Second quarter 2016 net income(1) per diluted
share was $1.97Operating EPS was $2.23
Second quarter 2016 return on equity excluding
AOCI was 21.0 percentOperating ROE excluding AOCI increased 40 bps
to 23.9 percent
Ameriprise Financial, Inc. (NYSE: AMP) today reported second
quarter 2016 net income(1) of $335 million, or $1.97 per diluted
share. Operating earnings were $379 million, with operating
earnings per diluted share of $2.23. Results included $0.17 per
share of unfavorable items outlined on page 3 of this release.
GAAP ResultsNet revenues of $2.9
billion were down 8 percent, reflecting lower average equity
markets compared to the year ago and asset management outflows,
resulting in lower fee revenue. Net revenues for the current period
included revenue of consolidated investment entities of $26 million
compared to $141 million for the prior period primarily reflecting
the deconsolidation of certain collateralized loan obligations and
all property funds in the first quarter.
Expenses of $2.5 billion were down 2 percent as a result of
lower distribution expenses and well controlled general and
administrative expenses. Expenses also declined as a result of the
deconsolidation of certain consolidated investment entities.
Operating ResultsOperating net
revenues of $2.9 billion were down 4 percent, reflecting lower
average equity and other markets compared to the year ago, as well
as asset management outflows, resulting in lower fee revenue.
Operating expenses of $2.4 billion were down 1 percent as a
result of lower distribution expenses and well controlled general
and administrative expenses. General and administrative expenses
decreased 1 percent associated with the company’s ongoing
reengineering and expense discipline that more than offset
unfavorable items in the quarter.
In the quarter, the company continued to deliver a strong return
to shareholders through share repurchases and dividends of $571
million. The company repurchased 4.7 million shares in the quarter,
up from 3.4 million shares in the year ago period.
“Ameriprise delivered solid underlying results in the second
quarter given increased volatility, lower average equity markets
and persistently low interest rates,” said Jim Cracchiolo, chairman
and chief executive officer. “We are focused on serving our
clients and advisors and providing the personal advice and
perspective investors need.”
(1) Net income represents net income attributable to Ameriprise
Financial.
“In this environment, clients remain cautious, which is
reflected in slower activity and high cash balances. However,
retail client assets increased to an all-time high and we had
another strong quarter for experienced advisor recruiting during a
time of change for the industry. In Asset Management, we
continue to make progress in the U.S. and are implementing our
initial plans to manage the post-UK referendum period
effectively.
“The strength of our financial foundation and broad capabilities
are differentiators for Ameriprise. We continue to invest for
growth and return capital to shareholders at a meaningful
level. Profitability remains quite strong and we’re delivering
one of the highest returns on equity in the industry.”
Ameriprise Financial, Inc.Second
Quarter Summary
(in millions, except per share amounts, unaudited)
Quarter EndedJune 30,
Per Diluted ShareQuarter
EndedJune 30,
2016 2015
% Better/(Worse)
2016 2015
% Better/(Worse)
Net income from continuing operations attributable to Ameriprise
Financial $ 335 $ 415 (19 )% $ 1.97 $ 2.23 (12 )%
Adjustments, net of tax (1) (see
reconciliation on p.13)
44 19 NM 0.26 0.10 NM Operating
earnings (2) $ 379 $ 434 (13 )% $ 2.23 $ 2.33 (4 )% Weighted
average common shares outstanding: Basic 168.3 183.8 Diluted 170.1
186.4
(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.
NM Not Meaningful — variance equal to or greater than 100%
Second quarter operating earnings included the following
after-tax items:
(in millions, except per share amounts, unaudited)
Quarter EndedJune 30,
Per Diluted ShareQuarter
EndedJune 30,
2016 2015
% Better/(Worse)
2016 2015
% Better/(Worse)
Auto & Home total catastrophe losses $ (24 ) $ (31 ) 23 % $
(0.14 ) $ (0.17 ) 18 % Resolution of legal matter (15 ) — NM (0.09
) — NM Loss on sale of operations center real estate (3 ) — NM
(0.02 ) — NM Tax benefit 17 — NM
0.10 — NM Previously disclosed items (25 ) (31
) 19 % (0.15 ) (0.17 ) 12 % DOL planning and implementation
expenses (5 ) — NM (0.03 ) — NM LTC reserves — 12 NM — 0.06 NM
Market impact on DAC/DSIC 1 (3 ) NM
0.01 (0.02 ) NM Total items (1) $ (29 ) $ (22 ) (32
)% $ (0.17 ) $ (0.13 ) (31 )%
(1) All items except the Tax benefit are
shown after-tax using the statutory tax rate of 35%
NM Not Meaningful — variance equal to or greater than 100%
Second Quarter 2016 Business Highlights
- Total assets under management and
administration were $777 billion as Ameriprise advisor client net
inflows were more than offset by the unfavorable impact of foreign
exchange rates related to the UK referendum and asset management
net outflows.
- Advice & Wealth Management advisor
client assets increased to $462 billion, reflecting continued
strength in fee-based investment advisory net inflows, including
$2.3 billion of net inflows in the quarter.
- On a trailing 12-month basis, operating
net revenue per advisor declined 1 percent to $507,000, reflecting
lower average equity markets, high market volatility and lower
transactional client activity.
- Total advisors were 9,758, reflecting
strong advisor retention and ongoing experienced advisor
recruiting. The company added 98 experienced, productive advisors
in the quarter.
- Ameriprise was well-represented in
Barron’s annual “Top 100 Women Financial Advisors” list, with eight
advisors recognized in the ranking.
- Asset Management segment AUM declined
to $460 billion, primarily driven by the unfavorable impact of
foreign exchange rates and net outflows.
- Investment performance remained strong
with 116 four- and five-star funds at Columbia Threadneedle
Investments.
- Columbia Threadneedle Investments
announced an agreement to acquire Emerging Global Advisors, LLC, a
New York-based registered investment advisor and provider of smart
beta portfolios focused on emerging markets. The acquisition
will expand the firm’s smart beta capabilities and is expected to
close later this year.
- Columbia Threadneedle Investments
launched three equity income smart beta exchange-traded funds
(ETFs), the first in a series from the new Columbia Beta
AdvantageSM family of rules-based, factor-driven, smart beta
ETFs.
- Variable annuity policyholder account
balances were $75 billion with sales of $1.2 billion in the
quarter.
- Excess capital was approximately $2.0
billion. In the quarter, the company repurchased 4.7 million shares
of common stock for $444 million, reflecting its strategy of
adjusting the level of share repurchases based on the valuation of
the stock, up from 3.4 million shares a year ago. The company also
paid $127 million in quarterly dividends.
- On June 17, more than 4,500 Ameriprise
employees, advisors and clients worked together to provide food for
people in need as part of our twice a year National Day of Service
in partnership with Feeding America®. Working at 265 events across
the country, the volunteers packaged, prepared and served meals for
those struggling with hunger.
Ameriprise Financial, Inc.Advice
& Wealth Management Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% Better/(Worse)
2016 2015 Advice & Wealth
Management Net revenues $ 1,250 $ 1,274 (2 )% Expenses
1,029 1,054 2 % Pretax operating earnings $
221 $ 220 — Pretax operating margin 17.7 %
17.3 %
Quarter Ended June 30,
% Better/(Worse)
2016 2015 Retail client assets (billions) $ 462 $ 453
2 % Wrap net flows (billions) $ 2.3 $ 3.3 (30 )% Operating net
revenue per branded advisor (trailing 12 months - thousands) $ 507
$ 512 (1 )%
Advice & Wealth Management pretax operating earnings
were up slightly to $221 million as growth in assets and higher
earnings on cash balances were offset by lower client activity and
lower average equity markets. Second quarter 2016 pretax operating
margin increased to 17.7 percent from 17.3 percent a year ago.
Operating net revenues of $1.3 billion declined 2 percent as
wrap account net inflows and higher earnings on cash balances were
more than offset by lower client activity and a 5 percent decline
in average equity markets1.
Operating expenses declined 2 percent to $1.0 billion as lower
distribution expenses reflected lower transactional activity.
General and administrative expenses were down 1 percent compared to
a year ago. The company will continue to manage expenses while
allocating resources to prepare for the Department of Labor
fiduciary rule and maintaining targeted growth investments.
Total retail client assets increased to $462 billion, driven by
client net inflows and client acquisition. Underlying business
fundamentals and metrics remained strong and are consistent with
the market environment. Wrap net inflows were $2.3 billion in the
quarter, which contributed to a 4 percent increase in wrap balances
to $190 billion. Total advisors were 9,758 reflecting strong
retention and another successful recruiting quarter, with 98
experienced advisors moving their practices to Ameriprise. Lower
client activity resulted in a 1 percent decrease in operating net
revenue per advisor on a trailing 12-month basis to $507,000.
(1) Represents the company’s internally calculated weighted
equity index.
Ameriprise Financial, Inc.Asset
Management Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% Better/(Worse)
2016 2015 Asset Management Net revenues
$ 739 $ 832 (11 )% Expenses 591 635 7 %
Pretax operating earnings $ 148 $ 197 (25 )%
Pretax operating margin 20.0 % 23.7 % Adjusted net pretax operating
margin (1) 33.0 % 39.1 % Item included in operating
earnings: Resolution of legal matter $ (9 ) $ — NM
Quarter Ended June 30,
% Better/(Worse)
2016 2015 Total segment AUM (billions) $ 460 $ 503 (9
)% Total segment net flows (billions)
$
(4.7
)
$ (2.0 ) NM Global Retail net flows, excl. former parent flows $
0.2 $ 0.5 (63 )% Global Institutional net flows, excl. former
parent flows
$
(2.6
)
$ 1.5 NM Former parent company related flows
$
(2.3
)
$ (4.0 ) 43 %
(1) See reconciliation on page 15
NM Not Meaningful — variance equal to or greater than 100%
Asset Management pretax operating earnings were $148
million versus $197 million last year, driven by a 5 percent
decline in average equity markets(2), net outflows and a $9 million
expense from the resolution of a legacy legal matter.
Second quarter pretax operating margin was 20.0 percent compared
to 23.7 percent a year ago. Adjusted net pretax operating margin
was 33.0 percent compared to 39.1 percent a year ago. The legal
matter impacted adjusted net pretax operating margin by 2.0
percent.
Operating net revenues of $739 million were down compared to a
year ago, reflecting the impact of lower asset levels. AUM declined
9 percent to $460 billion from unfavorable foreign exchange rates
and net outflows.
Operating expenses of $591 million declined 7 percent due to
well managed general and administrative expenses and lower
distribution expenses.
Net outflows were $4.7 billion in the quarter and were largely
driven by institutional outflows in former parent related assets
and short duration mandates, both of which had a low fee rate.
Global retail flows included net outflows from UK and European
investors reflecting the uncertainty related to the UK referendum,
as well as reinvested dividends.
(2) Represents the company’s internally calculated weighted
equity index.
Ameriprise Financial,
Inc.Annuities Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% Better/(Worse)
2016 2015 Annuities Net revenues $ 619
$ 651 (5 )% Expenses 473 501 6 % Pretax
operating earnings $ 146 $ 150 (3 )% Variable
annuity pretax operating earnings $ 118 $ 120 (2 )% Fixed annuity
pretax operating earnings 28 30 (7 )%
Total pretax operating earnings $ 146 $ 150 (3 )%
Item included in operating earnings: Market impact on DAC
and DSIC (mean reversion) $ 1 $ (5 ) NM
Quarter Ended
June 30,
% Better/(Worse)
2016 2015 Variable annuity ending account balances
(billions) $ 74.6 $ 77.1 (3 )% Variable annuity net flows
(millions) $ (512 ) $ (338 ) (51 )% Fixed annuity ending account
balances (billions) $ 10.3 $ 11.2 (8 )% Fixed annuity net flows
(millions) $ (256 ) $ (563 ) 55 % NM Not Meaningful —
variance equal to or greater than 100%
Annuities pretax operating earnings were $146 million,
primarily reflecting lower average account balances due to lower
average equity markets and outflows.
Variable annuity operating earnings declined slightly to $118
million, primarily driven by average account balances being lower
in the quarter due to market levels, leading to lower mortality and
expense fees. Variable annuity cash sales declined to $1.2 billion
in the quarter, similar with recent industry trends. Account
balances declined 3 percent to $75 billion, primarily reflecting
net outflows and market depreciation.
Fixed annuity operating earnings declined to $28 million from
$30 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 June
30,
% Better/(Worse)
2016 2015 Protection Net revenues $ 604
$ 600 1 % Expenses 567 528 (7 )% Pretax
operating earnings $ 37 $ 72 (49 )% Items
included in operating earnings: Market impact on DAC (mean
reversion) $ — $ — NM LTC reserves — 18 NM Auto and home
catastrophe losses (37 ) (48 ) 23 % Total protection
impact $ (37 ) $ (30 ) (23 )%
Quarter Ended June 30,
% 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) 956 952 — NM
Not Meaningful — variance equal to or greater than 100%
Protection pretax operating earnings were $37 million
compared to $72 million a year ago. Results in both periods
included seasonally elevated catastrophe losses while the prior
year period benefitted from an $18 million long term care reserve
release.
Life and Health insurance earnings were lower than the prior
year due to an $18 million long-term care reserve release in the
prior year period. Underlying results were solid in this low
interest rate environment. Claims experience, while higher than a
year ago, was within expected ranges. VUL/UL cash sales declined to
$66 million and VUL/UL account balances declined 2 percent.
Auto and Home had an operating loss in the quarter driven by
seasonally elevated catastrophe losses of $37 million, primarily
from hail and wind storms in southern and central regions of the
country. Management believes the enhancements made to underwriting,
pricing and claims practices are improving performance in both
short- and long-tailed coverages. As these business trends
continue to emerge, the company anticipates that they will begin to
be reflected in financial results.
Ameriprise Financial,
Inc.Corporate & Other Segment Operating Results
(in millions, unaudited)
Quarter Ended June
30,
% Better/(Worse)
2016 2015 Corporate & Other Net
revenues $ (7 ) $ (2 ) NM Expenses 69 55
(25 )% Pretax operating loss $ (76 ) $ (57 ) (33 )%
Items included in operating earnings: DOL planning and
implementation expenses $ (7 ) $ — NM Resolution of legal matter $
(14 ) $ — NM Loss on sale of operations center real estate $ (4 ) $
— NM NM Not Meaningful — variance equal to or greater than
100%
Corporate & Other pretax operating loss was $76
million for the quarter compared to a $57 million loss a year
ago. Included in the current quarter’s results was a $14
million expense from the resolution of a legacy legal matter, $7
million of incremental expenses related to the planning and
implementation of the Department of Labor’s fiduciary standard, as
well as a $4 million loss associated with the sale of operations
center real estate.
Taxes
The second quarter 2016 operating effective tax rate was 20.4
percent, compared to 25.4 percent a year ago. The quarter included
a $17 million benefit from the completion of tax audits from
previous years. The company estimates that its full year 2016
operating effective tax rate will be approximately 23 percent.
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;
- the statements in this news release
concerning the expected closing of the Emerging Global Advisors,
LLC acquisition;
- the statements in this news release
concerning the expected financial impact, and time during which
impacts might be realized, of business trends in Auto and Home
underwriting, pricing and claims practices;
- 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 (such as the recent UK
referendum on membership in the European Union), 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 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, 2016.
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, 2016. For
information about Ameriprise Financial entities, please refer to
the Second 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
Quarter EndedJune 30,
Per Diluted ShareQuarter
EndedJune 30,
(in millions, except per share amounts, unaudited)
2016
2015 2016 2015 Net income
attributable to Ameriprise Financial $ 335 $ 415 $ 1.97 $ 2.23
Less: Net income (loss) attributable to consolidated investment
entities — — — — Add: Integration/restructuring charges(1) — 1 —
0.01
Add: Market impact on variable
annuity guaranteed benefits(1)
58 36 0.34 0.19
Add: Market impact on indexed universal
life benefits(1)
(5 ) (5 ) (0.03 ) (0.03 ) Add: Market impact of hedges on
investments(1) 19 1 0.11 0.01 Add: Net realized investment (gains)
losses(1) (5 ) (5 ) (0.03 ) (0.03 ) Add: Tax effect of adjustments
(2) (23 ) (9 ) (0.13 ) (0.05 )
Operating earnings $ 379 $ 434 $ 2.23 $ 2.33
Weighted average common shares outstanding: Basic
168.3 183.8 Diluted 170.1 186.4
(1) Pretax operating adjustment.
(2) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial,
Inc.Reconciliation Table: Total Net Revenues
Quarter EndedJune 30,
(in millions, unaudited)
2016 2015 Total net revenues
$ 2,871 $ 3,128 Less: CIEs revenue 26 141 Less: Net realized
investment gains (losses) 5 5 Less: Market impact on indexed
universal life benefits 3 — Less: Market impact of hedges on
investments (19 ) (1 ) Operating total net revenues $
2,856 $ 2,983
Ameriprise Financial,
Inc.Reconciliation Table: Total Expenses
Quarter EndedJune 30,
(in millions, unaudited)
2016 2015 Total expenses $
2,461 $ 2,513 Less: CIEs expenses 25 80 Less:
Integration/restructuring charges — 1 Less: Market impact on
variable annuity guaranteed benefits 58 36 Less: Market impact on
indexed universal life benefits (2 ) (5 ) Operating
expenses $ 2,380 $ 2,401
Ameriprise Financial,
Inc.Reconciliation Table: Pretax Operating Earnings
Quarter EndedJune 30,
(in millions, unaudited)
2016 2015 Operating total
net revenues $ 2,856 $ 2,983 Operating expenses 2,380
2,401 Pretax operating earnings $ 476 $ 582
Ameriprise Financial,
Inc.Reconciliation Table: General and Administrative
Expense
Quarter EndedJune 30,
(in millions, unaudited)
2016 2015 General and
administrative expense $ 763 $ 792 Less: CIEs expenses 1 21 Less:
Integration/restructuring charges — 1
Operating general and administrative expense $ 762 $ 770
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended June 30, 2016 (in millions,
unaudited)
GAAP Operating Pretax Income $ 410
$ 476 Income tax provision $ 75 $ 97 Effective tax
rate 18.4 % 20.4 %
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended June 30, 2015 (in millions, unaudited)
GAAP Operating Pretax Income $ 615 $ 582 Less: Pretax
income attributable to noncontrolling interests 61
— Pretax income excluding consolidated investment
entities $ 554 $ 582 Income tax provision $
139 $ 148 Effective tax rate 22.6 % 25.4 % Effective tax
rate excluding noncontrolling interests 25.1 % 25.4 %
Ameriprise Financial,
Inc.Reconciliation Table: Asset Management Adjusted Net
Pretax Operating Margin
Quarter Ended June 30,
(in millions, unaudited)
2016 2015 Operating total net revenues $ 739 $
832 Less: Distribution pass through revenues 203 219 Less:
Subadvisory and other pass through revenues 88
102 Adjusted operating revenues $ 448 $ 511
Pretax operating earnings $ 148 $ 197 Less: Operating net
investment income 5 4 Add: Amortization of intangibles 5
7 Adjusted operating earnings $ 148 $
200 Pretax operating margin 20.0 % 23.7 % Adjusted
net pretax operating margin 33.0 % 39.1 %
Ameriprise Financial,
Inc.Reconciliation Table: Return on Equity (ROE) Excluding
AccumulatedOther Comprehensive Income “AOCI”
Twelve Months EndedJune
30,
(in millions, unaudited)
2016 2015 Net income attributable to
Ameriprise Financial $ 1,453 $ 1,653 Less: Loss from discontinued
operations, net of tax — (1 )
Net income from continuing operations
attributable to Ameriprise Financial, as reported
1,453 1,654 Less: Adjustments (1) (174 ) (39 )
Operating earnings $ 1,627 $ 1,693 Total
Ameriprise Financial, Inc. shareholders’ equity $ 7,381 $ 8,176
Less: Accumulated other comprehensive income, net of tax 459
706 Total Ameriprise Financial, Inc.
shareholders’ equity excluding AOCI 6,922 7,470 Less: Equity
impacts attributable to the consolidated investment entities
114 280 Operating equity $ 6,808 $
7,190 Return on equity excluding AOCI 21.0 % 22.1 %
Operating return on equity excluding AOCI
(2)
23.9 % 23.5 %
(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 June
30,
% Better/(Worse)
2016 2015 Revenues Management and
financial advice fees $ 1,439 $ 1,518 (5 )% Distribution fees 448
472 (5 ) Net investment income 372 423 (12 ) Premiums 372 368 1
Other revenues 248 354 (30 ) Total revenues 2,879
3,135 (8 ) Banking and deposit interest expense 8 7
(14 )
Total net revenues 2,871 3,128 (8 )
Expenses Distribution expenses 803 835 4 Interest credited
to fixed accounts 158 160 1 Benefits, claims, losses and settlement
expenses 597 543 (10 ) Amortization of deferred acquisition costs
87 94 7 Interest and debt expense 53 89 40 General and
administrative expense 763 792 4
Total
expenses 2,461 2,513 2 Pretax income 410 615 (33 ) Income tax
provision 75 139 46
Net income 335 476
(30 ) Less: Net income attributable to noncontrolling interests
— 61 NM
Net income attributable to
Ameriprise Financial $ 335 $ 415 (19 ) NM Not Meaningful
— variance equal to or greater than 100%
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726006505/en/
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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