Third quarter 2016 net income(1) per diluted
share was $1.30Operating EPS was $1.37
Third quarter 2016 return on equity excluding
AOCI was 19.0 percentOperating ROE excluding AOCI was 21.5
percent
Excluding annual unlocking(2), operating EPS
was $2.29Operating ROE excluding AOCI was 23.8 percent
Ameriprise Financial, Inc. (NYSE: AMP) today reported third
quarter 2016 net income(1) of $215 million, or $1.30 per diluted
share. Operating earnings were $227 million, with operating
earnings per diluted share of $1.37. Excluding the non-cash impact
of annual unlocking(2) in both periods, operating earnings per
diluted share increased 4 percent to $2.29 with operating earnings
of $380 million in the quarter.
GAAP ResultsNet revenues of $3.0
billion increased 4 percent reflecting the cumulative impact of
wrap net inflows, higher average equity markets and an impact from
annual unlocking, partially offset by asset management outflows and
lower client transactional activity.
Expenses of $2.8 billion increased 14 percent as a result of
higher expenses related to unlocking as general and administrative
expenses remained well controlled.
Operating ResultsOperating net
revenues of $3.0 billion increased 3 percent. Excluding annual
unlocking in both quarters, operating net revenues were essentially
flat, reflecting the cumulative impact of wrap net inflows and
higher average equity markets compared to the year ago, offset by
the cumulative impact of asset management outflows and lower client
transactional activity.
Operating expenses of $2.7 billion increased 16 percent.
Excluding annual unlocking in both quarters, operating expenses
increased 1 percent from higher distribution expenses and well
controlled general and administrative expenses.
In the quarter, the company continued to deliver a strong return
to shareholders through share repurchases and dividends of $502
million.
(1)
Net income represents net income attributable to
Ameriprise Financial.
(2)
Unlocking represents the company’s annual review of insurance and
annuity valuation assumptions and model changes and the long term
care review.
“Ameriprise delivered solid results in the third quarter on an
operating basis, led by Advice and Wealth Management,” said Jim
Cracchiolo, chairman and chief executive officer.
“With good inflows in investment advisory accounts, retail
client assets grew to a record high. Experienced advisors continue
to move their practices to Ameriprise as our advice value
proposition, level of support and capital strength are attractive
in this environment. In Asset Management, retail flows have
improved in the U.S., and the July volatility in the UK and Europe
subsided in the quarter.”
“In a more volatile climate and period of change for the
industry, we are managing expenses well and have a strong business
to serve our clients and advisors while consistently delivering
meaningful shareholder value.”
Ameriprise Financial, Inc.Third
Quarter Summary
(in millions, except per share amounts,
unaudited)
Quarter EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
2016 2015
% Better/(Worse)
2016 2015
% Better/(Worse)
Net income from continuing operations
attributable to Ameriprise Financial
$ 215 $ 397 (46 )% $ 1.30 $ 2.17 (40 )%
Adjustments, net of tax (1)
(see reconciliation on p.
14)
12 32 0.07 0.18 Operating earnings (2)
$ 227 $ 429 (47 )% $ 1.37 $ 2.35 (42 )% Less: annual unlocking
impact, net of tax (1) (153 ) 27 (0.92 )
0.15 Operating earnings, excluding annual unlocking $ 380 $
402 (5 )% $ 2.29 $ 2.20 4 % Weighted average common shares
outstanding: Basic 164.0 180.4 Diluted 165.8 182.7
(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.
In the third quarter of the year, the company conducts its
annual review of insurance and annuity valuation assumptions
relative to current experience and management expectations. To the
extent that expectations change as a result of this review, the
company updates valuation assumptions and models and the impact is
reflected as part of annual unlocking and the long term care
review. As discussed in the segment commentary to follow, the
continued low interest rate environment, as well as policyholder
behavior impact on living benefit reserves, more than offset
benefits from persistency on annuity contracts without living
benefits and other model updates.
Catastrophe losses in the Auto and Home business were $29
million compared to $8 million a year ago. Catastrophe losses were
$7 million in excess of our expectations for the third quarter.
Third quarter operating earnings also
included the following after-tax items(1):
(in millions, except per share amounts,
unaudited)
Quarter EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
2016 2015
% Better/(Worse)
2016 2015
% Better/(Worse)
Market Impact on DAC/DSIC 7 (20 ) NM 0.04 (0.11 ) NM Long term care
claim reserve adjustment (19 ) 8 NM (0.11 ) 0.04 NM Life and health
reinsurance premium correction —
(7
)
NM — (0.04 ) NM Auto & Home catastrophe losses (19 )
(5
)
NM (0.11 ) (0.03 ) NM Auto & Home prior year reserve
development 7 — NM 0.04 — NM DOL planning and implementation
expenses (5 ) — NM (0.03 ) — NM Affordable housing investment
adjustment (5 ) — NM (0.03 ) — NM Total
items $ (34 ) $ (24 ) (42 )% $ (0.20 ) $ (0.14 ) (43 )%
(1) All items are shown after-tax using
the statutory tax rate of 35%.
NM Not Meaningful — variance equal to or
greater than 100%
Third Quarter 2016 Business Highlights
- Total assets under management and
administration increased to $796 billion as Ameriprise advisor
client net inflows and market appreciation more than offset asset
management net outflows and the unfavorable impact of foreign
exchange rates.
- Advice & Wealth Management advisor
client assets increased to $476 billion, reflecting continued
strength in fee-based investment advisory net inflows, with net
inflows of $2.8 billion in the quarter.
- On a trailing 12-month basis, operating
net revenue per advisor declined 1 percent to $511,000, as higher
advisory fee revenue was more than offset by lower transactional
client activity.
- Total advisors were 9,747, reflecting
strong advisor retention and ongoing experienced advisor
recruiting. The company added 80 experienced, productive advisors
in the quarter.
- Asset Management segment AUM declined
to $468 billion, primarily driven by net outflows and the
unfavorable impact of foreign exchange rates.
- Investment performance remained strong
with 110 four- and five-star funds at Columbia Threadneedle
Investments.
- Columbia Threadneedle Investments
completed its acquisition of Emerging Global Advisors, LLC, a New
York-based registered investment advisor and provider of smart beta
portfolios focused on emerging markets.
- Variable annuity policyholder account
balances were $76 billion with sales of $1.2 billion in the
quarter.
- Excess capital was above $2 billion. In
the quarter, the company repurchased 3.9 million shares of common
stock for $378 million and paid $124 million in quarterly
dividends.
- During the quarter, the company issued
$500 million of 10-year senior notes to enhance its capital
structure given attractive rates. The proceeds are for general
corporate purposes.
- The company announced that it will
match donations to Feeding America up to $500,000 through
Thanksgiving. The annual Ameriprise Financial Challenge, which
kicked off in September, makes it easy for people to double the
impact of their donations to Feeding America, the nation’s leading
hunger-relief organization.
- Ameriprise Financial received the
Corporate Philanthropy – Financial Institutions award at the annual
Invest in Others Community Leadership Awards. The award is
presented to a company that has demonstrated an ongoing commitment
to encouraging philanthropic activities among its employees,
financial advisors and senior leaders.
Ameriprise Financial, Inc.Advice
& Wealth Management Segment Operating Results
(in millions, unaudited)
Quarter Ended September 30,
% Better/(Worse)
2016 2015 Advice & Wealth Management Net
revenues $ 1,272 $ 1,245 2 % Expenses 1,041 1,026 (1
)% Pretax operating earnings $ 231 $ 219 5 % Pretax
operating margin 18.2 % 17.6 %
Quarter Ended September
30,
% Better/(Worse)
2016 2015 Retail client assets (billions) $ 476 $ 433
10 % Wrap net flows (billions) $ 2.8 $ 3.0 (8 )% Operating net
revenue per branded advisor (trailing 12 months - thousands) $ 511
$ 514 (1 )%
Advice & Wealth Management pretax operating earnings
increased 5 percent to $231 million driven by growth in assets and
higher earnings on cash balances. Third quarter 2016 pretax
operating margin increased to 18.2 percent from 17.6 percent a year
ago.
Operating net revenues of $1.3 billion increased 2 percent from
wrap account net inflows and higher earnings on cash balances.
Client asset growth remains good as the company continues to see
asset growth in fee-based wrap accounts outpacing growth in
brokerage account balances.
Operating expenses increased 1 percent to $1.0 billion primarily
from higher distribution expenses related to increased wrap fees.
General and administrative expenses were down 1 percent compared to
a year ago. The company is dedicating significant internal
resources to prepare for the Department of Labor fiduciary rule and
maintaining targeted growth investments.
Total retail client assets increased to $476 billion, driven by
client net inflows and new client acquisition, as well as market
appreciation. Wrap net inflows were $2.8 billion in the quarter,
which contributed to a 14 percent year-over-year increase in wrap
balances to $197 billion. Total advisors were 9,747 reflecting
strong retention and another successful recruiting quarter, with 80
experienced advisors moving their practices to Ameriprise.
Operating net revenue per advisor decreased 1 percent on a trailing
12-month basis to $511,000.
Ameriprise Financial, Inc.Asset
Management Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2016 2015 Asset Management Net revenues
$ 740 $ 782 (5 )% Expenses 585 602 3 % Pretax
operating earnings $ 155 $ 180 (14 )% Pretax operating
margin 20.9 % 23.0 % Adjusted net pretax operating margin (1) 35.8
% 39.1 %
Quarter Ended September 30,
% Better/(Worse)
2016 2015 Total segment AUM (billions) $ 468 $ 471 (1
)% Total segment net flows (billions) $ (4.3 ) $ (7.4 ) 41 %
Global Retail net flows, excl. former parent flows $ (1.9 ) $ (3.5
) 45 % Global Institutional net flows, excl. former parent flows $
(2.0 ) $ (1.3 ) (53 )% Former parent company related flows $ (1.4 )
$ (2.6 ) 44 % Inflows from acquisitions $ 1.0 $ — NM
(1) See reconciliation on page 16
NM Not Meaningful — variance equal to or greater than 100%
Asset Management pretax operating earnings decreased 14
percent to $155 million, primarily from the cumulative impact of
net outflows. The decline in the British pound resulted in lower
revenues and expenses but had a minimal impact to pretax operating
earnings.
Third quarter pretax operating margin was 20.9 percent compared
to 23.0 percent a year ago. Adjusted net pretax operating margin
was 35.8 percent compared to 39.1 percent a year ago.
Operating net revenues declined to $740 million compared to a
year ago, reflecting the impact of lower asset levels and foreign
exchange rates. AUM declined 1 percent to $468 billion from net
outflows and unfavorable foreign exchange rates, partially offset
by higher equity markets.
Operating expenses of $585 million declined 3 percent due to
well managed general and administrative expenses and lower
distribution expenses.
Net outflows were $4.3 billion in the quarter compared to
outflows of $7.4 billion a year ago. Global retail outflows,
excluding former parent related assets, were $1.9 billion
reflecting improvement in intermediary and RIA distribution despite
continued industry pressure on active equity strategies in the
U.S., as well as lower retail activity among UK and European
investors in July following the UK referendum. Global institutional
outflows were $2 billion, including $0.7 billion from Acorn
strategies. Funding of global institutional mandates slowed in the
quarter and is expected to improve in the fourth quarter. In
addition, flows in the quarter included $1 billion of inflows
related to the acquisition of Emerging Global Advisors and $1.4
billion of former parent related outflows, primarily from legacy
insurance mandates.
Ameriprise Financial,
Inc.Annuities Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2016 2015 Annuities Net revenues $ 631
$ 632 — Expenses 699 456 (53 )% Pretax operating
earnings $ (68 ) $ 176 NM Variable Annuities: Pretax
operating earnings $ (97 ) $ 151 NM Annual unlocking (220 )
64 NM Pretax operating earnings, excluding annual unlocking
123 87 41 % Fixed Annuities: Pretax operating earnings 29 25 16 %
Annual unlocking 5 2 NM Pretax operating earnings,
excluding annual unlocking 24 23 4 % Total pretax operating
earnings, excluding annual unlocking $ 147 $ 110 34 % Item
included in operating earnings: Market impact on DAC and DSIC (mean
reversion) $ 9 $ (29 ) NM
Quarter Ended September 30,
% Better/(Worse)
2016 2015 Variable annuity ending account balances
(billions) $ 75.9 $ 72.8 4 % Variable annuity net flows (millions)
$ (650 ) $ (259 ) NM Fixed annuity ending account balances
(billions) $ 10.2 $ 10.9 (7 )% Fixed annuity net flows (millions) $
(240 ) $ (375 ) 36 % NM Not Meaningful — variance equal to
or greater than 100%
Annuities pretax operating loss was $68 million compared
to earnings of $176 million a year ago, primarily reflecting the
unfavorable unlocking. Excluding unlocking in both periods,
operating earnings were $147 million, up 34 percent, reflecting a
favorable market impact on DAC and DSIC.
Variable annuity operating loss was $97 million, reflecting an
unfavorable $220 million annual unlocking impact, which was
primarily driven by continued low interest rates and policyholder
behavior. Variable annuity cash sales declined to $1.2 billion in
the quarter, which is consistent with recent industry trends.
Account balances increased 4 percent to $76 billion, reflecting
market appreciation, partially offset by net outflows.
Fixed annuity operating earnings increased to $29 million from
$25 million, as a small benefit from annual unlocking was partially
offset by continued older policy lapses and the interest rate
environment remains challenging for investment yields and new
product sales.
Ameriprise Financial,
Inc.Protection Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2016 2015 Protection Net revenues $ 679 $ 586
16 % Expenses 668 561 (19 )% Pretax operating
earnings $ 11 $ 25 (56 )% Annual unlocking – other life and health
17 (24 ) NM Annual long term care review (37 )
— NM Pretax operating earnings, excluding unlocking $ 31 $
49 (37 )% Items included in operating earnings: Market
impact on DAC (mean reversion) $ 1 $ (2 ) NM Long term care claim
reserve adjustment (29 ) 13 NM Life and health reinsurance premium
correction
— (11 ) NM Auto and Home catastrophe losses (29 )
(8 ) NM Auto and Home prior year reserve development 10
— NM Total protection impact $ (47 ) $ (8 ) NM
Quarter Ended September 30,
% Better/(Worse)
2016 2015 Life insurance in force (billions) $ 196 $
196 — VUL/UL ending account balances (billions) $ 11.5 $ 10.9 5 %
Auto & Home policies in force (thousands) 950 958 (1 )%
NM Not Meaningful — variance equal to or greater than 100%
Protection pretax operating earnings were $11 million
compared to $25 million a year ago.
Life and Health insurance earnings, excluding long term care and
the items noted above, increased from a year ago. VUL/UL cash sales
declined to $70 million and VUL/UL account balances increased 5
percent.
Long term care had an operating loss of $73 million in the
quarter driven by $66 million from two items: a $37 million impact
primarily from loss recognition and an unfavorable $29 million
correction related to a claim utilization assumption. The loss
recognition related to low interest rates and higher reinsurance
expense. Excluding these items, operating results were within
expectations.
Auto & Home had a loss of $8 million driven by higher than
anticipated catastrophe losses. The quarter included a $10 million
favorable prior year reserve development reflecting improved trends
from changes made to underwriting, claims and pricing. Management
will continue to evaluate prior year and 2016 emerging loss
experience to determine future actions.
Ameriprise Financial,
Inc.Corporate & Other Segment Operating Results
(in millions, unaudited)
Quarter Ended September
30,
% Better/(Worse)
2016 2015 Corporate & Other Net
revenues $ (15 ) $ (4 ) NM Expenses 57 38 (50 )%
Pretax operating loss $ (72 ) $ (42 )
(71
)% Items included in operating earnings: DOL planning and
implementation expenses $ (7 ) $ — NM Affordable housing investment
adjustment (7 ) — NM Total corporate impact $ (14 ) $
— NM NM Not Meaningful — variance equal to or greater than
100%
Corporate & Other pretax operating loss was $72
million for the quarter compared to a $42 million loss a year
ago. Included in the current quarter’s results was an
adjustment for an affordable housing investment to align it with
the remaining tax benefit cash flows that lowered net investment
income by $7 million. Results in the quarter included $7 million of
incremental expenses related to the planning and implementation of
the Department of Labor’s fiduciary standard.
Taxes
The third quarter 2016 operating effective tax rate was 11.7
percent reflecting lower earnings in the quarter related to the
unfavorable unlocking as well as discrete tax items, primarily from
the finalization of the 2015 tax return. Excluding the impact from
unlocking, the operating effective tax rate was 22.8 percent. The
operating effective tax rate was 23.1 percent a year ago.
At Ameriprise Financial, we have been helping people feel
confident about their financial future for more than 120 years.
With a nationwide network of 10,000 financial advisors and
extensive asset management, advisory and insurance capabilities, we
have the strength and expertise to serve the full range of
individual and institutional investors’ financial needs. For more
information, visit ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning
services, investments, insurance and annuity products. Columbia
Funds are distributed by Columbia Management Investment
Distributors, Inc., member FINRA and managed by Columbia Management
Investment Advisers, LLC. Threadneedle International Limited is an
SEC- and FCA-registered investment adviser affiliate of Columbia
Management Investment Advisers, LLC based in the U.K. Auto and home
insurance is underwritten by IDS Property Casualty Insurance
Company, or in certain states, Ameriprise Insurance Company, both
in De Pere, WI. RiverSource insurance and annuity products are
issued by RiverSource Life Insurance Company, and in New York only
by RiverSource Life Insurance Co. of New York, Albany, New York.
Only RiverSource Life Insurance Co. of New York is authorized to
sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member
FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that
reflect management’s plans, estimates and beliefs. Actual results
could differ materially from those described in these
forward-looking statements. Examples of such forward-looking
statements include:
- statements in this news release
concerning the expecting funding of mandates in the fourth
quarter;
- 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 June 2016 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 Reports on Form 10-Q for the quarters ended June 30,
2016 and 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 September 30, 2016. For
information about Ameriprise Financial entities, please refer to
the Third 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 EndedSeptember
30,
Per Diluted ShareQuarter
EndedSeptember 30,
(in millions, except per share amounts, unaudited)
2016
2015 2016 2015 Net income
attributable to Ameriprise Financial $ 215 $ 397 $ 1.30 $ 2.17
Less: Net income (loss) attributable to consolidated investment
entities — — — — Add: Integration/restructuring charges(1) — 3 —
0.02
Add: Market impact on variable
annuity guaranteed benefits(1)
37 5 0.22 0.03 Add: Market impact on indexed universal life
benefits(1) (7 ) 1 (0.04 ) 0.01 Add: Market impact of hedges on
investments(1) (5 ) 31 (0.03 ) 0.17 Add: Net realized investment
(gains) losses(1) (6 ) 10 (0.04 ) 0.05 Add: Tax effect of
adjustments (2) (7 ) (18 ) (0.04 )
(0.10 ) Operating earnings 227 429 1.37 2.35 Less: Pretax impact of
unlocking (235 ) 42 (1.42 ) 0.23 Less: Tax effect of unlocking (2)
82 (15 ) 0.50 (0.08 ) Operating
earnings excluding unlocking $ 380 $ 402 $ 2.29 $ 2.20
Weighted average common shares outstanding: Basic 164.0 180.4
Diluted 165.8 182.7
(1) Pretax operating adjustment.
(2) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial,
Inc.Reconciliation Table: Total Net Revenues
Quarter EndedSeptember
30,
(in millions, unaudited)
2016 2015
Total net revenues $ 2,998 $ 2,886 Less: CIEs revenue 27 43 Less:
Net realized investment gains (losses) 6 (10 ) Less: Market impact
on indexed universal life benefits 6 9 Less: Market impact of
hedges on investments 5 (31 ) Operating total net
revenues 2,954 2,875 Less: Unlocking 64 (8 )
Operating total net revenues excluding unlocking $ 2,890 $ 2,883
Ameriprise Financial,
Inc.Reconciliation Table: Total Expenses
Quarter EndedSeptember
30,
(in millions, unaudited)
2016 2015 Total
expenses $ 2,760 $ 2,423 Less: CIEs expenses 27 88 Less:
Integration/restructuring charges — 3 Less: Market impact on
variable annuity guaranteed benefits 37 5 Less: Market impact on
indexed universal life benefits (1 ) 10 Operating
expenses 2,697 2,317 Less: Unlocking 299 (50 )
Operating expenses excluding unlocking $ 2,398 $ 2,367
Ameriprise Financial,
Inc.Reconciliation Table: Pretax Operating Earnings
Quarter EndedSeptember
30,
(in millions, unaudited)
2016 2015 Operating
total net revenues $ 2,954 $ 2,875 Operating expenses 2,697
2,317 Pretax operating earnings $ 257 $ 558
Ameriprise Financial,
Inc.Reconciliation Table: General and Administrative
Expense
Quarter EndedSeptember
30,
(in millions, unaudited)
2016 2015
General and administrative expense $ 731 $ 744 Less: CIEs expenses
2 20 Less: Integration/restructuring charges — 3
Operating general and administrative expense $ 729 $ 721
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended September 30, 2016 (in millions,
unaudited)
GAAP Operating Pretax Income $ 238
$ 257 Income tax provision $ 23 $ 30 Effective tax rate 9.7
% 11.7 %
Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate
Quarter Ended September 30, 2016 (in millions,
unaudited)
Operating Pretax Income $ 257 Less: Pretax income
attributable to unlocking (235 ) Pretax income excluding
unlocking $ 492 Income tax provision $ 30 Less: Income tax
provision attributable to unlocking (82 ) Income tax
provision excluding unlocking $ 112 Effective tax rate 11.7
% Effective tax rate excluding unlocking 22.8 %
Ameriprise Financial,
Inc.Reconciliation Table: Effective Tax Rate
Quarter Ended September 30, 2015 (in millions,
unaudited)
GAAP Operating Pretax Income $ 463
$ 558 Less: Pretax income attributable to noncontrolling interests
(45 ) — Pretax income excluding consolidated
investment entities $ 508 $ 558 Income tax provision $ 111 $
129 Effective tax rate 24.1 % 23.1 % Effective tax rate
excluding noncontrolling interests 21.9 % 23.1 %
Ameriprise Financial,
Inc.Reconciliation Table: Asset Management Adjusted Net
Pretax Operating Margin
Quarter Ended September 30,
(in millions, unaudited)
2016
2015 Operating total net revenues $ 740 $ 782 Less:
Distribution pass through revenues 211 214 Less: Subadvisory and
other pass through revenues 85 95 Adjusted operating
revenues $ 444 $ 473 Pretax operating earnings $ 155 $ 180
Less: Operating net investment income 1 1 Add: Amortization of
intangibles 5 6 Adjusted operating earnings $ 159 $
185 Pretax operating margin 20.9 % 23.0 % Adjusted net
pretax operating margin 35.8 % 39.1 %
Ameriprise Financial,
Inc.Reconciliation Table: Return on Equity (ROE) Excluding
AccumulatedOther Comprehensive Income “AOCI”
Twelve Months EndedSeptember
30,
(in millions, unaudited)
2016 2015 Net income attributable to
Ameriprise Financial $ 1,271 $ 1,630 Less: Loss from discontinued
operations, net of tax — (1 )
Net income from continuing operations
attributable to Ameriprise Financial, as reported
1,271 1,631 Less: Adjustments (1) (154 ) (84 )
Operating earnings 1,425 1,715 Less: Unlocking, net of tax (2)
(153 ) 27 Operating earnings excluding unlocking $
1,578 $ 1,688 Total Ameriprise Financial, Inc. shareholders’
equity $ 7,165 $ 8,017 Less: Accumulated other comprehensive
income, net of tax 478 615 Total Ameriprise
Financial, Inc. shareholders’ equity excluding AOCI 6,687 7,402
Less: Equity impacts attributable to the consolidated investment
entities 62 250 Operating equity $ 6,625 $ 7,152
Return on equity excluding AOCI 19.0 % 22.0 % Operating
return on equity excluding AOCI (3) 21.5 % 24.0 % Operating return
on equity excluding AOCI and unlocking 23.8 % 23.6 %
(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) After-tax is calculated using the
statutory tax rate of 35%.
(3) 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 September
30,
% Better/(Worse)
2016 2015 Revenues Management
and financial advice fees $ 1,464 $ 1,465 — % Distribution fees 455
451 1 Net investment income 387 321 21 Premiums 374 360 4 Other
revenues 330 296 11 Total revenues 3,010 2,893 4
Banking and deposit interest expense 12 7 (71 )
Total net revenues 2,998 2,886 4
Expenses
Distribution expenses 798 806 1 Interest credited to fixed accounts
161 171 6 Benefits, claims, losses and settlement expenses 855 471
(82 ) Amortization of deferred acquisition costs 163 133 (23 )
Interest and debt expense 52 98 47 General and administrative
expense 731 744 2
Total expenses 2,760 2,423
(14 ) Pretax income 238 463 (49 ) Income tax provision 23
111 79
Net income 215 352 (39 )
Less: Net income attributable to
noncontrolling interests
— (45 ) NM
Net income attributable to
Ameriprise Financial $ 215 $ 397 (46 ) NM Not Meaningful
— variance equal to or greater than 100%
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161025006639/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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