[April 27, 2016] |
|
Ameriprise Financial Reports First Quarter 2016 Results
Ameriprise Financial, Inc. (NYSE:AMP) today reported first quarter 2016
net income(1) of $364 million, or $2.09 per diluted share.
Operating earnings were $378 million, with operating earnings per
diluted share of $2.17. Operating results include previously announced
unfavorable items of $0.09 per share.
Operating net revenues of $2.8 billion were down 4 percent, reflecting
the dislocation in equity markets during the quarter, which caused a
lower level of average assets under management, resulting in lower fee
revenue. The dislocation in equity markets also impacted revenues on a
sequential basis.
Operating expenses of $2.3 billion were down 2 percent from a year ago
as a result of lower distribution expenses and well controlled general
and administrative expenses. General and administrative expenses
decreased 2 percent, primarily associated with ongoing reengineering and
disciplined expense control in response to the challenging market
environment during the quarter. Overall, the company will continue to
manage expenses tightly in response to the market environment while
maintaining targeted growth investments.
In the quarter, the company continued to deliver a strong return to
shareholders through share repurchases and dividends of $568 million,
returning 150 percent of its operating earnings.
"Ameriprise performed well in a challenging market environment for the
industry," said Jim Cracchiolo, chairman and chief executive officer.
"With equity market declines and high volatility during the quarter, we
continued to deliver solid underlying results as we focused on
supporting our clients and advisors through this period and providing
important perspective for the long-term. While client activity slowed
given the markets, we continued to generate solid net inflows in
fee-based investment advisory accounts and strong investment
performance."
"Our strong capital position and financial foundation provides important
flexibility as we invest through market cycles and return capital to
shareholders. In the quarter, we nearly doubled the number of shares of
common stock we repurchased compared to a year ago, and today we
announced another increase to our regular quarterly dividend, up 12
percent, representing the ninth increase over the past seven years."
(1) Net income represents net income attributable to
Ameriprise Financial.
|
Ameriprise Financial, Inc.
|
First Quarter Summary
|
|
(in millions, except per share amounts, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
|
Per Diluted Share Quarter Ended March
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
% Better/ (Worse)
|
Net income attributable to Ameriprise Financial
|
|
|
$
|
364
|
|
|
$
|
393
|
|
|
(7
|
)%
|
|
|
$
|
2.09
|
|
|
$
|
2.08
|
|
|
-
|
Adjustments, net of tax (1) (see reconciliation on p.
11)
|
|
|
|
14
|
|
|
|
19
|
|
|
|
|
|
|
0.08
|
|
|
|
0.10
|
|
|
|
Operating earnings (2)
|
|
|
$
|
378
|
|
|
$
|
412
|
|
|
(8
|
)%
|
|
|
$
|
2.17
|
|
|
$
|
2.18
|
|
|
-
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
172.6
|
|
|
|
186.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
174.4
|
|
|
|
189.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) After-tax is calculated using the statutory tax rate of 35%
|
|
(2) The company believes the presentation of operating earnings
best represents the economics of the business. Operating earnings,
after-tax, exclude the consolidation of certain investment
entities; net realized investment gains or losses, net of deferred
sales inducement costs ("DSIC") and deferred acquisition costs
("DAC") amortization, unearned revenue amortization and the
reinsurance accrual; integration and restructuring charges; the
market impact on variable annuity guaranteed benefits, net of
hedges and related DSIC and DAC amortization; the market impact on
indexed universal life benefits, net of hedges and related DAC
amortization, unearned revenue amortization, and the reinsurance
accrual; the market impact of hedges to offset interest rate
changes on unrealized gains or losses for certain investments; and
income or loss from discontinued operations.
|
|
First quarter 2016 operating earnings included the following after-tax
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Diluted Share
|
|
|
|
Quarter Ended
|
|
|
Quarter Ended
|
|
|
|
March 31, 2016
|
|
|
March 31, 2016
|
(in millions, except per share amounts, unaudited)
|
|
|
|
|
|
|
Auto & Home excess catastrophe losses (1)
|
|
|
$
|
(9
|
)
|
|
|
$
|
(0.05
|
)
|
Market impact on SOP reserves (1) (2)
|
|
|
|
(2
|
)
|
|
|
|
(0.01
|
)
|
Market impact on DAC/DSIC (1)
|
|
|
|
(5
|
)
|
|
|
|
(0.03
|
)
|
Total items (3)
|
|
|
$
|
(16
|
)
|
|
|
$
|
(0.09
|
)
|
|
(1) After-tax is calculated using the statutory tax rate of 35%
|
|
(2) Reserves for insurance features in non-traditional contracts
|
|
(3) Previously announced items
|
|
Taxes
The first quarter 2016 operating effective tax rate was 23.9 percent,
compared to 26.7 percent a year ago. The company estimates that its full
year 2016 operating effective tax rate will be in the 24 to 26 percent
range.
First Quarter 2016 Business Highlights
The company's average weighted equity index (WEI), which is a proxy
for equity movements on AUM, declined 8 percent year-over-year and 6
percent sequentially from the fourth quarter of 2015. The market
decline and high volatility impacted AUM and transactional fee revenue.
-
Total assets under management and administration were $773 billion as
Ameriprise advisor client net inflows were more than offset by market
depreciation and asset management outflows.
-
Advice & Wealth Management advisor client assets were $451 billion,
reflecting continued strength in fee-based investment advisory net
inflows, including $1.8 billion of net inflows in the quarter.
-
On a trailing 12-month basis, operating net revenue per advisor grew 1
percent to $510,000, reflecting high market volatility and lower
transactional client activity.
-
Total advisors were 9,766, reflecting strong advisor retention and
ongoing experienced advisor recruiting. The company added 70
experienced, productive advisors in the quarter.
-
Asset Management segment AUM declined to $464 billion, primarily
driven by net outflows. Outflows in the quarter were primarily in
lower-fee portfolios.
-
Investment performance remained strong with 115 four- and five-star
funds at Columbia Threadneedle Investments.
-
Five Columbia funds received 2016 Lipper Fund Awards as top-performing
mutual funds in their respective Lipper classifications for the period
ended Dec. 31, 2015.
-
Ameriprise ranked fifth out of 20 firms in the 2016 J.D. Power U.S.
Full Service Investor Satisfaction StudySM.
-
Variable annuity policyholder account balances were $74 billion with
sales of $1.1 billion in the quarter.
-
Excess capital was more than $2.0 billion after the company
repurchased 5.1 million shares of common stock in the quarter for $451
million, up from 2.6 million shares a year ago, and paid $117 million
in quarterly dividends.
-
The company increased its regular quarterly dividend 12 percent to
$0.75 per share payable on May 20, 2016 to shareholders of record as
of May 9, 2016.
-
The company returned 150 percent of operating earnings to shareholders
during the quarter, reflecting its strategy of adjusting the level of
share repurchases based on the valuation of the stock.
|
Ameriprise Financial, Inc.
|
Advice & Wealth Management Segment Operating Results
|
|
(in millions, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Advice & Wealth Management
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
1,198
|
|
|
|
$
|
1,228
|
|
|
|
(2
|
)%
|
Expenses
|
|
|
|
993
|
|
|
|
|
1,018
|
|
|
|
2
|
|
Pretax operating earnings
|
|
|
$
|
205
|
|
|
|
$
|
210
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
Pretax operating margin
|
|
|
|
17.1
|
%
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Retail client assets (billions)
|
|
|
$
|
451
|
|
|
|
$
|
453
|
|
|
|
-
|
|
Wrap net flows (billions)
|
|
|
$
|
1.8
|
|
|
|
$
|
2.8
|
|
|
|
(35
|
)%
|
Operating net revenue per branded advisor (trailing 12 months -
thousands)
|
|
|
$
|
510
|
|
|
|
$
|
505
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advice & Wealth Management pretax operating earnings were
$205 million as the company's fee-based assets were impacted by lower
average market levels resulting in lower revenues, which were partially
offset by continued effective general and administrative expense
management. While client net inflows remained strong, earnings were
impacted by lower transactional volume given the volatile and uncertain
markets. First quarter 2016 pretax operating margin was 17.1 percent,
flat compared to a year ago.
Operating net revenues of $1.2 billion declined 2 percent as lower
average equity markets reduced average client asset levels and lowered
client activity levels given the uncertainty in the market environment.
Operating expenses declined 2 percent to $1.0 billion as lower
distribution expenses reflected the slowdown in revenues. General and
administrative expenses were flat compared to a year ago - the company
will continue to tightly manage expenses while maintaining targeted
growth investments.
Total retail client assets were essentially flat at $451 billion, as
client net inflows and client acquisition were offset by year-over-year
market depreciation. Underlying business fundamentals and metrics
remained strong and are consistent with the market environment. Wrap net
inflows were $1.8 billion in the quarter, which contributed to a 2
percent increase in wrap balances to $183 billion. Total advisors were
9,766 reflecting strong retention and another successful recruiting
quarter, with 70 experienced advisors moving their practices to
Ameriprise. The combination of asset growth and client activity drove a
1 percent increase in operating net revenue per advisor on a trailing
12-month basis to $510,000.
|
Ameriprise Financial, Inc.
|
Asset Management Segment Operating Results
|
|
(in millions, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Asset Management
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
724
|
|
|
|
$
|
807
|
|
|
|
(10
|
)%
|
Expenses
|
|
|
|
575
|
|
|
|
|
616
|
|
|
|
7
|
|
Pretax operating earnings
|
|
|
$
|
149
|
|
|
|
$
|
191
|
|
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net pretax operating margin
|
|
|
|
34.7
|
%
|
|
|
|
39.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Total segment AUM (billions)
|
|
|
$
|
464
|
|
|
|
$
|
506
|
|
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
Total segment net flows (billions)
|
|
|
$
|
(7.5
|
)
|
|
|
$
|
(5.8
|
)
|
|
|
(28
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Retail net flows, excl. former parent flows
|
|
|
$
|
(2.6
|
)
|
|
|
$
|
(2.4
|
)
|
|
|
(6
|
)%
|
Global Institutional net flows, excl. former parent flows
|
|
|
$
|
(0.6
|
)
|
|
|
$
|
(1.9
|
)
|
|
|
72
|
%
|
Former parent related flows
|
|
|
$
|
(4.3
|
)
|
|
|
$
|
(1.5
|
)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
NM Not Meaningful - variance of greater than 100%
Asset Management pretax operating earnings were $149 million,
reflecting lower average AUM related to lower average global markets and
net outflows. Average AUM also declined sequentially after being
impacted by the lower average markets, which led to lower revenues. As
noted previously, the company's average weighted equity index (WEI),
which is a proxy for equity AUM, declined 8 percent year-over-year and 6
percent sequentially. Given the significant movement in equity markets,
earnings for the quarter were in line with management's expectations.
First quarter adjusted net pretax operating margin was 34.7 percent
compared to 39.7 percent a year ago.
Operating net revenues of $724 million were down compared to a year ago,
reflecting the impact of lower asset levels. AUM declined 8 percent to
$464 billion from market depreciation and net outflows, which were
primarily in lower-fee portfolios.
Operating expenses of $575 million declined 7 percent due to well
managed general and administrative expenses and lower distribution
expenses.
Net outflows were $7.5 billion in the quarter and were largely driven by
outflows in lower-fee mandates, as follows:
-
Elevated outflows of $5.8 billion in lower-fee assets in the quarter,
included:
-
$4.3 billion of former parent related assets, which were largely
driven by changes made to fixed income IMA accounts by a former
affiliated distribution partner that resulted in an expected $3.2
billion outflow of institutional assets.
-
$1.1 billion from the termination of a former subadvisor and $0.4
billion in other insurance portfolios.
-
Outflows of $1.1 billion from a third party institutional client that
redeemed assets for liquidity purposes - underlying third-party
institutional flows were positive.
-
While U.S. retail flows were challenging in the quarter consistent
with the industry, outflows in the Acorn Fund moderated to $0.6
billion. European retail flows were slightly negative and reflected
the volatile market environment.
|
Ameriprise Financial, Inc.
|
Annuities Segment Operating Results
|
|
|
|
|
|
|
|
(in millions, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Annuities
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
596
|
|
|
|
$
|
631
|
|
|
|
(6
|
)%
|
Expenses
|
|
|
|
472
|
|
|
|
|
459
|
|
|
|
(3
|
)
|
Pretax operating earnings
|
|
|
$
|
124
|
|
|
|
$
|
172
|
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable annuity pretax operating earnings
|
|
|
$
|
100
|
|
|
|
$
|
144
|
|
|
|
(31
|
)%
|
Fixed annuity pretax operating earnings
|
|
|
|
24
|
|
|
|
|
28
|
|
|
|
(14
|
)
|
Total pretax operating earnings
|
|
|
$
|
124
|
|
|
|
$
|
172
|
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items included in operating earnings:
|
|
|
|
|
|
|
|
|
|
Market impact on DAC and DSIC (mean reversion)
|
|
|
$
|
(6
|
)
|
|
|
$
|
10
|
|
|
|
NM
|
|
Market impacts on SOP reserves
|
|
|
|
(3
|
)
|
|
|
|
8
|
|
|
|
NM
|
|
Total annuities impact
|
|
|
$
|
(9
|
)
|
|
|
$
|
18
|
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Variable annuity ending account balances (billions)
|
|
|
$
|
74.2
|
|
|
|
$
|
77.9
|
|
|
|
(5
|
)%
|
Variable annuity net flows (millions)
|
|
|
$
|
(311
|
)
|
|
|
$
|
(385
|
)
|
|
|
19
|
%
|
Fixed annuity ending account balances (billions)
|
|
|
$
|
10.5
|
|
|
|
$
|
11.7
|
|
|
|
(10
|
)%
|
Fixed annuity net flows (millions)
|
|
|
$
|
(249
|
)
|
|
|
$
|
(565
|
)
|
|
|
56
|
%
|
|
|
|
|
|
|
|
NM Not Meaningful - variance of greater than 100%
|
|
|
|
|
|
|
|
Annuities pretax operating earnings were $124 million, primarily
reflecting lower average account balances due to markets, as well as the
market impact on DAC, DSIC and SOP reserves. Earnings were in line with
expectations given the market fluctuations.
Variable annuity operating earnings were $100 million compared to $144
million a year ago. The year-over-year decline included an impact of
approximately $16 million due to low interest rates and average account
balances being lower in the quarter due to market levels, leading to
lower mortality and expense fees. In addition, there was a $27 million
reduction in operating earnings compared to a year ago due to the market
impact on DAC, DSIC and SOP reserves. Variable annuity cash sales
remained strong at $1.1 billion in the quarter. Account balances
declined 5 percent to $74 billion, primarily reflecting net outflows in
a closed block of annuities sold through third parties and market
depreciation.
Fixed annuity operating earnings declined from $28 million to $24
million as older policies continue to lapse and the interest rate
environment remains challenging for investment yields.
|
Ameriprise Financial, Inc.
|
Protection Segment Operating Results
|
|
(in millions, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Protection
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
608
|
|
|
|
$
|
590
|
|
|
|
3
|
%
|
Expenses
|
|
|
|
539
|
|
|
|
|
539
|
|
|
|
-
|
|
Pretax operating earnings
|
|
|
$
|
69
|
|
|
|
$
|
51
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
Items included in operating earnings:
|
|
|
|
|
|
|
|
|
|
Market impact on DAC (mean reversion)
|
|
|
$
|
(1
|
)
|
|
|
$
|
1
|
|
|
|
NM
|
|
LTC reserves
|
|
|
|
-
|
|
|
|
|
(32
|
)
|
|
|
NM
|
|
L&H reinsurance recapture and model changes
|
|
|
|
6
|
|
|
|
|
-
|
|
|
|
NM
|
|
Disability income discount rate change
|
|
|
|
-
|
|
|
|
|
7
|
|
|
|
NM
|
|
Auto and home catastrophe losses (1)
|
|
|
|
(23
|
)
|
|
|
|
(12
|
)
|
|
|
(92
|
)%
|
Total protection impact
|
|
|
$
|
(18
|
)
|
|
|
$
|
(36
|
)
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Life insurance in force (billions)
|
|
|
$
|
196
|
|
|
|
$
|
196
|
|
|
|
-
|
|
VUL/UL ending account balances (billions)
|
|
|
$
|
11.2
|
|
|
|
$
|
11.4
|
|
|
|
(2
|
)%
|
Auto & Home policies in force (thousands)
|
|
|
|
957
|
|
|
|
|
943
|
|
|
|
1
|
%
|
|
(1) Q1 2015 includes $4 million related to 2014
catastrophe losses
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Protection pretax operating earnings were $69 million compared to
$51 million a year ago. Excluding the noted items above, earnings were
flat compared to last year.
Life and Health insurance earnings were solid. Life and Health earnings
continue to be impacted by the low interest rate environment. Claims
experience was within expected ranges. VUL/UL cash sales were $66
million, flat compared to a year ago, and VUL/UL account balances
declined 2 percent.
Auto and Home had an operating loss in the quarter driven by $14 million
of higher than expected catastrophe losses, primarily from hail and wind
storms in Texas. Excluding the excess catastrophe losses, Auto and Home
was marginally profitable and the company is seeing improvement in
overall loss trends in the quarter. The performance for the 2015 and
prior accident years currently remains in line with expectations,
benefiting from enhancements made to underwriting, pricing and claims
practices.
|
Ameriprise Financial, Inc.
|
Corporate & Other Segment Operating Results
|
|
(in millions, unaudited)
|
|
|
Quarter Ended March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
Corporate & Other
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
2
|
|
|
|
$
|
(6
|
)
|
|
|
NM
|
|
Expenses
|
|
|
|
52
|
|
|
|
|
56
|
|
|
|
7
|
%
|
Pretax operating loss
|
|
|
$
|
(50
|
)
|
|
|
$
|
(62
|
)
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
NM Not Meaningful - variance of greater than 100%
|
|
Corporate & Other pretax operating loss was $50 million for
the quarter compared to a $62 million loss a year ago.
At Ameriprise Financial, we have been helping people feel confident
about their financial future for more than 120 years. With a nationwide
network of 10,000 financial advisors and extensive asset management,
advisory and insurance capabilities, we have the strength and expertise
to serve the full range of individual and institutional investors'
financial needs. For more information, visit ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning services,
investments, insurance and annuity products. Columbia Funds are
distributed by Columbia Management Investment Distributors, Inc., member
FINRA and managed by Columbia Management Investment Advisers, LLC.
Threadneedle International Limited is an SEC- and FCA-registered
investment adviser affiliate of Columbia Management Investment Advisers,
LLC based in the U.K. Auto and home insurance is underwritten by IDS
Property Casualty Insurance Company, or in certain states, Ameriprise
Insurance Company, both in De Pere, WI. RiverSource insurance and
annuity products are issued by RiverSource Life Insurance Company, and
in New York only by RiverSource Life Insurance Co. of New York, Albany,
New York. Only RiverSource Life Insurance Co. of New York is authorized
to sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that reflect
management's plans, estimates and beliefs. Actual results could differ
materially from those described in these forward-looking statements.
Examples of such forward-looking statements include:
-
the statements in this news release concerning the company's
management of expenses;
-
the statements in this news release concerning the company's operating
effective tax rate;
-
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
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, 2015
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 Quarter Report on Form 10-Q for the
quarter ended March 31, 2016. For information about Ameriprise Financial
entities, please refer to the First Quarter 2016 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
|
|
|
|
|
|
|
|
Per Diluted Share
|
|
|
|
Quarter Ended
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
(in millions, except per share amounts, unaudited)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Net income attributable to Ameriprise Financial
|
|
|
$
|
364
|
|
|
|
$
|
393
|
|
|
|
$
|
2.09
|
|
|
|
$
|
2.08
|
|
Less: Net income (loss) attributable to consolidated investment
entities
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Add: Market impact on variable annuity guaranteed benefits, net
of tax(1)
|
|
|
|
(11
|
)
|
|
|
|
22
|
|
|
|
|
(0.06
|
)
|
|
|
|
0.12
|
|
Add: Market impact on indexed universal life benefits, net of tax(1)
|
|
|
|
(12
|
)
|
|
|
|
4
|
|
|
|
|
(0.07
|
)
|
|
|
|
0.02
|
|
Add: Market impact of hedges on investments, net of tax(1)
|
|
|
|
26
|
|
|
|
|
-
|
|
|
|
|
0.15
|
|
|
|
|
-
|
|
Add: Net realized (gains) losses, net of tax(1)
|
|
|
|
10
|
|
|
|
|
(7
|
)
|
|
|
|
0.06
|
|
|
|
|
(0.04
|
)
|
Operating earnings
|
|
|
$
|
378
|
|
|
|
$
|
412
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
172.6
|
|
|
|
|
186.3
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
174.4
|
|
|
|
|
189.1
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated using the statutory tax rate of 35%.
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Total Net Revenues
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
Total net revenues
|
|
|
$
|
2,765
|
|
|
|
$
|
3,053
|
|
Less: CIEs revenue
|
|
|
|
24
|
|
|
|
|
149
|
|
Less: Net realized gains (losses)
|
|
|
|
(16
|
)
|
|
|
|
10
|
|
Less: Market impact on indexed universal life benefits
|
|
|
|
9
|
|
|
|
|
(4
|
)
|
Less: Market impact of hedges on investments
|
|
|
|
(40
|
)
|
|
|
|
-
|
|
Operating total net revenues
|
|
|
$
|
2,788
|
|
|
|
$
|
2,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Total Expenses
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
Total expenses
|
|
|
$
|
2,290
|
|
|
|
$
|
2,435
|
Less: CIEs expenses
|
|
|
|
26
|
|
|
|
|
63
|
Less: Market impact on variable annuity guaranteed benefits
|
|
|
|
(17
|
)
|
|
|
|
34
|
Less: Market impact on indexed universal life benefits
|
|
|
|
(10
|
)
|
|
|
|
2
|
Operating expenses
|
|
|
$
|
2,291
|
|
|
|
$
|
2,336
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Pretax Operating Earnings
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
Operating total net revenues
|
|
|
$
|
2,788
|
|
|
$
|
2,898
|
Operating expenses
|
|
|
|
2,291
|
|
|
|
2,336
|
Pretax operating earnings
|
|
|
$
|
497
|
|
|
$
|
562
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: General and Administrative Expense
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
General and administrative expense
|
|
|
$
|
727
|
|
|
$
|
752
|
Less: CIEs expenses
|
|
|
|
-
|
|
|
|
10
|
Operating general and administrative expense
|
|
|
$
|
727
|
|
|
$
|
742
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Effective Tax Rate
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2016
|
(in millions, unaudited)
|
|
|
GAAP
|
|
|
Operating
|
Pretax income
|
|
|
$
|
475
|
|
|
|
$
|
497
|
|
Income tax provision
|
|
|
$
|
111
|
|
|
|
$
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
23.3
|
%
|
|
|
|
23.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Effective Tax Rate
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2015
|
(in millions, unaudited)
|
|
|
GAAP
|
|
|
Operating
|
Pretax income
|
|
|
$
|
618
|
|
|
|
$
|
562
|
|
Less: Pretax income attributable to noncontrolling interests
|
|
|
|
86
|
|
|
|
|
-
|
|
Pretax income excluding consolidated investment entities
|
|
|
$
|
532
|
|
|
|
$
|
562
|
|
Income tax provision
|
|
|
$
|
139
|
|
|
|
$
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
22.5
|
%
|
|
|
|
26.7
|
%
|
Effective tax rate excluding noncontrolling interests
|
|
|
|
26.1
|
%
|
|
|
|
26.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Asset Management Adjusted Net Pretax
Operating Margin
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
Operating total net revenues
|
|
|
$
|
724
|
|
|
|
$
|
807
|
|
Less: Distribution pass through revenues
|
|
|
|
199
|
|
|
|
|
218
|
|
Less: Subadvisory and other pass through revenues
|
|
|
|
87
|
|
|
|
|
103
|
|
Adjusted operating revenues
|
|
|
$
|
438
|
|
|
|
$
|
486
|
|
|
|
|
|
|
|
|
Pretax operating earnings
|
|
|
$
|
149
|
|
|
|
$
|
191
|
|
Less: Operating net investment income
|
|
|
|
3
|
|
|
|
|
6
|
|
Add: Amortization of intangibles
|
|
|
|
6
|
|
|
|
|
8
|
|
Adjusted operating earnings
|
|
|
$
|
152
|
|
|
|
$
|
193
|
|
|
|
|
|
|
|
|
Adjusted net pretax operating margin
|
|
|
|
34.7
|
%
|
|
|
|
39.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameriprise Financial, Inc.
|
Reconciliation Table: Return on Equity (ROE) Excluding Accumulated
|
Other Comprehensive Income "AOCI"
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
(in millions, unaudited)
|
|
|
2016
|
|
|
2015
|
Net income attributable to Ameriprise Financial
|
|
|
$
|
1,533
|
|
|
|
$
|
1,612
|
|
Less: Loss from discontinued operations, net of tax
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
Net income from continuing operations attributable to Ameriprise
Financial, as reported
|
|
|
|
1,533
|
|
|
|
|
1,613
|
|
Less: Adjustments (1)
|
|
|
|
(149
|
)
|
|
|
|
(54
|
)
|
Operating earnings
|
|
|
$
|
1,682
|
|
|
|
$
|
1,667
|
|
|
|
|
|
|
|
|
Total Ameriprise Financial, Inc. shareholders' equity
|
|
|
$
|
7,602
|
|
|
|
$
|
8,270
|
|
Less: Accumulated other comprehensive income, net of tax
|
|
|
|
472
|
|
|
|
|
755
|
|
Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI
|
|
|
|
7,130
|
|
|
|
|
7,515
|
|
Less: Equity impacts attributable to the consolidated investment
entities
|
|
|
|
170
|
|
|
|
|
300
|
|
Operating equity
|
|
|
$
|
6,960
|
|
|
|
$
|
7,215
|
|
|
|
|
|
|
|
|
Return on equity excluding AOCI
|
|
|
|
21.5
|
%
|
|
|
|
21.5
|
%
|
Operating return on equity excluding AOCI (2)
|
|
|
|
24.2
|
%
|
|
|
|
23.1
|
%
|
|
(1) Adjustments reflect the trailing twelve months' sum of
after-tax net realized investment gains/losses, net of deferred
sales inducement costs ("DSIC") and deferred acquisition costs
("DAC") amortization, unearned revenue amortization and the
reinsurance accrual; market impact on variable annuity guaranteed
benefits, net of hedges and related DSIC and DAC amortization; the
market impact on indexed universal life benefits, net of hedges
and related DAC amortization, unearned revenue amortization, and
the reinsurance accrual; the market impact of hedges to offset
interest rate changes on unrealized gains or losses for certain
investments; integration/restructuring charges; and the impact of
consolidating certain investment entities. After-tax is calculated
using the statutory tax rate of 35%.
|
|
(2) Operating return on equity excluding accumulated other
comprehensive income (AOCI) is calculated using the trailing
twelve months of earnings excluding the after-tax net realized
investment gains/losses, net of deferred sales inducement costs
("DSIC") and deferred acquisition costs ("DAC") amortization,
unearned revenue amortization and the reinsurance accrual; market
impact on variable annuity guaranteed benefits, net of hedges and
related DSIC and DAC amortization; the market impact on indexed
universal life benefits, net of hedges and related DAC
amortization, unearned revenue amortization, and the reinsurance
accrual; the market impact of hedges to offset interest rate
changes on unrealized gains or losses for certain investments;
integration/restructuring charges; the impact of consolidating
certain investment entities; 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 March 31,
|
|
|
% Better/ (Worse)
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Management and financial advice fees
|
|
|
$
|
1,386
|
|
|
$
|
1,468
|
|
|
(6
|
)%
|
Distribution fees
|
|
|
|
435
|
|
|
|
466
|
|
|
(7
|
)
|
Net investment income
|
|
|
|
331
|
|
|
|
484
|
|
|
(32
|
)
|
Premiums
|
|
|
|
368
|
|
|
|
353
|
|
|
4
|
|
Other revenues
|
|
|
|
254
|
|
|
|
289
|
|
|
(12
|
)
|
Total revenues
|
|
|
|
2,774
|
|
|
|
3,060
|
|
|
(9
|
)
|
Banking and deposit interest expense
|
|
|
|
9
|
|
|
|
7
|
|
|
(29
|
)
|
Total net revenues
|
|
|
|
2,765
|
|
|
|
3,053
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Distribution expenses
|
|
|
|
770
|
|
|
|
819
|
|
|
6
|
|
Interest credited to fixed accounts
|
|
|
|
146
|
|
|
|
172
|
|
|
15
|
|
Benefits, claims, losses and settlement expenses
|
|
|
|
482
|
|
|
|
533
|
|
|
10
|
|
Amortization of deferred acquisition costs
|
|
|
|
110
|
|
|
|
75
|
|
|
(47
|
)
|
Interest and debt expense
|
|
|
|
55
|
|
|
|
84
|
|
|
35
|
|
General and administrative expense
|
|
|
|
727
|
|
|
|
752
|
|
|
3
|
|
Total expenses
|
|
|
|
2,290
|
|
|
|
2,435
|
|
|
6
|
|
Pretax income
|
|
|
|
475
|
|
|
|
618
|
|
|
(23
|
)
|
Income tax provision
|
|
|
|
111
|
|
|
|
139
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
364
|
|
|
|
479
|
|
|
(24
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
|
|
-
|
|
|
|
86
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ameriprise Financial
|
|
|
$
|
364
|
|
|
$
|
393
|
|
|
(7
|
)
|
|
NM Not Meaningful - variance of greater than 100%
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160427006692/en/
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