Ameriprise Financial, Inc. (NYSE: AMP) today reported fourth
quarter 2011 operating earnings of $312 million, or $1.33 per
diluted share, compared to $340 million, or $1.31 per diluted
share, a year ago. Net income from continuing operations
attributable to Ameriprise Financial for the fourth quarter of 2011
was $240 million, or $1.02 per diluted share, compared to $306
million, or $1.18 per diluted share, a year ago.
The decline in fourth quarter 2011 operating earnings primarily
reflected lower revenues compared to a year ago. Fourth quarter
2011 operating net revenues declined 2 percent to $2.5 billion from
lower hedge fund performance fees, the continued low interest rate
environment, and the impact of market volatility, partially offset
by growth in asset-based fees from retail client net inflows.
On a full-year basis, the company delivered record operating
earnings and net revenues driven by strong growth in its fee-based
advisory and asset management businesses. Compared to 2010,
operating net revenues grew 10 percent to $10.1 billion, operating
earnings grew 4 percent to $1.2 billion, and operating earnings per
diluted share increased 10 percent to $5.00.
The company’s excess capital position remained above $2.0
billion at year-end 2011, even after deploying $248 million to
repurchase approximately 5.5 million shares of common stock during
the quarter. In 2011, the company returned $1.7 billion to
shareholders through share repurchases and dividends, which
represented 135 percent of full year operating earnings. The
company also announced a $0.05 per share, or 22 percent, increase
in the company’s regular quarterly dividend payable on February 24,
2012 to shareholders of record at the close of business on February
10, 2012.
Operating return on shareholders’ equity excluding accumulated
other comprehensive income was 13.1 percent for the year ended
December 31, 2011, compared to 12.9 percent for the year ended
December 31, 2010.
"We delivered another good quarter and a strong year," said Jim
Cracchiolo, chairman and chief executive officer. "Despite the
impact of volatile markets and low interest rates on our revenues,
we continued to make significant progress. Our advisory business
generated excellent results for the year, highlighted by record
advisor productivity and accelerating success in our experienced
advisor recruiting program. In the asset management business,
equity flows remained negative for us and the industry. Apart from
this near-term challenge, we feel very good about the global
platform we've developed now that we have integrated Columbia
Management and with Threadneedle expanding to new geographic
markets."
"Our exceptionally strong financial foundation continues to
enable us to make targeted, strategic investments for growth. In
fact, during the fourth quarter we increased our investment
spending, most notably to build our brand further through national
advertising and to convert to our new brokerage platform. That
said, we will maintain and accelerate our focus on re-engineering
and expense management to adjust for market challenges."
Fourth Quarter Summary
Ameriprise Financial, Inc. Fourth Quarter
Summary Per Diluted Share Quarter
Ended Quarter Ended (in millions, except per share
amounts,
December 31, December 31, December
31, December 31, unaudited)
2011
2010 2011 2010 Net income from continuing
operations attributable to Ameriprise Financial $ 240 $ 306 $ 1.02
$ 1.18 Add: Market impact on variable annuity guaranteed living
benefits, net of tax(1) 59 27 0.25 0.10 Add: Integration charges,
net of tax(1) 14 20 0.06 0.08 Less: Net realized gains, net of
tax(1) 1 13 — 0.05 Operating earnings $
312 $ 340 $ 1.33 $ 1.31 Weighted average common shares
outstanding: Basic 230.6 252.7 Diluted 234.5 258.9
(1) Calculated using the statutory tax
rate of 35%.
The company believes the presentation of operating earnings best
represents the economics of the business. Operating earnings
exclude the consolidation of certain investment entities, net
realized gains or losses, integration and restructuring charges,
the market impact on variable annuity guaranteed living benefits
net of deferred acquisition costs (DAC) and deferred sales
inducement costs (DSIC), and income or loss from discontinued
operations.
Compared to a year ago, fourth quarter 2011 operating earnings
included a $1 million net after-tax benefit from the market impact
on insurance and annuity DAC and DSIC. The after-tax benefit in the
fourth quarter of 2011 was $18 million compared to $17 million a
year ago. There are other items detailed in segment results that in
the aggregate had an immaterial impact on consolidated financial
results.
Fourth Quarter 2011 Highlights
While equity market volatility in the second half of 2011 and
the continued low interest rate environment created a challenging
market environment for the industry, the company continues to make
significant progress.
- Total assets under management and
administration were $631 billion at December 31, 2011, up 5 percent
sequentially driven by Asset Management net inflows and market
appreciation.
- Asset Management net inflows were $4.3
billion in the quarter, driven by a $14 billion inflow at
Threadneedle from a strategic relationship with Liverpool Victoria
to manage its insurance and pension fund portfolio. The agreement
represented a major institutional win and added significant scale
to Threadneedle’s fixed income business. Asset Management net
inflows in the quarter were partially offset by $6.7 billion in
outflows of previously announced, low basis point, former parent
company assets.
- At year end, the company had 113 four-
and five-star Morningstar rated funds, including 52 Columbia funds
and 61 Threadneedle funds.
- The fourth quarter represented the
third consecutive quarter of an increased advisor count, with 105
experienced advisors joining Ameriprise. Compared to a year ago,
the number of advisors grew 1 percent to 9,730, reflecting strong
advisor retention and experienced advisor recruiting. Operating net
revenue per advisor increased 12 percent in 2011 to a record
$384,000.
- The company launched the next phase of
its MORE WITHIN REACH® advertising campaign with expanded
advertising and local marketing to deepen Ameriprise Financial
brand awareness and support client and advisor acquisition.
- The company is executing a multi-year
investment to transition advisors to a new brokerage platform.
During the quarter, the first group of franchisee advisors
converted to the new platform, and the company will continue to
make additional investments in the platform in 2012.
- During the quarter, the company
launched financial planning and advisory services in India focused
on serving consumers in Mumbai and Delhi-NCR.
- RiverSource Life generated strong sales
of its newly launched indexed universal life insurance
product.
- Ameriprise ranked #1 in life insurance
customer satisfaction in a recent survey by insure.com.
- Ameriprise Auto & Home had a solid
fourth quarter. Compared to a year ago, policies in force grew by 7
percent and claims were favorable as auto liability claims returned
to levels more consistent with historic experience and
weather-related claims improved significantly.
Balance Sheet Summary as of December 31, 2011
Excess capital and prudent capital
management
- The company’s excess capital position
remained above $2.0 billion at year-end 2011.
- The company repurchased 5.5 million
shares of its common stock in the fourth quarter of 2011 for $248
million. In 2011, the company returned $1.7 billion to shareholders
in share repurchases and dividends, which represented 135 percent
of full year operating earnings.
- During the quarter, RiverSource Life
paid an $850 million dividend to the holding company. RiverSource
Life’s preliminary year-end 2011 risk-based capital ratio was
approximately 490 percent.
- Cash and cash equivalents were $2.8
billion, with $700 million at the holding company and $650 million
in free cash. The holding company has $850 million in high-quality,
short-duration securities from the RiverSource Life dividend.
- The company’s variable annuity hedging
program continues to perform well, including during a volatile
second half of the year.
High-quality investment
portfolio
- The total investment portfolio,
including cash and cash equivalents, was $41.6 billion and remains
well positioned. The company’s balance sheet has no holdings of
sovereign debt in financially troubled European countries. There
were $11 million of impairments in the quarter, primarily
associated with residential mortgage-backed securities.
- The company’s available-for-sale
portfolio ended the quarter with $2.1 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 25.4 percent for the fourth
quarter of 2011 and 24.8 percent for full year 2011.
Segment Summaries
Ameriprise Financial, Inc. Advice & Wealth
Management Segment Results (in millions, unaudited)
Quarter Ended December 31, 2011 Quarter
Ended December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Advice & Wealth Management Net revenues $ 901 $ (4 ) $
905 $ 895 $ 1 $ 894 1 % Expenses 822 — 822
798 — 798 3 Pretax income $ 79 $ (4 ) $ 83 $
97 $ 1 $ 96 (14 )
Quarter Ended
Quarter Ended % December 31, 2011 December
31, 2010 Change Retail client assets (billions) $ 310 $
304 2 % Wrap net flows (billions) $ 1.4 $ 1.7 (22 )% Operating net
revenue per branded advisor (thousands) $ 93 $ 93 —
(1) Includes net realized
gains/losses.
Advice & Wealth Management fourth quarter 2011 pretax
operating earnings declined 14 percent from a year ago to $83
million as retail client asset growth was offset by the negative
impact of market volatility and increased investments to drive
advisor business growth.
Revenue growth slowed to 1 percent as asset growth was partially
offset by the impact of market volatility. Total retail client
assets grew 2 percent to $310 billion, including $1.4 billion in
wrap net inflows in the quarter. However, during the quarter,
clients increased cash balances and transactional volumes declined
modestly. Earnings from cash accounts remained low due to the
interest rate environment.
Operating net revenue per advisor was $93,000 in the quarter,
which was unchanged compared to a year ago, reflecting the impact
of market volatility. On a full-year basis, operating net revenue
per advisor increased 12 percent to a record $384,000, reflecting
retail net inflows, experienced advisor recruiting and market
appreciation.
Operating expenses increased 3 percent, primarily from a $14
million increase in advertising and technology investments. The
company launched the next phase of its advertising campaign aimed
at increasing brand awareness to support client acquisition and
experienced advisor recruiting. The company is also executing a
multi-year investment to install a new brokerage technology
platform. During the quarter, approximately 500 franchise advisors
converted to the new platform, and the company expects to have all
advisors on the platform by the end of 2012.
Fourth quarter 2011 pretax operating margin was 9.2 percent
compared to 10.7 percent a year ago, reflecting increased
investments in the business. On a full-year basis, pretax operating
margin was 10.9 percent compared to 9.6 percent in 2010.
Ameriprise Financial, Inc. Asset Management
Segment Results
(in millions, unaudited)
Quarter Ended December 31, 2011 Quarter Ended
December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Asset Management Net revenues $ 703 $ 1 $ 702 $ 774 $ 1 $
773 (9 )% Expenses 596 21 575 634
24 610 (6 ) Pretax income $ 107 $ (20 ) $ 127 $ 140 $
(23 ) $ 163 (22 )
Items included in operating earnings:
Hedge fund earnings $ 1 $ 22 CDO liquidation benefit $ 11 $ —
Quarter Ended Quarter Ended
% December 31, 2011 December 31, 2010
Change Total segment AUM(2) (billions) $ 436 $ 457 (5 )%
Columbia Management AUM $ 326 $ 355 (8 )% Threadneedle AUM $ 114 $
106 8 % Flows(2) (billions) $ 4.3 $ (5.8 ) NM Columbia
Management net flows $ (8.4 ) $ (5.2 ) (62 )% Threadneedle net
flows $ 12.6 $ (0.6 ) NM
(1) Includes net realized gains and
integration/restructuring charges.
(2) Subadvisory eliminations between
Columbia and Threadneedle are included in the company’s Fourth
Quarter 2011 Statistical Supplement available at
ir.ameriprise.com.
NM Not Meaningful — variance of greater than 100%
Asset Management pretax operating earnings declined $36
million from a year ago to $127 million. Earnings in the year ago
quarter included $22 million associated with hedge fund performance
compared to only $1 million in the current quarter. Fourth quarter
2011 earnings also reflected the impact of net outflows, market
depreciation and increased advertising expense, partially offset by
a benefit from the liquidation of a collateralized debt obligation
(CDO) structure.
Operating net revenues declined 9 percent to $702 million,
largely driven by $57 million in lower hedge fund performance fees
than a year ago. In addition, revenues reflected the impact of net
outflows in assets under management and market depreciation,
partially offset by the CDO liquidation benefit.
Operating expenses declined 6 percent to $575 million, primarily
due to $36 million in lower hedge fund performance compensation as
well as lower general and administrative expenses associated with
expense synergies, which were offset by increased advertising
expense.
Adjusted net pretax operating margin, which excludes
pass-through distribution expenses, was 31.4 percent for the fourth
quarter of 2011 compared to 34.1 percent a year ago. On a full-year
basis, adjusted net pretax operating margin was 33.2 percent
compared to 30.1 percent in 2010.
Total segment assets under management declined 5 percent from a
year ago to $436 billion, as 8 percent asset growth at Threadneedle
was more than offset by outflows at Columbia Management.
Threadneedle generated $12.6 billion in net inflows in the quarter,
reflecting approximately $14 billion from a strategic relationship
with Liverpool Victoria to manage its insurance and pension fund
portfolio. Columbia Management net outflows of $8.4 billion in the
quarter were largely driven by $6.7 billion of previously announced
outflows of low basis point, former parent company assets, as well
as net outflows in subadvised funds. In addition, during the
quarter, a former parent-related program sponsor shifted $4.7
billion from a traditional separately managed account platform to a
model-delivery only unified managed account platform that utilizes
Columbia models. While the assets are excluded from managed assets,
the movement in assets was neutral to earnings.
Ameriprise Financial, Inc. Annuities Segment
Results
(in millions, unaudited)
Quarter Ended December 31, 2011 Quarter Ended
December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Annuities Net revenues $ 639 $ 5 $ 634 $ 642 $ 3 $ 639 (1 )%
Expenses 551 91 460 511 43
468 (2 ) Pretax income $ 88 $ (86 ) $ 174 $ 131 $ (40 ) $
171 2 Variable annuity pretax income $ 129 $ 105 23 %
Fixed annuity pretax income $ 45 $ 66 (32 )%
Items included in operating earnings:
Market impact on DAC and DSIC benefits $ 24 $ 23 4 % Indexed
annuity reserve adjustment $ (8 ) $ — —
Quarter Ended Quarter Ended %
December 31, 2011 December 31, 2010 Change
Variable annuity ending account balances (billions) $ 62.3 $ 62.6 —
Variable annuity net flows(2) (millions) $ 227 $ 401 (43 )% Fixed
annuity ending account balances (billions) $ 14.2 $ 14.4 (2 )%
Fixed annuity net flows (millions) $ (158 ) $ (224 ) 29 %
(1) Includes net realized gains and market
impact on variable annuity guaranteed living benefits, net of DAC
and DSIC.
(2) 4Q10 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.
Annuities pretax operating earnings increased 2 percent
to $174 million as growth in variable annuity earnings was
partially offset by a decline in fixed annuity earnings. Variable
annuity earnings growth reflected client net inflows and a benefit
from enhancing the variable annuity guaranteed benefit valuation
model, partially offset by the impact of low rates on assets
backing fixed accounts. Fixed annuity earnings were impacted by the
continued low rate environment and an $8 million unfavorable
adjustment in the liability for a closed book of indexed
annuities.
Operating net revenues declined 1 percent to $634 million,
primarily driven by $21 million of higher variable annuity rider
fees and management fees from increased average separate account
balances that were more than offset by a $25 million decline in net
investment income from low interest rates, primarily in fixed
annuities.
Operating expenses declined 2 percent to $460 million,
reflecting lower interest credited expenses, favorable market
impacts on benefits, claims, losses and settlement expenses, as
well as lower DAC amortization.
RiverSource variable annuity net inflows in the Ameriprise
channel declined 7 percent from a year ago to $442 million. 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 December 31, 2011 Quarter
Ended December 31, 2010 GAAP
Less:Adjustments
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Protection Net revenues $ 529 $ — $ 529 $ 523 $ (1 ) $ 524 1
% Expenses 420 — 420 440 —
440 (5 ) Pretax income $ 109 $ — $ 109 $ 83 $ (1 ) $ 84 30
Items included in operating earnings: Market impact on DAC
benefits $ 3 $ 3 —
Quarter Ended Quarter
Ended % December 31, 2011 December 31,
2010 Change Life insurance in force (billions) $ 191 $
192 — VUL/UL ending account balances (billions) $ 9.2 $ 9.5 (3 )%
Auto & home policies in force (thousands) 696 650 7 %
(1) Includes net realized losses.
Protection pretax operating earnings increased 30 percent
to $109 million, driven by improvement in auto and home earnings
and favorable life and health claims compared to a year ago.
Operating net revenues increased 1 percent to $529 million as
auto and home premium growth was largely offset by a decline in
life and health investment income due to the low interest rate
environment.
Operating expenses declined 5 percent to $420 million from
favorable claims in both the life and health and auto and home
businesses. Auto and home claims in the fourth quarter of 2010
included $11 million from catastrophe losses, as well as elevated
auto liability claims. Over the past four quarters, reported auto
losses and loss frequency have continued to improve and are
currently at levels more consistent with historic experience.
Life insurance in force declined slightly from a year ago to
$191 billion, and Auto & Home continued to grow its policy
count, up 7 percent compared to a year ago.
Ameriprise Financial, Inc. Corporate & Other
Segment Results
(in millions, unaudited)
Quarter Ended December 31, 2011 Quarter
Ended December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Corporate & Other Net revenues $ 139 $ 145 $ (6 ) $ 46 $
52 $ (6 ) — Expenses 170 101 69 129
67 62 11 % Pretax loss $ (31 ) $ 44 $ (75 ) $ (83 ) $
(15 ) $ (68 ) (10 )
(1) Includes revenues and expenses of the
consolidated investment entities; net realized gains/losses; and
integration/restructuring charges.
Corporate & Other pretax operating loss was $75
million for the quarter compared to a loss of $68 million a year
ago. The fourth quarter of 2011 included an $8 million increase in
enterprise investments.
At Ameriprise Financial, we have been helping people feel
confident about their financial future since 1894. With outstanding
asset management, advisory and insurance capabilities and a
nationwide network of 10,000 financial advisors, we have the
strength and expertise to serve the full range of individual and
institutional investors' financial needs. For more information, or
to find an Ameriprise financial advisor, visit ameriprise.com.
Ameriprise Financial Services, Inc. offers financial planning
services, investments, insurance and annuity products. Columbia
Funds are distributed by Columbia Management Investment
Distributors, Inc., member FINRA and managed by Columbia Management
Investment Advisers, LLC. Threadneedle International Limited is an
SEC- and FSA-registered investment adviser affiliate of Columbia
Management Investment Advisers, LLC based in the U.K. Auto and home
insurance is underwritten by IDS Property Casualty Insurance
Company, or in certain states, Ameriprise Insurance Company, both
in De Pere, WI. RiverSource insurance and annuity products are
issued by RiverSource Life Insurance Company, and in New York only
by RiverSource Life Insurance Co. of New York, Albany, New York.
Only RiverSource Life Insurance Co. of New York is authorized to
sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member
FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that
reflect management’s plans, estimates and beliefs. Actual results
could differ materially from those described in these
forward-looking statements. Examples of such forward-looking
statements include:
- the statement of belief in this news
release that the company will maintain and accelerate its focus on
re-engineering and expense management to adjust for market
challenges;
- statements in this news release
regarding planned additional investment in a new brokerage platform
and the expectation that all advisors will have transitioned to the
new platform by the end of 2012;
- 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 and adoption of 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
distribution partner 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 or
unlocking 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, restructurings, 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
and under Part 2, Item 1A of our Quarterly Report on Form 10-Q for
the quarter ended September 30, 2011 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 Annual
Report on Form 10-K for the year ended December 31, 2011. For
information about Ameriprise Financial entities, please refer to
the Fourth 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 December 31, 2011
Quarter Ended December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Revenues
Management and financial advice fees
$ 1,101 $ (20 ) $ 1,121 $ 1,146 $ (10 ) $ 1,156 (3 )% Distribution
fees 371 — 371 385 — 385 (4 ) Net investment income 588 113 475 540
43 497 (4 ) Premiums 305 — 305 295 — 295 3 Other revenues
228 34 194 206 13 193 1 Total
revenues 2,593 127 2,466 2,572 46 2,526 (2 ) Banking and deposit
interest expense 11 — 11 14 —
14 (21 )
Total net revenues 2,582 127 2,455 2,558 46
2,512 (2 )
Expenses Distribution expenses 611 — 611 582 —
582 5
Interest credited to fixed accounts
221 — 221 223 — 223 (1 )
Benefits, claims, losses and settlement
expenses
512 152 360 465 72 393 (8 ) Amortization of deferred acquisition
costs 46 (61 ) 107 84 (29 ) 113 (5 ) Interest and debt expense 96
73 23 78 51 27 (15 )
General and administrative expense
744 29 715 758 30 728 (2
)
Total expenses 2,230 193 2,037 2,190 124 2,066 (1 ) Income
from continuing operations before income tax provision 352 (66 )
418 368 (78 ) 446 (6 ) Income tax provision 67 (39 )
106 88 (18 ) 106 — Income from
continuing operations 285 (27 ) 312 280 (60 ) 340 (8 ) Income
(loss) from discontinued operations, net of tax 13 13
— (26 ) (26 ) —
—
Net income 298 (14 ) 312 254 (86 ) 340 (8 ) Less: Net income
(loss) attributable to noncontrolling interests 45 45
— (26 ) (26 ) —
—
Net income attributable to Ameriprise
Financial
$ 253 $ (59 ) $ 312 $ 280 $ (60 ) $ 340 (8 )%
(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: GAAP Income Statement to Operating Income Statement
(in millions, unaudited)
Year Ended December 31, 2011
Year Ended December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Revenues
Management and financial advice fees
$ 4,537 $ (49 ) $ 4,586 $ 3,784 $ (38 ) $ 3,822 20 % Distribution
fees 1,573 — 1,573 1,447 — 1,447 9 Net investment income 2,046 97
1,949 2,309 308 2,001 (3 ) Premiums 1,220 — 1,220 1,179 — 1,179 3
Other revenues 863 94 769 863
125 738 4 Total revenues 10,239 142 10,097 9,582 395 9,187
10 Banking and deposit interest expense 47 —
47 70 — 70 (33 )
Total net revenues
10,192 142 10,050 9,512 395 9,117 10
Expenses Distribution
expenses 2,497 — 2,497 2,065 — 2,065 21
Interest credited to fixed accounts
853 — 853 909 — 909 (6 )
Benefits, claims, losses and settlement
expenses
1,557 67 1,490 1,750 9 1,741 (14 ) Amortization of deferred
acquisition costs 618 (8 ) 626 127 16 111 NM Interest and debt
expense 317 221 96 290 181 109 (12 )
General and administrative expense
2,965 116 2,849 2,737 129
2,608 9
Total expenses 8,807 396 8,411 7,878 335 7,543 12
Income from continuing operations before income tax provision 1,385
(254 ) 1,639 1,634 60 1,574 4 Income tax provision 355
(52 ) 407 350 (36 ) 386 5 Income
from continuing operations 1,030 (202 ) 1,232 1,284 96 1,188 4 Loss
from discontinued operations, net of tax (60 ) (60 )
— (24 ) (24 ) — —
Net income 970
(262 ) 1,232 1,260 72 1,188 4 Less: Net income (loss) attributable
to noncontrolling interests (106 ) (106 ) —
163 163 — —
Net income attributable to Ameriprise
Financial
$ 1,076 $ (156 ) $ 1,232 $ 1,097 $ (91 ) $ 1,188 4 %
(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.
NM Not Meaningful — variance of greater than 100%
Ameriprise Financial, Inc. Reconciliation Table: Net
Income from Continuing Operations Attributable to Ameriprise
Financial Per Diluted Share Year
Ended Year Ended
(in millions, except per share amounts,
unaudited)
December 31,2011
December 31,2010
December 31,2011
December 31,2010
Net income attributable to Ameriprise
Financial
$ 1,076 $ 1,097 $ 4.37 $ 4.18 Less: Loss from discontinued
operations, net of tax (60 ) (24 ) (0.24 )
(0.09 ) Net income from continuing operations attributable
to Ameriprise Financial 1,136 1,121 4.61 4.27 Add: Market impact on
variable annuity guaranteed living benefits, net of tax(1) 38 16
0.15 0.06 Add: Integration charges, net of tax(1) 62 73 0.25 0.28
Less: Net realized gains, net of tax(1) 4 22
0.01 0.08 Operating earnings $ 1,232 $ 1,188 $ 5.00 $ 4.53
Weighted average common shares outstanding: Basic 241.4
257.4 Diluted 246.3 262.3
(1) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial, Inc. Reconciliation
Table: Net Income from Continuing Operations Attributable to
Ameriprise Financial Per Diluted
Share Quarter Ended Quarter Ended
(in millions, except per share amounts,
unaudited)
December 31,2011
December 31,2010
December 31,2011
December 31,2010
Net income attributable to Ameriprise
Financial
$ 253 $ 280 $ 1.08 $ 1.08 Less: Income (loss) from discontinued
operations, net of tax 13 (26 ) 0.06
(0.10 ) Net income from continuing operations attributable to
Ameriprise Financial 240 306 1.02 1.18 Add: Market impact on
variable annuity guaranteed living benefits, net of tax(1) 59 27
0.25 0.10 Add: Integration charges, net of tax(1) 14 20 0.06 0.08
Less: Net realized gains, net of tax(1) 1 13 —
0.05 Operating earnings $ 312 $ 340 $ 1.33 $ 1.31
Weighted average common shares outstanding: Basic 230.6 252.7
Diluted 234.5 258.9
(1) Calculated using the statutory tax
rate of 35%.
Ameriprise Financial, Inc. Reconciliation
Table: Effective Tax Rate Quarter Ended
December 31, 2011 (in millions, unaudited)
GAAP
Operating Income from continuing operations before income
tax provision $ 352 $ 418 Less: Pretax income attributable to
noncontrolling interests 45 — Income from continuing
operations before income tax provision excluding consolidated
investment entities (CIEs) $ 307 $ 418 Income tax provision from
continuing operations $ 67 $ 106 Effective tax rate 19.1 %
25.4 % Effective tax rate excluding noncontrolling interests 21.9 %
25.4 %
Year Ended December 31, 2011 (in millions,
unaudited)
GAAP Operating Income from continuing
operations before income tax provision $ 1,385 $ 1,639 Less: Pretax
loss attributable to noncontrolling interests (106 )
— Income from continuing operations before income tax provision
excluding consolidated investment entities (CIEs) $ 1,491 $ 1,639
Income tax provision from continuing operations $ 355 $ 407
Effective tax rate 25.6 % 24.8 % Effective tax rate excluding
noncontrolling interests 23.8 % 24.8 %
Ameriprise
Financial, Inc. Reconciliation Table: Advice & Wealth
Management Segment Results (in millions, unaudited)
Year Ended December 31, 2011 Year Ended
December 31, 2010 GAAP
Less:Adjustments(1)
Operating GAAP
Less:Adjustments(1)
Operating
%Change
Advice & Wealth Management
Net revenues $ 3,708 $ (5 ) $ 3,713 $ 3,343 $ 1 $ 3,342 11 %
Expenses 3,307 — 3,307 3,027 7
3,020 10 Pretax income $ 401 $ (5 ) $ 406 $ 316 $ (6 ) $ 322
26
(1) Includes net realized gains/losses and
integration/restructuring charges.
Ameriprise Financial, Inc. Reconciliation
Table: Asset Management Adjusted Net Pretax Operating Margin
Quarter Ended December 31, December
31, (in millions, unaudited)
2011 2010 Total net
revenues $ 703 $ 774 Less: Realized gains 1 1
Operating total net revenues 702 773 Less: Distribution pass
through revenues 201 188 Less: Subadvisory and other pass through
revenues 100 95 Adjusted operating revenues $ 401 $
490 Pretax income $ 107 $ 140 Less: Realized gains 1 1 Add:
Integration/restructuring charges 21 24 Pretax
operating earnings 127 163 Less: Operating net investment income 11
6 Add: Amortization of intangibles 10 10 Adjusted
operating earnings $ 126 $ 167 Adjusted net pretax operating
margin 31.4 % 34.1 %
Ameriprise Financial,
Inc. Reconciliation Table: Asset Management Adjusted Net
Pretax Operating Margin Year Ended
December 31, December 31, (in millions, unaudited)
2011 2010 Total net revenues $ 2,900 $ 2,368 Less:
Realized gains 3 3 Operating total net revenues 2,897
2,365 Less: Distribution pass through revenues 833 627 Less:
Subadvisory and other pass through revenues 385 292
Adjusted operating revenues $ 1,679 $ 1,446 Pretax income $
436 $ 318 Less: Realized gains 3 3 Add: Integration/restructuring
charges 95 95 Pretax operating earnings 528 410 Less:
Operating net investment income 11 14 Add: Amortization of
intangibles 40 39 Adjusted operating earnings $ 557 $
435 Adjusted net pretax operating margin 33.2 % 30.1 %
Ameriprise Financial, Inc. Reconciliation
Table: Return on Equity (ROE) Excluding Accumulated Other
Comprehensive Income “AOCI” Twelve Months Ended
December 31, December 31, (in millions,
unaudited)
2011 2010
Net income from continuing operations
attributable to Ameriprise Financial, as reported
$ 1,136 $ 1,121
Less: Adjustments (1)
(96
)
(67
)
Operating earnings $ 1,232 $ 1,188 Total Ameriprise Financial, Inc.
shareholders’ equity $ 10,482 $ 10,309 Less: Assets and liabilities
held for sale 29 102 Less: Accumulated other comprehensive income,
net of tax 603 540
Total Ameriprise Financial, Inc.
shareholders’ equity from continuing operations excluding AOCI
9,850 9,667
Less: Equity impacts attributable to the
consolidated investment entities
478 455 Operating equity $ 9,372 $ 9,212 Return on
equity from continuing operations, excluding AOCI 11.5 % 11.6 %
Operating return on equity excluding CIEs
and AOCI (2)
13.1 % 12.9 %
(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
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