Fourth quarter 2014 net income(1) per diluted
share was $2.23, operating EPS up 23 percent to $2.30
Full Year 2014 net income(1) per diluted share
was $8.31, operating EPS up 21 percent to $8.52
Fourth quarter 2014 return on equity excluding
AOCI was 21.5 percentOperating ROE excluding AOCI increased 330 bps
to a record high 23.0 percent
Ameriprise Financial, Inc. (NYSE: AMP) today reported fourth
quarter 2014 net income(1) of $426 million, or $2.23 per diluted
share. Operating earnings were $440 million, up 16 percent from a
year ago, with operating earnings per diluted share increasing 23
percent to $2.30.
Operating net revenues increased 5 percent to $3.0 billion
driven by strong fee-based business growth from client net inflows
and market appreciation.
Operating expenses increased 5 percent to $2.4 billion
reflecting higher distribution expense and higher benefits to
policyholders in the insurance and annuities businesses. General
and administrative expenses decreased 2 percent compared to a year
ago reflecting the company’s ongoing expense discipline.
On a full-year basis, the company generated strong operating
results and revenue growth. Compared to 2013, operating net
revenues grew 7 percent to $11.6 billion, operating earnings grew
14 percent to $1.7 billion, and operating earnings per diluted
share increased 21 percent to $8.52.
In the quarter, the company returned $444 million to
shareholders through share repurchases and dividends. For the full
year, the company returned $1.8 billion to shareholders.
“Ameriprise delivered another good quarter to complete a strong
year, led by our Advice and Wealth Management business,” said Jim
Cracchiolo, chairman and chief executive officer. “We’re
bringing in significant client net inflows, growing our assets
under management and increasing advisor productivity.”
“Our operating return on equity for the year increased to 23.0
percent – another record high. With our excellent financial
foundation and ability to generate significant free cash flow,
Ameriprise continues to return a differentiated level of capital to
shareholders. 2014 marked the fourth consecutive year when we’ve
returned more than 100 percent of our operating earnings to
shareholders.”
(1) Net income represents net income from continuing operations
attributable to Ameriprise Financial.
Ameriprise Financial, Inc. Fourth Quarter and Full
Year Summary
(in millions, except per share amounts, unaudited)
Quarter EndedDecember
31,
Year EndedDecember 31,
2014 2013
% Better/(Worse)
2014 2013
% Better/(Worse)
Net income from continuing operations
attributable to Ameriprise Financial
$ 426 $ 298 43 % $ 1,621 $ 1,337 21 %
Adjustments, net of tax (1)
(see reconciliation on p. 11) 14 80 41
123
Operating earnings (2)
$ 440 $ 378 16 % $ 1,662 $ 1,460 14 % Earnings Per Diluted
Share Income from continuing operations $ 2.23 $ 1.47 52 % $ 8.31 $
6.46 29 %
Adjustments, net of tax (1)
(see reconciliation on p. 11) 0.07 0.40 0.21
0.59
Operating earnings (2)
$ 2.30 $ 1.87 23 % $ 8.52 $ 7.05 21 % Weighted average
common shares outstanding: Basic 187.9 198.3 191.6 203.2 Diluted
191.2 202.3 195.0 207.1
(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 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.
Results in the quarter were strong and included a favorable $8
million pretax market impact on DAC and DSIC compared to a $17
million pretax benefit a year ago. Results also included a benefit
from lower taxes that was largely offset by an increase in Auto and
Home reserves and an actuarial model correction, both in the
Protection segment. The net effect of these items was an
unfavorable impact of $6 million after-tax, or $0.03 per diluted
share.
In addition, the results in the year ago quarter included a
favorable $26 million pretax impact from variable annuity product
changes.
Taxes
The fourth quarter 2014 operating effective tax rate was 20.3
percent compared to 27.2 percent a year ago. The 2014 full year
operating effective tax rate was 25.4 percent. The lower tax rate
reflects the impact of an increase in the dividends received
deduction and lower state income taxes. These changes reduced taxes
by approximately $32 million. The company estimates that its full
year 2015 operating effective tax rate will be in the 26 to 28
percent range.
Fourth Quarter 2014 Business Highlights
- Total assets under management and
administration grew 5 percent from a year ago to $806 billion
driven by Ameriprise advisor client net inflows and market
appreciation.
- Advice & Wealth Management
experienced continued strong growth in client assets and flows with
advisor client assets up 9 percent to $444 billion and wrap assets
increasing 14 percent to $175 billion. Wrap net inflows in the
quarter remained strong at $3.1 billion.
- Advisor productivity continues to
improve. On a trailing 12-month basis, operating net revenue per
advisor grew 13 percent to $496,000.
- Experienced advisor recruiting was
strong in the quarter, with 73 experienced advisors moving their
practices to Ameriprise.
- Asset Management segment AUM increased
1 percent to $506 billion driven by market appreciation, partially
offset by the cumulative effect of net outflows in prior quarters
and an unfavorable impact from foreign exchange. For the quarter,
net inflows were $5.7 billion driven by reinvested dividends.
- The company has 118 four- and five-star
rated funds, with 51 funds managed by Columbia Management and 67
managed by Threadneedle.
- Chief Investment Officer magazine
recognized Columbia Management with an industry innovation award
for the Columbia Adaptive Risk Allocation Fund, which was developed
by Jeffrey Knight, Global Head of Investment Solutions and Asset
Allocation, and his team.
- In January 2015, Columbia Management
and Threadneedle Investments announced that the two firms will
rebrand to Columbia Threadneedle InvestmentsSM in the first half of
2015. The new global brand will represent the combined
capabilities, resources and reach of Columbia and Threadneedle,
offering clients access to the best of both firms and positioning
the asset management group for a greater share of global
growth.
- Combined, Advice & Wealth
Management and Asset Management generated 68 percent of company
pretax operating earnings(1), up from 59 percent a year ago.
- Variable annuity policyholder account
balances grew 2 percent to $77 billion and included $1.2 billion in
new sales – 28 percent of sales in the quarter did not include
living benefits.
- RiverSource Annuities launched Income
GuideSM , a new income monitoring program for clients with a
variable annuity without a living benefit.
- Variable Universal Life / Universal
Life insurance account balances increased 3 percent to $11
billion.
- Excess capital was approximately $2.5
billion after repurchasing 2.7 million shares of common stock in
the quarter for $335 million and paying $109 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
Ameriprise Financial, Inc. Advice & Wealth
Management Segment Operating Results (in millions,
unaudited)
Quarter EndedDecember
31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013
Advice & Wealth Management Net revenues $ 1,249 $ 1,127
11 % $ 4,806 $ 4,295 12 % Expenses 1,037 967 (7 )
4,014 3,703 (8 ) Pretax operating earnings $ 212 $
160 33 $ 792 $ 592 34 Pretax operating margin 17.0 % 14.2 %
16.5 % 13.8 %
Quarter Ended December 31,
% Better/(Worse)
2014 2013 Retail client assets (billions) $
444 $ 409 9 % Mutual fund wrap net flows (billions) $ 3.1 $ 2.8 10
% Operating net revenue per branded advisor (trailing 12 months -
thousands) $ 496 $ 440 13 %
Advice & Wealth Management pretax operating earnings
increased 33 percent to $212 million reflecting strong revenue
growth and expense controls. Fourth quarter 2014 pretax operating
margin reached a record high of 17.0 percent compared to 14.2
percent a year ago.
Operating net revenues grew 11 percent to $1.2 billion driven by
asset growth in fee-based accounts from client inflows and market
appreciation.
Operating expenses increased 7 percent to $1 billion as business
growth resulted in higher distribution expenses. General and
administrative expenses were flat compared to a year ago as
investments in the business were offset by ongoing expense
discipline.
Total retail client assets grew 9 percent to $444 billion driven
by client net inflows, new client acquisition and market
appreciation. Wrap net inflows remained strong at $3.1 billion with
wrap balances increasing 14 percent to $175 billion. The
combination of asset growth and client activity drove a 13 percent
increase in operating net revenue per advisor on a trailing
12-month basis.
Ameriprise Financial, Inc. Asset Management
Segment Operating Results (in millions, unaudited)
Quarter EndedDecember
31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013
Asset Management Net revenues $ 830 $ 824 1 % $ 3,320 $
3,169 5 % Expenses 632 637 1 2,532
2,478 (2 ) Pretax operating earnings $ 198 $ 187 6 $ 788 $ 691 14
Adjusted net pretax operating margin 40.0 % 38.8 % 39.8 %
36.5 %
Quarter Ended December 31,
% Better/(Worse)
2014 2013 Total segment AUM(1) (billions) $
506 $ 501 1 % Columbia Management AUM $ 361 $ 357 1 % Threadneedle
AUM $ 148 $ 147 — Total segment net flows (billions) $ 5.7 $
5.5 3 % Retail net flows $ 4.9 $ 4.5 10 % Institutional net flows $
0.3 $ 0.8 (68 )% Alternative net flows $ 0.5 $ 0.2 NM
(1) Subadvisory eliminations between
Columbia Management and Threadneedle are included in the company’s
Fourth Quarter 2014 Statistical Supplement available at
ir.ameriprise.com
NM Not Meaningful — variance of greater than 100%
Asset Management pretax operating earnings increased 6
percent to $198 million driven by market appreciation and continued
expense management, partially offset by the cumulative impact of
net outflows.
Fourth quarter adjusted net pretax operating margin remained
strong at 40.0 percent compared to 38.8 percent a year ago.
Operating net revenues grew 1 percent to $830 million primarily
driven by asset growth from market appreciation, partially offset
by the cumulative impact of net outflows.
Operating expenses decreased 1 percent to $632 million
reflecting lower general and administrative expenses and flat
distribution expenses.
AUM grew 1 percent to $506 billion as market appreciation more
than offset the cumulative impact of net outflows and the impact
from foreign exchange. For the quarter, net inflows were $5.7
billion reflecting robust inflows from third party institutional
mandates, the launch of a CLO, and strong reinvested dividends.
Third party institutional inflows of $1.7 billion were primarily
offset by former parent company related outflows at both Columbia
and Threadneedle. Retail flows continued to be pressured from
outflows in a large fund, former parent company affiliated
distribution, and certain subadvised funds.
Ameriprise Financial, Inc. Annuities Segment
Operating Results (in millions, unaudited)
Quarter EndedDecember
31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013
Annuities Net revenues $ 649 $ 653 (1 )% $ 2,591 $ 2,561 1 %
Expenses 490 481 (2 ) 1,958 1,932 (1 )
Pretax operating earnings $ 159 $ 172 (8 ) $ 633 $ 629 1
Variable annuity pretax operating earnings $ 123 $ 151 (19 )% $ 489
$ 514 (5 )% Fixed annuity pretax operating earnings 36
21 71 144 115 25 Total pretax operating
earnings $ 159 $ 172 (8 ) $ 633 $ 629 1
Quarter Ended
December 31,
% Better/(Worse)
2014 2013 Items included in operating
earnings: Market impact on DAC and DSIC (mean reversion) $ 7 $ 16
(56 )% Impact of variable annuity product changes 2
26 (92 )% Total annuities impact $ 9 $ 42 (79 )% Variable
annuity ending account balances (billions) $ 77.0 $ 75.5 2 %
Variable annuity net flows (millions) $ (406 ) $ (275 ) (48 )%
Fixed annuity ending account balances (billions) $ 12.1 $ 13.3 (8
)% Fixed annuity net flows (millions) $ (315 ) $ (292 ) (8 )%
Annuities pretax operating earnings were $159 million
compared to $172 million a year ago, as the year ago period
included $33 million of higher benefits from the market impact on
DAC and DSIC and a variable annuity product change.
Variable annuity operating earnings were $123 million in the
quarter reflecting $33 million of lower benefits from a product
change in the year ago period and the market impact on DAC and
DSIC, as well as the negative impact of interest rates. Without
these items, variable annuity earnings increased 8 percent from
growth in account balances. Account balances grew 2 percent to $77
billion driven by market appreciation, partially offset by net
outflows. Variable annuity cash sales were $1.2 billion for the
quarter and were $4.9 billion for the year.
Fixed annuity operating earnings increased to $36 million
primarily driven by higher spreads due to lower crediting rates,
partially offset by the cumulative decline in account balances.
Fixed annuity account balances decreased 8 percent given limited
new sales from low rates and lapse rates consistent with the
company’s expectations.
Ameriprise Financial, Inc. Protection Segment
Operating Results (in millions, unaudited)
Quarter EndedDecember
31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013
Protection Net revenues $ 600 $ 564 6 % $ 2,287 $ 2,186 5 %
Expenses 570 490 (16 ) 2,041 1,850 (10
) Pretax operating earnings $ 30 $ 74 (59 ) $ 246 $ 336 (27 )
Quarter Ended December 31,
% Better/(Worse)
2014 2013 Items included in operating
earnings: Market impact on DAC (mean reversion) $ 1 $ 1 — Actuarial
model correction (7 ) — NM Auto & Home reserves (60 )
(20 ) NM Total protection impact $ (66 ) $ (19 ) NM
Life insurance in force (billions) $ 196 $ 194 1 % VUL/UL ending
account balances (billions) $ 11.3 $ 10.9 3 % Auto & Home
policies in force (thousands) 929 838 11 % NM Not Meaningful
— variance of greater than 100%
Protection pretax operating earnings were $30 million
compared to $74 million a year ago. Included in the current
quarter’s results were a $60 million Auto and Home reserve increase
and a $7 million actuarial model correction in Life and Health.
Without these items, operating earnings would have been $97 million
in the quarter.
Life and Health earnings, without the actuarial model
correction, were solid and reflect normal quarterly claims
fluctuations. VUL/UL account balances grew 3 percent primarily from
market appreciation. VUL/UL cash sales were $85 million, up 2
percent.
Reserves in Auto and Home increased primarily related to higher
claims frequency and severity levels in the auto product line.
Improvements in underwriting, operational and claims processes, and
pricing actions were taken in 2014 and will continue in 2015. The
benefits of these actions are anticipated to be realized over the
next several years. Auto and Home policy growth remains strong with
home policies in force up 16 percent and auto policies up 7
percent.
Ameriprise Financial, Inc. Corporate & Other
Segment Operating Results (in millions, unaudited)
Quarter EndedDecember
31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013
Corporate & Other Net revenues $ 1 $ 7 (86 )% $ 4 $ 15
(73 )% Expenses 48 81 41 234 244 4
Pretax operating loss $ (47 ) $ (74 ) 36 $ (230 ) $ (229 ) —
Quarter Ended December 31,
% Better/(Worse)
2014
2013 Items included in operating earnings: Debt
retirement expense
$
— $ (19 )
NM
NM Not Meaningful — variance of greater than 100%
Corporate & Other pretax operating loss was $47
million for the quarter compared to a $74 million loss a year
ago. The year ago quarter included a $19 million make whole
expense associated with the retirement of debt.
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 2015 operating effective tax rate
to be in the 26 to 28 percent range;
- the statements in this news release
concerning the anticipated timing and effect of rebranding at
Columbia and Threadneedle;
- 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 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 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, 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 Annual
Report on Form 10-K for the year ended December 31, 2014. For
information about Ameriprise Financial entities, please refer to
the Fourth 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
December 31,
Per Diluted Share
Quarter Ended
December 31,
(in millions, except per share amounts, unaudited)
2014
2013 2014 2013 Net income
attributable to Ameriprise Financial $ 425 $ 296 $ 2.22 $ 1.46
Less: Loss from discontinued operations, net of tax (1 )
(2 ) (0.01 ) (0.01 )
Net income from continuing
operations attributable to Ameriprise Financial
426 298 2.23 1.47
Add: Market impact on variable
annuity guaranteed benefits, net of tax(1)
21 68 0.11 0.34 Add: Market impact on indexed universal life
benefits, net of tax(1) 10 5 0.05 0.03
Add: Integration/restructuring charges,
net of tax(1)
— 7 — 0.03 Add: Net realized (gains) losses, net of tax(1)
(17 ) — (0.09 ) — Operating earnings $ 440 $
378 $ 2.30 $ 1.87 Weighted average common shares outstanding: Basic
187.9 198.3 Diluted 191.2 202.3
(1) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial, Inc. Reconciliation
Table: Earnings Year Ended
December 31,
Per Diluted Share
Year Ended
December 31,
(in millions, except per share amounts, unaudited)
2014
2013 2014 2013 Net income attributable to
Ameriprise Financial $ 1,619 $ 1,334 $ 8.30 $ 6.44 Less: Loss from
discontinued operations, net of tax (2 ) (3 )
(0.01 ) (0.02 )
Net income from continuing
operations attributable to Ameriprise Financial
1,621 1,337 8.31 6.46
Add: Market impact on variable
annuity guaranteed benefits, net of tax(1)
61 111 0.31 0.53 Add: Market impact on indexed universal life
benefits, net of tax(1) 4 8 0.02 0.04 Add:
Integration/restructuring charges, net of tax(1) — 9 — 0.04 Add:
Net realized (gains) losses, net of tax(1) (24 ) (5 )
(0.12 ) (0.02 ) Operating earnings $ 1,662 $ 1,460 $
8.52 $ 7.05 Weighted average common shares outstanding: Basic 191.6
203.2 Diluted 195.0 207.1
(1) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial, Inc. Reconciliation
Table: Total Net Revenues
Quarter EndedDecember
31,
Year EndedDecember 31,
(in millions, unaudited)
2014 2013 2014
2013 Total net revenues $ 3,089 $ 2,946 $ 12,268 $
11,199 Less: CIEs revenue 108 137 651 345 Less: Net realized gains
(losses) 27 — 37 7 Less: Market impact on indexed universal life
benefits (11 ) (7 ) (11 ) (10 )
Operating total net revenues $ 2,965 $ 2,816 $ 11,591 $ 10,857
Ameriprise Financial, Inc. Reconciliation
Table: Total Expenses
Quarter EndedDecember
31,
Year EndedDecember 31,
(in millions, unaudited)
2014 2013 2014
2013 Total expenses $ 2,531 $ 2,467 $ 9,721 $ 9,229 Less:
CIEs expenses 80 53 270 204 Less: Market impact on variable annuity
guaranteed benefits 34 104 94 170 Less: Market impact on indexed
universal life benefits 4 2 (5 ) 3 Less: Integration/restructuring
charges — 11 — 14 Operating expenses $
2,413 $ 2,297 $ 9,362 $ 8,838
Ameriprise
Financial, Inc. Reconciliation Table: Pretax Operating
Earnings
Quarter EndedDecember
31,
Year EndedDecember 31,
(in millions, unaudited)
2014 2013 2014
2013 Operating total net revenues $ 2,965 $ 2,816 $ 11,591 $
10,857 Operating expenses 2,413 2,297 9,362
8,838 Pretax operating earnings $ 552 $ 519 $ 2,229 $ 2,019
Ameriprise Financial, Inc. Reconciliation
Table: General and Administrative Expense
Quarter Ended December 31, (in millions, unaudited)
2014 2013 General and administrative expense $
775 $ 793 Less: CIEs expenses 20 15 Less: Integration/restructuring
charges — 11 Operating general and administrative
expense $ 755 $ 767
Ameriprise Financial, Inc.
Reconciliation Table: Variable Annuity Pretax Operating
Earnings Quarter Ended December 31, (in millions,
unaudited)
2014 2013 Pretax operating earnings $ 123
$ 151 Less: Market impact on DAC and DSIC (mean reversion) 7 16
Less: Impact of variable annuity product changes 2 26 Less: Impact
of interest rates (4 ) — Pretax operating earnings
excluding impact of mean reversion, variable annuity product
changes, and interest rates $ 118 $ 109
Ameriprise
Financial, Inc. Reconciliation Table: Effective Tax Rate
Quarter Ended December 31, 2014 (in millions,
unaudited)
GAAP Operating Income from
continuing operations before income tax provision $ 558 $ 552 Less:
Pretax income attributable to noncontrolling interests 28
— Income from continuing operations before income tax
provision excluding consolidated investment entities $ 530 $ 552
Income tax provision from continuing operations $ 104 $ 112
Effective tax rate 18.7 % 20.3 % Effective tax rate excluding
noncontrolling interests 19.7 % 20.3 %
Ameriprise
Financial, Inc. Reconciliation Table: Effective Tax Rate
Quarter Ended December 31, 2013 (in millions,
unaudited)
GAAP Operating Income from continuing
operations before income tax provision $ 479 $ 519 Less: Pretax
income attributable to noncontrolling interests 84 —
Income from continuing operations before income tax provision
excluding consolidated investment entities $ 395 $ 519 Income tax
provision from continuing operations $ 97 $ 141 Effective
tax rate 20.5 % 27.2 % Effective tax rate excluding noncontrolling
interests 24.8 % 27.2 %
Ameriprise Financial,
Inc. Reconciliation Table: Effective Tax Rate
Year Ended December 31, 2014 (in millions, unaudited)
GAAP Operating Income from continuing operations
before income tax provision $ 2,547 $ 2,229 Less: Pretax income
attributable to noncontrolling interests 381 — Income
from continuing operations before income tax provision excluding
consolidated investment entities $ 2,166 $ 2,229 Income tax
provision from continuing operations $ 545 $ 567 Effective
tax rate 21.4 % 25.4 % Effective tax rate excluding noncontrolling
interests 25.2 % 25.4 %
Ameriprise Financial,
Inc. Reconciliation Table: Asset Management Adjusted Net
Pretax Operating Margin Quarter Ended December
31,
(in millions, unaudited)
2014 2013 Operating total net revenues $ 830 $
824 Less: Distribution pass through revenues 231 229 Less:
Subadvisory and other pass through revenues 99 100
Adjusted operating revenues $ 500 $ 495 Pretax operating
earnings $ 198 $ 187 Less: Operating net investment income 6 4 Add:
Amortization of intangibles 8 9 Adjusted operating
earnings $ 200 $ 192 Adjusted net pretax operating margin
40.0 % 38.8 %
Ameriprise Financial, Inc.
Reconciliation Table: Asset Management Adjusted Net Pretax
Operating Margin
Year Ended December 31,
(in millions, unaudited)
2014 2013 Operating total
net revenues $ 3,320 $ 3,169 Less: Distribution pass through
revenues 929 892 Less: Subadvisory and other pass through revenues
400 430 Adjusted operating revenues $ 1,991 $ 1,847
Pretax operating earnings $ 788 $ 691 Less: Operating net
investment income 30 54 Add: Amortization of intangibles 34
38 Adjusted operating earnings $ 792 $ 675 Adjusted
net pretax operating margin 39.8 % 36.5 %
Ameriprise Financial, Inc. Reconciliation Table: Return
on Equity (ROE) Excluding Accumulated Other Comprehensive
Income “AOCI”
Twelve Months EndedDecember
31,
(in millions, unaudited)
2014 2013 Net income attributable to
Ameriprise Financial $ 1,619 $ 1,334 Less: Loss from discontinued
operations, net of tax (2 ) (3 ) Net income from
continuing operations attributable toAmeriprise Financial, as
reported 1,621 1,337
Less: Adjustments (1)
(41 ) (123 ) Operating earnings $ 1,662 $ 1,460
Total Ameriprise Financial, Inc. shareholders’ equity $
8,270 $ 8,582 Less: Accumulated other comprehensive income, net of
tax 734 821 Total Ameriprise Financial, Inc.
shareholders’ equity excluding AOCI 7,536 7,761 Less: Equity
impacts attributable to the consolidated investment entities
311 333 Operating equity $ 7,225 $ 7,428 Return on
equity excluding AOCI 21.5 % 17.2 %
Operating return on equity excluding AOCI
(2)
23.0 % 19.7 %
(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 December 31,
% Better/(Worse)
2014 2013 Revenues Management and
financial advice fees $ 1,489 $ 1,397 7 % Distribution fees 484 448
8 Net investment income 409 458 (11 ) Premiums 359 333 8 Other
revenues 355 317 12 Total revenues 3,096 2,953 5
Banking and deposit interest expense 7 7 —
Total
net revenues 3,089 2,946 5
Expenses Distribution
expenses 827 764 (8 ) Interest credited to fixed accounts 184 206
11 Benefits, claims, losses and settlement expenses 568 563 (1 )
Amortization of deferred acquisition costs 86 54 (59 ) Interest and
debt expense 91 87 (5 ) General and administrative expense
775 793 2
Total expenses 2,531 2,467 (3 ) Income from
continuing operations before income tax provision 558 479 16 Income
tax provision 104 97 (7 ) Income from continuing
operations 454 382 19 Loss from discontinued operations, net of tax
(1 ) (2 ) 50
Net income 453 380 19
Less: Net income attributable to noncontrolling interests 28
84 (67 )
Net income attributable to Ameriprise
Financial $ 425 $ 296 44
Ameriprise Financial,
Inc. Consolidated GAAP Results (in millions,
unaudited)
Year Ended December 31,
% Better/(Worse)
2014 2013 Revenues Management and
financial advice fees $ 5,810 $ 5,253 11 % Distribution fees 1,894
1,771 7 Net investment income 1,741 1,889 (8 ) Premiums 1,385 1,282
8 Other revenues 1,466 1,035 42 Total revenues 12,296
11,230 9 Banking and deposit interest expense 28 31
10
Total net revenues 12,268 11,199 10
Expenses Distribution expenses 3,236 2,925 (11 ) Interest
credited to fixed accounts 713 806 12 Benefits, claims, losses and
settlement expenses 1,982 1,954 (1 ) Amortization of deferred
acquisition costs 367 207 (77 ) Interest and debt expense 328 281
(17 ) General and administrative expense 3,095 3,056
(1 )
Total expenses 9,721 9,229 (5 ) Income from continuing
operations before income tax provision 2,547 1,970 29 Income tax
provision 545 492 (11 ) Income from continuing
operations 2,002 1,478 35 Loss from discontinued operations, net of
tax (2 ) (3 ) 33
Net income 2,000 1,475
36 Less: Net income attributable to noncontrolling interests
381 141 NM
Net income attributable to Ameriprise
Financial $ 1,619 $ 1,334 21 NM Not Meaningful —
variance of greater than 100%
Ameriprise FinancialInvestor Relations:Alicia A. Charity,
612-671-2080alicia.a.charity@ampf.comorChad J. Sanner,
612-671-4676chad.j.sanner@ampf.comorMedia Relations:Paul W.
Johnson, 612-671-0625paul.w.johnson@ampf.com
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