dividends to $571 million.
“Ameriprise had a solid third quarter given the backdrop of
declining and volatile equity markets, unfavorable foreign exchange
and persistently low interest rates,” said Jim Cracchiolo, chairman
and chief executive officer. “In Advice and Wealth Management,
we’re serving more clients and delivered another strong quarter for
experienced advisor recruiting, both of which contributed to good
client flows and helped balance market-related impacts in our other
businesses.”
“We continue to differentiate Ameriprise with our capital
strength. Return on equity reached 24 percent at quarter end – one
of the best in the industry. With the pull back in our valuation,
we increased our share repurchases, and with dividends, returned
more than $570 million to shareholders in the quarter.”
(1) Net income represents net income from continuing operations
attributable to Ameriprise Financial.(2) Unlocking represents the
company’s annual review of insurance and annuity valuation
assumptions and model changes.
Ameriprise Financial, Inc.Third
Quarter Summary
(in millions, except per share amounts,
unaudited)
Quarter EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
2015 2014
% Better/(Worse)
2015 2014
% Better/(Worse)
Net income from continuing operations
attributable to Ameriprise Financial
$ 397 $ 420 (5 )% $ 2.17 $ 2.17 — %
Adjustments, net of tax (1)
(see reconciliation on p. 11) 32 (13 ) 0.18
(0.07 ) Operating earnings (2) $ 429 $ 407 5 % $ 2.35 $ 2.10
12 % Weighted average common shares outstanding: Basic 180.4
190.3 Diluted 182.7 193.7
(1) After-tax is calculated using the
statutory tax rate of 35%.
(2) The company believes the presentation
of operating earnings best represents the economics of the
business. Operating earnings, after-tax, exclude the consolidation
of certain investment entities; net realized investment gains or
losses, net of deferred sales inducement costs (“DSIC”) and
deferred acquisition costs (“DAC”) amortization, unearned revenue
amortization and the reinsurance accrual; integration and
restructuring charges; the market impact on variable annuity
guaranteed benefits, net of hedges and related DSIC and DAC
amortization; the market impact on indexed universal life benefits,
net of hedges and related DAC amortization, unearned revenue
amortization, and the reinsurance accrual; the market impact of
hedges to offset interest rate changes on unrealized gains or
losses for certain investments; and income or loss from
discontinued operations.
In the third quarter of the year, the company conducts its
annual review of insurance and annuity valuation assumptions
relative to current experience and management expectations. To the
extent that expectations change as a result of this review, the
company updates valuation assumptions and models and the impact is
reflected as part of annual unlocking. As discussed in the segment
commentary to follow, the favorable impact in the current quarter
reflects improved policyholder behavior and model updates that more
than offset the continued low interest rate environment, which the
company estimated would increase over the past year.
In addition, the annual review of the closed long term care book
resulted in no loss recognition, as better-than-expected premium
increases offset higher morbidity and lower interest rates.
Third quarter operating earnings included the following
after-tax items(1):
Quarter EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
(in millions, except per share amounts, unaudited)
2015
2014 2015 2014
Valuation Assumptions and Model Changes
(unlocking)
$ 27 $ (28 ) $ 0.15 $
(0.14
)
Market Impact on DAC/DSIC $ (20 ) $ (4 ) $ (0.11 ) $ (0.02 )
(1) After-tax is calculated using the
statutory tax rate of 35%.
Taxes
The third quarter 2015 operating effective tax rate was 23.1
percent. The company estimates that its full year 2015 operating
effective tax rate will be approximately 25 percent.
Third Quarter 2015 Business Highlights
- Total assets under management and
administration were $766 billion as Ameriprise advisor client net
inflows were more than offset by market depreciation and an
unfavorable foreign exchange impact of approximately $10
billion.
- Advice & Wealth Management advisor
client assets of $433 billion were essentially flat from a year ago
as lower equity markets were partially offset by continued strength
in fee-based investment advisory net inflows, including $3.0
billion of net inflows in the quarter.
- On a trailing 12-month basis, operating
net revenue per advisor grew 6 percent to a record $514,000
reflecting consistent growth in advisor productivity.
- Total advisors increased to 9,814
reflecting strong advisor retention and ongoing experienced advisor
recruiting. The company completed the acquisition of the retail
assets of JHS Capital Advisors that added 53 advisors and $1.0
billion of client assets. In addition, the company added 95
experienced, highly productive advisors in the quarter.
- The company debuted its “Be
BrilliantSM” brand platform that highlights the long-term benefits
investors can gain by working with Ameriprise advisors. The
accompanying national advertising illustrates how personal,
comprehensive financial planning can help investors achieve moments
of brilliance in their everyday lives and in retirement.
- Asset Management segment AUM declined
to $471 billion, primarily driven by net outflows of $7.4 billion
in the quarter and an unfavorable foreign exchange impact of
approximately $10 billion year-over-year. Outflows were driven by
former parent related flows and $3.3 billion from two clients’
decisions to exit strong performing portfolios due to either asset
allocation or specific liquidity needs related to geopolitical
issues.
- Investment performance remained strong
with 114 four- and five-star funds at Columbia Threadneedle
Investments.
- Variable annuity policyholder account
balances were $73 billion and included $1.3 billion in new sales,
up 11 percent driven by new benefit riders and increased sales of
non-living benefit policies.
- Excess capital was approximately $2.5
billion after the company repurchased 3.8 million shares of common
stock in the quarter for $450 million and paid $121 million in
quarterly dividends. The company also holds $250 million of
additional capital above required levels, primarily for variable
annuity products.
- The company returned 133% of operating
earnings to shareholders in the quarter, reflecting its strategy of
adjusting the level of share repurchases based on valuation.
October 2015 marked the 10-year anniversary of our successful
spin-off of Ameriprise Financial as an independent public company.
During that time, we have transformed the company into a
diversified financial services leader. We are proud of our strong
record of delivering for our clients, advisors and shareholders and
remain focused on continuing to serve our clients’ needs and
advance the firm.
Ameriprise Financial, Inc.Advice
& Wealth Management Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Advice & Wealth
Management Net revenues $ 1,245 $ 1,210 3 % Expenses
1,026 1,005 (2 )% Pretax operating earnings $ 219 $ 205 7 %
Pretax operating margin 17.6 % 16.9 %
Quarter
Ended September 30,
% Better/(Worse)
2015 2014 Retail client assets (billions) $ 433 $ 434
— % Mutual fund wrap net flows (billions) $ 3.0 $ 3.8 (22 )%
Operating net revenue per branded advisor (trailing 12 months -
thousands) $ 514 $ 483 6 %
Advice & Wealth Management pretax operating earnings
increased 7 percent to $219 million despite volatile equity
markets. Given the operating environment, revenue growth was good
and we continued our disciplined expense controls. Third quarter
2015 pretax operating margin reached a record high of 17.6 percent
compared to 16.9 percent a year ago.
Operating net revenues grew 3 percent to $1.2 billion driven by
growth in fee-based accounts from client net inflows partially
offset by the negative impact of $20 billion of lower asset levels
from market declines during the quarter.
Operating expenses increased 2 percent to $1.0 billion as
business growth resulted in higher distribution expenses. General
and administrative expenses declined 1 percent compared to a year
ago.
Total retail client assets of $433 billion were essentially flat
compared to the prior year as client net inflows and client
acquisition were offset by year-over-year market depreciation.
Underlying business metrics remained strong in the quarter. Wrap
net inflows were $3.0 billion with wrap balances increasing 3
percent to $174 billion. Total advisors increased to 9,814
reflecting strong advisor retention and ongoing experienced advisor
recruiting with 95 experienced advisors moving their practices to
Ameriprise in the quarter. The combination of asset growth and
client activity drove a 6 percent increase in operating net revenue
per advisor on a trailing 12-month basis to $514,000.
Ameriprise Financial, Inc.Asset
Management Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Asset Management Net revenues
$ 782 $ 839 (7 )% Expenses 602 631 5 % Pretax
operating earnings $ 180 $ 208 (13 )% Adjusted net pretax
operating margin 39.1 % 41.3 %
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Total segment AUM(1) (billions) $ 471 $ 505
(7 )% Columbia Management AUM $ 336 $ 358 (6 )% Threadneedle AUM $
139 $ 150 (7 )% Total segment net flows (billions) $ (7.4 )
$ (4.1 ) (79 )% Retail net flows $ (4.1 ) $ (3.5 ) (16 )%
Institutional net flows $ (3.8 ) $ (0.5 ) NM Alternative net flows
$ 0.5 $ (0.1 ) NM
(1) Subadvisory eliminations between
Columbia Management and Threadneedle are included in the company’s
Third Quarter 2015 Statistical Supplement available at
ir.ameriprise.com
NM Not Meaningful — variance of greater than 100%
Asset Management pretax operating earnings decreased 13
percent to $180 million driven by volatile market conditions
globally, net outflows and the negative impact of foreign exchange.
In addition, performance fees, which fluctuate quarter-to-quarter,
were nominal in the current quarter compared to $10 million a year
ago.
Third quarter adjusted net pretax operating margin remained
solid at 39.1 percent compared to 41.3 percent a year ago.
Operating net revenues were down 7 percent to $782 million as
asset levels were impacted by slowing market appreciation, as well
as net outflows and the negative impact of foreign exchange. The
year-ago quarter included $10 million of performance fees compared
with less than $1 million in the current quarter.
Operating expenses decreased 5 percent to $602 million
reflecting well-controlled general and administrative expenses and
lower distribution expenses.
AUM was $471 billion, down $34 billion of which $10 billion was
due to an unfavorable foreign exchange impact, and net
outflows.
The quarter included $7.4 billion of net outflows, which
reflected elevated outflows of $3.3 billion from two clients’
decisions to exit strong performing portfolios due to either asset
allocation or specific liquidity needs due to geopolitical issues.
In addition, we experienced outflows of $2.5 billion of lower fee
former parent related assets. Underlying retail outflows were
largely driven by $1.6 billion of outflows from the Acorn Fund as
well as market volatility in the quarter that dampened investor
demand.
Ameriprise Financial,
Inc.Annuities Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Annuities Net revenues $ 632
$ 655 (4 )% Expenses 456 527 13 % Pretax operating
earnings $ 176 $ 128 38 % Variable annuity pretax operating
earnings $ 151 $ 81 86 % Fixed annuity pretax operating earnings
25 47 (47 )% Total pretax operating earnings $ 176 $
128 38 % Items included in operating earnings: Variable
Annuities: Annual unlocking $ 64 $ (32 ) NM Market impact on DAC
and DSIC (mean reversion) (29 ) (6 ) NM Fixed Annuities: Annual
unlocking 2 10 (80 )% Total annuities impact $ 37 $
(28 ) NM
Quarter Ended September 30,
% Better/(Worse)
2015 2014 Variable annuity ending account balances
(billions) $ 72.8 $ 76.1 (4 )% Variable annuity net flows
(millions) $ (259 ) $ (426 ) 39 % Fixed annuity ending account
balances (billions) $ 10.9 $ 12.4 (12 )% Fixed annuity net flows
(millions) $ (375 ) $ (314 ) (19 )% NM Not Meaningful —
variance of greater than 100%
Annuities pretax operating earnings increased to $176
million compared to $128 million a year ago, as the favorable
impact from unlocking was partially offset by the higher market
impact on DAC and DSIC expenses than a year ago. Adjusting for
these items, earnings declined 11 percent primarily reflecting the
continued anticipated run-off of the fixed annuity block.
Variable annuity operating earnings were $151 million in the
quarter reflecting a $35 million net favorable impact from
unlocking, partially offset by an unfavorable market impact on DAC
and DSIC. The favorable unlocking of $64 million was driven by
improved policyholder behavior and model updates, partially offset
by continued low interest rates. Without these items in both
periods, operating earnings declined $3 million as a result of the
market impact on fees and the reserves for death and living benefit
guarantees.
Variable annuity cash sales increased 11 percent to $1.3 billion
for the quarter, driven by the introduction of new living benefit
riders and increased sales of non-living benefit policies. Account
balances were $73 billion driven by net outflows in a closed block
of annuities sold through third parties and equity market
declines.
Fixed annuity operating earnings declined to $25 million
reflecting annual unlocking, as well as minimal sales given the
continued low interest rate environment and older policies lapsing.
Excluding unlocking, operating earnings declined $14 million
reflecting the gradual run-off of the block.
Ameriprise Financial,
Inc.Protection Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Protection Net revenues $ 586
$ 553 6 % Expenses 561 487 (15 )% Pretax operating
earnings $ 25 $ 66 (62 )% Items included in operating
earnings: Annual unlocking $ (24 ) $ (21 ) (14 )% Market impact on
DAC (mean reversion) (2 ) — NM Long term care reserves 13 — NM Life
and health reinsurance premium correction (11 ) — NM
Total protection impact $ (24 ) $ (21 ) (14 )%
Quarter
Ended September 30,
% Better/(Worse)
2015 2014 Life insurance in force (billions) $ 196 $
195 — % VUL/UL ending account balances (billions) $ 10.9 $ 11.1 (2
)% Auto & Home policies in force (thousands) 958 912 5 %
NM Not Meaningful — variance of greater than 100%
Protection pretax operating earnings were $25 million
compared to $66 million a year ago. Adjusting for the items noted
above, earnings decreased by $38 million with the impact
essentially split between higher life mortality and unfavorable
experience in Auto and Home.
Life and Health insurance earnings declined due to higher claims
experience and the impact of low interest rates. Life claims were
unusually high as a result of claims from several large, later
duration policies that had limited reinsurance coverage. VUL/UL
cash sales were $81 million, down 5 percent from a year ago, and
VUL/UL account balances declined 2 percent.
The unfavorable unlocking this quarter was primarily driven by
continued low interest rates. The review of the closed long term
care book resulted in no loss recognition, as better-than-expected
premium increases offset higher morbidity and lower interest
rates.
Auto and Home had an operating loss in the quarter as low
catastrophe experience was more than offset by deterioration in
auto collision experience consistent with other firms. Results also
include losses associated with the travel insurance business that
the company is exiting, modest prior year catastrophe reserve
development, and higher expenses associated with investing for
business improvements. The company continues to make improvements
in underwriting, operational and claims processes, and is
implementing pricing actions to improve performance. These actions
are expected to show improvement in 2016.
Ameriprise Financial,
Inc.Corporate & Other Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Corporate & Other Net
revenues $ (4 ) $ (1 ) NM Expenses 38 52 27 % Pretax
operating loss $ (42 ) $ (53 ) 21 % NM Not Meaningful —
variance of greater than 100%
Corporate & Other pretax operating loss was $42
million for the quarter compared to a $53 million loss a year
ago.
At Ameriprise Financial, we have been helping people feel
confident about their financial future for more than 120 years.
With a nationwide network of 10,000 financial advisors and
extensive asset management, advisory and insurance capabilities, we
have the strength and expertise to serve the full range of
individual and institutional investors’ financial needs. For more
information, visit ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning
services, investments, insurance and annuity products. Columbia
Funds are distributed by Columbia Management Investment
Distributors, Inc., member FINRA and managed by Columbia Management
Investment Advisers, LLC. Threadneedle International Limited is an
SEC- and FCA-registered investment adviser affiliate of Columbia
Management Investment Advisers, LLC based in the U.K. Auto and home
insurance is underwritten by IDS Property Casualty Insurance
Company, or in certain states, Ameriprise Insurance Company, both
in De Pere, WI. RiverSource insurance and annuity products are
issued by RiverSource Life Insurance Company, and in New York only
by RiverSource Life Insurance Co. of New York, Albany, New York.
Only RiverSource Life Insurance Co. of New York is authorized to
sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member
FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that
reflect management’s plans, estimates and beliefs. Actual results
could differ materially from those described in these
forward-looking statements. Examples of such forward-looking
statements include:
- the statement in this news release that
the company expects its full-year 2015 operating effective tax rate
to be approximately 25 percent;
- the statements in this news release
concerning the expected impact, and time during which impacts might
be realized, as a result of actions taken in the company’s Auto and
Home business;
- statements of the company’s plans,
intentions, positioning, expectations, objectives or goals,
including those relating to asset flows, mass affluent and affluent
client acquisition strategy, client retention and growth of our
client base, financial advisor productivity, retention, recruiting
and enrollments, the introduction, cessation, terms or pricing of
new or existing products and services, acquisition integration,
general and administrative costs, consolidated tax rate, return of
capital to shareholders, and excess capital position and financial
flexibility to capture additional growth opportunities;
- other statements about future economic
performance, the performance of equity markets and interest rate
variations and the economic performance of the United States and of
global markets; and
- statements of assumptions underlying
such statements.
The words “believe,” “expect,” “anticipate,” “optimistic,”
“intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,”
“likely,” “forecast,” “on pace,” “project” and similar expressions
are intended to identify forward-looking statements but are not the
exclusive means of identifying such statements. Forward-looking
statements are subject to risks and uncertainties, which could
cause actual results to differ materially from such statements.
Such factors include, but are not limited to:
- conditions in the interest rate, credit
default, equity market and foreign exchange environments, including
changes in valuations, liquidity and volatility;
- changes in and the adoption of relevant
accounting standards and securities rating agency standards and
processes, as well as changes in the litigation and regulatory
environment, including ongoing legal proceedings and regulatory
actions, the frequency and extent of legal claims threatened or
initiated by clients, other persons and regulators, and
developments in regulation and legislation, including the rules,
exemptions and regulations implemented or that may be implemented
in connection with the Dodd-Frank Wall Street Reform and Consumer
Protection Act or in light of the U.S. Department of Labor pending
rule and exemptions pertaining to the fiduciary status of
investment advice providers to 401(k) plan, plan sponsors, plan
participants and the holders of individual retirement or health
savings accounts;
- investment management performance and
distribution partner and consumer acceptance of the company’s
products;
- effects of competition in the financial
services industry, including pricing pressure, the introduction of
new products and services and changes in product distribution mix
and distribution channels;
- changes to the company’s reputation
that may arise from employee or advisor misconduct, legal or
regulatory actions, perceptions of the financial services industry
generally, improper management of conflicts of interest or
otherwise;
- the company’s capital structure,
including indebtedness, limitations on subsidiaries to pay
dividends, and the extent, manner, terms and timing of any share or
debt repurchases management may effect as well as the opinions of
rating agencies and other analysts and the reactions of market
participants or the company’s regulators, advisors, distribution
partners or customers in response to any change or prospect of
change in any such opinion;
- changes to the availability and cost of
liquidity and the Company’s credit capacity that may arise due to
shifts in market conditions, the Company’s credit ratings and the
overall availability of credit;
- risks of default, capacity constraint
or repricing by issuers or guarantors of investments the company
owns or by counterparties to hedge, derivative, insurance or
reinsurance arrangements or by manufacturers of products the
company distributes, experience deviations from the company’s
assumptions regarding such risks, the evaluations or the prospect
of changes in evaluations of any such third parties published by
rating agencies or other analysts, and the reactions of other
market participants or the company’s regulators, advisors,
distribution partners or customers in response to any such
evaluation or prospect of changes in evaluation;
- experience deviations from the
company’s assumptions regarding morbidity, mortality and
persistency in certain annuity and insurance products, or from
assumptions regarding market returns assumed in valuing or
unlocking DAC and DSIC or market volatility underlying our
valuation and hedging of guaranteed living benefit annuity riders,
or from assumptions regarding interest rates assumed in our loss
recognition testing of our Long Term Care business, or from
assumptions regarding anticipated claims and losses relating to our
automobile and home insurance products;
- changes in capital requirements that
may be indicated, required or advised by regulators or rating
agencies;
- the impacts of the company’s efforts to
improve distribution economics and to grow third-party distribution
of its products;
- the ability to pursue and complete
strategic transactions and initiatives, including acquisitions,
divestitures, restructurings, joint ventures and the development of
new products and services;
- the ability to realize the financial,
operating and business fundamental benefits of strategic
transactions and initiatives the company has completed, is pursuing
or may pursue in the future, which may be impacted by the ability
to obtain regulatory approvals, the ability to effectively manage
related expenses and by market, business partner and consumer
reactions to such strategic transactions and initiatives;
- the ability and timing to realize
savings and other benefits from re-engineering and tax
planning;
- interruptions or other failures in our
communications, technology and other operating systems, including
errors or failures caused by third party service providers,
interference or failures caused by third party attacks on our
systems, or the failure to safeguard the privacy or confidentiality
of sensitive information and data on such systems; and
- general economic and political factors,
including consumer confidence in the economy and the financial
industry, the ability and inclination of consumers generally to
invest as well as their ability and inclination to invest in
financial instruments and products other than cash and cash
equivalents, the costs of products and services the company
consumes in the conduct of its business, and applicable legislation
and regulation and changes therein, including tax laws, tax
treaties, fiscal and central government treasury policy, and
policies regarding the financial services industry and publicly
held firms, and regulatory rulings and pronouncements.
Management cautions the reader that the foregoing list of
factors is not exhaustive. There may also be other risks that
management is unable to predict at this time that may cause actual
results to differ materially from those in forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
on which they are made. Management undertakes no obligation to
update publicly or revise any forward-looking statements. The
foregoing list of factors should be read in conjunction with the
“Risk Factors” discussion under Part 1, Item 1A of and elsewhere in
our Annual Report on Form 10-K for the year ended December 31, 2014
available at ir.ameriprise.com and the “Risk Factors” discussion
included in Part II, Item 1A and elsewhere in our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2015.
The financial results discussed in this news release represent
past performance only, which may not be used to predict or project
future results. The financial results and values presented in this
news release and the below-referenced Statistical Supplement are
based upon asset valuations that represent estimates as of the date
of this news release and may be revised in the company’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2015. For
information about Ameriprise Financial entities, please refer to
the Third Quarter 2015 Statistical Supplement available at
ir.ameriprise.com and the tables that follow in this news
release.
Ameriprise Financial announces financial and other information
to investors through the company’s investor relations website at
ir.ameriprise.com, as well as SEC filings, press releases, public
conference calls and webcasts. Investors and others interested in
the company are encouraged to visit the investor relations website
from time to time, as information is updated and new information is
posted. The website also allows users to sign up for automatic
notifications in the event new materials are posted. The
information found on the website is not incorporated by reference
into this release or in any other report or document the company
furnishes or files with the SEC.
Reconciliation Tables
Ameriprise Financial,
Inc.Reconciliation Table: Earnings
Quarter EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
(in millions, except per share amounts, unaudited)
2015
2014 2015 2014 Net income
attributable to Ameriprise Financial $ 397 $ 420 $ 2.17 $ 2.17
Less: Loss from discontinued operations, net of tax —
— — —
Net income from continuing
operations attributable to Ameriprise Financial
397 420 2.17 2.17 Add: Integration/restructuring charges, net of
tax(1) 2 — 0.01 —
Add: Market impact on variable
annuity guaranteed benefits, net of tax(1)
3 (5 ) 0.02 (0.03 ) Add: Market impact on indexed universal life
benefits, net of tax(1) — (5 ) — (0.03 ) Add: Market impact of
hedges on investments, net of tax(1) 20 — 0.11 — Add: Net realized
investment (gains) losses, net of tax(1) 7 (3 )
0.04 (0.01 ) Operating earnings $ 429 $ 407 $ 2.35 $
2.10 Weighted average common shares outstanding: Basic 180.4
190.3 Diluted 182.7 193.7
(1) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial,
Inc.Reconciliation Table: Total Net Revenues
Quarter Ended
September 30,
(in millions, unaudited)
2015 2014 Total net
revenues $ 2,886 $ 3,111 Less: CIEs revenue 43 206 Less: Net
realized investment gains (losses) (10 ) 4 Less: Market impact on
indexed universal life benefits 9 2 Less: Market impact of hedges
on investments (31 ) — Operating total net revenues $
2,875 $ 2,899
Ameriprise Financial,
Inc.Reconciliation Table: Total Expenses
Quarter Ended
September 30,
(in millions, unaudited)
2015 2014 Total expenses $
2,423 $ 2,391 Less: CIEs expenses 88 61 Less:
Integration/restructuring charges 3 — Less: Market impact on
variable annuity guaranteed benefits 5 (9 ) Less: Market impact on
indexed universal life benefits 10 (6 ) Operating
expenses $ 2,317 $ 2,345
Ameriprise Financial,
Inc.Reconciliation Table: Pretax Operating Earnings
Quarter Ended
September 30,
(in millions, unaudited)
2015 2014 Operating total
net revenues $ 2,875 $ 2,899 Operating expenses 2,317
2,345 Pretax operating earnings $ 558 $ 554
Ameriprise Financial,
Inc.Reconciliation Table: General and Administrative
Expense
Quarter Ended
September 30,
(in millions, unaudited)
2015
2014
General and administrative expense $ 744
$
757
Less: CIEs expenses 20 7 Less: Integration/restructuring charges
3 — Operating general and administrative expense $
721
$
750
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended September 30, 2015 (in millions,
unaudited)
GAAP Operating Income from
continuing operations before income tax provision $ 463 $ 558 Less:
Pretax income attributable to noncontrolling interests (45 )
— Income from continuing operations before income tax
provision excluding consolidated investment entities $ 508 $ 558
Income tax provision from continuing operations $ 111 $ 129
Effective tax rate 24.1 % 23.1 % Effective tax rate excluding
noncontrolling interests 21.9 % 23.1 %
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended September 30, 2014 (in millions,
unaudited)
GAAP Operating Income from continuing
operations before income tax provision $ 720 $ 554 Less: Pretax
income attributable to noncontrolling interests 145 —
Income from continuing operations before income tax provision
excluding consolidated investment entities $ 575 $ 554 Income tax
provision from continuing operations $ 155 $ 147 Effective
tax rate 21.6 % 26.5 % Effective tax rate excluding noncontrolling
interests 27.0 % 26.5 %
Ameriprise Financial,
Inc.Reconciliation Table: Asset Management Adjusted Net
Pretax Operating Margin
Quarter Ended September 30,
(in millions, unaudited)
2015 2014 Operating total net revenues $ 782 $
839 Less: Distribution pass through revenues 214 233 Less:
Subadvisory and other pass through revenues 95 98
Adjusted operating revenues $ 473 $ 508 Pretax operating
earnings $ 180 $ 208 Less: Operating net investment income 1 7 Add:
Amortization of intangibles 6 9 Adjusted operating
earnings $ 185 $ 210 Adjusted net pretax operating margin
39.1 % 41.3 %
Ameriprise Financial,
Inc.Reconciliation Table: Annuities Pretax Operating
Earnings
Quarter EndedSeptember
30,
(in millions, unaudited)
2015 2014 Pretax
operating earnings $ 176 $ 128 Less: Unlocking 66 (22 ) Less:
Market impact on DAC and DSIC (mean reversion) (29 )
(6 ) Pretax operating earnings excluding unlocking and market
impact on DAC and DSIC (mean reversion) $ 139 $ 156
Ameriprise Financial,
Inc.Reconciliation Table: Return on Equity (ROE) Excluding
AccumulatedOther Comprehensive Income “AOCI”
Twelve Months EndedSeptember
30,
(in millions, unaudited)
2015 2014 Net income attributable to
Ameriprise Financial $ 1,630 $ 1,490 Less: Loss from discontinued
operations, net of tax (1 ) (3 )
Net income from continuing operations
attributable to Ameriprise Financial, as reported
1,631 1,493
Less: Adjustments (1)
(84 ) (107 ) Operating earnings $ 1,715 $ 1,600
Total Ameriprise Financial, Inc. shareholders’ equity $
8,017 $ 8,310 Less: Accumulated other comprehensive income, net of
tax 615 723 Total Ameriprise Financial, Inc.
shareholders’ equity excluding AOCI 7,402 7,587 Less: Equity
impacts attributable to the consolidated investment entities
250 331 Operating equity $ 7,152 $ 7,256 Return on
equity excluding AOCI 22.0 % 19.7 %
Operating return on equity excluding AOCI
(2)
24.0 % 22.1 %
(1) Adjustments reflect the trailing
twelve months’ sum of after-tax net realized investment
gains/losses, net of deferred sales inducement costs (“DSIC”) and
deferred acquisition costs (“DAC”) amortization, unearned revenue
amortization and the reinsurance accrual; market impact on variable
annuity guaranteed benefits, net of hedges and related DSIC and DAC
amortization; the market impact on indexed universal life benefits,
net of hedges and related DAC amortization, unearned revenue
amortization, and the reinsurance accrual; the market impact of
hedges to offset interest rate changes on unrealized gains or
losses for certain investments; and integration/restructuring
charges. After-tax is calculated using the statutory tax rate of
35%.
(2) Operating return on equity excluding
accumulated other comprehensive income (AOCI) is calculated using
the trailing twelve months of earnings excluding the after-tax net
realized investment gains/losses, net of deferred sales inducement
costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization,
unearned revenue amortization and the reinsurance accrual; market
impact on variable annuity guaranteed benefits, net of hedges and
related DSIC and DAC amortization; the market impact on indexed
universal life benefits, net of hedges and related DAC
amortization, unearned revenue amortization, and the reinsurance
accrual; the market impact of hedges to offset interest rate
changes on unrealized gains or losses for certain investments;
integration/restructuring charges; and discontinued operations in
the numerator, and Ameriprise Financial shareholders’ equity
excluding AOCI and the impact of consolidating investment entities
using a five-point average of quarter-end equity in the
denominator. After-tax is calculated using the statutory tax rate
of 35%.
Ameriprise Financial,
Inc.Consolidated GAAP Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2015 2014 Revenues Management and
financial advice fees $ 1,465 $ 1,483 (1 )% Distribution fees 451
464 (3 ) Net investment income 321 428 (25 ) Premiums 360 351 3
Other revenues 296 392 (24 ) Total revenues 2,893
3,118 (7 ) Banking and deposit interest expense 7 7 —
Total net revenues 2,886 3,111 (7 )
Expenses
Distribution expenses 806 813 1 Interest credited to fixed accounts
171 168 (2 ) Benefits, claims, losses and settlement expenses 471
458 (3 ) Amortization of deferred acquisition costs 133 116 (15 )
Interest and debt expense 98 79 (24 ) General and administrative
expense 744 757 2
Total expenses 2,423 2,391
(1 ) Income from continuing operations before income tax provision
463 720 (36 ) Income tax provision 111 155 28 Income
from continuing operations 352 565 (38 ) Loss from discontinued
operations, net of tax — — —
Net income
352 565 (38 ) Less: Net income attributable to noncontrolling
interests (45 ) 145 NM
Net income
attributable to Ameriprise Financial $ 397 $ 420 (5 ) NM
Not Meaningful — variance of greater than 100%
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151021006658/en/
Ameriprise Financial, Inc.Investor Relations:Alicia A.
Charity, 612-671-2080alicia.a.charity@ampf.comorChad J. Sanner,
612-671-4676chad.j.sanner@ampf.comorMedia Relations:Paul W.
Johnson, 612-671-0625paul.w.johnson@ampf.com
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