Ameriprise Financial, Inc. (NYSE: AMP) today reported second
quarter 2011 operating earnings of $328 million, or $1.31 per
diluted share, up 21 percent from $272 million, or $1.03 per
diluted share, compared to a year ago. Net income from continuing
operations attributable to Ameriprise Financial was $313 million,
or $1.25 per diluted share, compared to $257 million, or $0.97 per
diluted share, a year ago.
Operating net revenues were $2.6 billion, up 14 percent from
$2.3 billion a year ago driven by growth in asset-based fees from
retail client net inflows, market appreciation and the Columbia
Management acquisition.
Operating earnings growth reflected higher revenues from
business growth, partially offset by a higher tax rate.
Operating return on shareholders’ equity excluding accumulated
other comprehensive income (AOCI) increased to 14.5 percent for the
12 months ended June 30, 2011, compared to 11.5 percent for the 12
months ended June 30, 2010.
The company’s excess capital position remains strong. During the
quarter, the company deployed $366 million to repurchase 6.1
million shares of its common stock and announced a new $2.0 billion
share repurchase authorization due to the accelerated pace of
repurchases under the program announced in May 2010.
"Ameriprise Financial continued to generate strong revenue
growth as well as higher earnings and returns in the second
quarter," said Jim Cracchiolo, chairman and chief executive
officer. "In fact, our operating return on equity reached an
all-time high of 14.5 percent."
"Our advisory and asset management businesses are generating
strong results. Advisor productivity reached another record high,
and we're driving good asset flows and client activity. Our asset
management results in the quarter demonstrate the benefits of our
increased scale and geographic reach, with strong earnings growth
and improved retail and institutional flows."
Ameriprise Financial, Inc. Second Quarter
Results Summary
(in millions, except per share amounts,
unaudited)
2011 2010 % Change Operating(1)
Net revenues $ 2,592 $ 2,264 14 % Earnings $ 328 $
272 21 % Earnings per diluted share $ 1.31 $ 1.03 27 % Return on
equity excluding AOCI 14.5 % 11.5 %
GAAP Net revenues
$ 2,623 $ 2,462 7 % Net income from continuing operations
attributable to Ameriprise Financial $ 313 $ 257 22 % Earnings from
continuing operations per diluted share $ 1.25 $ 0.97 29 % Return
on equity from continuing operations excluding AOCI 12.8 % 10.6 %
Weighted average common shares outstanding: Basic
245.5 261.1 Diluted 251.0 265.3
(1)
Operating measures exclude the consolidation of certain
investment entities, net realized gains or losses, integration and
restructuring charges, market impact on variable annuity guaranteed
living benefits and discontinued operations. Reconciliation tables
of GAAP to Operating results are included in this release.
Second Quarter 2011 Business Highlights
- Total assets under management and
administration were $670 billion at June 30, 2011, up 17 percent
from a year ago as a result of net inflows and market appreciation.
Total assets under management and administration exclude assets
from discontinued operations.
- Asset Management assets under
management (AUM) increased 13 percent to $467 billion driven by
year-over-year equity market appreciation.
- Retail client assets in Advice &
Wealth Management increased 20 percent year-over-year to $319
billion, reflecting market appreciation and strong retail client
net inflows.
- Branded wrap assets grew 27 percent
from a year ago to $106 billion due to market appreciation and net
inflows, including net inflows of $2.3 billion in the quarter.
- Ameriprise advisor productivity,
measured as operating net revenue per advisor, was $99,000 in the
quarter, a 14 percent increase compared to a year ago. Growth was
primarily driven by improved client activity and retail client net
inflows.
- On a sequential basis, the number of
financial advisors increased slightly, reflecting continued
experienced advisor recruiting and strong advisor retention,
partially offset by the departure of lower-producing advisors.
- Asset Management net inflows of $0.5
billion in the quarter compared to net outflows of $4.9 billion a
year ago and net outflows of $4.8 billion in the prior quarter. Net
flows improved significantly, reflecting improved sales and lower
redemptions in European retail and institutional portfolios.
- Investment performance remained strong
at both Columbia Management and Threadneedle.
- Variable annuity ending account
balances increased 21 percent year-over-year to $65 billion from
market appreciation and net inflows, including net inflows of $0.4
billion in the Ameriprise channel in the quarter, partially offset
by net outflows from the closed book of variable annuities sold
through third-party channels.
- Variable universal life / universal
life (VUL/UL) ending account balances increased 13 percent from a
year ago to $9.7 billion.
- The previously announced sale of
Securities America is progressing as anticipated. Securities
America is now reported as discontinued operations for second
quarter 2011 and for all prior periods.
Second Quarter 2011 Segment
Results
Ameriprise Financial, Inc. Advice & Wealth
Management Segment Results (in millions, unaudited)
Quarter Ended June 30, 2011
Quarter Ended June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating % Change Advice & Wealth
Management Net revenues $ 957 $ — $ 957 $ 853 $ 1 $ 852 12 %
Expenses 849 — 849 770 4
766 11 Pretax income $ 108 $ — $ 108 $ 83 $ (3 ) $ 86 26
Quarter Ended
Quarter Ended June 30,
2011 June 30, 2010 % Change Retail client assets
(billions) $ 319 $ 266 20 % Mutual fund wrap net flows (billions) $
2.3 $ 1.9 21 % Operating net revenue per branded advisor
(thousands) $ 99 $ 87 14 %
(1)
Includes net realized gains and integration/restructuring
charges.
Advice & Wealth Management pretax operating earnings
increased 26 percent to $108 million due to improved advisor
productivity, higher equity markets and new client flows. Pretax
operating margin increased to 11.3 percent compared to 10.1 percent
a year ago.
Operating net revenues increased 12 percent to $957 million due
to higher management and distribution fees from growth in assets
under management and increased client activity.
Operating expenses increased 11 percent to $849 million due to
volume-related business growth and investments in the business.
Retail client assets grew 20 percent to $319 billion, including
strong net inflows in wrap accounts and market appreciation, as
well as growth from client acquisition and experienced advisor
recruiting.
The company continued to increase the productivity of its
advisors. Net revenue per advisor was $99,000 in the quarter, a 14
percent increase compared to a year ago, primarily driven by higher
assets under management and increased client activity. The number
of branded advisors increased slightly on a sequential basis,
reflecting experienced advisor recruiting and strong advisor
retention, partially offset by the departure of lower-producing
advisors.
Ameriprise Financial, Inc. Asset Management
Segment Results
(in millions,unaudited)
Quarter Ended June 30, 2011
Quarter Ended June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Asset Management Net revenues $ 753 $ — $ 753 $ 562 $ — $
562 34 % Expenses 628 21 607 506
48 458 33 Pretax income $ 125 $ (21 ) $ 146 $ 56 $ (48
)
$ 104 40
Quarter Ended
Quarter Ended
%
June 30, 2011
June 30, 2010
Change
Total segment AUM(2) (billions) $ 467 $ 413 13 % Columbia
Management AUM $ 362 $ 327 11 % Threadneedle AUM $ 110 $ 89 24 %
Flows(2) (billions) $ 0.5 $ (4.9 ) NM Columbia Management
net flows $ (0.2 ) $ (3.8 ) 94 % Threadneedle net flows $ 1.7 $
(1.1 ) NM
(1)
Includes integration/restructuring charges.
(2)
Total segment asset and flow results
eliminate $998 million of net flows and $5.2 billion of assets in
the 2011 quarter and $43 million of net flows and $3.4 billion of
assets in the 2010 quarter due to subadvisory relationships between
Threadneedle and Columbia Management.
NM Not Meaningful — variance of greater than 100%
Asset Management pretax operating earnings increased 40
percent to $146 million. Earnings in the quarter reflected a full
quarter of Columbia earnings compared to two months in the prior
year. Earnings growth in the quarter was also driven by asset
growth and expense synergies. Adjusted net pretax operating margin,
which excludes pass-through distribution expenses, improved to 34.9
percent for the second quarter of 2011, compared to 33.8 percent a
year ago.
Operating net revenues increased 34 percent to $753 million,
reflecting increased management fees, primarily due to growth in
assets from market appreciation, partially offset by net
outflows.
Operating expenses increased 33 percent to $607 million due to
new product and distribution investments as well as higher
Threadneedle equity-based compensation expenses, partially offset
by continued expense synergies related to the Columbia
acquisition.
Segment AUM was $467 billion, up 13 percent from a year ago, and
net inflows were $0.5 billion in the quarter. Sequentially, AUM
increased $2 billion driven by growth at Threadneedle. Threadneedle
AUM increased 3 percent sequentially to $110 billion, primarily
from strong retail net inflows and market appreciation.
Second quarter 2011 net inflows at Threadneedle were $1.7
billion compared to net outflows of $3.0 billion in the prior
quarter and net outflows of $1.1 billion a year ago. European
retail redemptions slowed significantly, and excluding outflows in
lower-margin Zurich portfolios, Threadneedle had strong
institutional net inflows in the quarter.
Columbia Management net outflows were $0.2 billion in the
quarter compared to net outflows of $2.0 billion in the prior
quarter and net outflows of $3.8 billion a year ago. The
improvement in net flows reflected lower retail redemptions,
improved institutional net flows and reinvested dividends.
Ameriprise Financial, Inc. Annuities Segment
Results
(in millions,unaudited)
Quarter Ended June 30, 2011 Quarter Ended
June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Annuities Net revenues $ 666 $ 1 $ 665 $ 630 $ 4 $ 626 6 %
Expenses 523 7 516 497 (27 )
524 (2 ) Pretax income $ 143 $ (6 ) $ 149 $ 133 $ 31 $ 102
46 Items: DAC and DSIC benefits [mean reversion] $ 3 $ (35 )
NM DAC and DSIC model updates — $ 26 NM Portfolio Navigator
modifications $ — $ (8 ) NM
Quarter Ended
Quarter Ended
%
June 30, 2011 June 30, 2010
Change
Variable annuity ending account balances (billions) $ 65 $ 54 21
%
Variable annuity net flows (millions) $ 163 $ 199 (2) (18 )% Fixed
annuity ending account balances (billions) $ 14.2 $ 14.5 (2 )%
Fixed annuity net flows (millions) $ (212 ) $ (190 ) (12 )%
(1)
Includes net realized gains and market impact on variable
annuity guaranteed living benefits net of DAC and DSIC.
(2)
2Q10 variable annuity net flows include
sales in both Ameriprise and third-party channels. RiverSource
Annuities discontinued third-party sales of variable annuities in
the fourth quarter of 2010.
NM Not Meaningful—variance of greater than 100%
Annuities pretax operating earnings increased 46 percent
to $149 million, primarily reflecting higher fee revenue from
increased variable annuity separate account balances and a
significant change in mean reversion compared to a year ago. In
addition, the company generated strong fixed annuity returns.
Operating net revenues increased 6 percent to $665 million,
reflecting increased management fees from higher separate account
balances and higher fees from variable annuity guarantees,
partially offset by a decline in operating net investment
income.
Operating expenses declined 2 percent to $516 million from
market impacts on DAC amortization and lower interest credited to
client accounts, partially offset by higher distribution expenses
from increased variable annuity sales and asset-based compensation.
The second quarter of 2011 included a $3 million benefit in DAC and
DSIC amortization expenses driven by market impacts on separate
account balances (mean reversion) compared to a $35 million
negative impact a year ago. In addition, as previously disclosed,
second quarter 2010 results included a net benefit of $18 million
from model updates and modifications to Portfolio Navigator, a
variable annuity asset allocation program.
Variable annuity net inflows in the Ameriprise channel
essentially doubled to $0.4 billion compared to a year ago, whereas
total variable annuity net inflows declined to $0.2 billion for the
quarter, reflecting the company’s decision to discontinue new sales
of variable annuities sold through non-Ameriprise channels. The
resulting net flows were in line with expectations. Fixed annuities
remained in net outflows due to low client demand given current
interest rates.
Ameriprise Financial, Inc. Protection Segment
Results
(in millions,unaudited)
Quarter Ended June 30, 2011
Quarter Ended June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Protection Net revenues $ 525 $ 3 $ 522 $ 519 $ 1 $ 518 1 %
Expenses 435 — 435 385 —
385 13 Pretax income $ 90 $ 3 $ 87 $ 134 $ 1 $ 133 (35 )
Items: DAC and DSIC benefits [mean reversion] $ — $ (4 ) DAC model
updates $ — $ 7 Portfolio Navigator modifications $ — $ 6
Quarter Ended Quarter Ended
%
June 30, 2011 June 30, 2010
Change
Life insurance in force (billions) $ 192 $ 192 — VUL/UL ending
account balances (billions) $ 9.7 $ 8.6 13 % Auto and home policies
in force (thousands) 677 623 9 %
(1)
Includes net realized gains.
Protection pretax operating earnings declined $46 million
to $87 million, primarily driven by higher catastrophe losses and
continued higher reserve levels for auto liability claims and
universal life products with secondary guarantees, as explained
below. In addition, the prior year period included the impact of
previously disclosed items.
Operating net revenues increased slightly to $522 million
primarily from auto and home premium growth.
Operating expenses increased 13 percent to $435 million. Auto
and home results were impacted by $15 million of catastrophe losses
as well as $10 million of higher auto liability reserves reflecting
elevated reserve levels based on late 2010 experience. Reported
auto losses and loss frequency have improved since the fourth
quarter of 2010. These trends will be monitored and reflected in
reserves in future periods as appropriate. In life and health,
claim levels increased compared to the prior year, when they were
unusually favorable. In addition, results reflected a $7 million
increase in ongoing reserve levels for universal life products with
secondary guarantees. The company increased reserve levels for this
product beginning in the third quarter of 2010.
Life insurance in force remained flat compared to a year ago at
$192 billion, and auto and home continued to grow its policy count,
up 9 percent compared to a year ago.
Ameriprise Financial, Inc.
Corporate & Other Segment
Results
(in millions,unaudited)
Quarter Ended June 30, 2011
Quarter Ended June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Corporate & Other
Net revenues $ 59 $ 37 $ 22 $ 188 $ 202 $ (14 ) NM Expenses
126 63 63 132 67 65 (3 )% Pretax
income (loss) $ (67 ) $ (26 ) $ (41 ) $ 56 $ 135 $ (79 ) 48
(1)
Includes revenues and expenses of the consolidated
investment entities, integration/restructuring charges and net
realized gains. NM Not Meaningful—variance of greater than 100%
Corporate & Other pretax operating loss was $41
million for the quarter compared to a loss of $79 million a year
ago. Second quarter 2011 results included the recognition of an
approximately $27 million pretax gain on an interest rate hedge put
in place in anticipation of issuing debt between December 2010 and
June 2011. The company did not issue debt and does not plan to
issue debt in the foreseeable future.
Capital Management
- The company had more than $2.0 billion
in excess capital, with $1.0 billion of cash at the holding company
and $1.3 billion in free cash.
- During the quarter, the company
repurchased 6.1 million shares of its common stock for $366
million. As of June 30, 2011, the company had $165 million
remaining from its $1.5 billion authorization announced in May 2010
and announced an additional $2.0 billion share repurchase
authorization that expires in June 2013.
- RiverSource Life Insurance Company’s
estimated risk-based capital ratio was above 585 percent. During
the quarter, RiverSource Life paid a $400 million dividend to the
holding company.
- The total investment portfolio,
including cash and cash equivalents, was $40.5 billion at June 30,
2011 and remains well positioned for continued stress in the credit
and commercial mortgage markets. The company's asset liability
management programs remain well positioned for a potential increase
in interest rates.
- The company’s available-for-sale
portfolio ended the quarter with $1.7 billion in net unrealized
gains.
- Detailed information about the
company’s investment portfolio is available at
ir.ameriprise.com.
Taxes
The operating effective tax rate was 26.9 percent for the second
quarter of 2011. The company expects its full-year 2011 operating
effective tax rate to be 25 to 27 percent.
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
recent trends in auto and home losses and loss frequency will be
monitored and reflected in reserves in future periods as
appropriate;
- the statement of belief in this news
release that the company does not plan to issue debt in the
foreseeable future;
- the statements of belief in this news
release that the company's investment portfolio is well positioned
for continued stress in the credit and commercial mortgage markets
and that the investment portfolio is well positioned for a
potential increase in interest rates;
- the statement of belief in this news
release that the company expects its full-year 2011 operating
effective tax rate to be in the 25 to 27 percent range;
- 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, 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:
- changes in the valuations, liquidity
and volatility in the interest rate, credit default, equity market
and foreign exchange environments;
- changes in capital and credit market
conditions including the availability and cost of capital;
- 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 rules and
regulations implemented or to be implemented in connection with 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, 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 company’s ability to pursue and
complete strategic transactions and initiatives, including
acquisitions, divestitures, including the divestiture of Securities
America, joint ventures and the development of new products and
services;
- 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 may pursue and contract to
complete in the future, 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, 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, 2011. For
information about Ameriprise Financial entities, please refer to
the Second Quarter 2011 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, 2011 Quarter
Ended June 30, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Revenues
Management and financial advice fees
$ 1,172 $ (10 ) $ 1,182 $ 910 $ (10 ) $ 920 28 % Distribution fees
416 — 416 387 — 387 7 Net investment income 498 23 475 655 162 493
(4 ) Premiums 312 — 312 299 — 299 4 Other revenues 236
18 218 231 46 185 18 Total
revenues 2,634 31 2,603 2,482 198 2,284 14 Banking and deposit
interest expense 11 — 11 20 —
20 (45 )
Total net revenues 2,623 31 2,592 2,462 198
2,264 14
Expenses Distribution expenses 643 — 643 528
— 528 22
Interest credited to fixed accounts
212 — 212 231 — 231 (8 ) Benefits, claims, losses and settlement
expenses 406 7 399 297 (68 ) 365 9 Amortization of deferred
acquisition costs 138 — 138 171 41 130 6 Interest and debt expense
75 51 24 74 45 29 (17 )
General and administrative expense
750 23 727 699 64 635 14
Total expenses 2,224 81 2,143 2,000 82 1,918 12 Income from
continuing operations before income tax provision 399 (50 ) 449 462
116 346 30 Income tax provision 114 (7 ) 121
66 (8 ) 74 64 Income from continuing
operations 285 (43 ) 328 396 124 272 21
Income (loss) from discontinued
operations, net of tax
(4 ) (4 ) — 2 2 — —
Net income 281 (47 ) 328 398 126 272 21 Less: Net income
(loss) attributable to noncontrolling interests (28 )
(28 ) — 139 139 — —
Net income attributable to Ameriprise
Financial
$ 309 $ (19 ) $ 328 $ 259 $ (13 ) $ 272 21 %
(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; market impact on variable
annuity guaranteed living benefits net of DAC and DSIC;
integration/restructuring charges and income/loss from discontinued
operations. Income tax provision is calculated using the statutory
tax rate of 35% on applicable adjustments.
Ameriprise
Financial, Inc. Reconciliation Table: Net Income from
Continuing Operations Attributable to Ameriprise
Financial Per
Diluted Share Quarter Ended Quarter Ended
June June June June
30, 30, 30, 30, (in millions,
unaudited)
2011 2010 2011 2010
Income from continuing operations
$ 285 $ 396 Less: Net income (loss) attributable to noncontrolling
interests (28 ) 139 Net income from continuing operations
attributable to Ameriprise Financial 313 257 $ 1.25 $ 0.97
Income (loss) from discontinued
operations, net of tax
(4 ) 2 (0.02 ) 0.01 Net income
attributable to Ameriprise Financial 309 259 1.23 0.98 Operating
adjustments, after-tax 19 13 0.08 0.05
Operating earnings $ 328 $ 272 $ 1.31 $ 1.03 Weighted
average common shares outstanding: Basic 245.5 261.1 Diluted 251.0
265.3
Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate
Quarter Ended June 30, 2011 (in millions, unaudited)
GAAP Operating Income from
continuing operations before income tax provision $ 399 $ 449 Less:
Pretax loss attributable to noncontrolling interests (28 )
— Income from continuing operations before income tax
provision excluding consolidated investment entities (CIEs) $ 427 $
449 Income tax provision from continuing operations $ 114 $ 121
Effective tax rate 28.7 % 26.9 % Effective tax rate
excluding noncontrolling interests 26.8 % 26.9 %
Ameriprise Financial, Inc. Reconciliation Table:
Asset Management Adjusted Net Pretax Operating Margin
Quarter Ended
(in millions, unaudited)
June 30, 2011 June 30, 2010 Total net
revenues $ 753 $ 562 Less: Realized gains — —
Operating total net revenues 753 562 Less: Distribution pass
through revenues 218 158 Less: Subadvisory and other pass through
revenues 96 67 Adjusted operating revenues $ 439 $
337 Pretax income $ 125 $ 56 Less: Realized gains — — Add:
Integration/restructuring charges 21 48 Pretax
operating earnings 146 104 Less: Operating net investment income 3
— Add: Amortization of intangibles 10 10 Adjusted
operating earnings $ 153 $ 114 Adjusted net pretax operating
margin 34.9 % 33.8 %
Ameriprise Financial,
Inc. Return on Equity (ROE) Excluding Accumulated
Other Comprehensive Income “AOCI” Twelve Months
Ended
(in millions, unaudited)
June 30, 2011 June 30, 2010 Net income from
continuing operations attributable to Ameriprise Financial, as
reported $ 1,277 $ 966 Less: Adjustments (1) (84 )
(56 ) Operating earnings
$
1,361 $ 1,022 Total Ameriprise Financial, Inc. shareholders’
equity
$
10,654 $ 9,404 Less: Assets and liabilities held for sale 50 102
Less: Accumulated other comprehensive income, net of tax
649 226
Total Ameriprise Financial, Inc.
shareholders’ equity from continuing
operations excluding AOCI 9,955 9,076 Less: Equity impacts
attributable to the consolidated investment entities
558 226 Operating equity
$
9,397 $ 8,850 Return on equity from continuing operations,
excluding AOCI 12.8 % 10.6 % Operating return on equity excluding
CIEs and AOCI (2) 14.5 % 11.5 %
(1)
Adjustments reflect the trailing twelve months’ sum of
after-tax net realized gains/losses, market impact on variable
annuity guaranteed living benefits net of DAC and DSIC, and
integration/restructuring charges.
(2)
Operating return on equity excluding consolidated investment
entities and accumulated other comprehensive income is calculated
using the trailing twelve months of earnings excluding the
after-tax net realized gains/losses, market impact on variable
annuity guaranteed living benefits net of DAC and DSIC,
integration/restructuring charges, and discontinued operations in
the numerator, and Ameriprise Financial shareholders’ equity
excluding accumulated other comprehensive income, the impact of
consolidating investment entities, and the assets and liabilities
held for sale using a five point average of quarter-end equity in
the denominator.
Ameriprise Financial (NYSE:AMP)
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