[July 22, 2015] |
|
Ameriprise Financial Reports Second Quarter 2015 Results
Ameriprise Financial, Inc. (NYSE: AMP) today reported second quarter
2015 net income(1) of $415 million, or $2.23 per diluted
share. Operating earnings were $434 million, with operating earnings per
diluted share increasing 12 percent to $2.33. Second quarter 2015
results included a $0.05 per diluted share net unfavorable impact from
previously disclosed items. Without the disclosed items, operating
earnings per diluted share increased 15 percent from the prior year
period.
Operating net revenues increased 2 percent to $3.0 billion as business
growth was partially offset by the negative impact of foreign exchange,
a decline in net investment income from lower fixed annuity balances,
and a benefit in the prior year period from the liquidation of a
collateralized loan obligation (CLO). Without the benefit in the
prior-year period, operating net revenues increased 3 percent.
Operating expenses increased 3 percent to $2.4 billion, primarily driven
by higher Auto & Home weather-related catastrophe losses and higher
distribution expenses. General and administrative expenses decreased 2
percent compared to a year ago reflecting the company's ongoing expense
discipline.
In the quarter, the company returned $549 million to shareholders
through share repurchases and dividends, up 20 percent from the first
quarter.
"Our second quarter results reflect good performance with continued
strength in Advice and Wealth Management," said Jim Cracchiolo, chairman
and chief executive officer. "We posted new records for client assets
and advisor productivity from strong client net inflows in fee-based
investment advisory accounts, client acquisition and experienced advisor
recruiting."
"We're managing through this protracted period of low interest rates and
higher equity market volatility while continuing to invest in the
business consistent with our strategy. Given our balance sheet strength
and market movements, we increased our share repurchases in the quarter.
So far this year, we've returned more than $1 billion to shareholders
and generated an operating return on equity of 23.5 percent while
maintaining a strong excess capital position."
(1) Net income represents net income from continuing
operations attributable to Ameriprise Financial.
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Ameriprise Financial, Inc. Second Quarter Summary
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(in millions, except per share amounts, unaudited)
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Quarter Ended June 30,
|
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Per Diluted Share Quarter Ended June 30,
|
|
|
2015
|
|
|
2014
|
|
|
% Better/ (Worse)
|
|
|
2015
|
|
|
2014
|
|
|
% Better/ (Worse)
|
Net income from continuing operations attributable to Ameriprise
Financial
|
|
$
|
415
|
|
|
$
|
374
|
|
|
11
|
%
|
|
|
$
|
2.23
|
|
|
$
|
1.91
|
|
|
17
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%
|
Adjustments, net of tax (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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(see reconciliation on p.11)
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|
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19
|
|
|
|
34
|
|
|
|
|
|
|
0.10
|
|
|
|
0.17
|
|
|
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Operating earnings (2)
|
|
$
|
434
|
|
|
$
|
408
|
|
|
6
|
%
|
|
|
$
|
2.33
|
|
|
$
|
2.08
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
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183.8
|
|
|
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192.7
|
|
|
|
|
|
|
|
|
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Diluted
|
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186.4
|
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196.2
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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 investment 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; 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.
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|
Results in the quarter reflected a net unfavorable impact of $0.05 per
diluted share from previously disclosed items. This included a reserve
release of $0.06 per share related to our closed block of long term care
insurance that was more than offset by a $0.09 per share unfavorable
impact from higher than expected weather-related catastrophe losses in
Auto & Home and a $0.02 per share unfavorable impact from the market
impact on DAC and DSIC.
Taxes
The second quarter 2015 operating effective tax rate was 25.4 percent,
and the company estimates that its full year 2015 operating effective
tax rate will be approximately 26 percent.
Second Quarter 2015 Business Highlights
-
Total assets under management and administration were up slightly from
a year ago to $811 billion as Ameriprise advisor client net inflows
and market appreciation were essentially offset by an unfavorable
foreign exchange impact of approximately $12 billion.
-
Advice & Wealth Management experienced continued strong growth in
client assets and flows with advisor client assets increasing to $453
billion driven by continued strength in fee-based investment advisory
net inflows, including $3.3 billion of net inflows in the quarter.
-
On a trailing 12-month basis, operating net revenue per advisor grew 9
percent to a record $512,000, reflecting consistent growth in advisor
productivity.
-
Total advisors increased to 9,721 reflecting strong advisor retention
and ongoing experienced advisor recruiting. In the quarter, 93
experienced advisors moved their practices to Ameriprise.
-
Asset Management segment AUM declined to $503 billion, primarily
driven by an unfavorable foreign exchange impact of approximately $12
billion year-over-year and net outflows of $2.0 billion in the quarter.
-
The number of four- and five-star funds at Columbia Threadneedle
Investments increased to 125. In 2015, Columbia Threadneedle was
recognized with more than 35 Lipper Fund awards reflecting strong
performance in funds distributed in the U.S., Europe and Asia.
-
Columbia Threadneedle Investments continued to expand its products and
services for investors, including launching the Columbia U.S. Social
Bond Fund and the Columbia Global Unconstrained Bond Fund, as well as
its "TriGlide" app in the UK that helps financial advisors and their
clients identify investment solutions that fit their financial needs
in retirement.
-
During the quarter, Columbia Threadneedle Investments was recognized
with the 2015 Best Asset Management Firm - UK by Wealth and Money
Management.
-
Variable annuity policyholder account balances were $77 billion and
included $1.4 billion in new sales, up 9 percent driven by new benefit
riders and increased sales of non-living benefit policies.
-
RiverSource launched new variable annuity riders - SecureSource 4 and
SecureSource 4 Plus - and refreshed the disability income insurance
product line.
-
Variable Universal Life / Universal Life insurance account balances
increased 2 percent to $11.4 billion.
-
Combined, Advice & Wealth Management and Asset Management generated 65
percent of company pretax operating earnings(1), up from 60
percent a year ago.
-
Excess capital was approximately $2.5 billion after the company
repurchased 3.4 million shares of common stock in the quarter for $425
million and paid $124 million in quarterly dividends. The company also
holds $250 million of additional capital above required levels,
primarily for variable annuity products.
(1) Excludes Corporate & Other segment
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Ameriprise Financial, Inc. Advice & Wealth
Management Segment Operating Results
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(in millions, unaudited)
|
|
Quarter Ended June 30,
|
|
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% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Advice & Wealth Management
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
1,274
|
|
|
$
|
1,198
|
|
|
6
|
%
|
Expenses
|
|
|
1,054
|
|
|
|
1,004
|
|
|
(5
|
)%
|
Pretax operating earnings
|
|
$
|
220
|
|
|
$
|
194
|
|
|
13
|
%
|
|
|
|
|
|
|
|
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|
Pretax operating margin
|
|
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17.3
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%
|
|
|
16.2
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%
|
|
|
|
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Retail client assets (billions)
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|
$
|
453
|
|
|
$
|
435
|
|
|
4
|
%
|
Mutual fund wrap net flows (billions)
|
|
$
|
3.3
|
|
|
$
|
3.0
|
|
|
9
|
%
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Operating net revenue per branded advisor (trailing 12 months -
thousands)
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|
$
|
512
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|
|
$
|
468
|
|
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9
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%
|
|
|
|
|
|
|
|
|
|
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Advice & Wealth Management pretax operating earnings
increased 13 percent to $220 million reflecting strong revenue growth
and expense controls. Second quarter 2015 pretax operating margin
reached a record high of 17.3 percent compared to 16.2 percent a year
ago.
Operating net revenues grew 6 percent to $1.3 billion driven by asset
growth in fee-based accounts from client net inflows and market
appreciation.
Operating expenses increased 5 percent to $1.1 billion as business
growth resulted in higher distribution expenses. General and
administrative expenses were flat compared to a year ago.
Total retail client assets were $453 billion, up more than $18 billion
from the prior year driven by client net inflows, new client acquisition
and market appreciation. Wrap net inflows remained strong at $3.3
billion with wrap balances increasing 8 percent to $182 billion. The
combination of strong asset growth and client activity drove a 9 percent
increase in operating net revenue per advisor on a trailing 12-month
basis to $512,000.
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Ameriprise Financial, Inc. Asset Management Segment
Operating Results
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(in millions, unaudited)
|
|
Quarter Ended June 30,
|
|
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% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Asset Management
|
|
|
|
|
|
|
|
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Net revenues
|
|
$
|
832
|
|
|
$
|
844
|
|
|
(1
|
)%
|
Expenses
|
|
|
635
|
|
|
|
645
|
|
|
2
|
%
|
Pretax operating earnings
|
|
$
|
197
|
|
|
$
|
199
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
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Adjusted net pretax operating margin
|
|
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39.1
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%
|
|
|
38.7
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%
|
|
|
|
|
Items included in operating earnings:
|
CLO benefit
|
|
$
|
-
|
|
|
$
|
17
|
|
|
NM
|
|
|
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Total segment AUM(1) (billions)
|
|
$
|
503
|
|
|
$
|
518
|
|
|
(3
|
)%
|
Columbia Management AUM
|
|
$
|
359
|
|
|
$
|
364
|
|
|
(1
|
)%
|
Threadneedle AUM
|
|
$
|
151
|
|
|
$
|
158
|
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment net flows(2) (billions)
|
|
$
|
(2.0
|
)
|
|
$
|
4.4
|
|
|
NM
|
|
Retail net flows
|
|
$
|
-
|
|
|
$
|
0.6
|
|
|
NM
|
|
Institutional net flows
|
|
$
|
(2.5
|
)
|
|
$
|
3.5
|
|
|
NM
|
|
Alternative net flows
|
|
$
|
0.5
|
|
|
$
|
0.3
|
|
|
83
|
%
|
|
(1) Subadvisory eliminations between Columbia
Management and Threadneedle are included in the company's Second
Quarter 2015 Statistical Supplement available at ir.ameriprise.com
|
(2) Second Quarter 2014 net flows included a $5.6
billion mandate from a U.K. wealth manager.
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Asset Management pretax operating earnings decreased 1 percent to
$197 million. Without the CLO benefit in the year ago quarter, operating
earnings increased 8 percent driven by market appreciation and continued
expense management, partially offset by net outflows and the negative
impact of foreign exchange.
Second quarter adjusted net pretax operating margin remained strong at
39.1 percent compared to 38.7 percent a year ago.
Operating net revenues were down slightly to $832 million as asset
growth from market appreciation was more than offset by net outflows and
the negative impact of foreign exchange. In addition, the year-ago
period included a $23 million benefit from the liquidation of a CLO.
Operating expenses decreased 2 percent to $635 million reflecting
well-controlled general and administrative expenses and lower
distribution expenses that more than offset increased investments,
including in Marketing and the Columbia Threadneedle Investments brand.
AUM was $503 billion, down $15 billion of which $12 billion was driven
by the unfavorable foreign exchange impact. Net outflows in the quarter
were $2.0 billion:
-
Retail flows were essentially flat in the quarter and included $2.6
billion of net outflows in the Columbia Acorn Fund, which were
elevated from the prior year from the loss of a single mandate.
Excluding this fund, U.S. retail flows improved slightly. European
retail net inflows improved to $0.8 billion from flat a year ago.
Reinvested dividends were up slightly to $3.6 billion.
-
Institutional net outflows of $2.5 billion in the quarter were driven
by net outflows of $3.4 billion of former parent related assets,
primarily driven by low basis point insurance mandates that were
elevated from normal levels from the client's sale of a related
business. Third party institutional net inflows in the quarter were
strong at $0.9 billion.
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Ameriprise Financial, Inc. Annuities Segment
Operating Results
|
|
|
|
|
|
|
(in millions, unaudited)
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Annuities
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
651
|
|
|
$
|
651
|
|
|
-
|
%
|
Expenses
|
|
|
501
|
|
|
|
481
|
|
|
(4
|
)%
|
Pretax operating earnings
|
|
$
|
150
|
|
|
$
|
170
|
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
Variable annuity pretax operating earnings
|
|
$
|
120
|
|
|
$
|
140
|
|
|
(14
|
)%
|
Fixed annuity pretax operating earnings
|
|
|
30
|
|
|
|
30
|
|
|
-
|
%
|
Total pretax operating earnings
|
|
$
|
150
|
|
|
$
|
170
|
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
Items included in operating earnings:
|
|
|
|
|
|
|
|
|
|
Market impact on DAC and DSIC (mean reversion)
|
|
$
|
(5
|
)
|
|
$
|
15
|
|
|
NM
|
|
Impact of variable annuity product changes
|
|
|
2
|
|
|
|
10
|
|
|
(80
|
)%
|
Total annuities impact
|
|
$
|
(3
|
)
|
|
$
|
25
|
|
|
NM
|
|
|
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Variable annuity ending account balances (billions)
|
|
$
|
77.1
|
|
|
$
|
77.6
|
|
|
(1
|
)%
|
Variable annuity net flows (millions)
|
|
$
|
(338
|
)
|
|
$
|
(456
|
)
|
|
26
|
%
|
Fixed annuity ending account balances (billions)
|
|
$
|
11.2
|
|
|
$
|
12.6
|
|
|
(11
|
)%
|
Fixed annuity net flows (millions)
|
|
$
|
(563
|
)
|
|
$
|
(460
|
)
|
|
(22
|
)%
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Annuities pretax operating earnings were $150 million compared to
$170 million a year ago, as business growth was more than offset by the
higher market impact of DAC and DSIC expenses than a year ago and a
benefit in the prior year from policyholder behavior related to a
product change.
Variable annuity operating earnings were $120 million in the quarter
reflecting $28 million of lower year-over-year benefits from product
changes and the market impact on DAC and DSIC. Without these benefits,
operating earnings increased 7 percent. Variable annuity cash sales
increased 9 percent to $1.4 billion for the quarter, driven by the
introduction of new living benefit riders and increased sales of
non-living benefit policies. Account balances were $77 billion driven by
net outflows in a closed block of annuities sold through third parties,
partially offset by market appreciation.
Fixed annuity operating earnings were flat at $30 million from an 11
percent decline in account balances, as lower net investment income was
essentially offset by management actions a year ago to reprice a block
of annuities.
|
Ameriprise Financial, Inc. Protection Segment
Operating Results
|
|
(in millions, unaudited)
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Protection
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
600
|
|
|
$
|
579
|
|
|
4
|
%
|
Expenses
|
|
|
528
|
|
|
|
488
|
|
|
(8
|
)%
|
Pretax operating earnings
|
|
$
|
72
|
|
|
$
|
91
|
|
|
(21
|
)%
|
|
|
|
|
|
|
|
|
Items included in operating earnings:
|
|
|
|
|
|
|
|
Market impact on DAC (mean reversion)
|
|
$
|
-
|
|
|
$
|
1
|
|
|
NM
|
|
Long Term Care reserves
|
|
|
18
|
|
|
|
-
|
|
|
NM
|
|
Auto and home catastrophe losses
|
|
|
(48
|
)
|
|
|
(33
|
)
|
|
(45
|
)%
|
Total protection impact
|
|
$
|
(30
|
)
|
|
$
|
(32
|
)
|
|
6
|
%
|
|
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Life insurance in force (billions)
|
|
$
|
196
|
|
|
$
|
195
|
|
|
1
|
%
|
VUL/UL ending account balances (billions)
|
|
$
|
11.4
|
|
|
$
|
11.2
|
|
|
2
|
%
|
Auto & Home policies in force (thousands)
|
|
|
952
|
|
|
|
889
|
|
|
7
|
%
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Protection pretax operating earnings were $72 million compared to
$91 million a year ago. Included in the current quarter's results was an
$18 million long term care reserve release that was more than offset by
$48 million in Auto & Home weather-related catastrophe losses,
approximately half of which were not anticipated.
Life and Health insurance earnings primarily reflected higher claims
experience and the impact of low interest rates. Current quarter life
claims were slightly higher than expected, especially compared with
favorable claims a year ago. Disability claims were within targeted
ranges, though elevated compared to very favorable experience a year
ago. VUL/UL cash sales were $86 million, up 10 percent from a year ago,
and VUL/UL account balances grew 2 percent primarily from market
appreciation.
During the quarter, management completed its previously disclosed review
of the disabled life reserve for a closed block of long term care
insurance policies, which resulted in a favorable reserve release in the
quarter. In the first quarter of 2015, management increased disabled
life reserves by $32 million based primarily on claims utilization and
termination assumptions provided by the company's reinsurer. During the
second quarter, the company completed its analysis of actual claims
experience for this block of business with a third party actuarial
consultant. Based on the analysis, management concluded that the actual
claims utilization and termination experience was more favorable than
the initial assumptions provided by the reinsurer, and as a result,
released $18 million of the $32 million reserve.
Auto and Home had a modest operating gain in the quarter after adjusting
for higher than anticipated weather-related catastrophe losses. 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 going into
2016.
|
Ameriprise Financial, Inc. Corporate & Other
Segment Operating Results
|
|
(in millions, unaudited)
|
|
Quarter Ended June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Corporate & Other
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
-
|
|
Expenses
|
|
|
55
|
|
|
|
73
|
|
|
25
|
%
|
Pretax operating loss
|
|
$
|
(57
|
)
|
|
$
|
(75
|
)
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
Corporate & Other pretax operating loss was $57 million for
the quarter compared to a $75 million loss a year ago. Results in the
year-ago period included higher expenses primarily related to the early
redemption of corporate debt and other items.
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 26
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
March 31, 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 June 30, 2015. For information about Ameriprise
Financial entities, please refer to the Second 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 Ended June 30,
|
|
|
Per Diluted Share Quarter Ended June 30,
|
|
(in millions, except per share amounts, unaudited)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
415
|
|
|
$
|
374
|
|
|
$
|
2.23
|
|
|
$
|
1.91
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net income from continuing operations attributable to Ameriprise
Financial
|
|
|
415
|
|
|
|
374
|
|
|
|
2.23
|
|
|
|
1.91
|
|
Add: Integration/restructuring charges, net of tax(1)
|
|
|
1
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
Add: Market impact on variable annuity guaranteed benefits, net of
tax(1)
|
|
|
23
|
|
|
|
35
|
|
|
|
0.12
|
|
|
|
0.18
|
|
Add: Market impact on indexed universal life benefits, net of tax(1)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(0.02
|
)
|
|
|
-
|
|
Add: Market impact of hedges on investments, net of tax(1)
|
|
|
1
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
Add: Net realized investment (gains) losses, net of tax(1)
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(0.02
|
)
|
|
|
(0.01
|
)
|
Operating earnings
|
|
|
434
|
|
|
|
408
|
|
|
|
2.33
|
|
|
|
2.08
|
|
Less: Long Term Care reserves, net of tax(1)
|
|
|
12
|
|
|
|
-
|
|
|
|
0.06
|
|
|
|
-
|
|
Less: Auto and home excess catastrophe losses, net of tax(1)
|
|
|
(16
|
)
|
|
|
(8
|
)
|
|
|
(0.09
|
)
|
|
|
(0.04
|
)
|
Less: Market impact on DAC and DSIC, net of tax(1)
|
|
|
(3
|
)
|
|
|
10
|
|
|
|
(0.02
|
)
|
|
|
0.05
|
|
Operating earnings excluding previously disclosed items
|
|
$
|
441
|
|
|
$
|
406
|
|
|
$
|
2.38
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
183.8
|
|
|
|
192.7
|
|
|
|
|
|
|
|
Diluted
|
|
|
186.4
|
|
|
|
196.2
|
|
|
|
|
|
|
|
|
|
(1) Calculated using the statutory tax rate of 35%.
|
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Total Net Revenues
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Total net revenues
|
|
$
|
3,128
|
|
|
$
|
3,072
|
|
Less: CIEs revenue
|
|
|
141
|
|
|
|
160
|
|
Less: Net realized investment gains (losses)
|
|
|
5
|
|
|
|
1
|
|
Less: Market impact on indexed universal life benefits
|
|
|
-
|
|
|
|
(4
|
)
|
Less: Market impact of hedges on investments
|
|
|
(1
|
)
|
|
|
-
|
|
Operating total net revenues
|
|
|
2,983
|
|
|
|
2,915
|
|
Less: Liquidation of collateralized loan obligation (CLO)
|
|
|
-
|
|
|
|
23
|
|
Operating total net revenue excluding CLO liquidation benefit
|
|
$
|
2,983
|
|
|
$
|
2,892
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Total Expenses
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Total expenses
|
|
$
|
2,513
|
|
|
$
|
2,453
|
|
Less: CIEs expenses
|
|
|
80
|
|
|
|
67
|
|
Less: Integration/restructuring charges
|
|
|
1
|
|
|
|
-
|
|
Less: Market impact on variable annuity guaranteed benefits
|
|
|
36
|
|
|
|
54
|
|
Less: Market impact on indexed universal life benefits
|
|
|
(5
|
)
|
|
|
(4
|
)
|
Operating expenses
|
|
$
|
2,401
|
|
|
$
|
2,336
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Pretax Operating Earnings
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Operating total net revenues
|
|
$
|
2,983
|
|
|
$
|
2,915
|
|
Operating expenses
|
|
|
2,401
|
|
|
|
2,336
|
|
Pretax operating earnings
|
|
$
|
582
|
|
|
$
|
579
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
General and Administrative Expense
|
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
|
2015
|
|
|
2014
|
|
General and administrative expense
|
|
|
$
|
792
|
|
|
$
|
805
|
|
Less: CIEs expenses
|
|
|
|
21
|
|
|
|
22
|
|
Less: Integration/restructuring charges
|
|
|
|
1
|
|
|
|
-
|
|
Operating general and administrative expense
|
|
|
$
|
770
|
|
|
$
|
783
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Effective Tax Rate
|
|
|
|
Quarter Ended June 30, 2015
|
|
(in millions, unaudited)
|
|
GAAP
|
|
|
Operating
|
|
Income from continuing operations before income tax provision
|
|
$
|
615
|
|
|
$
|
582
|
|
Less: Pretax income attributable to noncontrolling interests
|
|
|
61
|
|
|
|
-
|
|
Income from continuing operations before income tax provision
excluding consolidated investment entities
|
|
$
|
554
|
|
|
$
|
582
|
|
Income tax provision from continuing operations
|
|
$
|
139
|
|
|
$
|
148
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
22.6
|
%
|
|
|
25.4
|
%
|
Effective tax rate excluding noncontrolling interests
|
|
|
25.1
|
%
|
|
|
25.4
|
%
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Effective Tax Rate
|
|
|
|
Quarter Ended June 30, 2014
|
|
(in millions, unaudited)
|
|
GAAP
|
|
|
Operating
|
|
Income from continuing operations before income tax provision
|
|
$
|
619
|
|
|
$
|
579
|
|
Less: Pretax income attributable to noncontrolling interests
|
|
|
93
|
|
|
|
-
|
|
Income from continuing operations before income tax provision
excluding consolidated investment entities
|
|
$
|
526
|
|
|
$
|
579
|
|
Income tax provision from continuing operations
|
|
$
|
152
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
24.5
|
%
|
|
|
29.5
|
%
|
Effective tax rate excluding noncontrolling interests
|
|
|
28.7
|
%
|
|
|
29.5
|
%
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Asset Management Pretax Operating Earnings
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Pretax operating earnings
|
|
$
|
197
|
|
|
$
|
199
|
|
Less: Liquidation of collateralized loan obligation (CLO)
|
|
|
-
|
|
|
|
17
|
|
Pretax operating earnings excluding CLO liquidation benefit
|
|
$
|
197
|
|
|
$
|
182
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Asset Management Adjusted Net Pretax Operating Margin
|
|
|
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Operating total net revenues
|
|
$
|
832
|
|
|
$
|
844
|
|
Less: Distribution pass through revenues
|
|
|
219
|
|
|
|
237
|
|
Less: Subadvisory and other pass through revenues
|
|
|
102
|
|
|
|
106
|
|
Adjusted operating revenues
|
|
$
|
511
|
|
|
$
|
501
|
|
|
|
|
|
|
|
|
Pretax operating earnings
|
|
$
|
197
|
|
|
$
|
199
|
|
Less: Operating net investment income
|
|
|
4
|
|
|
|
13
|
|
Add: Amortization of intangibles
|
|
|
7
|
|
|
|
8
|
|
Adjusted operating earnings
|
|
$
|
200
|
|
|
$
|
194
|
|
|
|
|
|
|
|
|
Adjusted net pretax operating margin
|
|
|
39.1
|
%
|
|
|
38.7
|
%
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Variable Annuity Pretax Operating Earnings
|
|
|
|
Quarter Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Pretax operating earnings
|
|
$
|
120
|
|
|
$
|
140
|
|
Less: Market impact on DAC and DSIC (mean reversion)
|
|
|
(5
|
)
|
|
|
15
|
|
Less: Impact of variable annuity product changes
|
|
|
2
|
|
|
|
10
|
|
Pretax operating earnings excluding market impact on DAC and DSIC
and impact of variable annuity product changes
|
|
$
|
123
|
|
|
$
|
115
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc. Reconciliation Table:
Return on Equity (ROE) Excluding Accumulated Other
Comprehensive Income "AOCI"
|
|
|
|
Twelve Months Ended June 30,
|
|
(in millions, unaudited)
|
|
2015
|
|
|
2014
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
1,653
|
|
|
$
|
1,452
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
(1
|
)
|
|
|
(2
|
)
|
Net income from continuing operations attributable to Ameriprise
Financial, as reported
|
|
|
1,654
|
|
|
|
1,454
|
|
Less: Adjustments (1)
|
|
|
(39
|
)
|
|
|
(131
|
)
|
Operating earnings
|
|
$
|
1,693
|
|
|
$
|
1,585
|
|
|
|
|
|
|
|
|
|
|
Total Ameriprise Financial, Inc. shareholders' equity
|
|
$
|
8,176
|
|
|
$
|
8,326
|
|
Less: Accumulated other comprehensive income, net of tax
|
|
|
706
|
|
|
|
698
|
|
Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI
|
|
|
7,470
|
|
|
|
7,628
|
|
Less: Equity impacts attributable to the consolidated investment
entities
|
|
|
280
|
|
|
|
330
|
|
Operating equity
|
|
$
|
7,190
|
|
|
$
|
7,298
|
|
|
|
|
|
|
|
|
|
|
Return on equity excluding AOCI
|
|
|
22.1
|
%
|
|
|
19.1
|
%
|
Operating return on equity excluding AOCI (2)
|
|
|
23.5
|
%
|
|
|
21.7
|
%
|
|
(1) Adjustments reflect the trailing twelve months' sum
of after-tax net realized investment 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; 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; 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 June 30,
|
|
|
% Better/ (Worse)
|
|
2015
|
|
|
2014
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Management and financial advice fees
|
|
$
|
1,518
|
|
|
$
|
1,452
|
|
|
5
|
%
|
Distribution fees
|
|
|
472
|
|
|
|
470
|
|
|
-
|
|
Net investment income
|
|
|
423
|
|
|
|
433
|
|
|
(2
|
)
|
Premiums
|
|
|
368
|
|
|
|
345
|
|
|
7
|
|
Other revenues
|
|
|
354
|
|
|
|
379
|
|
|
(7
|
)
|
Total revenues
|
|
|
3,135
|
|
|
|
3,079
|
|
|
2
|
|
Banking and deposit interest expense
|
|
|
7
|
|
|
|
7
|
|
|
-
|
|
Total net revenues
|
|
|
3,128
|
|
|
|
3,072
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Distribution expenses
|
|
|
835
|
|
|
|
810
|
|
|
(3
|
)
|
Interest credited to fixed accounts
|
|
|
160
|
|
|
|
175
|
|
|
9
|
|
Benefits, claims, losses and settlement expenses
|
|
|
543
|
|
|
|
506
|
|
|
(7
|
)
|
Amortization of deferred acquisition costs
|
|
|
94
|
|
|
|
78
|
|
|
(21
|
)
|
Interest and debt expense
|
|
|
89
|
|
|
|
79
|
|
|
(13
|
)
|
General and administrative expense
|
|
|
792
|
|
|
|
805
|
|
|
2
|
|
Total expenses
|
|
|
2,513
|
|
|
|
2,453
|
|
|
(2
|
)
|
Income from continuing operations before income tax provision
|
|
|
615
|
|
|
|
619
|
|
|
(1
|
)
|
Income tax provision
|
|
|
139
|
|
|
|
152
|
|
|
9
|
|
Income from continuing operations
|
|
|
476
|
|
|
|
467
|
|
|
2
|
|
Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
476
|
|
|
|
467
|
|
|
2
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
61
|
|
|
|
93
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ameriprise Financial
|
|
$
|
415
|
|
|
$
|
374
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150722006340/en/
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