[October 28, 2014] |
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Ameriprise Financial Reports Third Quarter 2014 Results
MINNEAPOLIS --(Business Wire)--
Ameriprise Financial, Inc. (NYSE: AMP) today reported third quarter 2014
net income(1) of $420 million, or $2.17 per diluted share.
Operating earnings were $407 million, with operating earnings per
diluted share increasing 10 percent to $2.10 from a year ago. Excluding
unlocking(2) in both quarters, operating earnings
increased 21 percent and operating earnings per diluted share increased
28 percent.
Third quarter 2014 operating results included a previously disclosed
non-cash unlocking expense. This $28 million after-tax, or $0.14 per
diluted share, unfavorable impact in the quarter compared to a benefit
of $32 million after-tax, or $0.16 per diluted share, a year ago.
Excluding the impact of unlocking in both quarters:
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Operating earnings increased 21 percent from strong fee-based business
growth and ongoing expense controls.
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Operating net revenues increased 8 percent to $2.9 billion driven by
client net inflows and market appreciation.
-
Operating expenses increased 5 percent to $2.3 billion reflecting
higher volume-related distribution expense. General and administrative
expenses remained well controlled, increasing 3 percent compared to a
year ago.
In the quarter, the company returned $442 million to shareholders
through share repurchases and dividends. The company has returned $1.4
billion to shareholders through the first three quarters of the year.
"Ameriprise delivered another strong quarter, continuing the trend we
set in the first half of the year," said Jim Cracchiolo, chairman and
chief executive officer. "Our fee-based businesses drove our growth, led
by Advice & Wealth Management."
"With our financial strength and cash flow generation, we continue to
return significant capital to shareholders with more than $1 billion
returned so far this year. And we're delivering a differentiated level
of return; our operating return on equity is now above 22 percent."
(1) Net income represents net income from continuing
operations attributable to Ameriprise Financial.
(2) Unlocking represents the company's annual review of
insurance and annuity valuation assumptions and model changes.
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Ameriprise Financial, Inc.
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Third Quarter Summary
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(in millions, except per share amounts, unaudited)
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Quarter Ended September 30,
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Per Diluted Share Quarter Ended September
30,
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2014
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2013
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% Better/ (Worse)
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2014
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2013
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% Better/ (Worse)
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Net income from continuing operations attributable to Ameriprise
Financial
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$
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420
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$
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381
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10
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%
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$
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2.17
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$
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1.86
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17
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%
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Adjustments, net of tax (1)
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(see reconciliation on p. 11)
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(13
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)
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11
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(0.07
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)
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0.05
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Operating earnings (2)
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$
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407
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$
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392
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4
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%
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$
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2.10
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$
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1.91
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10
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%
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Weighted average common shares outstanding:
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Basic
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190.3
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201.3
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Diluted
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193.7
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205.1
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(1) After-tax is calculated using the statutory tax
rate of 35%.
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(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 gains or losses; integration and
restructuring charges; the market impact on variable annuity
guaranteed benefits net of hedges and related deferred acquisition
costs (DAC) and deferred sales inducement costs (DSIC)
amortization; the market impact on indexed universal life
benefits, net of hedges and related DAC amortization, unearned
revenue amortization, and the reinsurance accrual; and income or
loss from discontinued operations.
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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
unfavorable impact in the current quarter reflects the continued low
interest rate environment, which the company estimated would increase
over the past year. This impact was partially offset by a benefit from
updating variable annuity living benefit withdrawal utilization
assumption.
In addition, results in the quarter included an unfavorable $6 million
pretax market impact on DAC and DSIC compared to a $13 million pretax
benefit a year ago.
Taxes
The third quarter 2014 operating effective tax rate was 26.5 percent
compared to 29.0 percent a year ago. The company estimates that its full
year 2014 operating effective tax rate will be in the 28 to 30 percent
range.
Third Quarter 2014 Business Highlights
-
Total assets under management and administration grew 8 percent from a
year ago to $797 billion driven by Ameriprise advisor client net
inflows and market appreciation.
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Advice & Wealth Management experienced continued strong growth in
client assets and flows with advisor client assets up 11 percent to
$434 billion and wrap assets increasing 17 percent to $169 billion.
Wrap net inflows in the quarter remained strong at $3.8 billion.
-
Advisor productivity continues to improve. On a trailing 12-month
basis, operating net revenue per advisor, excluding results from
former banking operations, grew 13 percent to $483,000.
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Experienced advisor recruiting was strong in the quarter, with 81
experienced advisors moving their practices to Ameriprise.
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Asset Management segment AUM increased 5 percent to $505 billion,
driven by market appreciation, partially offset by the cumulative
effect of net outflows.
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The company has 121 four- and five-star rated funds, with 54 funds
managed by Columbia Management and 67 managed by Threadneedle.
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Combined, Advice & Wealth Management and Asset Management generated 68
percent of company pretax operating earnings(1). Excluding
unlocking, these fee-based businesses drove 64 percent of company
pretax operating earnings(1).
-
Variable annuity policyholder account balances grew 5 percent to $76
billion and included $1.2 billion in new sales - 28 percent of sales
in the quarter did not include living benefits.
-
Variable Universal Life / Universal Life insurance account balances
increased 6 percent to $11 billion.
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The company repurchased 2.7 million shares of common stock in the
quarter for $331 million and paid $111 million in quarterly dividends.
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Excess capital increased to approximately $2.5 billion, including a
reduction in the level of contingent capital held in the event of a
severe market dislocation from $500 million to $250 million based upon
the company's risk assessment.
-
During the quarter, the company issued $550 million in 10-year senior
notes to enhance its capital structure given attractive rates. The
proceeds are for general corporate purposes, which may include funding
upcoming debt maturities.
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The company announced that it will match donations to Feeding America
up to $500,000 through Thanksgiving. The annual Ameriprise Financial
Challenge, which kicks off every September in support of Feeding
America's Hunger Action MonthTM, makes it easy for people
to double the impact of their donations to Feeding America, the
nation's leading hunger-relief organization.
(1) Excludes Corporate & Other segment
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Ameriprise Financial, Inc.
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Advice & Wealth Management Segment Operating Results
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(in millions, unaudited)
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Advice & Wealth Management
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Net revenues
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$
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1,210
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$
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1,074
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13
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%
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Expenses
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1,005
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922
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(9
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)
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Pretax operating earnings
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$
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205
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$
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152
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35
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Pretax operating margin
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16.9
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%
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14.2
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%
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|
|
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Retail client assets (billions)
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$
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434
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$
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389
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11
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%
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Mutual fund wrap net flows (billions)
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$
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3.8
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$
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3.0
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27
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%
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Operating net revenue per branded advisor, excluding former banking
operations (trailing 12 months - thousands)
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$
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483
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$
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426
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13
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%
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Advice & Wealth Management pretax operating earnings
increased 35 percent to $205 million, reflecting strong revenue growth
and expense controls. Third quarter 2014 pretax operating margin reached
a record high of 16.9 percent compared to 14.2 percent a year ago.
Operating net revenues grew 13 percent to $1.2 billion driven by asset
growth in fee-based accounts from client inflows and market appreciation.
Operating expenses increased 9 percent to $1 billion as business growth
resulted in higher distribution expenses. General and administrative
expenses were essentially flat compared to a year ago, as investments in
the business were offset by ongoing expense discipline.
Total retail client assets grew 11 percent to $434 billion driven by
client net inflows, new client acquisition and market appreciation. Wrap
net inflows continued to be strong at $3.8 billion and brokerage cash
balances were approximately $19 billion. The combination of asset growth
and client activity drove a 13 percent increase in operating net revenue
per advisor, excluding former banking operations, on a trailing 12-month
basis.
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Ameriprise Financial, Inc.
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Asset Management Segment Operating Results
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(in millions, unaudited)
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Asset Management
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Net revenues
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$
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839
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$
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777
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8
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%
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Expenses
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631
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605
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(4
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)
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Pretax operating earnings
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$
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208
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$
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172
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21
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Adjusted net pretax operating margin
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41.3
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%
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38.7
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%
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Total segment AUM(1) (billions)
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$
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505
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$
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479
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5
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%
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Columbia Management AUM
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$
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358
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$
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345
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4
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%
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Threadneedle AUM
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$
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150
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$
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137
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9
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%
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Total segment net flows (billions)
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$
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(4.1
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)
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$
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(4.3
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)
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5
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%
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Retail net flows
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$
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(3.5
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)
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$
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(2.4
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)
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(46
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)%
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Institutional net flows
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$
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(0.5
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)
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$
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(1.7
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)
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69
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%
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Alternative net flows
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$
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(0.1
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)
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$
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(0.2
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)
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61
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%
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(1) Subadvisory eliminations between Columbia
Management and Threadneedle are included in the company's Third
Quarter 2014 Statistical Supplement available at ir.ameriprise.com.
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Asset Management pretax operating earnings increased 21 percent
to $208 million, driven by market appreciation and continued expense
management, partially offset by the cumulative impact of net outflows.
Third quarter adjusted net pretax operating margin remained strong at
41.3 percent compared to 38.7 percent a year ago.
Operating net revenues grew 8 percent to $839 million, primarily driven
by asset growth from market appreciation, partially offset by the impact
of net outflows in prior quarters.
Operating expenses increased 4 percent to $631 million, reflecting
higher distribution expenses from market growth as well as higher
general and administrative expenses.
AUM grew 5 percent to $505 billion, reflecting market appreciation that
more than offset the cumulative impact of net outflows. For the quarter,
net outflows were $4.1 billion, reflecting strong inflows from third
party institutional mandates, which were more than offset by net
outflows in former parent company related portfolios and retail funds.
Total retail net outflows included net outflows at Threadneedle as
European investors' geopolitical concerns pressured sales, as well as
outflows from a portfolio manager departure earlier in the year.
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Ameriprise Financial, Inc.
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Annuities Segment Operating Results
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(in millions, unaudited)
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Annuities
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Net revenues
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$
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655
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$
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649
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|
1
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%
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Expenses
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527
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|
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|
444
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(19
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)
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Pretax operating earnings
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$
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128
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$
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205
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(38
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)
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Variable annuity pretax operating earnings
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$
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81
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$
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180
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(55
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)%
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Fixed annuity pretax operating earnings
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47
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|
25
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|
88
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Total pretax operating earnings
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$
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128
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$
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205
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(38
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)
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Items included in operating earnings:
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Annual unlocking - variable annuities
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$
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(32
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)
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$
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61
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NM
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Annual unlocking - fixed annuities
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10
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(1
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)
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NM
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Market impact on DAC and DSIC (mean reversion)
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(6
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)
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13
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NM
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Total annuities impact
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$
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(28
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)
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$
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73
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NM
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Quarter Ended September 30,
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% Better/ (Worse)
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2014
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2013
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Variable annuity ending account balances (billions)
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$
|
76.1
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$
|
72.7
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|
5
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%
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Variable annuity net flows (millions)
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$
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(426
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)
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|
$
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(154
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)
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NM
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Fixed annuity ending account balances (billions)
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$
|
12.4
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$
|
13.4
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(8
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)%
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Fixed annuity net flows (millions)
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|
$
|
(314
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)
|
|
$
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(218
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)
|
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(44
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)%
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NM Not Meaningful - variance of greater than 100%
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Annuities pretax operating earnings were $128 million compared to
$205 million a year ago. Unlocking and the market impact on DAC and DSIC
resulted in a net $28 million unfavorable impact in the quarter,
compared to $73 million benefit a year ago. Adjusting for unlocking and
the market impact on DAC and DSIC, earnings were up 18 percent driven by
higher variable annuity account balances from market appreciation.
Variable annuity operating earnings were $81 million and included a $38
million unfavorable impact from unlocking and the market impact on DAC
and DSIC, compared to a $74 million benefit a year ago. Excluding these
items, variable annuity earnings increased 12 percent from growth in
account balances. Account balances grew 5 percent to $76 billion driven
by market appreciation, partially offset by net outflows, primarily from
a closed block of variable annuities sold through third party channels.
Variable annuity cash sales remained solid at $1.2 billion.
Fixed annuity operating earnings were $47 million and included a $10
million benefit from unlocking in the quarter. Excluding the impact of
unlocking, earnings increased 42 percent from higher spread income. Both
spread expansion and lapse experience were consistent with the company's
expectations.
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Ameriprise Financial, Inc.
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Protection Segment Operating Results
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(in millions, unaudited)
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Quarter Ended September 30,
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|
% Better/ (Worse)
|
|
2014
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|
|
2013
|
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Protection
|
|
|
|
|
|
|
|
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Net revenues
|
|
$
|
553
|
|
|
$
|
535
|
|
|
3
|
%
|
Expenses
|
|
|
487
|
|
|
|
467
|
|
|
(4
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)
|
Pretax operating earnings
|
|
$
|
66
|
|
|
$
|
68
|
|
|
(3
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)
|
|
|
|
|
|
|
|
|
|
Items included in operating earnings:
|
|
|
|
|
|
|
|
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Annual unlocking
|
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$
|
(21
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)
|
|
$
|
(11
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)
|
|
(91
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)%
|
|
|
|
|
Quarter Ended September 30,
|
|
|
% Better/ (Worse)
|
|
2014
|
|
|
2013
|
|
|
Life insurance in force (billions)
|
|
$
|
195
|
|
|
$
|
193
|
|
|
1
|
%
|
VUL/UL ending account balances (billions)
|
|
$
|
11.1
|
|
|
$
|
10.5
|
|
|
6
|
%
|
Auto & Home policies in force (thousands)
|
|
|
912
|
|
|
|
819
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Protection pretax operating earnings were $66 million compared to
$68 million a year ago. Unlocking resulted in a $21 million unfavorable
impact in the quarter compared to an $11 million unfavorable impact a
year ago. Excluding the impact of unlocking in both quarters, pretax
operating earnings increased 10 percent.
Life and Health earnings, excluding the impact of unlocking, were within
expectations based on normal quarterly fluctuations in claims. VUL/UL
account balances grew 6 percent, primarily driven by market
appreciation. VUL/UL cash sales were $85 million, up 5 percent.
Auto and Home earnings improved from a year ago from premium growth.
Auto and Home policy growth remained strong, with policies in force up
11 percent.
|
Ameriprise Financial, Inc.
|
Corporate & Other Segment Operating Results
|
|
(in millions, unaudited)
|
|
Quarter Ended September 30,
|
|
|
% Better/ (Worse)
|
|
2014
|
|
|
2013
|
|
|
Corporate & Other
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
NM
|
|
Expenses
|
|
|
52
|
|
|
|
46
|
|
|
(13
|
)%
|
Pretax operating loss
|
|
$
|
(53
|
)
|
|
$
|
(45
|
)
|
|
(18
|
)
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Corporate & Other pretax operating loss was $53 million for
the quarter compared to a $45 million loss a year ago.
At Ameriprise Financial, we have been helping people feel confident
about their financial future for 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 2014 operating effective tax rate to be in the 28 to 30
percent range;
-
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 and regulations implemented or to be implemented in
connection with the Dodd-Frank Wall Street Reform and Consumer
Protection Act;
-
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 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, 2013
available at ir.ameriprise.com.
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, 2014. For information about Ameriprise
Financial entities, please refer to the Third Quarter 2014 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.
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Earnings
|
|
|
|
Quarter Ended September 30,
|
|
|
Per Diluted Share Quarter Ended September
30,
|
|
(in millions, except per share amounts, unaudited)
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
2013
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
420
|
|
|
$
|
382
|
|
|
$
|
2.17
|
|
$
|
1.86
|
|
Less: Income (loss) from discontinued operations, net of tax
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
-
|
|
Net income from continuing operations attributable to Ameriprise
Financial
|
|
|
420
|
|
|
|
381
|
|
|
|
2.17
|
|
|
1.86
|
|
Add: Market impact on variable annuity guaranteed benefits, net of
tax(1)
|
|
|
(5
|
)
|
|
|
13
|
|
|
|
(0.03
|
)
|
|
0.06
|
|
Add: Market impact on indexed universal life benefits, net of tax(1)
|
|
|
(5
|
)
|
|
|
2
|
|
|
|
(0.03
|
)
|
|
0.01
|
|
Add: Net realized (gains) losses, net of tax(1)
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(0.01
|
)
|
|
(0.02
|
)
|
Operating earnings
|
|
|
407
|
|
|
|
392
|
|
|
|
2.10
|
|
|
1.91
|
|
Less: Unlocking, net of tax(1)
|
|
|
(28
|
)
|
|
|
32
|
|
|
|
(0.14
|
)
|
|
0.16
|
|
Operating earnings excluding unlocking
|
|
$
|
435
|
|
|
$
|
360
|
|
|
$
|
2.24
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
190.3
|
|
|
|
201.3
|
|
|
|
|
|
|
|
Diluted
|
|
|
193.7
|
|
|
|
205.1
|
|
|
|
|
|
|
|
|
(1) Calculated using the statutory tax rate of 35%.
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Total Net Revenues
|
|
|
|
Quarter Ended September 30,
|
|
(in millions, unaudited)
|
|
2014
|
|
|
2013
|
|
Total net revenues
|
|
$
|
3,111
|
|
|
$
|
2,813
|
|
Less: CIEs revenue
|
|
|
206
|
|
|
|
114
|
|
Less: Net realized gains
|
|
|
4
|
|
|
|
6
|
|
Less: Market impact on indexed universal life benefits
|
|
|
2
|
|
|
|
(2
|
)
|
Operating total net revenues
|
|
|
2,899
|
|
|
|
2,695
|
|
Less: Unlocking
|
|
|
(29
|
)
|
|
|
(18
|
)
|
Operating total net revenues excluding unlocking
|
|
$
|
2,928
|
|
|
$
|
2,713
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Total Expenses
|
|
|
|
Quarter Ended September 30,
|
(in millions, unaudited)
|
|
2014
|
|
|
2013
|
|
Total expenses
|
|
$
|
2,391
|
|
|
$
|
2,211
|
|
Less: CIEs expenses
|
|
|
61
|
|
|
|
47
|
|
Less: Market impact on variable annuity guaranteed benefits
|
|
|
(9
|
)
|
|
|
21
|
|
Less: Market impact on indexed universal life benefits
|
|
|
(6
|
)
|
|
|
-
|
|
Operating expenses
|
|
|
2,345
|
|
|
|
2,143
|
|
Less: Unlocking
|
|
|
14
|
|
|
|
(67
|
)
|
Operating expenses excluding unlocking
|
|
$
|
2,331
|
|
|
$
|
2,210
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Pretax Operating Earnings
|
|
|
|
Quarter Ended September 30,
|
(in millions, unaudited)
|
|
2014
|
|
|
2013
|
|
Operating total net revenues
|
|
$
|
2,899
|
|
|
$
|
2,695
|
|
Operating expenses
|
|
|
2,345
|
|
|
|
2,143
|
|
Pretax operating earnings
|
|
$
|
554
|
|
|
$
|
552
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: General and Administrative Expense
|
|
|
|
|
|
|
Quarter Ended September 30,
|
(in millions, unaudited)
|
|
2014
|
|
|
2013
|
|
General and administrative expense
|
|
$
|
757
|
|
|
$
|
730
|
|
Less: CIEs expenses
|
|
|
7
|
|
|
|
5
|
|
Operating general and administrative expense
|
|
$
|
750
|
|
|
$
|
725
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Segment Pretax Operating Earnings(1)
|
|
(in millions, unaudited)
|
|
Quarter Ended September 30, 2014
|
|
Pretax operating earnings - Advice & Wealth Management and Asset
Management
|
|
$
|
413
|
|
Less: Unlocking
|
|
|
-
|
|
Pretax operating earnings excluding unlocking - Advice & Wealth
Management & Asset Management
|
|
$
|
413
|
|
|
|
|
|
|
Pretax operating earnings - Annuities and Protection
|
|
$
|
194
|
|
Less: Unlocking
|
|
|
(43
|
)
|
Pretax operating earnings excluding unlocking - Annuities and
Protection
|
|
$
|
237
|
|
|
|
|
|
|
Percent pretax operating earnings from Advice & Wealth Management
and Asset Management
|
|
|
68
|
%
|
Percent pretax operating earnings from Annuities and Protection
|
|
|
32
|
%
|
|
|
|
|
|
Percent pretax operating earnings from Advice & Wealth Management
and Asset Management excluding unlocking
|
|
|
64
|
%
|
Percent pretax operating earnings from Annuities and Protection
excluding unlocking
|
|
|
36
|
%
|
|
|
|
|
|
(1) Excludes Corporate & Other segment.
|
|
|
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: Effective Tax Rate
|
|
|
|
Quarter Ended September 30, 2013
|
|
(in millions, unaudited)
|
|
GAAP
|
|
|
Operating
|
|
Income from continuing operations before income tax provision
|
|
$
|
602
|
|
|
$
|
552
|
|
Less: Pretax income attributable to noncontrolling interests
|
|
|
67
|
|
|
|
-
|
|
Income from continuing operations before income tax provision
excluding consolidated investment entities
|
|
$
|
535
|
|
|
$
|
552
|
|
Income tax provision from continuing operations
|
|
$
|
154
|
|
|
$
|
160
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
25.5
|
%
|
|
|
29.0
|
%
|
Effective tax rate excluding noncontrolling interests
|
|
|
28.7
|
%
|
|
|
29.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Operating Total Net Revenues Per Financial
Advisor (trailing 12 months)
|
|
|
|
Quarter Ended September 30,
|
|
(in thousands, unaudited)
|
|
2014
|
|
2013
|
|
Operating total net revenues per financial advisor
|
|
$
|
483
|
|
$
|
427
|
|
Less: Operating total net revenues per financial advisor
attributable to former banking operations
|
|
|
-
|
|
|
1
|
|
Operating total net revenues per financial advisor excluding former
banking operations
|
|
$
|
483
|
|
$
|
426
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Asset Management Adjusted Net Pretax
Operating Margin
|
|
|
|
Quarter Ended September 30,
|
|
(in millions, unaudited)
|
|
2014
|
|
2013
|
|
Operating total net revenues
|
|
$
|
839
|
|
$
|
777
|
|
Less: Distribution pass through revenues
|
|
|
233
|
|
|
224
|
|
Less: Subadvisory and other pass through revenues
|
|
|
98
|
|
|
96
|
|
Adjusted operating revenues
|
|
$
|
508
|
|
$
|
457
|
|
|
|
|
|
|
Pretax operating earnings
|
|
$
|
208
|
|
$
|
172
|
|
Less: Operating net investment income
|
|
|
7
|
|
|
5
|
|
Add: Amortization of intangibles
|
|
|
9
|
|
|
10
|
|
Adjusted operating earnings
|
|
$
|
210
|
|
$
|
177
|
|
|
|
|
|
|
Adjusted net pretax operating margin
|
|
|
41.3
|
%
|
|
38.7
|
%
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Annuities Pretax Operating Earnings
|
|
|
|
Quarter Ended September 30,
|
|
(in millions, unaudited)
|
|
2014
|
|
2013
|
|
Pretax operating earnings
|
|
$
|
128
|
|
$
|
205
|
|
Less: Unlocking
|
|
|
(22
|
)
|
|
60
|
|
Less: Market impact on DAC and DSIC (mean reversion)
|
|
|
(6
|
)
|
|
13
|
|
Pretax operating earnings excluding unlocking and market impact on
DAC and DSIC (mean reversion)
|
|
$
|
156
|
|
$
|
132
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Protection Pretax Operating Earnings
|
|
|
|
Quarter Ended September 30,
|
|
(in millions, unaudited)
|
|
2014
|
|
2013
|
|
Pretax operating earnings
|
|
$
|
66
|
|
$
|
68
|
|
Less: Unlocking
|
|
|
(21
|
)
|
|
(11
|
)
|
Pretax operating earnings excluding unlocking
|
|
$
|
87
|
|
$
|
79
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Return on Equity (ROE) Excluding Accumulated
|
Other Comprehensive Income "AOCI"
|
|
|
|
Twelve Months Ended September 30,
|
|
(in millions, unaudited)
|
|
2014
|
|
|
2013
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
1,490
|
|
|
$
|
1,427
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
(3
|
)
|
|
|
-
|
|
Net income from continuing operations attributable to Ameriprise
Financial, as reported
|
|
|
1,493
|
|
|
|
1,427
|
|
Less: Adjustments (1)
|
|
|
(107
|
)
|
|
|
(22
|
)
|
Operating earnings
|
|
$
|
1,600
|
|
|
$
|
1,449
|
|
|
|
|
|
|
|
|
|
|
Total Ameriprise Financial, Inc. shareholders' equity
|
|
$
|
8,310
|
|
|
$
|
8,775
|
|
Less: Accumulated other comprehensive income, net of tax
|
|
|
723
|
|
|
|
955
|
|
Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI
|
|
|
7,587
|
|
|
|
7,820
|
|
Less: Equity impacts attributable to the consolidated investment
entities
|
|
|
331
|
|
|
|
344
|
|
Operating equity
|
|
$
|
7,256
|
|
|
$
|
7,476
|
|
|
|
|
|
|
|
|
|
|
Return on equity excluding AOCI
|
|
|
19.7
|
%
|
|
|
18.2
|
%
|
Operating return on equity excluding AOCI (2)
|
|
|
22.1
|
%
|
|
|
19.4
|
%
|
|
(1) Adjustments reflect the trailing twelve months' sum
of after-tax net realized gains/losses; 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; 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
gains/losses; 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; 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)
|
|
2014
|
|
2013
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Management and financial advice fees
|
|
$
|
1,483
|
|
$
|
1,318
|
|
|
13
|
%
|
Distribution fees
|
|
|
464
|
|
|
441
|
|
|
5
|
|
Net investment income
|
|
|
428
|
|
|
491
|
|
|
(13
|
)
|
Premiums
|
|
|
351
|
|
|
324
|
|
|
8
|
|
Other revenues
|
|
|
392
|
|
|
247
|
|
|
59
|
|
Total revenues
|
|
|
3,118
|
|
|
2,821
|
|
|
11
|
|
Banking and deposit interest expense
|
|
|
7
|
|
|
8
|
|
|
13
|
|
Total net revenues
|
|
|
3,111
|
|
|
2,813
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Distribution expenses
|
|
|
813
|
|
|
731
|
|
|
(11
|
)
|
Interest credited to fixed accounts
|
|
|
168
|
|
|
204
|
|
|
18
|
|
Benefits, claims, losses and settlement expenses
|
|
|
458
|
|
|
492
|
|
|
7
|
|
Amortization of deferred acquisition costs
|
|
|
116
|
|
|
(14
|
)
|
|
NM
|
|
Interest and debt expense
|
|
|
79
|
|
|
68
|
|
|
(16
|
)
|
General and administrative expense
|
|
|
757
|
|
|
730
|
|
|
(4
|
)
|
Total expenses
|
|
|
2,391
|
|
|
2,211
|
|
|
(8
|
)
|
Income from continuing operations before income tax provision
|
|
|
720
|
|
|
602
|
|
|
20
|
|
Income tax provision
|
|
|
155
|
|
|
154
|
|
|
(1
|
)
|
Income from continuing operations
|
|
|
565
|
|
|
448
|
|
|
26
|
|
Income from discontinued operations, net of tax
|
|
|
-
|
|
|
1
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
565
|
|
|
449
|
|
|
26
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
145
|
|
|
67
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
420
|
|
$
|
382
|
|
|
10
|
|
|
NM Not Meaningful - variance of greater than 100%
|
|
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