MINNEAPOLIS--(BUSINESS WIRE)--
Ameriprise Financial, Inc. (NYSE: AMP) today reported net income of $95
million for the second quarter of 2009, compared to $210 million for the
second quarter of 2008. Earnings per diluted share for the second
quarter of 2009 were $0.41, compared to $0.93 for the second quarter of
2008.
Core operating earnings per diluted share were $0.58 for the second
quarter of 2009, compared to $1.03 in the second quarter of 2008. Core
operating earnings exclude market impacts on amortization of deferred
acquisition costs (DAC) and variable annuity guarantee costs,
acquisition-related integration charges and net realized gains / losses.
The company estimates that $0.51 of the year-over-year impact to core
operating earnings resulted from the market-driven decline in
asset-based fees and the impact of maintaining high liquidity levels.
"While the environment continued to impact our results, we're beginning
to see signs of improvement, with increased client activity and solid
asset flows across our platform," said Chairman and Chief Executive
Officer Jim Cracchiolo. "In addition, we took actions during the quarter
to further enhance our strong capital base, which puts us in a position
to pursue additional growth opportunities."
Net revenues declined 5 percent to $1.9 billion in the second quarter of
2009, compared to $2.0 billion in the second quarter of 2008. Growth in
fixed annuities was more than offset by the impact on assets and fees of
year-over-year equity market depreciation. Net revenues grew 9 percent
sequentially, primarily driven by a 10 percent increase in the average
of the S&P 500 Index during the quarter, as well as significantly
improved retail net flows.
The company is mitigating market-driven revenue declines by implementing
expense reductions through re-engineering. The company recognized
approximately $110 million in benefits in the second quarter of 2009, up
from approximately $60 million in the first quarter, and is on-track to
exceed its $350 million full-year 2009 re-engineering savings target.
As of June 30, 2009, the company's excess capital position was more than
$2 billion. This included $869 million in net equity raised in the
second quarter and reflects anticipated year-end regulatory (VACARVM)
and rating agency requirements for the variable annuity business. In
addition, the company's recent tender offer to purchase $450 million
principal amount of its debt maturing in 2010 is planned to be completed
using proceeds from two second quarter debt offerings. The company's net
unrealized investment loss position declined to $577 million from $1.8
billion at March 31, 2009. The after-tax net unrealized loss represented
approximately 4 percent of shareholders' equity, excluding accumulated
other comprehensive income.
Second Quarter 2009 Summary
Management believes the exclusion of after-tax impacts of realized net
investment gains / losses, non-recurring integration costs and market
impacts on DAC, and variable annuity guarantee costs best reflects the
underlying performance of the business. For the non-GAAP presentation of
after-tax amounts, the tax effect is calculated using the statutory tax
rate of 35 percent.
Ameriprise Financial, Inc.
Second Quarter Summary
Per Diluted Share
(in millions, 2009 2008 % %
unaudited) Change 2009 2008 Change
Net income
attributable to $ 95 $ 210 (55 )% $ 0.41 $ 0.93 (56 )%
Ameriprise Financial
Add: After-tax
impacts:(1)
Investment (4 ) 18 NM (0.02 ) 0.08 NM
(gains)/losses
Integration charges 16 -- NM 0.07 -- NM
Other market
impacts:
DAC and DSIC (29 ) 7 NM (0.12 ) 0.03 NM
(benefits)/charges
Variable annuity
guarantee costs, net 55 (3 ) NM 0.24 (0.01 ) NM
of DAC and DSIC
Core operating $ 133 $ 232 (43 )% $ 0.58 $ 1.03 (44 )%
earnings, after-tax
Weighted average
common shares
outstanding:
Basic 228.8 223.2
Diluted 230.0 226.0
NM Not Meaningful
(1) For this non-GAAP presentation, after-tax is calculated using the statutory
tax rate of 35%.
The following items are excluded from core operating earnings. Each
impact is presented after tax.
-- $4 million benefit, or $0.02 per share, in net realized investment
gains, comprising $30 million in realized investment gains, partially
offset by $26 million in other-than-temporary impairments on previously
impaired non-agency residential mortgage-backed securities and reserves
for commercial mortgage loans.
-- $16 million expense, or $0.07 per share, in integration costs related to
recent acquisitions.
-- $29 million benefit, or $0.12 per share, from lower DAC and deferred
sales inducement cost (DSIC) amortization due to favorable market
conditions in the quarter.
-- $55 million expense, or $0.24 per share, from variable annuity guarantee
costs, consisting of:
o $139 million expense, or $0.60 per share, net of DAC and DSIC,
resulting from the impact of credit default spread on the SFAS 157
valuation of living benefit liabilities.
o $84 million benefit, or $0.36 per share, net of DAC and DSIC, from
living benefit guarantees and the favorable impact of equity market
appreciation on death benefits.
Core operating earnings for the second quarter of 2009 included a $16
million expense, or $0.07 per share, in increased legal reserves and a
provision for a client settlement, as well as a $5 million gain, or
$0.02 per share, on the repurchase of junior subordinated notes.
In addition, compared to the second quarter of 2008, core operating
earnings included estimated negative impacts of $0.36 per share from the
market-driven decline in asset-based fees and $0.15 per share from
maintaining high liquidity levels and lower spreads.
Liquidity and Balance Sheet as of June 30, 2009
The company further strengthened its balance sheet and excess capital
position, enhancing its financial flexibility to capture additional
growth opportunities.
Conservative capital management
-- The company's excess capital position was more than $2 billion, which
included $869 million in net equity raised in the second quarter and
reflects anticipated year-end regulatory (VACARVM) and rating agency
requirements for the variable annuity business.
-- The company will continue to use enterprise risk management capabilities
and product hedging to anticipate and mitigate risk. The variable
annuity hedging program continues to perform well.
Substantial liquidity
-- Cash and cash equivalents were $4.5 billion, with $1.9 billion at the
holding company level and $3.8 billion in free cash.
-- During the quarter, the company redeployed approximately $1.5 billion of
free cash into higher-yielding, longer-dated investments.
-- The company raised $500 million in gross proceeds from two debt
issuances during the quarter and launched a tender offer to purchase
$450 million principal amount of its November 2010 debt maturities. The
tender period ends July 29, 2009.
-- The company continues to generate substantial business cash flow and
invested $5.7 billion in long-term investments during the quarter.
High quality investment portfolio
-- The $30 billion Available-for-Sale portfolio is both well-diversified
and high-quality.
-- The net unrealized loss position declined to $577 million from $1.8
billion at March 31, 2009.
-- The total investment portfolio, including cash and cash equivalents,
increased to $39 billion from
$37 billion at March 31, 2009, and remains well-positioned. Detailed
information about the portfolio
is available online at ir.ameriprise.com.
Conservative capital ratios
-- The debt-to-total capital ratio was 23.1 percent. The debt-to-total
capital ratio excluding non-recourse debt and with 75 percent equity
credit for hybrid securities was 19.9 percent, or 16.2 percent on a pro
forma basis for the retirement of $450 million principal amount of debt
through the company's July 2009 tender offer.
Second Quarter 2009 Highlights
-- Total advisors increased 9 percent to 12,508 compared to the second
quarter of 2008, reflecting acquisitions and continued strong advisor
retention rates.
-- The company continued to attract experienced advisors, with more than
200 experienced advisors joining the firm's branded advisor channels in
the quarter.
-- Owned, managed and administered assets were $397 billion as of June 30,
2009, down 10 percent compared to June 30, 2008, primarily due to the 28
percent decline in the S&P 500. On a sequential basis, owned, managed
and administered assets grew 12 percent, primarily reflecting equity
market appreciation during the quarter and retail net inflows.
-- Client activity began to improve, resulting in solid asset flows across
product lines.
o Wrap net inflows of $2.8 billion in the quarter and market
appreciation increased total wrap assets by 16 percent sequentially.
o Total annuity net inflows in the quarter were $1.1 billion. The
company has announced variable annuity product changes for new
products to be marketed beginning in the third quarter.
o Total Asset Management net flows were slightly positive in the
quarter, reflecting improved flows at both RiverSource and
Threadneedle. Second quarter 2009 flows were approximately
$5 billion greater than the second quarter of 2008.
-- Ameriprise Auto & Home premiums increased 6 percent from the prior year,
primarily due to growth in policy counts.
-- The company generated approximately $110 million in re-engineering saves
in the second quarter, primarily from enhanced operational efficiencies.
For the first half of 2009, the company generated approximately $170
million in re-engineering saves and is on pace to exceed its 2009
re-engineering target of $350 million.
Ameriprise Financial, Inc.
Consolidated Income Statements
Quarter Ended June 30,
(in millions, unaudited) % Change
2009 2008
Revenues
Management and financial advice fees $ 606 $ 780 (22 )%
Distribution fees 351 422 (17 )
Net investment income 514 393 31
Premiums 269 257 5
Other revenues 175 158 11
Total revenues 1,915 2,010 (5 )
Banking and deposit interest expense 38 42 (10 )
Total net revenues 1,877 1,968 (5 )
Expenses
Distribution expenses 425 506 (16 )
Interest credited to fixed accounts 237 192 23
Benefits, claims, losses and settlement 587 294 100
expenses
Amortization of deferred acquisition costs (125 ) 144 NM
Interest and debt expense 28 28 --
General and administrative expense 610 572 7
Total expenses 1,762 1,736 1
Pretax income 115 232 (50 )
Income tax provision 28 27 4
Net income 87 205 (58 )
Less: Net loss attributable to (8 ) (5 ) (60 )
noncontrolling interest
Net income attributable to Ameriprise $ 95 $ 210 (55 )%
Financial
NM Not Meaningful
Second Quarter 2009 Consolidated Results
The company reported net income of $95 million for the second quarter of
2009, a 55 percent decline from net income of $210 million for the
second quarter of 2008. The primary driver of the decrease was the
market-driven decline in asset-based fees and the impact of maintaining
high liquidity levels, partially offset by retail net inflows and
ongoing expense controls.
Total net revenues declined 5 percent, or $91 million, to $1.9 billion,
driven by lower management and financial advice fees and distribution
fees, primarily as a result of the year-over-year decline in equity
markets and clients' preference for short-term and fixed income
investment products, partially offset by increased net investment income
driven by higher fixed annuity balances.
Management and financial advice fees declined 22 percent, or $174
million, to $606 million, primarily due to lower equity markets. On a
sequential basis, management and financial advice fees increased 9
percent, reflecting equity market appreciation during the quarter and
net inflows in advisor-managed wrap accounts and improved asset
management flows.
Distribution fees declined 17 percent, or $71 million, to $351 million,
primarily due to lower equity markets and growth in cash and deposit
products, which resulted in slower sales and flows for other products
that generate distribution fees.
Net investment income increased 31 percent, or $121 million, to $514
million, primarily from higher invested asset levels due to fixed
annuity net inflows, partially offset by the combination of low
short-term interest rates and high liquidity levels. In addition, the
current quarter included $6 million of net realized investment gains,
compared to $27 million of net realized investment losses in the second
quarter of 2008.
Premiums increased 5 percent, or $12 million, to $269 million, primarily
due to growth in Auto & Home premiums compared to the prior year.
Other revenues increased 11 percent, or $17 million, to $175 million,
primarily due to an $8 million gain on the repurchase of junior
subordinated notes.
Banking and deposit interest expense decreased 10 percent, or $4
million, to $38 million, primarily due to lower crediting rates on
certificates, partially offset by higher certificate balances.
Expenses
Consolidated expenses increased 1 percent, or $26 million, to $1.8
billion. Core consolidated expenses decreased 2 percent, or $32 million,
to $1.7 billion, reflecting market-driven declines in distribution
expenses and cost controls, partially offset by growth in fixed annuity
interest credited expense.
Distribution expenses declined 16 percent, or $81 million, to $425
million, reflecting decreased advisor compensation, primarily due to
year-over-year market depreciation on assets.
Interest credited to fixed accounts increased 23 percent, or $45
million, reflecting higher annuity fixed account balances and higher
average crediting rates compared to the prior year.
Benefits, claims, losses and settlement expenses increased 100 percent,
or $293 million, to $587 million. The current quarter was impacted by
$340 million in variable annuity death and living benefit expenses,
which included $604 million in expenses from the non-cash impact of the
credit default spread on the SFAS 157 valuation of living benefit
liabilities. The line also reflects $49 million in related lower DSIC
amortization. Net of the related $206 million DAC amortization offset,
DSIC and tax, total variable annuity guarantees lowered earnings by $55
million.
Amortization of DAC was a net benefit of $125 million for the current
quarter, compared to a $144 million expense in the prior-year period.
The current quarter included $206 million in lower DAC amortization
offsetting higher variable annuity benefit expenses and $39 million in
lower amortization related to the impact of higher policyholder account
balances as a result of market appreciation in the quarter.
General and administrative expense increased 7 percent, or $38 million,
to $610 million. Excluding $91 million in integration costs and ongoing
expenses from acquisitions closed in the fourth quarter of 2008, and $23
million in increased legal expenses and a provision for a client
settlement, general and administrative expense decreased 13 percent.
Taxes
The effective tax rate on net income in the second quarter of 2009 was
24.4 percent, up from 13.3 percent from the first quarter of 2009. The
second quarter 2009 effective tax rate brings the year-to-date effective
tax rate in line with the company's full-year forecast of 20 percent.
The higher forecasted effective tax rate reflects higher pretax income
estimates for the full year.
Ameriprise Financial, Inc.
Segment Results
Quarter Ended June 30,
(in millions, unaudited) % Change
2009 2008
Pretax income (loss) excluding net loss
attributable
to noncontrolling interest
Certificates and Banking $ 20 $ (24 ) NM
Wealth Management and Distribution (23 ) 75 NM
Advice & Wealth Management (3 ) 51 NM
Asset Management (12 ) 42 NM
Annuities 94 77 22 %
Protection 110 113 (3 )
Corporate & Other (66 ) (46 ) (43 )
Pretax income excluding net loss 123 237 (48 )
attributable to noncontrolling interest
Income tax provision 28 27 4
Net income attributable to Ameriprise $ 95 $ 210 (55 )%
Financial
NM Not Meaningful
Second Quarter 2009 Segment Financial Highlights
Advice & Wealth Management reported a pretax loss of $3
million for the quarter, compared to pretax income of $51 million for
the second quarter of 2008. Core operating earnings were $21 million in
the current quarter, compared to $72 million in the second quarter of
2008. The decrease was primarily due to an estimated $57 million
market-driven decline in asset-based fees and the impact of maintaining
high liquidity levels. Core operating earnings were also impacted by
reduced client activity and sales of lower-margin products compared to
the year-ago period, partially offset by expense controls.
Asset Management reported a pretax loss of $12 million for the
quarter, compared to pretax income of $42 million for the second quarter
of 2008. The core operating loss, which excludes integration charges,
was $3 million and included a $16 million provision for a client
settlement. The decline in core operating earnings was primarily due to
an estimated $49 million decrease in asset-based fees, partially offset
by continued re-engineering expense initiatives.
Annuities reported pretax income of $94 million for the quarter,
compared to pretax income of $77 million for the second quarter of 2008.
Core operating earnings for the segment were $132 million, compared to
$88 million in the prior year, driven by growth in fixed annuity account
values and higher spreads. The decline in market-driven asset-based fees
lowered year-over-year pretax income by approximately $36 million in the
quarter.
Protection reported pretax income of $110 million, compared to
$113 million for the second quarter of 2008. The decline was primarily
driven by a higher loss ratio in Auto & Home. Second quarter 2009
permanent insurance cash sales improved 36 percent compared to the first
quarter of 2009, reflecting increased sales of universal life insurance
and flat sales of more market-sensitive variable universal life
insurance.
Corporate & Other reported a pretax loss of $66 million,
compared to a pretax loss of $46 million for the second quarter of 2008.
Segment results for the current quarter included an $8 million gain from
the repurchase of junior subordinated notes as well as $7 million in net
realized investment gains. In addition, results included an estimated
$34 million negative impact from lower short-term interest rates on the
company's enterprise-wide liquidity pool.
Dividend
The Ameriprise Financial Board of Directors declared a quarterly cash
dividend of $0.17 per common share payable on August 17, 2009 to
shareholders of record at the close of business on August 3, 2009.
Ameriprise Financial, Inc. is a diversified financial services company
serving the comprehensive financial planning needs of the mass affluent
and affluent. For more information, visit ameriprise.com.
RiverSource mutual funds are distributed by RiverSource Distributors,
Inc. and RiverSource Fund Distributors, Inc., Members FINRA, and managed
by RiverSource Investments, LLC. For complete mutual fund ranking data
and other important disclosures please refer to Exhibit A "RiverSource
Mutual Fund Performance and Lipper Ranking" in the Second Quarter 2009
Statistical Supplement available at ir.ameriprise.com.
The Threadneedle group of companies constitutes the Ameriprise Financial
international investment platform. The group consists of wholly owned
subsidiaries of Ameriprise Financial, Inc. and provides services
independent from Ameriprise Financial Services, Inc., including
Ameriprise Financial Services' broker-dealer business.
Ameriprise Certificates are issued by Ameriprise Certificate Company and
distributed by Ameriprise Financial Services, Inc., Member FINRA.
Ameriprise Financial Services, Inc. offers financial planning services,
investments, insurance and annuity products. RiverSource insurance and
annuity products are issued by RiverSource Life Insurance Company, and
in New York only by RiverSource Life Insurance Co. of New York, Albany,
New York. Only RiverSource Life Insurance Co. of New York is authorized
to sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License #0684538.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell the company's 5.35% Senior Notes due November 15, 2010
(the "Notes") or any other securities. The tender offer is made only by
and pursuant to the terms of the Offer to Purchase dated July 1, 2009
and the related Letter of Transmittal. The tender offer is not being
made to holders in any jurisdiction in which the making or acceptance
thereof would be unlawful. None of Ameriprise Financial, Inc., the
dealer managers, the depositary or the information agent makes any
recommendation as to whether holders should tender their Notes in
response to the tender offer. Holders must make their own decisions as
to whether to tender Notes and, if so, the principal amount of Notes to
tender.
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. The
company has made various forward-looking statements in this report.
Examples of such forward-looking statements include:
-- the statement of belief in this news release that the company is
positioned to pursue additional growth opportunities;
-- the statement of belief in this news release that the company will
exceed $350 million of expense savings in 2009;
-- the statement of belief in this news release that pretax income
estimates for the current year are sequentially increased, and the
implications thereof and the first and second fiscal quarters on
estimated 2009 full-year effective tax rate;
-- the statement of belief in this news release that the company expects
its 2009 full-year effective tax rate will be approximately 20 percent;
-- the statement about the company's debt to total capital ratio on a pro
forma basis for the retirement of $450 million principal amount of debt
through the company's pending tender offer;
-- statements of the company's plans, intentions, expectations, objectives
or goals, including those relating to asset flows, mass affluent and
affluent client acquisition strategy, client retention, financial
advisor retention, recruiting and enrollments, general and
administrative costs, consolidated tax rate; and excess capital
position;
-- other statements about future economic performance, the performance of
equity markets and interest rate variations and the economic performance
of the United States and of global markets; and
-- statements of assumptions underlying such statements.
The words "believe," "expect," "anticipate," "optimistic," "intend,"
"plan," "aim," "will," "may," "should," "could," "would," "likely" 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 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;
-- investment management performance and consumer acceptance of the
company's products;
-- effects of competition in the financial services industry and changes in
product distribution mix and distribution channels;
-- 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 (including the
completion of the company's July 2009 tender offer) 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 by issuers or guarantors of investments the company
owns or by counterparties to hedge, derivative, insurance or reinsurance
arrangements or by manufacturers of products the company distributes,
experience deviations from the company's assumptions regarding such
risks, the evaluations or the prospect of changes in evaluations of any
such third parties published by rating agencies or other analysts, and
the reactions of other market participants or the company's regulators,
advisors, distribution partners or customers in response to any such
evaluation or prospect of changes in evaluation;
-- experience deviations from the company's assumptions regarding
morbidity, mortality and persistency in certain annuity and insurance
products, or from assumptions regarding market returns assumed in
valuing DAC and DSIC or market volatility underlying our valuation and
hedging of guaranteed living benefit annuity riders;
-- changes in capital requirements that may be indicated, required or
advised by regulators or rating agencies;
-- the impacts of the company's efforts to improve distribution economics
and to grow third-party distribution of its products;
-- the company's ability to realize the financial, operating and business
fundamental benefits or to obtain regulatory approvals regarding
integration we plan for the acquisitions we have completed;
-- 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 included as Part 1, Item 1A of and elsewhere
in our Annual Report on Form 10-K for year-end 2008 at ir.ameriprise.com/phoenix.zhtml?c=191716&p=irol-forwardLookingStatement.
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, 2009. For information about Ameriprise
Financial entities, please refer to the Second Quarter 2009 Statistical
Supplement available at ir.ameriprise.com
and the tables that follow in this news release.
Reconciliation Tables
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Income Statement to Core Operating Earnings
Quarter Ended June 30, 2009 Quarter Ended June 30, 2008
(in millions,
unaudited) GAAP Core GAAP Core
Earnings Adjustments Operating Earnings Adjustments Operating
Earnings Earnings
Revenues
Management and
financial $ 606 $ -- $ 606 $ 780 $ -- $ 780
advice fees
Distribution 351 -- 351 422 -- 422
fees
Net investment 514 (6 )(1) 508 393 27 (1) 420
income
Premiums 269 -- 269 257 -- 257
Other revenues 175 -- 175 158 -- 158
Total revenues 1,915 (6 ) 1,909 2,010 27 2,037
Banking and
deposit 38 -- 38 42 -- 42
interest
expense
Total net 1,877 (6 ) 1,871 1,968 27 1,995
revenues
Expenses
Distribution 425 -- 425 506 -- 506
expenses
Interest
credited to 237 -- 237 192 -- 192
fixed accounts
Benefits,
claims, losses 587 (285 )(2) 302 294 13 (4) 307
and settlement
expenses
Amortization
of deferred (125 ) 245 (3) 120 144 (20 )(5) 124
acquisition
costs
Interest and 28 -- 28 28 -- 28
debt expense
General and
administrative 610 (25 )(6) 585 572 -- 572
expense
Total expenses 1,762 (65 ) 1,697 1,736 (7 ) 1,729
Pretax income 115 59 174 232 34 266
Income tax 28 21 (7) 49 27 12 (7) 39
provision
Net income 87 38 125 205 22 227
Less: Net loss
attributable
to (8 ) -- (8 ) (5 ) -- (5 )
noncontrolling
interest
Net income
attributable $ 95 $ 38 $ 133 $ 210 $ 22 $ 232
to Ameriprise
Financial
(1) Includes net realized gains and losses on Available-for-Sale securities and
other securities and an increase in reserves on commercial mortgage loans.
Includes variable annuity living benefit costs net of hedges and DSIC
(2) impact, a net release of GMDB reserves and a decrease in DSIC amortization
from higher period ending account values.
Includes decreases in DAC amortization from higher period ending account
(3) values and from the impact of variable annuity living benefit costs, net of
hedges.
Includes GMDB and other unhedged variable annuity guaranteed benefit costs,
(4) an increase in DSIC amortization from lower period ending account values
and the impact of variable annuity living benefit riders, net of hedges and
DSIC.
Includes increases in DAC amortization from lower period ending account
(5) values and from the impact of variable annuity living benefit riders, net
of hedges.
(6) Includes integration charges.
(7) Reflects tax at the statutory rate of 35%.
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Pretax Segment Income to Core Operating Earnings
Quarter Ended June 30, 2009
(in millions, unaudited) GAAP Core
Earnings Adjustments Operating
Earnings
Pretax income (loss) excluding net loss
attributable to noncontrolling interest
Certificates and Banking $ 20 $ 8 $ 28
Wealth Management and Distribution (23 ) 16 (7 )
Advice & Wealth Management (3 ) 24 21
Asset Management (12 ) 9 (3 )
Annuities 94 38 132
Protection 110 (5 ) 105
Corporate & Other (66 ) (7 ) (73 )
Pretax income excluding net loss 123 59 182
attributable to noncontrolling interest
Income tax provision 28 21 49
Net income attributable to Ameriprise $ 95 $ 38 $ 133
Financial
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Pretax Segment Income to Core Operating Earnings
Quarter Ended June 30, 2008
(in millions, unaudited) GAAP Core
Earnings Adjustments Operating
Earnings
Pretax income (loss) excluding net loss
attributable to noncontrolling interest
Certificates and Banking $ (24 ) $ 21 $ (3 )
Wealth Management and Distribution 75 -- 75
Advice & Wealth Management 51 21 72
Asset Management 42 -- 42
Annuities 77 11 88
Protection 113 2 115
Corporate & Other (46 ) -- (46 )
Pretax income excluding net loss 237 34 271
attributable to noncontrolling interest
Income tax provision 27 12 39
Net income attributable to Ameriprise $ 210 $ 22 $ 232
Financial
Ameriprise Financial, Inc.
Reconciliation Table: Debt to Total Capital
June 30, 2009
(in Debt Less Impact of 75% Debt Less
millions, GAAP Non-recourse Non-recourse Equity Credit Non-recourse
unaudited) Measure Debt Debt (1) with Equity
Credit(1)
Debt $ 2,435 $ 123 $ 2,312 $ 242 $ 2,070
Total $ 10,545 $ 123 $ 10,422 $ 10,422
Capital
Debt to
Total 23.1 % 22.2 % 19.9 %
Capital
(1) The company's junior subordinated notes receive an equity credit of at
least 75% by the majority of the rating agencies.
Source: Ameriprise Financial
Contact: Ameriprise Financial
Investor Relations:
Laura Gagnon, 612-671-2080
laura.c.gagnon@ampf.com
or
Media Relations:
Paul Johnson, 612-671-0625
paul.w.johnson@ampf.com
or
Ben Pratt, 612-678-5881
benjamin.j.pratt@ampf.com