Ameriprise Financial, Inc. (NYSE: AMP):
Ameriprise Financial, Inc. First Quarter Results
(in millions, except per share
amounts, unaudited)
Per Diluted Share 2010
2009 % Change 2010 2009
% Change
GAAP Net revenues $ 2,271 $ 1,716 32 %
Net income attributable to
Ameriprise Financial
$ 214 $ 130 65 % $ 0.81 $ 0.58 40 %
Operating
Net revenues $ 2,139 $ 1,713 25 % Earnings $ 215 $ 133 62 % $ 0.81
$ 0.60 35 %
Weighted average common shares
outstanding:
Basic
260.8
222.3 Diluted
265.0
223.5
See reconciliation tables included
in this release.
Ameriprise Financial, Inc. (NYSE: AMP) today reported net income
attributable to Ameriprise Financial of $214 million for the first
quarter of 2010 compared to $130 million for the first quarter of
2009. Net income per diluted share for the first quarter of 2010
was $0.81 compared to $0.58 a year ago.
The company has introduced new operating financial measures to
provide continued transparency of the underlying performance of the
business. Operating measures exclude the impact of a new accounting
standard that required the company to consolidate client assets in
certain investment entities on the Ameriprise Financial balance
sheet and income statement; as well as integration expenses and net
realized gains/losses.
Operating earnings increased 62 percent to $215 million in the
first quarter of 2010 compared to $133 million a year ago.
Operating earnings per diluted share were $0.81 in the first
quarter of 2010, up 35 percent from $0.60 a year ago. The increase
in operating earnings was driven by higher asset-based revenues,
higher income from spread products and re-engineering benefits.
Operating net revenues were $2.1 billion in the first quarter of
2010, up 25 percent from a year ago, driven by growth in management
fees from market appreciation on assets and net inflows in wrap
accounts and asset management, as well as increased net investment
income from higher fixed annuity account balances and higher
investment yields.
As of March 31, 2010, the company’s excess capital position was
more than $2.5 billion, including approximately $1 billion for the
company’s pending acquisition of Columbia Management’s long-term
asset management business, which is expected to be completed on May
1, 2010. As of March 31, 2010, the company had $1.0 billion in net
unrealized investment gains, reflecting the quality and diversity
of its investment portfolio. Book value per share, excluding
accumulated other comprehensive income (AOCI) and the equity impact
of the required consolidation in certain investment entities,
increased 5 percent from a year ago to $35.19.
Return on equity excluding AOCI was 9.3 percent for the 12
months ended March 31, 2010. Operating return on equity was 9.7
percent for the same period. Operating return on equity was
negatively impacted by including the June 2009 share issuance in
equity, the proceeds of which are being used for the Columbia
Management acquisition while the related earnings will not be
included in returns until the acquisition closes.
"We had a solid quarter aided by equity market appreciation and
improved client activity," said Jim Cracchiolo, chairman and chief
executive officer. "We generated positive retail client asset
flows, driven by particular strength in our mutual fund wrap
business, and we had good new client acquisition growth. These
improvements led to a 31 percent increase in client assets and
continued progress in the profitability of our Advice & Wealth
Management and Asset Management businesses.
"Despite lower absolute market levels and slower client activity
compared with prior years, we generated our best first quarter
earnings as a public company. The re-engineering and expense
reductions we executed in 2009 have generated meaningful earnings
leverage as conditions continue to improve. I am confident that our
expense discipline, along with our strong balance sheet and
capital, position us well for the current environment.
"We are on track to complete our acquisition of Columbia
Management on May 1, 2010, and we're focused on executing a
seamless integration. We believe the combined asset manager will
possess an exceptional depth of investment talent and product
capability, and we feel good about our ability to generate solid
returns from that business."
First Quarter 2010 Business Highlights
- The company had a strong quarter
for new client acquisition, the highest level since second quarter
2008.
- The introduction of the
company’s MORE WITHIN REACHSM brand platform in the quarter
increased Ameriprise Financial brand awareness.
- Operating net revenue per
financial advisor increased 25 percent compared to a year ago,
primarily driven by the gradual improvement in client activity and
market appreciation on assets.
- Total advisors declined 5
percent year-over-year to 11,837, primarily due to the continuing
departure of low-producing advisors. Franchise advisor retention
rates remain strong. The company continued to recruit experienced
advisors, although at a slower rate than in 2009.
- Total owned, managed and
administered assets were $463 billion at March 31, 2010, up 31
percent from a year ago, primarily due to market appreciation and
strong wrap net inflows.
- Total managed assets reached
$332 billion, an increase of 31 percent from a year ago, driven by
market appreciation and solid asset flows.
- First quarter 2010 wrap net
inflows were $2.5 billion, up 93 percent from a year ago. Net
inflows and market appreciation increased total wrap assets to
approximately $100 billion at March 31, 2010, an all-time
high.
- Total domestic asset management
net outflows were $0.9 billion in the quarter as a result of $1.1
billion in retail net outflows. Hedge fund net inflows remained
strong, and institutional net inflows of $0.1 billion included
negative synergies of $0.6 billion in expected outflows from the
Columbia Management acquisition, offset by new institutional
mandates.
- Total international asset
management retail net inflows of $1.3 billion in the quarter were
largely offset by $1.3 billion in institutional net outflows,
driven by $1.5 billion in Zurich-related net outflows. Threadneedle
continues to shift AUM toward higher fee asset classes.
- Variable annuity ending balances
increased 37 percent to $57 billion at quarter end driven by market
appreciation on assets. Slower sales in the quarter resulted in net
inflows of $98 million. Fixed annuity balances were $14.6 billion,
up 6 percent from a year ago reflecting strong sales growth in the
first two quarters of 2009. Fixed annuity net outflows of $166
million in the first quarter of 2010 were primarily due to the
company’s decision to lower crediting rates on new contracts, which
lowered sales.
- Variable universal life /
universal life (VUL/UL) ending policyholder account balances were
up 23 percent to $9 billion compared to a year ago. VUL/UL sales
were $54 million in the quarter, up 64 percent from a year ago with
increases in both variable and universal life insurance.
- Ameriprise Auto & Home
premiums increased 7 percent from a year ago, primarily due to
growth in policy counts.
- The company expects to complete
the acquisition of Columbia Management’s long-term asset management
business on May 1, 2010. Operational and financial expectations are
on track.
Liquidity and Balance Sheet as of March 31, 2010
The company continued to maintain strong balance sheet
fundamentals, excess capital and financial flexibility to capture
additional growth opportunities.
Conservative capital
management
- On April 26, 2010, the
Ameriprise Financial Board of Directors increased the regular
quarterly dividend per common share to $0.18 per share, a $0.01
increase compared to the prior quarter’s cash dividend. The
dividend will be payable on May 21, 2010 to shareholders of record
at the close of business on May 7, 2010.
- The company’s excess capital
position was more than $2.5 billion, which included approximately
$1 billion for the Columbia Management acquisition.
- At the end of the first quarter
of 2010, RiverSource Life’s estimated risk-based capital ratio
remained well in excess of 400 percent.
- The company will continue to use
enterprise risk management capabilities and product hedging to
anticipate and mitigate risk. The company’s variable annuity
hedging program continued to perform well.
Substantial liquidity
- Cash and cash equivalents were
$4.8 billion, with $2.5 billion at the holding company level and
$4.3 billion in free cash.
- Holding company cash increased
sequentially, primarily as a result of the company’s $750 million
debt issuance during the quarter, as well as the $425 million
dividend received from RiverSource Life.
- RiverSource Life increased cash
by approximately $600 million in preparation to implement an
enhanced variable annuity asset allocation program designed to help
the company manage variable annuity subaccounts more efficiently
and effectively. The implementation will require a portion of fixed
account assets to move from the general account to separate
accounts.
High-quality investment
portfolio
- The $31 billion
available-for-sale portfolio remained well diversified and
high-quality.
- The investment portfolio
remained in a net unrealized gain position, with $1.0 billion in
net unrealized gains.
- During the quarter, the company
recorded realized gains as it prepared to introduce an enhanced
variable annuity asset allocation program. These gains were offset
by realized losses as the company repositioned and strengthened its
investment portfolio.
- The total investment portfolio,
including cash and cash equivalents, was $40.6 billion and remained
well positioned. Detailed information about the portfolio is
available online at ir.ameriprise.com.
Conservative capital
ratios
- The debt-to-total capital ratio
attributable to Ameriprise Financial was 20.5 percent. The
debt-to-total capital ratio was 19.3 percent excluding non-recourse
debt, the impact of consolidated investment entities and the 75
percent equity credit for the hybrid securities.
- The company issued $750 million
of 10-year senior notes during the quarter. A portion of those
proceeds will be used to retire $340 million of debt maturing in
November 2010.
Taxes
The effective tax rate on net income including net income (loss)
attributable to noncontrolling interests was 17.9 percent for the
first quarter of 2010. The effective tax rate on net income
excluding net income (loss) attributable to noncontrolling
interests and the required consolidation in certain investment
entities was 23.2 percent in the first quarter of 2010.
The company reduced its expected full-year operating tax rate
from approximately 28 to 30 percent to approximately 25 to 27
percent based on expected benefits from tax planning. The company
expects to record a large portion of these tax planning benefits in
the first and second quarters of 2010.
Summary
Ameriprise Financial, Inc. First Quarter Summary
(in millions, except per share
amounts, unaudited)
2010 2009
%Change
Per Diluted Share
%Change
2010 2009
Net income attributable to
Ameriprise Financial
$ 214 $ 130 65 % $ 0.81 $ 0.58 40 %
Add: Integration charges,
after-tax(1)
4 12 (67 ) 0.01 0.05 (80 )
Less: Net realized gains,
after-tax(1)
3 9 (67 ) 0.01 0.03 (67 )
Operating earnings $ 215 $ 133 62 % $ 0.81 $ 0.60 35 %
Weighted average common shares
outstanding:
Basic 260.8 222.3 Diluted 265.0 223.5 (1) After-tax is
calculated using the statutory tax rate of 35%.
During the first quarter of 2010, the company adopted a new
accounting standard that required the consolidation of
approximately $6 billion of client assets in certain investment
entities on its balance sheet with the related income reported
through its income statement. As noted previously, the company
believes that operating results, which exclude the impact of the
consolidation, as well as integration expenses and net realized
gains/losses, improve transparency of the underlying performance of
the business.
In addition, first quarter 2010 operating results included the
following after-tax impacts:
- $18 million, or $0.07 per share,
expense related to recognizing a substantial increase in
Threadneedle’s estimated market valuation attributable to its
incentive compensation program compared to the 2009 market
valuation. The charge reflects a valuation that increased more than
100 percent from the prior year and is higher than the year-end
2007 estimated valuation.
- $14 million, or $0.05 per share,
benefit from payments related to the Reserve Funds matter.
- $3 million, or $0.01 per share,
impact from the decline in net investment income from raising cash
in the quarter in preparation for the introduction of an enhanced
variable annuity asset allocation program.
Ameriprise Financial, Inc. Advice & Wealth Management
Segment Results (in millions,
unaudited)
Quarter Ended March 31, 2010 Quarter Ended
March 31, 2009
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
Advice & Wealth Management Net revenues $ 879 $ (1 ) $
880 $ 726 $ (10 ) $ 736 Expenses 828 2 826
787 12 775 Pretax income (loss) $ 51 $ (3 ) $
54 $ (61 ) $ (22 ) $ (39 )
Disclosed items included in
operating earnings(2)
Reserve Funds recovery
$ 2
(1) Includes net realized losses
and integration charges.
(2) Positive disclosed items
increased operating earnings; negative disclosed items decreased
operating earnings.
Advice & Wealth Management reported pretax income of
$51 million for the first quarter of 2010 compared to a pretax loss
of $61 million a year ago. Segment operating earnings were $54
million compared to a $39 million loss a year ago. Pretax operating
margin for the first quarter of 2010 was 6.1 percent.
Operating net revenues increased 20 percent, or $144 million, to
$880 million. Wrap account assets increased to $100 billion, an
all-time high driven by market appreciation and continued strong
net inflows. While brokerage cash balances remain high, at $13
billion, cash spreads increased slightly to 53 basis points. These
positives were partially offset by slow sales of annuities compared
to a year ago.
Operating expenses increased 7 percent primarily as a result of
higher distribution expenses. Segment operating general and
administrative expenses declined 7 percent driven by expense
controls partially offset by the introduction of a new advertising
campaign and increased investment in the business, primarily the
continued roll-out of an enhanced brokerage platform.
The company had a strong quarter for new client acquisition. Net
retail inflows combined with market appreciation drove total retail
client assets up 31 percent to $304 billion. The company continued
to recruit experienced advisors, although at a slower rate than in
2009.
Ameriprise Financial, Inc. Asset Management Segment
Results (in millions, unaudited)
Quarter Ended
March 31, 2010 Quarter Ended March 31, 2009
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
Asset Management Net revenues $ 370 $ 1 $ 369 $ 260 $ (3 ) $
263 Expenses 352 5 347 268 7
261 Pretax income (loss) $ 18 $ (4 ) $ 22 $ (8 ) $ (10 ) $ 2
Disclosed items included in
operating earnings(2)
Threadneedle valuation adjustment $ (27 ) $ 10
(1) Includes net realized gains
(losses) and integration charges.
(2) Positive disclosed items
increased operating earnings; negative disclosed items decreased
operating earnings.
Asset Management reported pretax income of $18 million
for the quarter compared to an $8 million loss a year ago. Segment
operating earnings were $22 million and included a $27 million
negative impact related to recognizing the more than 100 percent
year-over-year increase in Threadneedle’s estimated market value
attributable to its incentive compensation program. The company
uses this annual valuation to mark-to-market all current and
historical reserves for the program. Asset Management pretax
operating margin for the first quarter of 2010 was 6.0 percent or
13.3 percent when excluding the Threadneedle valuation change.
Operating net revenues increased 40 percent, or $106 million, to
$369 million, driven by higher management fees due to market
appreciation on assets and net inflows in prior quarters. Excluding
the impact of the Threadneedle valuation increase, segment
operating general and administrative expenses increased 14 percent,
primarily due to year-over-year timing differences in investment
performance compensation accruals.
RiverSource Investments continued to improve equity investment
performance and reported more than half of equity and fixed income
assets above Lipper peer group medians for 1-, 3- and 5-year time
periods, as of March 31, 2010. Threadneedle continues to maintain
strong longer-term track records in both equity and fixed income
portfolios.
Total managed assets were $246 billion, up 29 percent compared
to a year ago. Domestic asset management experienced solid net
inflows in hedge funds and positive institutional net inflows.
Domestic institutional net inflows included $0.6 billion in
outflows reflecting expected negative synergies from the Columbia
Management acquisition, offset by solid growth in institutional
mandates. Domestic asset management also experienced $1.1 billion
in retail net outflows, which included the negative impact of lower
year-over-year flows into variable products. Threadneedle continued
to shift toward higher yielding asset classes. International retail
net inflows continued to be strong at $1.3 billion, while
institutional net outflows of $1.3 billion were driven by
Zurich-related net outflows.
Ameriprise Financial, Inc. Annuities Segment Results
Quarter Ended March 31, 2010
Quarter Ended March 31, 2009
(in millions, unaudited)
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
Annuities Net revenues $ 602 $ 3 $ 599 $ 492 $ 20 $ 472
Expenses 482 — 482
363 — 363 Pretax income $ 120 $ 3 $ 117 $ 129
$ 20 $ 109
Disclosed items included in operating
earnings(2)
Decline in net investment income $ (5
)
(1) Includes net realized
gains.
(2) Positive disclosed items
increased operating earnings; negative disclosed items decreased
operating earnings.
Annuities segment operating earnings increased 7 percent
to $117 million compared to a year ago. Market volatility
materially impacted DAC amortization expense, benefits expense and
pretax operating earnings in the first quarter of 2009, making
comparisons to the year-ago period less meaningful.
In the first quarter of 2010, the company took action related to
the introduction of an enhanced variable annuity asset allocation
program, increasing liquidity in general account assets in
preparation to move those assets to separate accounts. This
negatively impacted net investment income by $5 million. In
addition, net investment income was negatively impacted in the
quarter by lower commercial mortgage loan fees and the absence of
consent fees and call premiums.
The mark-to-market impact of variable annuity living benefits
increased benefits expense by $24 million in the first quarter of
2010, primarily driven by model changes, FAS 157 valuation impacts
and basis risk. The enhanced variable annuity asset allocation
program the company will introduce in 2010 is designed to improve
the mitigation of basis risk.
While variable annuity inflows were low at $98 million in the
quarter, variable annuity exit rates improved over 150 basis points
from the prior-year period. Fixed annuities net outflows of $166
million in the first quarter of 2010 were primarily due to lower
sales from the company’s decision to lower crediting rates on new
contracts. Fixed annuity redemption rates also improved materially
from the prior-year period.
Ameriprise Financial, Inc. Protection Segment Results
(in millions, unaudited)
Quarter
Ended March 31, 2010 Quarter Ended March 31, 2009
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
Protection Net revenues $ 507 $ 1 $ 506 $ 496 $ 8 $ 488
Expenses 388 — 388 384 —
384 Pretax income $ 119 $ 1 $ 118 $ 112 $ 8 $ 104
(1) Includes net realized
gains.
Protection reported pretax income of $119 million for the
first quarter of 2010 compared to pretax income of $112 million a
year ago. Segment operating earnings were $118 million, up 13
percent compared to $104 million a year ago.
Operating revenues increased 4 percent, or $18 million, to $506
million, compared to a year ago, primarily driven by auto and home
premium growth, as well as increased net investment income due to
higher investment yields and increased general account assets.
Operating expenses increased slightly to $388 million from $384
million a year ago, as higher benefit expenses were partially
offset by lower DAC amortization. The increase in benefits expenses
was primarily driven by weather-related auto and home claims,
offset by favorable life and disability income insurance claims.
The decline in DAC amortization expenses was primarily the result
of the unfavorable market impact a year ago.
VUL / UL account balances were up 23 percent year-over-year to
$9 billion, primarily driven by equity market appreciation on VUL
balances. VUL / UL sales of $54 million increased 64 percent from a
year ago. Auto and home policy counts grew at a steady pace, up 9
percent from the prior-year period.
Ameriprise Financial, Inc. Corporate & Other Segment
Results Quarter Ended March 31, 2010
Quarter Ended March 31, 2009
(in millions, unaudited)
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
Corporate & Other Net revenues $ 157 $ 137 $ 20 $ 17 $
(12 ) $ 29 Expenses 104 54 50 55
2 53 Pretax income (loss) $ 53 $ 83 $ (30 ) $ (38 ) $ (14 )
$ (24 )
Disclosed items included in
operating earnings(2)
Gain on hybrid repurchase
$
50
Benefit from Reserve Funds $ 20
(1) Includes the revenues and
expenses of the consolidated investment entities and net realized
gains.
(2) Positive disclosed items
increased operating earnings; negative disclosed items decreased
operating earnings.
Corporate & Other reported pretax income of $53
million for the quarter of 2010 compared to a $38 million pretax
loss in the prior-year period. Pretax income included $82 million
attributable to noncontrolling interests and $1 million in realized
gains compared to a $14 million loss attributable to noncontrolling
interests in the prior-year period. Segment pretax operating loss
was $30 million in the first quarter compared to a pretax loss of
$24 million in the prior-year period.
Operating earnings in the first quarter of 2009 included a $50
million benefit from repurchasing the company’s hybrid securities
at a discount. In the first quarter of 2010, operating earnings
included a $20 million benefit from payments related to the Reserve
Funds matter.
Operating interest and debt expense was down $2 million
year-over-year. On March 11, 2010, the company issued $750 million
in 10-year notes with a 5.3 percent coupon. In addition, the
company swapped $1.375 billion of debt from fixed to floating,
consistent with its asset-liability matching strategy.
Ameriprise Financial, Inc. is a diversified financial services
company serving the comprehensive financial planning needs of the
mass affluent and affluent. For more information, visit
ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning
services, investments, insurance and annuity products. 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 of belief in this
news release that the company is expected to deploy approximately
$1 billion of excess capital to acquire the long-term asset
management business of Columbia Management;
- the statement of belief in this
news release that the transaction with Columbia Management is
expected to be completed on May 1, 2010 and that related
operational and financial expectations are on track;
- the statement of belief in this
news release regarding the capabilities of the combined asset
management business;
- the statement of belief in this
news release that the company will continue to use enterprise risk
management capabilities and product hedging to anticipate and
mitigate risk;
- the statements in this news
release regarding the expected implementation of an enhanced
variable annuity asset allocation program designed to improve the
mitigation of basis risk;
- the statement of belief in this
news release that a portion of the proceeds from the company’s
issuance of $750 million of 10-year senior notes will be used to
retire $340 million in debt maturing in November 2010;
- the statement of belief in this
news release that the company expects its 2010 full-year effective
tax rate will be approximately 25 to 27 percent;
- the statement of belief in this
news release that a large portion of tax planning benefits expected
for 2010 will be recorded during the first and second
quarters;
- statements of the company’s
plans, intentions, expectations, objectives or goals, including
those relating to asset flows, mass affluent and affluent client
acquisition strategy, client retention, financial advisor
retention, recruiting and enrollments, general and administrative
costs, consolidated tax rate and excess capital position;
- 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:
- changes in the valuations,
liquidity and volatility in the interest rate, credit default,
equity market and foreign exchange environments;
- 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;
- investment management
performance and consumer acceptance of the company’s products;
- effects of competition in the
financial services industry and changes in product distribution mix
and distribution channels;
- changes to the company’s
reputation that may arise from employee or affiliated advisor
misconduct, legal or regulatory actions, 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;
- 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 DAC and
DSIC or market volatility underlying our valuation and hedging of
guaranteed living benefit annuity riders;
- 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 complete the
acquisition opportunities the company negotiates (including the
transaction with Columbia Management);
- the company’s ability to realize
the financial, operating and business fundamental benefits or to
obtain regulatory approvals regarding integrations we plan for the
acquisitions we have completed or have contracted to complete, as
well as the amount and timing of integration expenses;
- the ability and timing to
realize savings and other benefits from re-engineering and tax
planning;
- changes in the capital markets
and competitive environments induced or resulting from the partial
or total ownership or other support by central governments of
certain financial services firms or financial assets; and
- general economic and political
factors, including consumer confidence in the economy, 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 included as Part 1, Item 1A of and
elsewhere in our Annual Report on Form 10-K for the year ended
December 31, 2009 at
ir.ameriprise.com/phoenix.zhtml?c=191716&p=irol-forwardLookingStatement.
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 March 31, 2010. For
information about Ameriprise Financial entities, please refer to
the First Quarter 2010 Statistical Supplement available at
ir.ameriprise.com and the tables that follow in this news
release.
Ameriprise Financial, Inc. Reconciliation Table: GAAP
Income Statement to Operating Income Statement
(in millions, unaudited)
Quarter Ended
March 31, 2010 Quarter Ended March 31, 2009
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
GAAPEarnings
Less:Adjustments(1)
OperatingEarnings
OperatingEarnings% Change
Revenues
Management and financial advice
fees
$ 774 $ (9 ) $ 783 $ 554 $ — $ 554 41 % Distribution fees 391 — 391
311 — 311 26 Net investment income 590 84 506 418 16 402 26
Premiums 282 — 282 266 — 266 6 Other revenues 255 57
198 209 (12 ) 221 (10 ) Total revenues
2,292 132 2,160 1,758 4 1,754 23 Banking and deposit interest
expense 21 — 21 42 1 41
(49 )
Total net revenues 2,271 132
2,139 1,716 3 1,713 25
Expenses Distribution expenses 525 — 525 384 — 384 37
Interest credited to fixed accounts 228 — 228 205 — 205 11
Benefits, claims, lossesand settlement expenses 354 — 354 100 — 100
NM Amortization of deferred acquisition costs 118 — 118 286 — 286
(59 ) Interest and debt expense 64 40 24 26 — 26 (8 )
General and administrative
expense
621 12 609 581 21 560 9
Total expenses 1,910 52 1,858
1,582 21 1,561 19 Pretax income 361 80
281 134 (18 ) 152 85 Income tax provision 65 (1 )
66 18 (1 ) 19 NM
Net income
296 81 215
116 (17 ) 133 62
Less: Net income (loss)
attributable to noncontrolling interests
82 82 — (14 ) (14 ) — —
Net income attributable to
Ameriprise Financial
$ 214 $ (1 ) $ 215
$ 130 $ (3 ) $ 133
62 NM Not Meaningful
(1) Includes the elimination of
management fees earned by the company from the consolidated
investment entities and the related expense, the revenues and
expenses of the consolidated investment entities, net realized
gains/losses and integration charges.
Ameriprise Financial, Inc. Additional GAAP to Operating
reconciliations (in millions,
unaudited)
Quarter Ended March 31, 2010 Quarter Ended
March 31, 2009
GAAPExpenses
Less:Adjustments(1)(2)
OperatingExpenses
GAAPExpenses
Less:Adjustments(1)
OperatingExpenses
Advice & Wealth Management
General and administrative
expense
$ 292 $ 2 $ 290 $ 325 $ 12 $ 313
Asset Management
General and administrative
expense
$ 240 $ 5 $ 235 $ 180 $ 7 $ 173
Corporate and Other
Interest and debt expense(2)
$ 64 $ 40 $ 24 $ 26 $ — $ 26
(1) Includes integration
charges.
(2) Includes the expenses of the
consolidated investment entities.
Ameriprise Financial, Inc. Reconciliation Table:
Effective Tax Rate
(in millions, unaudited)
Quarter EndedMarch 31,
2010
Pretax income $ 361 Less: Pretax income attributable to
noncontrolling interests 82
Pretax income excluding CIEs
$ 279 Income tax provision $ 65 Effective tax rate
17.9% Effective tax rate excluding noncontrolling interests 23.2%
Ameriprise Financial, Inc. Reconciliation Table:
Ameriprise Financial Debt to Ameriprise Financial Capital Ratio
March 31, 2010 GAAP
Measure GAAP Measure Excluding
Non-recourse Excluding Non-recourse Debt
and Non-recourse Debt and Equity of Equity
of Debt and Equity Consolidated
Consolidated of Consolidated Impact of
Investment GAAP Investment Investment
75% Equity Entities with 75% (in millions, unaudited)
Measure
Entities(1)
Entities
Credit(2)
Equity
Credit(1)(2)
Ameriprise Financial Debt
$ 2,612 $ 6 $ 2,606 $ 242 $ 2,364 Ameriprise Financial Capital $
12,720 $ 488 $ 12,232 $ 12,232
Ameriprise Financial Debt to
Ameriprise Financial Capital
20.5 % 21.3 % 19.3 %
(1) Includes non-recourse debt of
muni inverse floaters and equity impacts attributable to
consolidated investment entities.
(2) The company’s junior
subordinated notes receive an equity credit of at least 75% by the
majority of the rating agencies.
Ameriprise Financial, Inc. Return on Equity (ROE)
Excluding Accumulated Other Comprehensive Income (AOCI)
Calculation for the
12 Months as of March 31,
2010
ROE
(in millions, unaudited)
excluding AOCI
Less:
Adjustments(1)
Operating ROE(2)
Return
$
806
$ (28
)
$
834
Equity excluding AOCI
$
8,708
$
101
$ 8,607
Return on Equity excluding
AOCI
9.3
%
9.7
%
Ameriprise Financial, Inc.
Return on Equity (ROE)
Excluding Accumulated Other Comprehensive Income (AOCI)
Calculation for the
12 Months as of March 31,
2009
ROE
(in millions, unaudited)
excluding AOCI
Less:
Adjustments(1)
Operating ROE(2)
Return
$
(99
)
$
(505
)
$
406
Equity excluding AOCI
$
7,637
$
—
$
7,637
Return on Equity excluding
AOCI
(1.3)
%
5.3
%
(1) Adjustments reflect the
trailing twelve months’ sum of after-tax net realized gains/losses
and integration charges less the equity impacts attributable to the
consolidated investment entities.
(2) Operating return on equity
excluding accumulated other comprehensive loss and consolidated
investment entities is calculated using the trailing twelve months
of earnings excluding the after-tax net realized gains/losses and
integration charges in the numerator, and Ameriprise Financial
shareholders’ equity excluding the impact of consolidated
investment entities using a five point average of quarter-end
equity in the denominator.
Ameriprise Financial, Inc. Reconciliation Table: Book
Value
March 31, March 31, %
(in millions, except per share
amounts, unaudited)
2010 2009 Change Total Ameriprise
Financial shareholders’ equity $ 10,108 $ 6,384 58 % Less:
Accumulated other comprehensive income (AOCI) 365 — NM Add:
Accumulated other comprehensive loss — 1,134 NM Less: Appropriated
retained earnings of CIEs 508 — NM Total Ameriprise
Financial shareholders’ equity excluding AOCI and CIEs $ 9,235 $
7,518 23 Basic common shares outstanding 262.4 223.7 NM
Book value per share $ 38.52 $ 28.54 35 Book value per share
excluding AOCI and CIEs $ 35.19 $ 33.61 5 %
NM Not Meaningful
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