Press Release

Ameriprise Financial Reports First Quarter 2020 Results

Company Release - 5/6/2020 4:07 PM ET

MINNEAPOLIS--(BUSINESS WIRE)-- Ameriprise Financial, Inc. (NYSE: AMP):

Earnings Per Diluted Share

 

Return on Equity, ex. AOCI

First Quarter 2020:

 

 

First Quarter 2020:

 

GAAP

$15.88

 

GAAP

59.5%

Adjusted Operating

$5.41

 

Adjusted Operating(1)

39.7%

Ameriprise announced that it raised its quarterly dividend 7 percent to $1.04 per share.

  • First quarter adjusted operating earnings per diluted share was $5.41, up 46 percent(1) reflecting strong business performance in a challenging environment and a tax benefit(2) from a projected net operating loss (NOL).
  • In the quarter, the sizable difference between the company’s GAAP and adjusted operating results was driven by the severity of the market dislocation in March, primarily related to widening in our credit spread and the valuation of derivatives used to hedge the company’s variable annuity living benefit guarantees(3). Management believes adjusted operating results best reflect underlying performance.
  • Adjusted operating net revenue grew 4 percent to $3.0 billion(1) from strong client activity, net inflows and higher average equity markets, partially offset by lower interest rates.
  • The company’s risk management approach resulted in balance sheet fundamentals remaining strong in a challenging operating environment. Parent company liquidity was approximately $2 billion with significant additional liquidity available in the business segments. Excess capital was $1.7 billion after implementing VM-21, hedging strategies were 99 percent effective and the investment portfolio remains high quality with a net unrealized gain of $0.6 billion and limited impairments.
  • Advice & Wealth Management and Asset Management generated approximately 74 percent of the company’s revenue and 76 percent of pretax adjusted operating earnings in the quarter.
  • Total pretax adjusted operating margin was 22.1 percent, which was in line with last year. Advice & Wealth Management margin was 22.3 percent and Asset Management net adjusted margin was 37.9 percent, reflecting excellent business fundamentals and well-managed expenses.
  • The company maintained its strong track record of capital return and free cash flow, returning $512 million to shareholders in the quarter, with 2.5 million shares repurchased. And the company announced that it raised its quarterly dividend 7 percent to $1.04 per share.

(1) Excluding the Auto & Home insurance business, which was sold in 2019.

(2) See page 2 for additional detail.

(3) See page 8 for reconciliation.

Perspective from Jim Cracchiolo,
Chairman and Chief Executive Officer

 

“The global pandemic has caused a healthcare and economic crisis, as well as significant equity market declines, extreme volatility and record low interest rates. During this time, we have focused on our clients as well as protecting the health and safety of our employees and advisors. Ameriprise has remained strong.

 

“The strength of our first quarter results reflects the commitment of our team, as well as the power of our diversified business, advice value proposition and highly effective technology infrastructure. We had a good start to the year despite the challenging operating environment. Even with the vast majority of our employees and advisors working from home, we remained focused and delivered strong growth in client flows and near record levels of gross sales
in Asset Management.

 

“With our excellent balance sheet and risk management, we have been able to absorb considerable market impacts. We completed the quarter with a sizable excess capital position that provides important flexibility, and we also have ample liquidity. Both our financial strength and ability to generate free cash flow across market cycles differentiate Ameriprise. We are able to continue executing our long-term strategy and return capital to shareholders. This includes raising our regular quarterly dividend 7 percent, the 16th increase over the last 15 years.

 

“While market conditions and the operating environment remain fluid, Ameriprise is in a strong position.”

 

Ameriprise Financial, Inc.
First Quarter Summary

(in millions, except per share amounts, unaudited)

Quarter Ended
March 31,

 

% Over/
(Under)

Per Diluted Share
Quarter Ended
March 31,

% Over/
(Under)

2020

 

2019

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

$

2,036

$

395

NM

$

15.88

$

2.82

NM

 

Adjusted operating earnings

$

694

$

525

32

%

$

5.41

$

3.75

44

%

(see reconciliation on p. 8)

 

 

 

 

 

 

 

 

 

GAAP Return on Equity, ex. AOCI

59.5

%

32.5

%

 

 

 

 

Adjusted Operating Return on Equity, ex. AOCI

39.7

%

36.4

%

 

 

 

 

 

 

 

 

 

Percent of pretax adjusted operating earnings
from Advice & Wealth Management, excluding
Corporate & Other

54

%

50

%

 

 

 

 

Percent of pretax adjusted operating earnings
from Advice & Wealth Management and Asset
Management, excluding Corporate & Other

76

%

71

%

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

Basic

126.4

138.8

 

 

 

 

Diluted

128.2

 

 

140.1

 

 

 

 

 

 

 

 

 

 

NM Not Meaningful – variance equal to or greater than 100%

Taxes

The first quarter adjusted operating effective tax rate was negative 6.4 percent, or $42 million. The primary driver of the tax rate in the quarter was the forecasted utilization of NOLs that will be applied to prior year tax filings during 2020. The first quarter benefit associated with these NOLs was $144 million, or 65 percent of the forecasted full year 2020 total NOL benefit.

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Adjusted Operating Results

(in millions, unaudited)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Net revenues

$

1,695

 

$

1,554

 

9

%

Distribution expense

970

 

870

 

(11

)%

G&A / other expense

347

 

334

 

(4

)%

Pretax adjusted operating earnings

$

378

 

$

350

 

8

%

 

 

 

 

 

Pretax adjusted operating margin

22.3

%

22.5

%

 

 

 

 

 

(in billions, unless otherwise noted)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Total client assets

$

560

 

$

588

 

(5

)%

Wrap net flows

$

6.1

 

$

4.3

 

41

%

Brokerage cash balance

$

32.7

 

$

25.3

 

29

%

Average spread rate on brokerage cash balances (bps)

133

 

212

 

(79

) bps

Adjusted operating net revenue per advisor (trailing 12 months - thousands)

$

680

 

$

628

 

8

%

 

 

 

 

 

 

 

 

 

Advice & Wealth Management demonstrated continued strength with an 8 percent increase in pretax adjusted operating earnings from strong client activity and higher average equity markets that more than offset the decline in short term interest rates. Pretax adjusted operating margin of 22.3 percent remained strong.

The company’s business continuity capabilities ensured that advisors have the tools and information necessary to meet and exceed client needs in this volatile environment. Our excellent client service and strong technology foundation enable advisors to provide full-service transaction and advisory services to clients.

Adjusted operating net revenues increased 9 percent to $1.7 billion. Strong organic growth and higher average equity markets more than offset lower cash sweep revenue related to short term interest rate cuts in March. Quarter-to-date through February 2020, revenue increased 14 percent, with the market depreciation in March reducing the growth rate for the quarter. Bank assets increased $2.4 billion in the quarter to $6.2 billion. The bank substantially increased its fixed term investment strategy as credit spreads widened during the quarter, which will increase interest earnings going forward.

Strong business performance and higher activity levels drove an 11 percent increase in distribution expenses. General and administrative expenses, excluding bank-related expenses, increased 2 percent. This was in line with expectations as planned investments for future growth were partially offset by ongoing expense reengineering.

Total client assets grew 6 percent to $616 billion through February from strong client flows, however, total client assets ended the quarter at $560 billion following the market depreciation in March. Organic growth remained very strong with growth in client inflows as wrap flows reached a high of $6.1 billion in the quarter. Client brokerage cash balances increased 29 percent to $32.7 billion, with a significant increase in March as clients reallocated portfolios.

Adjusted operating net revenue per advisor on a trailing 12-month basis increased 8 percent to $680,000. Total advisors were 9,878, demonstrating solid advisor retention and experienced advisor recruiting with 80 advisors moving their practices to Ameriprise in the quarter.

Ameriprise Financial, Inc.

Asset Management Segment Adjusted Operating Results

 

(in millions, unaudited)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Net revenues

$

686

 

$

689

 

Distribution expense

231

 

223

 

(4

)%

G&A / other expense

298

 

320

 

7

%

Pretax adjusted operating earnings

$

157

 

$

146

 

8

%

 

 

 

 

 

Pretax adjusted operating margin

22.9

%

21.2

%

 

Net Pretax adjusted operating margin (1)

 

37.9

%

 

33.6

%

 

 

 

 

 

 

(in billions)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Total segment AUM

$

426

 

$

459

 

(7

)%

 

 

 

 

 

 

 

 

 

Net Flows

 

 

 

 

 

 

 

 

Former parent company related new flows

$

(0.8

)

$

(1.1

)

27

%

Global Retail net flows, excl. former parent flows

 

(2.7

)

(3.4

)

22

%

Global Institutional net flows, excl. former parent flows

1.0

 

(2.7

)

NM

 

Total segment net flows

$

(2.5

)

$

(7.2

)

66

%

 

 

 

 

 

 

 

 

 

 

(1) See Reconciliation on page 13

NM Not Meaningful – variance equal to or greater than 100%

Asset Management pretax adjusted operating earnings were $157 million, up $11 million, reflecting higher average equity markets. Excluding a performance fee adjustment, pretax adjusted operating earnings were $172 million, up 18 percent. First quarter net pretax adjusted operating margin remained strong at 37.9 percent.

Adjusted operating revenues increased 2 percent versus last year, excluding the performance fee adjustment, as growth in average equity markets and higher fee net inflows more than offset the cumulative impact of net outflows. Through February, adjusted operating revenues grew 9 percent, however, the market dislocation in March resulted in revenues for the quarter that were flat to a year ago.

Adjusted operating expenses decreased 3 percent as a 7 percent decline in general and administrative and other expenses was partially offset by higher distribution expenses.

In the quarter, retail gross sales increased 50 percent, reflecting strong execution of business growth strategies, which reduced net outflows to $2.5 billion, a $4.7 billion improvement from a year ago. Net inflows in January and February were $2.1 billion(2), with elevated redemptions in March resulting in net outflows for the quarter. Global institutional inflows were $1.0 billion. Excluding former parent flows, total net outflows were $1.7 billion, including a $1.3 billion very low fee institutional redemption that was anticipated.

(2) Excluding former parent flows

Ameriprise Financial, Inc.

Annuities and Protection Segments Adjusted Operating Results

(in millions, unaudited)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

 

Annuities

 

 

 

 

 

 

 

 

Net revenues

$

589

 

$

604

 

(2

%)

Expenses

 

494

 

 

476

 

(4

%)

Pretax adjusted operating earnings

$

95

 

$

128

 

(26

%)

 

 

 

 

 

 

 

 

 

Variable annuity pretax adjusted operating earnings

$

93

 

$

115

 

(19

%)

Fixed annuity pretax adjusted operating earnings

 

2

 

 

13

 

(85

%)

Total pretax adjusted operating earnings

$

95

 

$

128

 

(26

%)

 

 

 

 

Protection

 

 

 

 

 

 

 

 

Net revenues

$

257

 

$

262

 

(2

%)

Expenses

 

185

 

 

188

 

2

%

Pretax adjusted operating earnings

$

72

 

$

74

 

(3

%)

 

 

 

 

 

 

 

 

 

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

 

Variable annuity ending account balances (billions)

$

70.0

 

$

76.9

 

(9

%)

Fixed deferred annuity ending account balances (billions)

$

8.2

 

$

8.6

 

(5

%)

Life insurance in force (billions)

$

194.6

 

$

194.9

 

 

 

 

 

 

 

 

 

 

 

Annuities pretax adjusted operating earnings were $95 million, down $33 million from the prior year.

Variable annuity pretax adjusted operating earnings decreased to $93 million. Operating net revenues increased 2 percent driven by market appreciation, which more than offset net outflows. Expenses increased 9 percent reflecting higher expected reserve accruals for living benefits that were compounded by market dislocation, as well as lower DAC amortization in the year ago quarter. Variable annuity sales improved 24 percent year-over-year to $1.1 billion and benefited from the launch of a structured product that accounted for approximately 10 percent of sales in the quarter.

Fixed annuity pretax adjusted operating earnings were $2 million, down from $13 million a year ago and $7 million last quarter, primarily reflecting continued low interest rates. Account balances declined 5 percent from limited new product sales and continued lapses.

Protection pretax adjusted operating earnings were $72 million compared to $74 million a year ago. Overall claims were slightly favorable but within expected ranges. VUL/UL cash sales were flat at $56 million as higher VUL sales offset lower indexed universal life sales.

Ameriprise Financial, Inc.

Corporate & Other Segment Adjusted Operating Results

 

(in millions, unaudited)

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Pretax adjusted operating earnings/(loss):

 

 

 

 

 

 

 

 

Corporate & Other (excl. LTC and Auto & Home)

$

(52

)

$

(78

)

33

%

Long Term Care

$

2

 

$

6

 

(67

)%

 

 

 

 

 

 

 

 

 

Corporate & Other pretax adjusted operating loss(1) was $52 million, down $26 million from the prior year, primarily due to the impact of share price depreciation on compensation expense and lower investment expenses.

Long Term Care pretax adjusted operating earnings were $2 million.

(1) Excluding Long Term Care and Auto & Home

About Ameriprise Financial

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 125 years. With extensive advisory, asset management and insurance capabilities and a nationwide network of approximately 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, LLC offers financial planning services, investments, insurance and annuity products. Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an SEC- and FCA-registered investment adviser affiliate of Columbia Management Investment Advisers, LLC based in the U.K. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company, and in New York only by RiverSource Life Insurance Co. of New York, Albany, New York. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuity products in the state of New York. These companies are all part of Ameriprise Financial, Inc. CA License #0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.

Forward-Looking Statements

This news release contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

  • statements of the company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;
  • statements of the company’s position, future performance and ability to pursue business strategy and return of capital to shareholders relative to the spread and impact of the COVID-19 pandemic and the related market, economic, client, governmental and healthcare system response environments;
  • statements about the forecasted full year 2020 total NOL benefit;
  • 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 track,” “project,” ”continue,” “able to remain”, “resume,” “deliver,” “develop,” “evolve,” “drive,” ”enable,” “flexibility,” “scenario, “case” 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.

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 cautions readers to carefully consider the risks described in 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, 2019, and subsequent Quarterly Reports on Form 10-Q, available at ir.ameriprise.com. Management undertakes no obligation to update publicly or revise any forward-looking statements.

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 Form 10-Q for the quarter ended March 31, 2020. For information about Ameriprise Financial entities, please refer to the First Quarter 2020 Statistical Supplement available at ir.ameriprise.com and the tables that follow in this news release.

Ameriprise Financial announces financial and other information to investors through the company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this release or in any other report or document the company furnishes or files with the SEC.

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

 

(in millions, except per share amounts, unaudited)

Quarter Ended
March 31,

 

Per Diluted Share
Quarter Ended
March 31,

 

2020

2019

2020

2019

 

 

 

 

 

 

 

 

 

 

Net income

$

2,036

 

$

395

 

$

15.88

 

$

2.82

 

Less: Net Income (loss) attributable to consolidated investment entities

 

(2)

 

 

 

 

(0.02)

 

 

 

Add: Integration/restructuring charges (1)

 

1

 

 

7

 

 

0.01

 

 

0.05

 

Add: Market impact on variable annuity guaranteed benefits (1)

 

(1,689)

 

 

142

 

 

(13.18)

 

 

1.02

 

Add: Market impact on fixed index annuity benefits(1)

 

(3)

 

 

 

 

(0.02)

 

 

 

Add: Mean reversion-related impacts (1)

 

61

 

 

(36)

 

 

0.47

 

 

(0.26)

 

Add: Market impact on indexed universal life benefits (1)

 

(91)

 

 

51

 

 

(0.71)

 

 

0.36

 

Add: Market impact on hedges on investments (1)

 

 

 

10

 

 

 

 

0.07

 

Add: Net realized investment (gains) Losses (1)

 

20

 

 

(9)

 

 

0.16

 

 

(0.06)

 

Less: Gain on disposal of business (1)

 

 

 

 

 

 

 

 

Add: Tax effect of adjustment (2)

 

357

 

 

(35)

 

 

2.78

 

 

(0.25)

 

Adjusted operating earnings

$

694

 

$

525

 

$

5.41

 

$

3.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Pretax impact of Auto & Home core results

 

 

 

9

 

 

 

 

0.06

 

Less: Tax effect of Auto & Home core results

 

 

 

(2)

 

 

 

 

(0.01)

 

Adjusted operating earnings excluding Auto & Home

$

694

 

$

518

 

$

5.41

 

$

3.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

126.4

 

 

138.8

 

 

 

 

 

 

 

Diluted

 

128.2

 

 

140.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Pretax adjusted operating adjustment.

(2) Calculated using the statutory tax rate of 21%

Ameriprise Financial, Inc.

Reconciliation Table: Pretax Adjusted Operating Earnings and Pretax Adjusted Operating Margin

(in millions, except per share amounts, unaudited)

Quarter Ended
March 31,

 

2020

2019

 

 

 

 

 

 

Total net revenues

$

3,001

 

$

3,118

 

Less: CIEs revenue

 

16

 

 

21

 

Less: Integration/restructuring charges

 

 

 

(3)

 

Less: Net realized investment gains (losses)

 

(20)

 

 

9

 

Less: Market impact on indexed universal life benefits

 

55

 

 

(17)

 

Less: Mean reversion related impacts

 

(1)

 

 

 

Less: Market impact of hedges on investments

 

 

 

(10)

 

Less: Gain on disposal of business

 

 

 

 

Adjusted operating total net revenues

$

2,951

 

$

3,118

 

Less: Auto & Home revenue

 

 

 

288

 

Adjusted operating total net revenues excluding Auto & Home

$

2,951

 

$

2,830

 

 

 

 

 

 

 

 

Total expenses

$

650

 

$

2,648

 

Less: CIEs expenses

 

18

 

 

21

 

Less: Integration/restructuring charges

 

1

 

 

4

 

Less: Market impact on variable annuity guaranteed benefits

 

(1,689)

 

 

142

 

Less: Market impact on indexed universal life benefits

 

(36)

 

 

34

 

Less: Market impact on fixed index annuity benefits

 

(3)

 

 

 

Less: Mean reversion-related impacts

 

60

 

 

(36)

 

Adjusted operating expenses

$

2,299

 

$

2,483

 

Less: Auto & Home expenses

 

 

 

279

 

Adjusted operating total net revenues excluding Auto & Home

$

2,299

 

$

2,204

 

 

 

 

 

 

 

 

Pretax income

$

2,351

 

$

470

 

Pretax adjusted operating earnings

 

652

 

 

635

 

Less: Auto & Home

 

 

 

9

 

Pretax adjusted operating earnings excluding Auto & Home

$

652

 

$

626

 

 

 

 

 

 

 

 

Pretax income margin

 

78.3%

 

 

15.1%

 

Pretax adjusted operating margin

 

22.1%

 

 

20.4%

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management and Asset Management

Percent of Pretax Adjusted Operating Earnings (1)

 

(in millions, unaudited)

Quarter Ended
March 31,

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Advice & Wealth Management pretax adjusted operating earnings

$

378

 

$

350

 

Advice & Wealth Management and Asset Management pretax adjusted operating earnings

$

535

 

$

496

 

Annuities and Protection pretax adjusted operating earnings

$

167

 

$

202

 

 

 

 

 

 

 

 

Percent pretax adjusted operating earnings from Advice & Wealth Management

 

54%

 

 

50%

 

Percent pretax adjusted operating earnings from Advice & Wealth Management and Asset Management

 

76%

 

 

71%

 

Percent pretax adjusted operating earnings from Annuities and Protection

 

24%

 

 

29%

 

 

 

 

 

 

 

 

(1) Excludes Corporate & Other Segment

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management and Asset Management

Percent of Adjusted Operating Net Revenues (1)

 

(in millions, unaudited)

Quarter Ended
March 31,

 

2020

 

2019

 

 

 

 

 

 

Advice & Wealth Management pretax adjusted operating revenues

$

1,695

 

$

1,554

 

Advice & Wealth Management and Asset Management pretax
adjusted operating revenues

$

2,381

 

$

2,243

 

Annuities and Protection pretax adjusted operating revenues

$

846

 

$

866

 

 

 

 

 

 

 

 

Percent pretax adjusted operating revenues from Advice & Wealth Management

 

53%

 

 

50%

 

Percent pretax adjusted operating revenues from Advice & Wealth Management and Asset Management

 

74%

 

 

72%

 

Percent pretax adjusted operating revenues from Annuities and Protection

 

26%

 

 

28%

 

 

 

 

 

 

 

 

(1) Excludes Corporate & Other Segment

Ameriprise Financial, Inc.

Reconciliation Table: General and Administrative Expense

(in millions, unaudited)

Quarter Ended
March 31,

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense

$

753

 

$

805

 

Less: CIE expenses

 

1

 

 

1

 

Less: Integration/restructuring charges

 

1

 

 

4

 

Adjusted operating general and administrative expense

$

751

 

$

800

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Effective Tax Rate

 

(in millions, unaudited)

Quarter Ended
March 31, 2020

 

GAAP

Adjusted
Operating

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

$

2,351

 

$

652

 

Income tax provision

$

315

 

$

(42

)

Effective tax rate

 

13.4

%

 

(6.4

%)

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Effective Tax Rate

 

(in millions, unaudited)

Quarter Ended
March 31, 2019

 

GAAP

 

Adjusted
Operating

 

 

 

 

 

 

Pretax income

$

470

 

$

635

 

Income tax provision

$

75

 

$

110

 

Effective tax rate

 

15.9

%

 

17.3

%

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management Revenues

 

 

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

AWM general and administrative expenses

$

345

 

$

331

 

(4

%)

Less: Bank general and administrative expenses

 

11

 

 

4

 

NM

 

Adjusted AWM general and administrative expenses

$

334

 

$

327

 

(2

%)

 
 

NM Not Meaningful – variance equal to or greater than 100%

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Revenues

 

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Net revenues

$

686

 

$

689

 

 

Less: Performance fee adjustment

 

(19

)

 

 

NM

 

Adjusted net revenues

$

705

 

$

689

 

2

%

 

 

 

 

NM Not Meaningful – variance equal to or greater than 100%

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Pretax Operating Earnings

 

 

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Pretax adjusted operating earnings

$

157

 

$

146

 

8

%

Less: Performance fee adjustment

 

(15

)

 

 

NM

 

Pretax adjusted operating earnings

$

172

 

$

146

 

18

%

 

 

 

 

 

 

 

 

 

 

NM Not Meaningful – variance equal to or greater than 100%

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Net Pretax Adjusted Operating Margin

 

(in millions, unaudited)

Quarter Ended
March 31,

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating total net revenues

$

686

 

$

689

 

Less: Distribution pass through revenues

 

186

 

 

179

 

Less: Subadvisory and other pass through revenues

 

78

 

 

81

 

Net adjusted operating revenues

$

422

 

$

429

 

 

 

 

 

 

 

 

Pretax adjusted operating earnings

$

157

 

$

146

 

Less: Adjusted operating net investment income

 

 

 

6

 

Add: Amortization of intangibles

 

3

 

 

4

 

Net adjusted operating earnings

$

160

 

$

144

 

 

 

 

 

 

 

 

Pretax adjusted operating margin

 

22.9%

 

 

21.2%

 

Net adjusted operating revenues

 

37.9%

 

 

33.6%

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI”

 

(in millions, unaudited)

Twelve Months Ended
March 31,

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

3,534

 

$

1,899

 

Less: Adjustments(1)

 

1,175

 

 

(229)

 

Adjusted operating earnings

 

2,359

 

 

2,128

 

Less: Auto & Home, net of tax(2)

 

3

 

 

(5)

 

Adjusted operating earnings excluding Auto & Home

$

2,356

 

$

2,133

 

 

 

 

 

 

 

 

Total Ameriprise Financial, Inc. shareholders' equity

$

6,058

 

$

5,704

 

Less: Accumulated other comprehensive income, net of tax

 

121

 

 

(137)

 

Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI

 

5,937

 

 

5,841

 

Less: Equity impacts attributable to the consolidated investment entities

 

1

 

 

1

 

Adjusted operating equity

$

5,936

 

$

5,840

 

 

 

 

 

 

 

 

Return on equity excluding AOCI

 

59.5%

 

 

32.5%

 

Adjusted operating return on equity excluding AOCI(3)

 

39.7%

 

 

36.4%

 

Adjusted operating return on equity excluding AOCI and Auto & Home

 

39.7%

 

 

36.5%

 

 

 

 

 

 

 

 

(1)

 

Adjustments reflect the trailing twelve months’ sum of after-tax net realized investment gains/losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact on fixed index annuity benefits, net of hedges and the related DAC amortization; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; mean reversion related impacts; gain or loss on disposal of business that is not considered discontinued operations; integration/restructuring charges; and the impact of consolidating certain investment entities. After-tax is calculated using the statutory tax rate of 21%.

(2)

After-tax is calculated using the statutory tax rate of 21%.

(3)

 

Adjusted operating return on equity excluding accumulated other comprehensive income (AOCI) is calculated using the trailing twelve months of earnings excluding the after-tax net realized investment gains/losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact on fixed index annuity benefits, net of hedges and the related DAC amortization; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; mean reversion related impacts; gain or loss on disposal of business that is not considered discontinued operations; integration/restructuring charges; the impact of consolidating certain investment entities; and discontinued operations in the numerator, and Ameriprise Financial shareholders’ equity excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory tax rate of 21%. 

Ameriprise Financial, Inc.

Consolidated GAAP Results

 

 

Quarter Ended
March 31,

 

 

% Over/
(Under)

2020

 

2019

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Management and financial advice fees

$

1,770

 

$

1,627

 

9

%

Distribution fees

 

464

 

 

480

 

(3

)%

Net investment income

 

328

 

 

397

 

(17

)%

Premiums

 

91

 

 

371

 

(75

)%

Other revenues

 

373

 

 

278

 

34

%

Gain on Disposal of Business

 

 

 

 

 

Total revenues

 

3,026

 

 

3,153

 

(4

)%

Banking and deposit interest expense

 

25

 

 

35

 

(29

)%

Total net revenues

 

3,001

 

 

3,118

 

(4

)%

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Distribution expenses

 

995

 

 

900

 

(11

)%

Interest credited to fixed accounts

 

91

 

 

204

 

55

%

Benefits, claims, losses and settlement expenses

 

(1,747)

 

 

670

 

NM

 

Amortization of deferred acquisition costs

 

512

 

 

16

 

NM

 

Interest and debt expense

 

46

 

 

53

 

13

%

General and administrative expense

 

753

 

 

805

 

6

%

Total expenses

 

650

 

 

2,648

 

75

%

Pretax income

 

2,351

 

 

470

 

NM

 

Income tax provision

 

315

 

 

75

 

NM

 

Net income

$

2,036

 

$

395

 

NM

 

 

 

 

 

 

 

 

 

 

NM Not Meaningful – variance equal to or greater than 100%

 

Investor Relations:
Alicia A. Charity
Ameriprise Financial
(612) 671-2080
alicia.a.charity@ampf.com

Stephanie M. Rabe
Ameriprise Financial
(612) 671-4085
stephanie.m.rabe@ampf.com

Media Relations:
Paul W. Johnson
Ameriprise Financial
(612) 671-0625
paul.w.johnson@ampf.com

Source: Ameriprise Financial, Inc.