Ameriprise Financial, Inc. (NYSE: AMP):
Ameriprise Financial, Inc. Second Quarter
Results
(in millions, except pershare
amounts, unaudited)
Per Diluted Share 2010
2009 % Change 2010 2009
% Change GAAP Net revenues $ 2,577 $ 1,874 38
% Net income(1) $ 259 $ 95 173 % $ 0.98 $ 0.41 139 %
Operating* Net revenues $ 2,379 $ 1,876 27 % Earnings $ 291
$ 107 172 % $ 1.10 $ 0.47 134 %
Weighted average common shares
outstanding:
Basic 261.1 228.8 Diluted 265.3 230.0
* Operating measures exclude net
realized gains/losses, integration expenses and the impact of the
adoption of a new accounting standard in 2010 that required the
company to consolidate $6 billion of client assets in certain
investment entities on its balance sheet and report related
revenues and expenses through its income statement. Reconciliation
tables of GAAP to operating results are included throughout this
release.
Ameriprise Financial, Inc. (NYSE: AMP) today reported net
income1 of $259 million for the second quarter of 2010 compared to
$95 million for the second quarter of 2009. Net income per diluted
share for the second quarter of 2010 was $0.98 compared to $0.41 a
year ago.
Operating earnings increased 172 percent to $291 million in the
second quarter of 2010 compared to $107 million a year ago.
Operating earnings per diluted share were $1.10 in the second
quarter of 2010, up 134 percent from $0.47 a year ago. Operating
earnings reflected organic growth driven by higher asset-based
revenues and re-engineering benefits as well as two months of
earnings from the Columbia Management acquisition that closed on
April 30, 2010. Strong operating earnings growth reflected
continued margin improvement in Advice & Wealth Management and
Asset Management.
Operating net revenues were $2.4 billion in the second quarter
of 2010, up 27 percent from a year ago, driven primarily by growth
in asset-based management fees and distribution fees resulting from
higher asset levels and increased client activity. Higher asset
levels reflected market appreciation, the acquisition of Columbia
Management and retail net inflows. Excluding the acquisition,
operating revenues grew 18 percent from a year ago.
As of June 30, 2010, the company’s excess capital position was
more than $1.5 billion after deploying $220 million to repurchase
5.7 million shares of common stock during the quarter. The
company’s investment portfolio remained in a net unrealized gain
position. Excluding accumulated other comprehensive income (AOCI)
and the equity impact of the required consolidation in certain
investment entities, book value per share increased 10 percent from
a year ago to $36.07.
Return on shareholders’ equity excluding AOCI was 10.6 percent
for the 12 months ended June 30, 2010. Operating return on equity
was 11.4 percent for the same period.
"Our strong financial results for the quarter reflect the
strength of our diversified business," said Jim Cracchiolo,
chairman and chief executive officer. "Each of our segments
performed well, led by stronger earnings in Advice & Wealth
Management and Asset Management. Client activity and advisor
productivity continued to improve despite the on-going volatility
in the markets."
"The Columbia Management integration is on schedule and on
budget. We are focused on delivering consistent, competitive
performance, retaining and growing our retail and institutional
assets, and achieving our expectations for revenue growth and
expense synergies.
"We continue to operate from a position of financial strength,
with a high-quality balance sheet and substantial excess capital.
During the quarter, we began to return more capital to our
shareholders by buying back $220 million of common stock."
1 Net income represents net income attributable to Ameriprise
Financial.
Summary
Ameriprise Financial, Inc. Second Quarter Summary
(in millions, except pershare
amounts, unaudited)
Per Diluted Share 2010
2009 % Change 2010 2009
% Change Net income attributable toAmeriprise
Financial $ 259 $ 95 173 % $ 0.98 $ 0.41 139 % Add:
Integration charges, after-tax(1) 37 16 131 % 0.14 0.07 100 % Less:
Net realized gains, after-tax(1) 5 4 25 % 0.02
0.01 100 % Operating earnings $ 291 $ 107 172 % $
1.10 $ 0.47 134 %
Weighted average common shares
outstanding:
Basic 261.1 228.8 Diluted 265.3 230.0 (1) After-tax is
calculated using the statutory tax rate of 35%.
The company believes that operating measures, which exclude net
realized gains or losses, integration charges and the impact of the
consolidation of certain investment entities, best reflect the
performance of the business.
Second quarter 2010 operating results demonstrated the strength
of the business and included the following after-tax items:
- $25 million or $0.09 per diluted
share expense from accelerated deferred acquisition costs (DAC) and
deferred sales inducement costs (DSIC) amortization driven by the
equity market declines in the quarter.
- $21 million or $0.08 per diluted
share benefit from revising certain calculations in its valuation
of DAC and DSIC.
- $16 million or $0.06 per diluted
share benefit from the mark-to-market valuation of hedged living
benefits, primarily driven by the impact of credit spreads on the
GAAP liability valuation, which the company does not hedge.
- $5 million or $0.02 per diluted
share expense from supporting the $1.00 net asset value of certain
2a-7 funds.
Taxes
The effective tax rate on net income excluding net income (loss)
attributable to noncontrolling interests and the required
consolidation of certain investment entities was 20.8 percent in
the second quarter of 2010. The company expects its full-year 2010
operating tax rate to be at the low end of the 25 to 27 percent
range based on expected benefits from tax planning, a large portion
of which have been realized in the first and second quarters of the
year.
Second Quarter 2010 Business Highlights
- The company closed its
acquisition of the long-term asset management business of Columbia
Management on April 30, 2010. The integration is progressing on
schedule; operational and financial results are on track with
expectations.
- Total owned, managed and
administered assets were $600 billion at June 30, 2010, up 51
percent from a year ago, including $166 billion in acquired assets.
Excluding the acquisition, growth was driven by year-over-year
market appreciation and retail net inflows.
- Total client assets increased 12
percent year-over-year reflecting market appreciation, retail net
inflows and strong client and asset retention.
- Advisor productivity, measured
as operating net revenue per advisor, increased 32 percent compared
to a year ago, matching an all-time high. Growth was primarily
driven by higher asset-based fees as a result of year-over-year
market appreciation and net inflows, improved client activity and
the company’s focus on higher-producing advisors.
- Total advisors declined 7
percent from a year ago to 11,684, primarily due to the 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.
- Asset Management segment managed
assets increased 93 percent to $413 billion largely due to the
acquisition of Columbia Management and the year-over-year
appreciation in the S&P 500. In the second quarter of 2010,
U.S. asset management reported approximately $4.6 billion in net
outflows, primarily in lower-margin portfolios. In addition,
Threadneedle reported approximately $1.1 billion in net outflows in
the quarter, primarily driven by Zurich-related outflows.
- Wrap assets increased 23 percent
year-over-year to $97 billion due to net inflows and market
appreciation. In the second quarter of 2010, wrap net inflows of
$2.2 billion were more than offset by market depreciation on
assets.
- Total annuity net inflows
remained positive with $199 million in variable annuity net inflows
in the quarter, partially offset by fixed annuity net outflows of
$190 million. While variable annuity net inflows remained below
historical levels, net inflows more than doubled sequentially due
to improved sales within the Ameriprise channel.
- The insurance business had its
strongest cash sales quarter since the third quarter of 2008.
Variable universal life / universal life (VUL/UL) sales were $59
million in the quarter, up 31 percent from a year ago with
increases in both variable and fixed universal life insurance. In
the second quarter of 2010, VUL/UL ending policyholder account
balances were up 8 percent to $8.6 billion compared to a year
ago.
- Ameriprise Auto & Home
premiums increased 7 percent from a year ago, primarily due to
growth in policy counts.
Liquidity and Balance Sheet as of June 30, 2010
The company maintains strong balance sheet fundamentals, excess
capital and financial flexibility to capture additional growth
opportunities.
Conservative capital
management
- The company’s excess capital
position was more than $1.5 billion.
- The company repurchased 5.7
million shares of its common stock for $220 million.
- RiverSource Life Insurance
Company’s estimated risk-based capital ratio was above 500
percent.
- The debt-to-total capital ratio
attributable to Ameriprise Financial was 20.4 percent. The
debt-to-total capital ratio was 19.4 percent excluding non-recourse
debt, the impact of consolidated investment entities and the 75
percent equity credit for the hybrid securities.
- 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
$3.8 billion, with $1.6 billion at the holding company level and
$2.1 billion in free cash.
High-quality investment
portfolio
- The $32 billion
available-for-sale portfolio remained well diversified and high
quality.
- The investment portfolio
remained in a net unrealized gain position, with $1.6 billion in
net unrealized gains.
- The total investment portfolio,
including cash and cash equivalents, was $40.4 billion and remained
well positioned. Detailed information about the portfolio is
available at ir.ameriprise.com
Segment Results
Ameriprise Financial, Inc. Advice & Wealth Management
Segment Results (in millions, unaudited)
Quarter Ended June 30, 2010 Quarter Ended June 30,
2009 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating Advice & Wealth Management Net
revenues $ 969 $ 1 $ 968 $ 785 $ (8 ) $ 793 Expenses 884
4 880 788 16 772 Pretax income
(loss) $ 85 $ (3 ) $ 88 $ (3 ) $ (24 ) $ 21 (1) Includes net
realized gains (losses) and integration charges.
Advice & Wealth Management reported pretax income of
$85 million for the second quarter of 2010 compared to a pretax
loss of $3 million a year ago. Segment operating earnings were $88
million compared to $21 million a year ago. Pretax operating margin
for the second quarter of 2010 was 9.1 percent.
Operating net revenues increased 22 percent to $968 million from
higher management and distribution fees driven by year-over-year
market appreciation, retail net inflows and increased brokerage
transactional activity.
Operating expenses increased 14 percent to $880 million,
primarily as a result of higher advisor compensation from higher
business levels. Segment operating general and administrative
expenses declined slightly reflecting cost controls partially
offset by continued investment in the business, including the
roll-out of an enhanced brokerage platform.
Advisor productivity increased for the fifth consecutive quarter
driven by higher asset-based fees as a result of year-over-year
market appreciation and net inflows, improved client activity and
the company’s focus on higher-producing advisors.
Ameriprise Financial, Inc. Asset Management Segment
Results (in millions, unaudited)
Quarter Ended
June 30, 2010 Quarter Ended June 30, 2009
GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating Asset Management Net revenues $ 562
$ —
$
562
$ 293 $ — $ 293 Expenses 506 48 458 305
9 296 Pretax income (loss) $ 56 $ (48 ) $ 104 $ (12 )
$ (9 ) $ (3 ) (1) Includes integration charges.
Asset Management reported pretax income of $56 million
for the second quarter of 2010 compared to a $12 million loss a
year ago. Segment operating earnings were $104 million compared to
a $3 million loss a year ago driven by the inclusion of two months
of Columbia Management results during the quarter, as well as
benefits from year-over-year market appreciation on assets and
re-engineering. Asset Management pretax operating margin for the
second quarter of 2010 was 18.5 percent.
Operating net revenues increased 92 percent to $562 million
driven by an increase in management fees due to the growth in
assets from the acquisition and market appreciation.
Operating expenses increased 55 percent to $458 million,
primarily reflecting increased general and administrative and
distribution expenses from the acquisition. During the quarter, the
company recognized $48 million in integration-related expenses,
which was consistent with original estimates.
The U.S. asset management business ended the quarter with $327
billion in managed assets and strong investment and wholesaling
teams in place. Investment performance continued to be solid,
complementing strong longer-term investment track records. Net
outflows in the second quarter were $4.6 billion, including $2.1
billion from a single low-yielding institutional account and $0.8
billion in lower-margin sub-advised retail portfolios included in
acquired assets, as well as integration-related outflows. Retail
net outflows also reflected slower equity sales, consistent with
the industry.
At Threadneedle, total managed assets were $89 billion at June
30, 2010, up 8 percent from a year ago reflecting year-over-year
market appreciation and net inflows, partially offset by negative
foreign currency translation. Total net outflows of $1.1 billion in
the second quarter of 2010 were primarily due to institutional
outflows in Zurich-related portfolios. In addition, market
volatility negatively impacted European retail investor behavior in
the quarter, dampening the positive trend in flows from prior
quarters and contributing to net outflows in retail portfolios.
Longer-term investment track records remained strong.
Ameriprise Financial, Inc. Annuities Segment
Results Quarter Ended June 30, 2010
Quarter Ended June 30, 2009
(in millions, unaudited)
GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating Annuities Net revenues $ 630 $ 4 $
626 $ 562 $ 8 $ 554 Expenses 497 — 497
468 — 468 Pretax income $ 133 $ 4 $ 129 $ 94 $ 8 $ 86
(1) Includes net realized gains.
Annuities reported pretax income of $133 million for the
second quarter of 2010 compared to $94 million a year ago. Segment
operating earnings were $129 million compared to $86 million a year
ago.
Segment operating earnings in the quarter included the following
items:
- $35 million increased expense
from accelerated DAC and DSIC amortization driven by equity market
declines in the quarter.
- $26 million benefit from
revising certain calculations in its valuation of DAC and
DSIC.
- $25 million benefit, net of DAC
and DSIC, from the mark-to-market valuation of hedged living
benefits, primarily driven by the impact of credit spreads on the
GAAP liability valuation, which the company does not hedge.
- $6 million in additional
benefits expense, net of DAC amortization, related to the
implementation of an enhanced asset allocation program known as
Enhanced Portfolio Navigator for variable annuity and variable
universal life products.
Operating net revenues increased 13 percent to $626 million,
reflecting increased management and distribution fees as a result
of increased separate account balances, primarily due to higher
equity market levels and variable annuity net inflows.
Segment general and administrative expenses increased $5 million
from a year ago, primarily driven by additional expenses related to
a new product introduction and the implementation of Enhanced
Portfolio Navigator.
Total annuity net inflows in the quarter continued to reflect
variable annuity net inflows largely offset by fixed annuity net
outflows. While variable annuity sales were consistent with the
year-ago period, variable annuity sales increased 19 percent
sequentially. Lower fixed annuity sales in the quarter primarily
reflected decreased client demand due to lower offered crediting
rates.
Ameriprise Financial, Inc. Protection Segment
Results (in millions, unaudited)
Quarter Ended
June 30, 2010 Quarter Ended June 30, 2009
GAAP Less: Adjustments(1)
Operating GAAP Less: Adjustments(1)
Operating Protection Net revenues $ 521 $ 1 $ 520 $
497 $ (1 ) $ 498 Expenses 386 — 386 387
— 387 Pretax income $ 135 $ 1 $ 134 $ 110 $ (1 ) $
111
(1) Includes net realized gains
(losses).
Protection reported pretax income of $135 million for the
second quarter of 2010 compared to pretax income of $110 million a
year ago. Segment operating earnings were $134 million compared to
$111 million a year ago. Operating earnings included a $7 million
benefit from revising certain calculations in its valuation of DAC;
a $6 million DAC amortization benefit from the introduction of
Enhanced Portfolio Navigator; and a $4 million increase in expense
from accelerated DAC amortization driven by equity market declines
in the quarter.
Operating net revenues increased 4 percent to $520 million
compared to a year ago, primarily driven by increased net
investment income due to higher investment yields and increased
general account assets, as well as auto and home premium
growth.
Operating expenses were essentially flat at $386 million as
volume-based expense increases were offset by a $6 million benefit
from the introduction of Enhanced Portfolio Navigator.
Life and health insurance cash sales increased 23 percent from
the year-ago period, reflecting improved client activity.
Auto and Home continued to grow new sales while retention
remained strong driving net written premiums up 7 percent on a
year-over-year basis. In addition, the combined loss ratio and
expense ratio in the quarter remained favorable.
Ameriprise Financial, Inc. Corporate & Other
Segment Results Quarter Ended June 30,
2010 Quarter Ended June 30, 2009
(in millions, unaudited)
GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
Corporate & Other
Net revenues $ 188 $ 202 $ (14 ) $ (12 ) $ — $ (12 ) Expenses
131 67 64 62 1 61 Pretax
income (loss) $ 57 $ 135 $ (78 ) $ (74 ) $ 1 $ (73 )
(1) Includes revenues and expenses
of the consolidated investment entities, net realized gains and
integration charges.
Corporate & Other reported pretax income of $57
million for the second quarter of 2010 compared to a $74 million
pretax loss a year ago. Segment operating loss was $78 million in
the quarter compared to a pretax loss of $73 million a year
ago.
Operating expenses in the second quarter of 2010 included $8
million in higher general and administrative expenses related to
supporting the $1.00 net asset value of certain 2a-7 funds.
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 in this news
release that the integration of Columbia Management is on schedule
and that operational and financial results are on track with
expectations;
- 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 statement of belief in this
news release that the company expects its 2010 full-year effective
tax rate will be at the low end of the 25 to 27 percent range;
- 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
productivity, retention, recruiting and enrollments, general and
administrative costs, consolidated tax rate, return of capital to
shareholders 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 relevant accounting
standards, 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 recent
enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act;
- 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 and to pursue
other growth opportunities;
- 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 under Part 1, Item 1A of and elsewhere in
our Annual Report on Form 10-K for the year ended December 31, 2009
and under Part 2, Item 1A of our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010, available at
ir.ameriprise.com.
The financial results discussed in this news release represent
past performance only, which may not be used to predict or project
future results. The financial results and values presented in this
news release and the below-referenced Statistical Supplement are
based upon asset valuations that represent estimates as of the date
of this news release and may be revised in the company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2010. For
information about Ameriprise Financial entities, please refer to
the Second 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 June 30, 2010
Quarter Ended June 30, 2009 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating % Change Revenues
Management andfinancial advice
fees
$ 955 $ (10 ) $ 965 $ 606 $ (1 ) $ 607 59 % Distribution fees 453 —
453 351 — 351 29 Net investment income 654 162 492 511 7 504 (2 )
Premiums 299 — 299 269 — 269 11 Other revenues 236 46
190 175 (7 ) 182 4 Total revenues 2,597
198 2,399 1,912 (1 ) 1,913 25
Banking and depositinterest
expense
20 — 20 38 1 37 (46 )
Total net revenues 2,577 198 2,379
1,874 (2 )
1,876 27
Expenses
Distribution expenses
621 — 621 432 — 432 44 Interest credited tofixed accounts 231 — 231
237 — 237 (3 ) Benefits, claims, lossesand settlement expenses 298
— 298 587 — 587 (49 ) Amortization of deferred acquisition costs
171 — 171 (125 ) — (125 ) NM Interest and debt expense 74 45 29 28
— 28 4 General andadministrative expense 716 64
652 600 25 575 13
Total expenses
2,111 109 2,002 1,759 25
1,734 15 Pretax income 466 89 377 115 (27 ) 142 NM
Income tax provision 68 (18 ) 86 28
(7 ) 35 NM
Net income 398 107
291 87 (20
)
107 NM
Less: Net income (loss)
attributable to noncontrolling interests
139 139 — (8 ) (8 ) — — %
Net income attributable
to Ameriprise Financial
$ 259 $ (32 ) $
291 $ 95 $ (12 ) $
107 NM NM Not Meaningful
(1) Includes the elimination of
management fees earned by the company from the consolidated
investment entities and the related expense, revenues and expenses
of the consolidated investment entities, net realized gains/losses
and integration charges. Income tax provision is calculated using
the statutory tax rate of 35% on applicable adjustments.
Ameriprise Financial, Inc. Reconciliation
Table: Effective Tax Rate
(in millions, unaudited)
Quarter EndedJune 30,
2010
Pretax income $ 466 Less: Pretax income attributable to
noncontrolling interests 139 Pretax income excluding CIEs $
327 Income tax provision $ 68 Effective tax rate
14.6% Effective tax rate excluding noncontrolling interests 20.8%
Ameriprise Financial, Inc. Reconciliation
Table: Ameriprise Financial Debt to Ameriprise Financial Capital
Ratio June 30, 2010 (in millions, unaudited)
GAAP Measure Non-recourse Debt and Equity
of Consolidated Investment Entities(1)
GAAP Measure Excluding
Non-recourse Debt and Equity of Consolidated Investment
Entities
Impact of 75% Equity Credit(2)
GAAP Measure Excluding
Non-recourse Debt and Equity of Consolidated Investment Entities
with 75% Equity Credit(1)(2)
Ameriprise Financial Debt
$ 2,684 $ 6 $ 2,678 $ 242 $ 2,436 Ameriprise Financial Capital $
13,182 $ 602 $ 12,580 — $ 12,580
Ameriprise Financial Debt
to Ameriprise Financial Capital
20.4 % 21.3 % 19.4 %
(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 (Loss)
“AOCI” Calculation for the 12 Months Ended June 30, 2010
(in millions, unaudited)
ROE excluding AOCI Less:
Adjustments(1) Operating ROE(2)
Return $ 970 $ (48 ) $ 1,018 Equity excluding AOCI $ 9,178 $
226 $ 8,952 Return on Equity excluding AOCI 10.6 % 11.4 %
Ameriprise Financial, Inc. Return on Equity
(ROE) Excluding Accumulated Other Comprehensive Income (Loss)
“AOCI” Calculation for the 12 Months Ended June 30, 2009
(in millions, unaudited)
ROE excluding AOCI
Less: Adjustments(1) Operating ROE(2)
Return $ (214 ) $ (499 ) $ 285 Equity excluding AOCI $ 7,757
$ — $ 7,757 Return on Equity excluding AOCI (2.8 )% 3.7 %
(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 income (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
consolidating investment entities using a five point average of
quarter-end equity in the denominator.
Ameriprise Financial, Inc. Reconciliation
Table: Book Value
(in millions, except per share
amounts, unaudited)
June 30, 2010
June 30,2009
%Change
Total Ameriprise Financial shareholders’ equity $ 10,498 $ 8,106 30
% Less: Appropriated retained earnings of CIEs 620 — NM Add:
Accumulated other comprehensive income (AOCI) of CIEs(1) 24
— NM Total Ameriprise Financial shareholders’ equity
excluding CIEs 9,902 8,106 22 Less: AOCI excluding CIEs 631 — NM
Add: Accumulated other comprehensive loss — 386 NM
Total Ameriprise Financial shareholders’ equity excluding AOCI and
CIEs $ 9,271 $ 8,492 9 Basic common shares outstanding 257.0
259.2 (1 ) Book value per share $ 40.85 $ 31.27 31 Book
value per share excluding CIEs $ 38.53 $ 31.27 23 Book value per
share excluding AOCI and CIEs $ 36.07 $ 32.76 10 % NM Not
Meaningful
(1) This adjustment reflects the
add back of the elimination of unrealized gains on the Company’s
investment in CIEs.
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