Second quarter 2015 net income(1) per diluted
share was $2.23, operating EPS up 12 percent to $2.33 and included
an unfavorable $0.05 impact of previously disclosed items
Second quarter 2015 return on equity excluding
AOCI was 22.1 percentOperating ROE excluding AOCI increased 180 bps
to a record high 23.5 percent
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.
Ameriprise Financial, Inc.Second
Quarter Summary
(in millions, except per share amounts, unaudited)
Quarter EndedJune 30,
Per Diluted ShareQuarter
EndedJune 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 %
Adjustments, net of tax (1)
(see reconciliation on p.11) 19 34 0.10
0.17 Operating earnings (2) $ 434 $ 408 6 % $ 2.33 $ 2.08 12 %
Weighted average common shares outstanding: Basic 183.8
192.7 Diluted 186.4 196.2
(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; 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.
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
Ameriprise Financial, Inc.Advice
& Wealth Management Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% 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 %
Pretax operating margin 17.3 % 16.2 %
Quarter
Ended June 30,
% Better/(Worse)
2015 2014 Retail client assets (billions) $ 453 $ 435
4 % Mutual fund wrap net flows (billions) $ 3.3 $ 3.0 9 % Operating
net revenue per branded advisor (trailing 12 months - thousands) $
512 $ 468 9 %
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.
Ameriprise Financial, Inc.Asset
Management Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% Better/(Worse)
2015 2014 Asset Management Net revenues
$ 832 $ 844 (1 )% Expenses 635 645 2 % Pretax
operating earnings $ 197 $ 199 (1 )% Adjusted net pretax
operating margin 39.1 % 38.7 % 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.
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 EndedJune 30,
Per Diluted ShareQuarter
EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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 EndedJune 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
AccumulatedOther Comprehensive Income “AOCI”
Twelve Months EndedJune
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/
Ameriprise FinancialInvestor Relations:Alicia A. Charity,
612-671-2080orChad J. Sanner,
612-671-4676chad.j.sanner@ampf.comorMedia Relations:Paul W.
Johnson, 612-671-0625
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