Second quarter 2013 net income(1) per
diluted share was $1.54.
Operating earnings per diluted
share were $1.69.
Second quarter 2013 return on equity excluding AOCI was 15.5 percent.
Operating
return on equity excluding AOCI was a record 17.9 percent.
MINNEAPOLIS--(BUSINESS WIRE)--
Ameriprise Financial, Inc. (NYSE: AMP) today reported strong second
quarter 2013 results. Net income(1) was $322 million, or
$1.54 per diluted share, compared to $224 million, or $0.99 per diluted
share, a year ago. Operating earnings were $352 million, or $1.69 per
diluted share, compared to $254 million, or $1.13 per diluted share, a
year ago.
Operating net revenues grew 9 percent to $2.7 billion, primarily driven
by robust client net inflows, increased client activity and market
appreciation, partially offset by the decline in net investment income
from low interest rates.
Operating expenses increased 6 percent to $2.3 billion, primarily
reflecting higher distribution costs from business growth. The company’s
ongoing focus on expense discipline resulted in general and
administrative expenses remaining flat compared to a year ago.
The company continues to return capital to shareholders while
maintaining a strong financial foundation. In the quarter, a total of
$488 million was returned to shareholders through share repurchases and
dividends. During the past four quarters, 134 percent of operating
earnings was returned to shareholders.
Return on shareholders’ equity excluding accumulated other comprehensive
income (AOCI) was 15.5 percent for the 12 months ended June 30, 2013.
Consistent with its strategy, the company has steadily expanded its
return, with operating return on equity excluding AOCI reaching 17.9
percent at quarter end, a 270 basis point increase from a year ago.
“Ameriprise delivered another quarter of strong financial results,” said
Jim Cracchiolo, chairman and chief executive officer. “Revenues and
earnings were up nicely; in fact, our operating return on equity reached
an all-time high of 17.9 percent.”
“All of our business segments performed well, most notably Advice and
Wealth Management. We’re experiencing good growth in client acquisition
and strong client net inflows, which are key drivers of advisor
productivity gains. Even with the pressure of low interest rates, we’re
delivering meaningful growth in profitability.
”With our strong capital position and ability to generate free cash
flow, we’re able to reinvest in the business and consistently return
capital to shareholders through dividends and share repurchases.”
(1) Net income represents net income from continuing
operations attributable to Ameriprise Financial
|
Ameriprise Financial, Inc. |
Second Quarter Summary |
|
(in millions, except per share amounts, unaudited)
|
| Quarter Ended June 30, | |
| Per Diluted Share Quarter Ended June 30, | |
| 2013 |
| 2012 |
| % Better/ (Worse) | | 2013 |
| 2012 |
| % Better/ (Worse) |
| | | | | | | | | | | | | | | | | | |
Net income from continuing operations attributable to Ameriprise
Financial | |
$
|
322
| |
$
|
224
| |
44
|
%
| |
$
|
1.54
| |
$
|
0.99
| |
56
|
%
|
Adjustments, net of tax (1) (see reconciliation on p.
11)
| |
|
30
| |
|
30
| | | | |
|
0.15
| |
|
0.14
| | | |
Operating earnings
| |
$
|
352
| |
$
|
254
| |
39
|
%
| |
$
|
1.69
| |
$
|
1.13
| |
50
|
%
|
| | | | | | | | | | | | | | | | | |
|
Weighted average common shares outstanding:
| | | | | | | | | | | | | | | | | | |
Basic
| | |
204.9
| | |
221.7
| | | | | | | | | | | | |
Diluted
| | |
208.6
| | |
225.6
| | | | | | | | | | | | |
|
(1) After-tax is 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, after-tax,
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 hedges and
related deferred acquisition costs (DAC) and deferred sales inducement
costs (DSIC) amortization; the market impact on indexed universal life
benefits, net of hedges and related DAC amortization, unearned revenue
amortization, and the reinsurance accrual; and income or loss from
discontinued operations.
The company’s financial results in the quarter included a gain from the
sale of Threadneedle’s strategic business investment in Cofunds and
several items that are detailed in a table on page 12. The net effect of
the gain and these items was a $2 million after-tax benefit to earnings,
or $0.01 per diluted share in the quarter.
In addition, results in the prior year period included $12 million, or
$0.05 per diluted share, in after-tax operating earnings from former
banking operations that ceased in the fourth quarter of 2012.
Taxes
The first quarter 2013 operating effective tax rate was 27.9 percent
compared to 36.3 percent a year ago due to the previously disclosed tax
item in the year ago period. The company estimates that its 2013
operating effective tax rate will be in the 26 to 28 percent range.
Second Quarter 2013 Business Highlights
-
Assets under management and administration were $703 billion—a 7
percent increase from a year ago driven by Ameriprise advisor client
net inflows and market appreciation.
-
Ameriprise advisor client assets grew 13 percent to $373 billion from
net inflows, client acquisition and market appreciation.
-
Wrap net inflows increased 18 percent to $3.1 billion. Total wrap
assets increased 20 percent to $136 billion.
-
Operating net revenue per advisor, excluding results from former
banking operations, improved 17 percent to $110,000.
-
The company added 88 experienced advisors during the quarter, which
was consistent with the year ago period.
-
Asset Management segment AUM of $459 billion increased 3 percent from
a year ago, driven by market appreciation, partially offset by an
unfavorable impact from foreign exchange and net outflows. Net
outflows were $2.1 billion in the quarter.
-
On a global basis, the company managed 123 four- and five-star
Morningstar-rated funds, including 51 Columbia Management funds and 72
Threadneedle funds.
-
The company made progress strengthening its global asset management
capability, bringing together existing Emerging Market Debt and
Emerging Market Equity investment teams from Columbia Management and
Threadneedle Investments to create global teams that benefit from the
full resources and capabilities of both organizations.
-
Variable annuity cash sales increased 20 percent from a year ago. The
company added three new managed volatility funds for its variable
annuity with living benefits and additional fund offerings within its
product line of variable annuities without living benefit riders.
-
Life and health insurance cash sales grew 32 percent from a year ago,
reflecting solid indexed universal life insurance sales and expanded
variable universal life insurance sales.
-
Auto and home policies in force continued to grow steadily, up 10
percent from a year ago.
-
The company announced the launch of its exclusive Confident
Retirement® approach that helps clients and advisors
address four fundamental areas of retirement planning: covering
essentials, ensuring a lifestyle, preparing for the unexpected, and
leaving a legacy.
Balance Sheet Summary as of June 30, 2013
-
Cash and cash equivalents were $2.3 billion, with $0.9 billion at the
holding company. In addition, the holding company holds $0.7 billion
in high-quality, short-duration securities.
-
Excess capital remained over $2 billion after the return of $488
million to shareholders during the quarter through share repurchases
and dividends.
-
The company repurchased 4.9 million shares of its common stock in the
quarter for $380 million.
-
The total investment portfolio ended the quarter with $1.7 billion in
net unrealized gains.
-
RiverSource Life Insurance Company’s estimated risk-based capital
ratio was approximately 470 percent.
Segment Summaries
|
Ameriprise Financial, Inc. |
Advice & Wealth Management Segment Operating Results |
|
| |
| |
(in millions, unaudited)
| | Quarter Ended June 30, | | % Better/ (Worse) |
| 2013 |
| 2012 | |
Advice & Wealth Management | | | | | | | | | |
Net revenues
| |
$
|
1,076
| |
$
|
953
| |
13
|
%
|
Expenses
| |
|
924
| |
|
842
| |
(10
|
)
|
Pretax operating earnings
| |
$
|
152
| |
$
|
111
| |
37
| |
Operating results included former banking operations:
|
Net revenues
| |
$
|
—
| |
$
|
34
| |
NM
| |
General and administrative expense
| |
|
—
| |
|
16
| |
NM
| |
Operating earnings
| |
$
|
—
| |
$
|
18
| |
NM
| |
|
| | Quarter Ended June 30, | | % Better/ (Worse) |
| 2013 | | 2012 | |
Retail client assets (billions)
| |
$
|
373
| |
$
|
331
| |
13
|
%
|
Mutual fund wrap net flows (billions)
| |
$
|
3.1
| |
$
|
2.6
| |
18
|
%
|
Operating net revenue per advisor, excluding former banking
operations (thousands)
| |
$
|
110
| |
$
|
94
| |
17
|
%
|
|
NM Not Meaningful — variance of greater than 100%
|
|
Advice & Wealth Management pretax operating earnings
increased 37 percent to $152 million, reflecting robust revenue growth
and expense controls. Earnings growth included a $15 million unfavorable
impact in the 2013 period from lower interest rates, as well as the
absence of $18 million of earnings from former banking operations.
Second quarter 2013 pretax operating margin was 14.1 percent compared to
11.6 percent a year ago. Results in the year ago quarter included
earnings from former banking operations, which contributed 150 basis
points to operating margin.
Operating net revenues grew 13 percent to $1.1 billion driven by asset
growth in fee-based accounts from client inflows and market
appreciation, and improved client activity across annuity, insurance and
financial products. The company generated robust revenue growth even
after absorbing the bank transition and the negative impact of lower
interest rates.
Operating expenses increased 10 percent to $924 million as business
growth resulted in higher distribution expenses and higher accruals for
retention and performance-based compensation. General and administrative
expenses declined 6 percent, demonstrating ongoing expense discipline
and the impact of former banking operations.
Total retail client assets grew 13 percent to a record $373 billion
driven by client net inflows, client acquisition and market
appreciation. Wrap net inflows increased 18 percent to $3.1 billion, and
brokerage cash balances reached $18.5 billion. The combination of asset
growth and improved client activity drove a 17 percent increase in
operating net revenue per advisor, excluding results from former banking
operations.
|
Ameriprise Financial, Inc. |
Asset Management Segment Operating Results |
|
| | |
| |
(in millions, unaudited)
| | Quarter Ended June 30, | | | % Better/ (Worse) |
| 2013 | |
| 2012 | | |
Asset Management | | | | | | | | | | | |
Net revenues
| |
$
|
822
| | |
$
|
707
| | |
16
|
%
|
Expenses
| |
|
623
| | |
|
577
| | |
(8
|
)
|
Pretax operating earnings
| |
$
|
199
| | |
$
|
130
| | |
53
| |
|
Items included in operating earnings:
|
Threadneedle gain on sale – Cofunds
| |
$
|
30
| | |
$
|
—
| | |
NM
| |
|
| | Quarter Ended June 30, | | | % Better/ (Worse) |
| 2013 | | | 2012 | | |
Total segment AUM(1) (billions)
| |
$
|
459
| | |
$
|
446
| | |
3
|
%
|
Columbia Management AUM
| |
$
|
335
| | |
$
|
332
| | |
1
|
%
|
Threadneedle AUM
| |
$
|
127
| | |
$
|
117
| | |
9
|
%
|
| | | | | | | | | | |
|
Total segment net flows (billions)
| |
$
|
(2.1
|
)
| |
$
|
(6.6
|
)
| |
68
|
%
|
Retail net flows
| |
$
|
(0.9
|
)
| |
$
|
(3.8
|
)
| |
77
|
%
|
Institutional net flows
| |
$
|
(0.8
|
)
| |
$
|
(2.5
|
)
| |
66
|
%
|
Alternative net flows
| |
$
|
(0.4
|
)
| |
$
|
(0.3
|
)
| |
(14
|
)%
|
| | | | | | | | | | |
|
(1) Subadvisory eliminations between Columbia
Management and Threadneedle are included in the company’s Second
Quarter 2013 Statistical Supplement available at ir.ameriprise.com |
|
NM Not Meaningful — variance of greater than 100%
|
|
Asset Management pretax operating earnings increased 53 percent
to $199 million and included an expected $30 million gain from the sale
of a strategic business investment in Cofunds. In addition, earnings
included a benefit from the normal course of a CDO liquidation in the
quarter.
Second quarter 2013 adjusted net pretax operating margin was 36.2
percent compared to 33.7 percent a year ago and 34.6 percent in the
sequential quarter. Adjusted net pretax operating margin excludes the
Cofunds gain.
Operating net revenues grew 16 percent to $822 million, primarily driven
by asset growth from market appreciation, the previously mentioned gain,
higher fees from the CDO liquidation and reengineering benefits, which
were partially offset by the impact of net outflows.
Operating expenses increased 8 percent to $623 million, reflecting
higher distribution expenses from market growth. General and
administrative expenses increased 6 percent from higher
performance-based compensation and investments in business growth.
Overall, expenses remained well controlled as the company benefited from
its expense discipline and reengineering.
Total segment assets under management grew 3 percent from a year ago to
$459 billion, reflecting market appreciation, partially offset by net
outflows and the impact from foreign exchange.
Asset Management net outflows were $2.1 billion in the quarter. Strong
retail client net inflows at Threadneedle were more than offset by
retail net outflows at Columbia. Consistent with the industry, outflows
in retail fixed income funds were elevated late in the quarter.
Institutional net outflows were primarily from legacy insurance assets
and low basis point former parent influenced mandates, and were
partially offset by the funding of third-party institutional mandates.
|
Ameriprise Financial, Inc. |
Annuities Segment Operating Results |
|
(in millions, unaudited)
|
| Quarter Ended June 30, | |
| % Better/ (Worse) |
| 2013 | |
| 2012 | | |
Annuities | | | | | | | | | | | |
Net revenues
| |
$
|
641
| | |
$
|
628
| | |
2
|
%
|
Expenses
| |
|
517
| | |
|
512
| | |
(1
|
)
|
Pretax operating earnings
| |
$
|
124
| | |
$
|
116
| | |
7
| |
| | | | | | | | | | |
|
Variable annuity pretax operating earnings
| |
$
|
82
| | |
$
|
83
| | |
(1
|
)%
|
Fixed annuity pretax operating earnings
| |
|
42
| | |
|
33
| | |
27
| |
Total pretax operating earnings
| |
$
|
124
| | |
$
|
116
| | |
7
| |
|
Items included in operating earnings:
| | | | | | | | | | | |
Market impact on DAC and DSIC (mean reversion)
| |
$
|
(12
|
)
| |
$
|
(11
|
)
| |
(9
|
)%
|
Valuation model adjustments
| |
$
|
—
| | |
$
|
(14
|
)
| |
NM
| |
Insurance industry guaranty fund assessments, primarily related to
Executive Life of NY (unaffiliated)
| |
$
|
—
| | |
$
|
(6
|
)
| |
NM
| |
|
|
| | Quarter Ended June 30, | | | % Better/ (Worse) |
| 2013 | | | 2012 | | |
Variable annuity ending account balances (billions)
| |
$
|
70.3
| | |
$
|
65.2
| | |
8
|
%
|
Variable annuity net flows (millions)
| |
$
|
(135
|
)
| |
$
|
(147
|
)
| |
8
|
%
|
Fixed annuity ending account balances (billions)
| |
$
|
13.5
| | |
$
|
14.1
| | |
(4
|
)%
|
Fixed annuity net flows (millions)
| |
$
|
(275
|
)
| |
$
|
(177
|
)
| |
(55
|
)%
|
|
NM Not Meaningful — variance of greater than 100%
|
|
Annuities pretax operating earnings increased 7 percent to $124
million, reflecting new business growth and market appreciation
partially offset by fixed annuity spread compression and the unfavorable
market impact on DAC and DSIC, primarily from the rise in interest
rates. In addition, the prior year period included items noted above
that negatively impacted earnings.
Variable annuity operating earnings were $82 million as equity market
appreciation offset higher distribution expenses from business growth
and market appreciation. In addition, results included $7 million of
higher reserve funding and amortization of DAC associated with the
unlocking of interest rate assumptions in the third quarter of 2012. The
market impact on DAC and DSIC was similar in both the current and prior
periods, although the rise in interest rates primarily impacted the
current quarter and equity market movements primarily impacted the year
ago quarter.
Fixed annuity operating earnings increased 27 percent to $42 million
primarily due to $17 million of unfavorable items in the year ago
quarter. Underlying earnings in the quarter reflected continued spread
compression from low interest rates, partially offset by income
accretion related to former bank assets transferred to the insurance
company last year.
Variable annuity account balances grew 8 percent to $70 billion driven
by market appreciation, partially offset by net outflows. Variable
annuity net outflows in the quarter reflected the closed book of
RiverSource annuities previously sold through third parties, partially
offset by $139 million of net inflows in the Ameriprise channel. Fixed
annuity account balances declined 4 percent to $13.5 billion due to
ongoing net outflows from low client demand given the interest rate
environment.
|
Ameriprise Financial, Inc. |
Protection Segment Operating Results |
|
(in millions, unaudited)
|
| Quarter Ended June 30, | |
| % Better/ (Worse) |
| 2013 | |
| 2012 | | |
Protection | | | | | | | | | | | |
Net revenues
| |
$
|
551
| | |
$
|
528
| | |
4
|
%
|
Expenses
| |
|
453
| | |
|
419
| | |
(8
|
)
|
Pretax operating earnings
| |
$
|
98
| | |
$
|
109
| | |
(10
|
)
|
| | | | | | | |
|
Items included in operating earnings:
| | | | | | | | |
Market impact on DAC (mean reversion)
| |
$
|
—
| | |
$
|
(1
|
)
| |
NM
| |
Reserve release
| |
$
|
—
| | |
$
|
9
| | |
NM
| |
Disability income insurance reserve adjustment
| |
$
|
(8
|
)
| |
$
|
—
| | |
NM
| |
| | | | | | | | | | |
|
|
| | Quarter Ended June 30, | | | % Better/ (Worse) |
| 2013 | | | 2012 | | |
Life insurance in force (billions)
| |
$
|
193
| | |
$
|
191
| | |
1
|
%
|
VUL/UL ending account balances (billions)
| |
$
|
10.2
| | |
$
|
9.5
| | |
7
|
%
|
Auto and home policies in force (thousands)
| | |
795
| | | |
725
| | |
10
|
%
|
|
NM Not Meaningful — variance of greater than 100%
|
|
Protection pretax operating earnings declined 10 percent to $98
million as good performance in life insurance was more than offset by a
reserve adjustment in life and health as well as higher auto and home
reserves.
Life and health earnings declined 8 percent. Cash sales increased 32
percent to $86 million from growth in indexed universal life insurance
and continued improvement in variable universal life insurance sales.
The benefits from business growth were more than offset by the
unfavorable reserve adjustment in the current quarter and a reserve
release in the year ago quarter. Overall claims experience remained
within expectations inclusive of the reserve adjustment.
Auto and home results reflected solid premium growth that was offset by
increased reserves and catastrophe losses. Steady growth in auto and
home policies continued, up 10 percent compared to a year ago.Catastrophe
losses were $18 million in the quarter, which were $4 million higher
than management’s expectations.
|
Ameriprise Financial, Inc. |
Corporate & Other Segment Operating Results |
|
| | |
| |
(in millions, unaudited)
| | Quarter Ended June 30, | | | % Better/ (Worse) |
| 2013 | |
| 2012 | | |
Corporate & Other | | | | | | | | | | | |
Net revenues
| |
$
|
(4
|
)
| |
$
|
7
| | |
NM
| |
Expenses
| |
|
81
| | |
|
74
| | |
(9
|
)%
|
Pretax operating loss
| |
$
|
(85
|
)
| |
$
|
(67
|
)
| |
(27
|
)
|
|
NM Not Meaningful — variance of greater than 100%
|
|
Corporate & Other pretax operating loss was $85 million for
the quarter compared to $67 million a year ago. Losses were higher
primarily due to how the company accounts for the transfer of former
bank assets, as well as higher performance-based compensation expenses
and severance. At the consolidated Ameriprise level, the bank-related
impact in Corporate was offset by the associated incremental accretion
income, primarily in the Annuities segment.
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 FCA-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 in this news release that the company expects its 2013
operating effective tax rate to be in the 26 to 28 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, 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;
-
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:
-
conditions in the interest rate, credit default, equity market and
foreign exchange environments, including changes in valuations,
liquidity and volatility;
-
changes in and the adoption of relevant accounting standards and
securities rating agency standards and processes, 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, including
pricing pressure, the introduction of new products and services and
changes in product distribution mix and distribution channels;
-
changes to the company’s reputation that may arise from employee or
advisor misconduct, legal or regulatory actions, perceptions of the
financial services industry generally, 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;
-
changes to the availability and cost of liquidity and the Company’s
credit capacity that may arise due to shifts in market conditions, the
Company’s credit ratings and the overall availability of credit;
-
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;
-
interruptions or other failures in our communications, technology and
other operating systems, including errors or failures caused by third
party service providers, interference or failures caused by third
party attacks on our systems, or the failure to safeguard the privacy
or confidentiality of sensitive information and data on such systems;
and
-
general economic and political factors, including consumer confidence
in the economy and the financial industry, 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, 2012
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, 2013. For information about Ameriprise
Financial entities, please refer to the Second Quarter 2013 Statistical
Supplement available at ir.ameriprise.com
and the tables that follow in this news release.
|
Ameriprise Financial, Inc. |
Reconciliation Table: Earnings |
|
|
| | |
| Per Diluted Share |
| | Quarter Ended | | | Quarter Ended |
| | June 30, | | | June 30, |
(in millions, except per share amounts, unaudited)
| | 2013 | |
| 2012 | | | 2013 |
|
| 2012 |
Net income attributable to Ameriprise Financial | |
$
|
321
| | |
$
|
223
| | |
$
|
1.54
| | |
$
|
0.99
|
Less: Loss from discontinued operations, net of tax
| |
|
(1
|
)
| |
|
(1
|
)
| |
|
—
| | |
|
—
|
Net income from continuing operations attributable to
Ameriprise Financial | | |
322
| | | |
224
| | | |
1.54
| | | |
0.99
|
Add: Market impact on variable annuity guaranteed living
benefits, net of tax(1) | | |
28
| | | |
9
| | | |
0.13
| | | |
0.04
|
Add: Market impact on indexed universal life benefits, net of tax(1) | | |
1
| | | |
—
| | | |
0.01
| | | |
—
|
Add: Integration/restructuring charges, net of tax(1) | | |
1
| | | |
17
| | | |
0.01
| | | |
0.08
|
Add: Net realized losses, net of tax(1) | |
|
—
| | |
|
4
| | |
|
—
| | |
|
0.02
|
Operating earnings
| |
$
|
352
| | |
$
|
254
| | |
$
|
1.69
| | |
$
|
1.13
|
| | | | | | | | | | |
|
Weighted average common shares outstanding:
| | | | | | | | | | | |
Basic
| | |
204.9
| | | |
221.7
| | | | | | | | |
Diluted
| | |
208.6
| | | |
225.6
| | | | | | | | |
|
(1) Calculated using the statutory tax rate of 35%.
|
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Total Net Revenues |
|
|
| Quarter Ended | |
| | June 30, | |
(in millions, unaudited)
| | 2013 | |
| 2012 | |
Total net revenues
| |
$
|
2,749
| | |
$
|
2,514
| |
Less: CIEs revenue
| | |
12
| | | |
1
| |
Less: Net realized gains (losses)
| | |
—
| | | |
(5
|
)
|
Less: Market impact on indexed universal life benefits
| |
|
(1
|
)
| |
|
—
| |
Operating total net revenues
| |
$
|
2,738
| | |
$
|
2,518
| |
| | | | | | | |
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Total Expenses |
|
|
| Quarter Ended |
| | June 30, |
(in millions, unaudited)
| | 2013 |
|
| 2012 |
Total expenses
| |
$
|
2,347
| | |
$
|
2,215
|
Less: CIEs expenses
| | |
52
| | | |
54
|
Less: Market impact on variable annuity guaranteed living benefits
| | |
43
| | | |
16
|
Less: Market impact on indexed universal life benefits
| | |
1
| | | |
—
|
Less: Integration/restructuring charges
| |
|
1
| | |
|
26
|
Operating expenses
| |
$
|
2,250
| | |
$
|
2,119
|
| | | | | | |
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Pretax Operating Earnings |
|
| |
| | Quarter Ended |
| | June 30, |
(in millions, unaudited)
| | 2013 |
|
| 2012 |
Operating total net revenues
| |
$
|
2,738
| | |
$
|
2,518
|
Operating expenses
| |
|
2,250
| | |
|
2,119
|
Pretax operating earnings
| |
$
|
488
| | |
$
|
399
|
| | | | | | |
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: General and Administrative Expense |
|
|
| Quarter Ended |
| | June 30, |
(in millions, unaudited)
| | 2013 |
|
| 2012 |
General and administrative expense
| |
$
|
747
| | |
$
|
763
|
Less: CIEs expenses
| | |
17
| | | |
6
|
Less: Integration/restructuring charges
| |
|
1
| | |
|
26
|
Operating general and administrative expense
| |
$
|
729
| | |
$
|
731
|
| | | | | | |
|
|
Ameriprise Financial, Inc. |
After-tax(1) Items Included in
Operating Earnings |
|
(in millions, except per share amounts, unaudited)
|
| Quarter Ended June 30, 2013 |
| Per Diluted Share Quarter Ended June
30, 2013 |
| |
Threadneedle gain on sale – Cofunds
| |
$
|
20
| | |
$
|
0.10
| |
CDO fund liquidation benefit
| |
$
|
12
| | |
$
|
0.06
| |
Market impact on DAC and DSIC
| |
$
|
(8
|
)
| |
$
|
(0.04
|
)
|
Protection: reserve adjustment & catastrophe losses(2) | |
$
|
(8
|
)
| |
$
|
(0.04
|
)
|
True-up of performance based compensation, retention and benefit
items as well as severance expense
| |
$
|
(14
|
)
| |
$
|
(0.07
|
)
|
|
(1) After-tax is calculated using the statutory tax
rate of 35%.
|
(2) Catastrophe losses in the table reflect $3 million
(after-tax) of above normal expected levels of claims; total
catastrophe losses were $12 million (after-tax) for the quarter.
|
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Effective Tax Rate |
|
|
| Quarter Ended | |
| | June 30, 2013 | |
(in millions, unaudited)
| | GAAP | |
| Operating | |
Income from continuing operations before income tax provision
| |
$
|
402
| | |
$
|
488
| |
Less: Pretax income (loss) attributable to noncontrolling interests
| |
|
(40
|
)
| |
|
—
| |
Income from continuing operations before income tax provision
excluding consolidated investment entities
| |
$
|
442
| | |
$
|
488
| |
Income tax provision from continuing operations
| |
$
|
120
| | |
$
|
136
| |
| | | | | | | |
|
Effective tax rate
| | |
29.6
|
%
| | |
27.9
|
%
|
Effective tax rate excluding noncontrolling interests
| | |
26.9
|
%
| | |
27.9
|
%
|
| | | | | | | |
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Effective Tax Rate |
|
|
| Quarter Ended | |
| | June 30, 2012 | |
(in millions, unaudited)
| | GAAP | |
| Operating | |
Income from continuing operations before income tax provision
| |
$
|
299
| | |
$
|
399
| |
Less: Pretax income (loss) attributable to noncontrolling interests
| |
|
(53
|
)
| |
|
—
| |
Income from continuing operations before income tax provision
excluding consolidated investment entities
| |
$
|
352
| | |
$
|
399
| |
Income tax provision from continuing operations
| |
$
|
128
| | |
$
|
145
| |
| | | | | | | |
|
Effective tax rate
| | |
42.8
|
%
| | |
36.3
|
%
|
Effective tax rate excluding noncontrolling interests
| | |
36.4
|
%
| | |
36.3
|
%
|
| | | | | | | |
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Asset Management Adjusted Net Pretax
Operating Margin |
|
| | |
| | Quarter Ended | |
| | June 30, | |
| June 30, | |
| March 31, | |
(in millions, unaudited)
| | 2013 | | | 2012 | | | 2013 | |
Operating total net revenues
| |
$
|
822
| | |
$
|
707
| | |
$
|
746
| |
Less: Distribution pass through revenues
| | |
225
| | | |
203
| | | |
214
| |
Less: Subadvisory and other pass through revenues(1) | |
|
136
| | |
|
95
| | |
|
98
| |
Adjusted operating revenues
| |
$
|
461
| | |
$
|
409
| | |
$
|
434
| |
| | | | | | | | | | | |
|
Pretax operating earnings
| |
$
|
199
| | |
$
|
130
| | |
$
|
144
| |
Less: Operating net investment income(1) | | |
41
| | | |
2
| | | |
4
| |
Add: Amortization of intangibles
| |
|
9
| | |
|
10
| | |
|
10
| |
Adjusted operating earnings
| |
$
|
167
| | |
$
|
138
| | |
$
|
150
| |
| | | | | | | | | | | |
|
Adjusted net pretax operating margin
| | |
36.2
|
%
| | |
33.7
|
%
| | |
34.6
|
%
|
|
(1) Includes $30 million related to the gain on the sale
of Cofunds in second quarter 2013.
|
|
|
Ameriprise Financial, Inc. |
Reconciliation Table: Return on Equity (ROE) Excluding Accumulated |
Other Comprehensive Income “AOCI” |
|
|
| Twelve Months Ended | |
| | June 30, | |
(in millions, unaudited)
| | 2013 | |
| 2012 | |
Net income attributable to Ameriprise Financial | |
$
|
1,218
| | |
$
|
1,027
| |
Less: Income (loss) from discontinued operations, net of tax
| |
|
(2
|
)
| |
|
13
| |
Net income from continuing operations attributable to Ameriprise
Financial, as reported
| | |
1,220
| | | |
1,014
| |
Less: Adjustments (1) | |
|
(126
|
)
| |
|
(172
|
)
|
Operating earnings
| |
$
|
1,346
| | |
$
|
1,186
| |
| | | | | | | |
|
Total Ameriprise Financial, Inc. shareholders’ equity
| |
$
|
8,911
| | |
$
|
9,072
| |
Less: Assets and liabilities held for sale
| | |
—
| | | |
16
| |
Less: Accumulated other comprehensive income, net of tax
| |
|
1,023
| | |
|
804
| |
Total Ameriprise Financial, Inc. shareholders’ equity from
continuing operations excluding AOCI
| | |
7,888
| | | |
8,252
| |
Less: Equity impacts attributable to the consolidated investment
entities
| |
|
356
| | |
|
427
| |
Operating equity
| |
$
|
7,532
| | |
$
|
7,825
| |
| | | | | | | |
|
Return on equity excluding AOCI
| | |
15.5
|
%
| | |
12.3
|
%
|
Operating return on equity excluding AOCI (2) | | |
17.9
|
%
| | |
15.2
|
%
|
|
(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 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; and
integration/restructuring charges. After-tax is calculated using
the statutory tax rate of 35%.
|
(2) 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
gains/losses; market impact on variable annuity guaranteed living
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; integration/restructuring charges; and
discontinued operations in the numerator, and Ameriprise Financial
shareholders’ equity excluding AOCI; 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. After-tax is calculated using the statutory tax rate
of 35%
|
|
|
Ameriprise Financial, Inc. |
Consolidated GAAP Results |
|
(in millions, unaudited)
|
| Quarter Ended June 30, | |
| % Better/ (Worse) |
| 2013 | |
| 2012 | | |
Revenues | | | | | | | | | | | |
Management and financial advice fees
| |
$
|
1,294
| | |
$
|
1,152
| | |
12
|
%
|
Distribution fees
| | |
448
| | | |
396
| | |
13
| |
Net investment income
| | |
451
| | | |
472
| | |
(4
|
)
|
Premiums
| | |
315
| | | |
302
| | |
4
| |
Other revenues
| |
|
249
| | |
|
202
| | |
23
| |
Total revenues
| | |
2,757
| | | |
2,524
| | |
9
| |
Banking and deposit interest expense
| |
|
8
| | |
|
10
| | |
20
| |
Total net revenues | | |
2,749
| | | |
2,514
| | |
9
| |
| | | | | | | | | | |
|
Expenses | | | | | | | | | | | |
Distribution expenses
| | |
760
| | | |
663
| | |
(15
|
)
|
Interest credited to fixed accounts
| | |
198
| | | |
209
| | |
5
| |
Benefits, claims, losses and settlement expenses
| | |
490
| | | |
409
| | |
(20
|
)
|
Amortization of deferred acquisition costs
| | |
92
| | | |
99
| | |
7
| |
Interest and debt expense
| | |
60
| | | |
72
| | |
17
| |
General and administrative expense
| |
|
747
| | |
|
763
| | |
2
| |
Total expenses | | |
2,347
| | | |
2,215
| | |
(6
|
)
|
Income from continuing operations before income tax provision
| | |
402
| | | |
299
| | |
34
| |
Income tax provision
| |
|
120
| | |
|
128
| | |
6
| |
Income from continuing operations
| | |
282
| | | |
171
| | |
65
| |
Loss from discontinued operations, net of tax
| |
|
(1
|
)
| |
|
(1
|
)
| |
—
| |
| | | | | | | | | | |
|
Net income | | |
281
| | | |
170
| | |
65
| |
Less: Net income (loss) attributable to noncontrolling interests
| |
|
(40
|
)
| |
|
(53
|
)
| |
25
| |
| | | | | | | | | | |
|
Net income attributable to Ameriprise Financial | |
$
|
321
| | |
$
|
223
| | |
44
|
%
|
| | | | | | | | | | |
|
Ameriprise Financial
Investor Relations:
Alicia A. Charity,
612-671-2080
alicia.a.charity@ampf.com
or
Chad
J. Sanner, 612-671-4676
chad.j.sanner@ampf.com
or
Media
Relations:
Paul W. Johnson, 612-671-0625
paul.w.johnson@ampf.com
Source: Ameriprise Financial, Inc.