Net income was $260 million for the quarter compared to a net loss
in the prior year;
Core operating earnings increased 7 percent to $268 million;
Company maintains strong capital flexibility
MINNEAPOLIS--(BUSINESS WIRE)--
Ameriprise Financial, Inc. (NYSE: AMP) today reported net income of $260
million for the third quarter of 2009, compared to a net loss of $70
million for the third quarter of 2008. Earnings per share for the third
quarter of 2009 were $1.00, compared to a loss of $0.32 a year ago.
Core operating earnings were $268 million in the third quarter of 2009,
compared to $251 million a year ago, a 7 percent increase (see summary
table below). Core operating earnings per share declined to $1.03 in the
third quarter of 2009 from $1.13 a year ago. Excluding 36 million shares
the company issued to pre-fund its acquisition, core operating earnings
per share were $1.19, up 5 percent from the prior year.
Core operating earnings reflect lower equity markets and the cost of
maintaining high liquidity levels, substantially offset by growth in
spread products and re-engineering benefits. In addition, year-over-year
growth reflects a net $0.02 per share benefit from favorable adjustments
from updating valuation assumptions (unlocking) in both periods.
Net revenues increased 20 percent to $2.0 billion in the third quarter
of 2009, compared to $1.6 billion in the third quarter of 2008. Revenue
growth reflects the year-over-year improvement in net investment income,
primarily driven by net investment losses in the prior year.
The company continues to achieve re-engineering expense savings. During
the quarter, the company recognized approximately $120 million in
re-engineering benefits and is on pace to exceed $350 million in
re-engineering expense benefits for full-year 2009.
As of September 30, 2009, the company's excess capital position was more
than $2 billion, including $1 billion from the company's decision to
pre-fund its acquisition. As of September 30, 2009, the company had $0.8
billion in net unrealized investment gains, reflecting the quality and
diversity of its investment portfolio. Book value per share increased to
$34.97.
"As our results demonstrate, we're beginning to see a return of the
earnings power inherent in our diversified model," said Jim Cracchiolo,
chairman and chief executive officer. "The fundamentals of our business
are improving slowly but steadily, with new client growth and improved
asset levels and product flows. This increasing business momentum, along
with our continued focus on delivering re-engineering savings to the
bottom line, provides important earnings leverage for the future.
"We also expect meaningful contributions from our pending acquisition of
Columbia Management's long-term asset management business. As we work
through the initial phases of our integration planning, we remain
confident that the acquisition will fit well with our culture, and that
we will be able to generate the financial benefits that we have
projected."
Third Quarter 2009 Summary
Management believes the exclusion of certain after-tax impacts, such as
realized net investment gains/losses, non-recurring integration costs
and other market impacts listed below 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.
Third Quarter Summary
% Per Diluted Share %
(in millions, 2009 2008 Change 2009 2008 Change
unaudited)
Net income (loss)
attributable to $ 260 $ (70 ) NM $ 1.00 $ (0.32 )(2) NM
Ameriprise
Financial
Add: After-tax
impacts: (1)
Investment (9 ) 213 NM (0.03 ) 0.96 NM
(gains)/losses
Integration 21 -- NM 0.08 -- NM
charges
Other market
impacts:
DAC and DSIC
(benefits) / (18 ) 29 NM (0.07 ) 0.13 NM
charges [mean
reversion]
Variable annuity
guarantees, net (1 ) (9 ) 89 % -- (0.04 ) NM
of DAC and DSIC
RiverSource 2a-7
money market 7 57 (88 ) 0.02 0.26 (92 )%
funds support
costs
Expenses related
to unaffiliated -- 31 NM -- 0.14 NM
money market
funds
Debt retirement 8 -- NM 0.03 -- NM
costs
Core operating
earnings, $ 268 $ 251 7 % $ 1.03 $ 1.13 (9 )%
after-tax
Core operating
earnings per
share, after-tax,
excluding 36
million shares $ 1.19
issued to
pre-fund the
company's
acquisition
Weighted average
common shares
outstanding:
Basic 258.7 219.1
Diluted 260.7 221.7
NM Not Meaningful
(1) For this non-GAAP presentation, after-tax is calculated using the statutory
tax rate of 35%.
(2) Diluted shares used in this calculation represent basic shares due to the
net loss. Using actual diluted shares would result in anti-dilution.
The following items are excluded from core operating earnings in the
third quarter of 2009. Each impact is presented after tax.
-- $9 million benefit, or $0.03 per share, in net realized investment
gains, comprising $36 million in realized investment gains, partially
offset by $27 million in realized investment losses and
other-than-temporary impairments on corporate bonds and previously
impaired non-agency residential mortgage-backed securities, as well as
reserves for commercial mortgage loans.
-- $21 million expense, or $0.08 per share, comprising $18 million in
integration costs from 2008 acquisitions and $3 million associated with
the company's agreement to acquire the long-term asset management
business of Columbia Management.
-- $18 million benefit, or $0.07 per share, from lower deferred acquisition
costs (DAC) and deferred sales inducement costs (DSIC) amortization due
to favorable market conditions in the quarter.
-- $1 million benefit from variable annuity guarantees, consisting of:
o $17 million expense, or $0.07 per share, net of DAC and DSIC,
resulting from the impact of the credit default spread on the SFAS 157
valuation of living benefit liabilities.
o $18 million benefit, or $0.07 per share, net of DAC and DSIC, from
living benefit guarantees and the favorable impact of equity market
appreciation on death benefits.
-- $7 million expense, or $0.02 per share, in RiverSource 2a-7 money market
fund support costs.
-- $8 million expense, or $0.03 per share, related to the early retirement
of $450 million of the company's notes due in 2010.
Core operating earnings for the third quarter of 2009 included an $87
million, or $0.33 per share, after-tax unlocking benefit from updating
valuation assumptions, compared to a $69 million, or $0.31 per share,
after-tax unlocking benefit in the prior year from updating valuation
assumptions and the implementation of a new actuarial valuation system.
While the year-over-year change to pretax earnings was $28 million, the
benefit was the result of a $162 million year-over-year reduction in
revenues combined with a $190 million reduction in expenses.
The third quarter of 2009 also included a $7 million, or $0.03 per
share, after-tax reserve related to a previously disclosed client
mediation.
In addition, compared to the third quarter of 2008, core operating
earnings included estimated negative impacts of $0.18 per share from the
market-driven decline in asset-based fees and $0.11 per share from
maintaining high liquidity levels and lower cash product spreads.
Liquidity and Balance Sheet as of September 30, 2009
The company continues to maintain strong balance sheet fundamentals,
excess capital and financial flexibility to capture additional growth
opportunities.
Conservative capital management
-- The company's excess capital position was more than $2 billion,
including $1 billion from the company's decision to pre-fund its
acquisition and expected year end changes to capital 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 $3.6 billion, with $1 billion at the
holding company level and $2.1 billion in free cash.
-- The company continues to generate substantial business and portfolio
cash flow and invested $4 billion in long-term investments during the
quarter.
High-quality investment portfolio
-- The $32.6 billion available-for-sale portfolio is both well diversified
and high quality.
-- The company reported a net unrealized gain of $0.8 billion, which
improved from a net unrealized loss position of $0.6 billion at June 30,
2009.
-- The total investment portfolio, including cash and cash equivalents,
increased to $40.4 billion from $39.3 billion at June 30, 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 18.7 percent. The debt-to-total
capital ratio excluding non-recourse debt and with 75 percent equity
credit for hybrid securities was 14.8 percent.
Third Quarter 2009 Highlights
-- The company announced a definitive agreement to acquire the long-term
asset management business of Columbia Management for approximately $1
billion. The transaction is expected to be completed in the spring of
2010. The transaction is expected to be accretive to earnings and ROE
within one year, based on Institutional Brokers' Estimate System
(I/B/E/S) estimates just prior to the announcement.
-- Total advisors increased 8 percent to 12,314 compared to the third
quarter of 2008, reflecting acquisitions, experienced advisor recruiting
and continued strong advisor retention rates.
-- Owned, managed and administered assets were $440 billion as of September
30, 2009, up 12 percent compared to September 30, 2008, primarily due to
strong product flows, bond market appreciation and recent acquisitions,
partially offset by the 9 percent decline in the S&P 500 compared to the
prior year. On a sequential basis, owned, managed and administered
assets grew 11 percent, primarily reflecting equity and bond market
appreciation during the quarter and retail net inflows.
-- Client activity continued to improve, with solid asset flows across
product lines.
o Wrap net inflows of $2.7 billion in the quarter and market
appreciation increased total wrap assets to more than $89 billion, a 7
percent increase compared to the prior year.
o Total Asset Management net inflows were $2.3 billion in the quarter,
reflecting improved flows at both RiverSource and Threadneedle.
Year-to-date 2009 Asset Management net inflows reached $2.2 billion,
compared to net outflows of $19.3 billion for the first three quarters
of 2008.
o Total annuity net inflows in the quarter were $0.5 billion, resulting
almost entirely from variable annuity net inflows.
-- The company introduced new product solutions in the quarter, including
o AdvanceSourceSM, an optional rider available on permanent single-life
insurance policies to help clients with a life insurance need manage
the cost of chronic care services.
o Active Diversified Portfolios, the next generation of Active
Portfolios(R) investments, which provide individuals access to
alternative strategies often reserved for institutional investors.
-- Life insurance in force was $193 billion as of the end of the third
quarter of 2009, which was essentially flat compared to a year ago,
consistent with the slow sales environment for the industry. Over the
past two quarters, universal life sales have increased steadily,
offsetting flat sales in variable universal life.
-- Ameriprise Auto & Home premiums increased 6 percent from the prior year,
primarily due to growth in policy counts.
-- The company generated approximately $120 million in re-engineering
expense savings in the quarter, primarily from enhanced operational
efficiencies. As of the end of the third quarter, the company generated
approximately $290 million in year-to-date re-engineering expense
savings and is on pace to exceed $350 million in savings for full-year
2009.
Ameriprise Financial, Inc.
Consolidated Income Statements
Quarter Ended September 30,
(in millions, unaudited) % Change
2009 2008
Revenues
Management and financial advice fees $ 689 $ 721 (4 )%
Distribution fees 367 376 (2 )
Net investment income 542 62 NM
Premiums 276 264 5
Other revenues 109 249 (56 )
Total revenues 1,983 1,672 19
Banking and deposit interest expense 33 43 (23 )
Total net revenues 1,950 1,629 20
Expenses
Distribution expenses 466 461 1
Interest credited to fixed accounts 232 200 16
Benefits, claims, losses and settlement 306 196 56
expenses
Amortization of deferred acquisition (64 ) 240 NM
costs
Interest and debt expense 45 27 67
General and administrative expense 625 681 (8 )
Total expenses 1,610 1,805 (11 )%
Pretax income (loss) 340 (176 ) NM
Income tax provision (benefit) 80 (92 ) NM
Net income (loss) 260 (84 ) NM
Less: Net loss attributable to -- (14 ) NM
noncontrolling interest
Net income (loss) attributable to $ 260 $ (70 ) NM
Ameriprise Financial
NM Not Meaningful
Third Quarter 2009 Consolidated Results
The company reported net income of $260 million for the third quarter of
2009, compared to a net loss of $70 million for the third quarter of
2008. Core operating earnings increased $17 million, or 7 percent, to
$268 million.
Revenues
Total net revenues increased 20 percent, or $321 million, to $2.0
billion compared to a year ago. Core net revenues declined $38 million,
or 2 percent, driven by a $162 million decline in revenues from
unlocking, which were more than offset by reduced expenses from
unlocking. The impact of lower equity markets on fee revenue was more
than offset by increased net investment income from growth in spread
products and revenues from recent acquisitions.
Management and financial advice fees declined 4 percent, or $32 million,
to $689 million, driven by a 21 percent decline in the daily average S&P
500 on a year-over-year basis, partially offset by net inflows. On a
sequential basis, management and financial advice fees increased 14
percent, or $83 million, reflecting equity market appreciation in the
quarter, and asset management and advisor-managed wrap account inflows.
Distribution fees declined 2 percent, or $9 million, to $367 million
compared to a year ago, primarily due to lower asset-based fees driven
by lower equity markets. On a sequential basis, distribution fees
increased 5 percent, or $16 million, reflecting equity market
appreciation in the quarter and modest increases in advisor productivity
levels.
Net investment income increased to $542 million compared to $62 million
in the third quarter of 2008. Core net investment income increased 34
percent, or $133 million, to $528 million, driven by higher invested
assets levels, primarily from spread product net inflows and higher
yields on the longer-term investments in the company's investment
portfolio.
Premiums increased 5 percent, or $12 million, to $276 million, primarily
due to growth in auto and home premiums compared to the prior year, as
the business continues to increase sales through the Ameriprise advisor
channel.
Other revenues declined 56 percent, or $140 million, to $109 million,
primarily due to a $65 million negative impact from unlocking in the
third quarter of 2009, compared to a $95 million benefit from unlocking
in the prior year.
Banking and deposit interest expense declined 23 percent, or $10
million, to $33 million, primarily due to lower crediting rates on
certificates and deposit products, partially offset by a 17 percent
year-over-year increase in on-balance sheet deposits.
Expenses
Expenses declined 11 percent, or $195 million, to $1.6 billion. Core
expenses decreased 4 percent, or $74 million, to $1.6 billion. Core
expenses included ongoing expenses related to the 2008 acquisitions and
higher average crediting rates on fixed accounts, offset by the impact
of unlocking and re-engineering and cost controls.
Distribution expenses increased 1 percent, or $5 million, to $466
million, reflecting the company's 2008 acquisitions, partially offset by
lower activity levels.
Interest credited to fixed accounts increased 16 percent, or $32
million, to $232 million, reflecting higher annuity fixed account
balances and higher average crediting rates compared to the prior year.
Benefits, claims, losses and settlement expenses increased 56 percent,
or $110 million, to $306 million. Core benefits, claims, losses and
settlement expenses increased 21 percent, or $45 million, to $258
million, primarily driven by increased auto and home benefits from
higher business volumes, higher variable annuity death and living
benefit expenses and the impact of unlocking.
Amortization of DAC was a net benefit of $64 million for the third
quarter of 2009, compared to a $240 million expense in the prior year.
Core expenses in this line were $12 million, a decrease of $176 million
compared to the prior year. Unlocking resulted in reduced amortization
of $119 million in the third quarter of 2009, compared to additional
amortization of $81 million in the prior year.
General and administrative expense decreased 8 percent, or $56 million,
to $625 million, compared to a year ago. Excluding an estimated $63
million in ongoing costs from acquisitions, core general and
administrative expenses declined 8 percent compared to a year ago,
reflecting re-engineering benefits and cost controls.
Taxes
During the third quarter of 2009, the company increased its profit
expectation for 2009 and revised its full-year effective tax rate to
approximately 22 percent from 20 percent as of June 30, 2009. As a
result, the effective tax rate for the third quarter of 2009 was 23.7
percent to reflect the catch-up for the prior quarters.
Ameriprise Financial, Inc.
Segment Results
Quarter Ended September 30,
(in millions, unaudited) % Change
2009 2008
Pretax income (loss) attributable to
Ameriprise Financial
Advice & Wealth Management $ 12 $ (77 ) NM
Asset Management 10 15 (33 )%
Annuities 268 (34 ) NM
Protection 145 104 39
Corporate & Other (95 ) (170 ) 44 %
Pretax income (loss) attributable to 340 (162 ) NM
Ameriprise Financial
Income tax provision (benefit) 80 (92 ) NM
Net income (loss) attributable to $ 260 $ (70 ) NM
Ameriprise Financial
NM Not Meaningful
Ameriprise Financial, Inc.
Core Operating Earnings by Segment
Quarter Ended September 30,
(in millions, unaudited) % Change
2009 2008
Pretax income (loss) attributable to
Ameriprise Financial
Advice & Wealth Management $ 28 $ 57 (51 )%
Asset Management 17 15 13
Annuities 241 153 58
Protection 137 152 (10 )
Corporate & Other (70 ) (46 ) (52 )
Pretax income attributable to 353 331 7
Ameriprise Financial
Income tax provision 85 80 6
Net income attributable to Ameriprise $ 268 $ 251 7 %
Financial
Third Quarter 2009 Segment Financial Highlights
Advice & Wealth Management reported pretax income of $12
million for the quarter, compared to a pretax loss of $77 million for
the third quarter of 2008. Excluding integration charges and net
realized investment gains, segment core operating earnings were $28
million in the third quarter of 2009, down $29 million compared to the
prior year. The decline was primarily due to lower equity markets and
client activity, partially offset by growth in spread income on bank and
certificate balances, as well as expense controls.
Asset Management reported pretax income of $10 million for the
quarter, compared to $15 million for the third quarter of 2008.
Excluding integration charges, segment core operating earnings were $17
million in the third quarter of 2009, up $2 million compared to the
prior year. Core results included a $10 million reserve related to a
previously disclosed client dispute in the third quarter of 2009. The
increase reflected improved net inflows and expense controls, partially
offset by lower fee revenue driven by the 21 percent year-over-year
decline in the daily average S&P 500 Index in the quarter.
Annuities reported pretax income of $268 million for the quarter,
compared to a pretax loss of $34 million for the third quarter of 2008.
Excluding the impact of favorable markets on DAC amortization and
annuity benefits, segment core operating earnings were $241 million in
the third quarter of 2009, up $88 million compared to the prior year.
Core results for the third quarter of 2009 included a $55 million
increase in unlocking benefits compared to the prior year. The impact of
the decline in the equity markets on asset-based fees was more than
offset by growth in fixed annuity balances and spread income.
Protection reported pretax income of $145 million for the
quarter, compared to $104 million for the third quarter of 2008.
Excluding net investment gains and the impact of favorable markets on
DAC amortization, segment core operating earnings were $137 million in
the third quarter of 2009, down $15 million compared to the prior year.
The decline was driven by a $27 million decrease in unlocking benefits
compared to the prior period.
Corporate & Other reported a pretax loss of $95 million for
the quarter, compared to a pretax loss of $170 million for the third
quarter of 2008. Excluding money market support costs, net investment
gains, early debt retirement costs and one-time Columbia acquisition
costs, segment core corporate & other pretax loss was $70 million, an
increase of $24 million compared to a year ago. The increase was
primarily due to reduced net investment income from high liquidity
levels and the year-over-year decline in short-term interest rates.
Ameriprise Financial, Inc. is a diversified financial services company
serving the comprehensive financial planning needs of the mass affluent
and affluent. For more information, visit ameriprise.com.
Ameriprise Financial is the investment manager for Active Diversified
Portfolios investments. Wilshire Associates constructs and monitors the
model portfolios. Wilshire is not affiliated with Ameriprise Financial
and Wilshire does not have any discretionary authority or control with
respect to purchasing or selling securities or making investments for
investors.
Ameriprise Financial Services, Inc. offers financial planning services,
investments, insurance and annuity products. RiverSource insurance and
annuity products are issued by RiverSource Life Insurance Company, and
in New York only by RiverSource Life Insurance Co. of New York, Albany,
New York. Only RiverSource Life Insurance Co. of New York is authorized
to sell insurance and annuity products in the state of New York. These
companies are all part of Ameriprise Financial, Inc. CA License
#0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.
Forward-Looking Statements
This news release contains forward-looking statements that reflect
management's plans, estimates and beliefs. Actual results could differ
materially from those described in these forward-looking statements. 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
expected to deploy $1 billion of excess capital to acquire the long-term
asset management business of Columbia Management;
-- the statement of belief in this news release that the transaction with
Columbia Management is expected to be completed in the spring of 2010
and that the transaction is expected to be accretive to earnings and ROE
within one year;
-- the statements of belief in this news release regarding the expected
contributions from the transaction with Columbia Management, its fit
with the company's culture and the company's ability to generate the
projected financial benefits, including those related to assets under
management, margin expansion, cost savings and net synergies, market
synergies and EPS and ROE accretion;
-- 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 for increasing the forecasted quarterly and 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 22 percent;
-- statements about continued improvement in the fundamental drivers of the
company's business;
-- 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,"
"forecast," "on pace," "project" and similar expressions are intended to
identify forward-looking statements but are not the exclusive means of
identifying such statements. Forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ
materially from such statements.
Such factors include, but are not limited to:
-- changes in the valuations, liquidity and volatility in the interest
rate, credit default, equity market, and foreign exchange environments;
-- changes in 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 as well as the
opinions of rating agencies and other analysts and the reactions of
market participants or the company's regulators, advisors, distribution
partners or customers in response to any change or prospect of change in
any such opinion;
-- risks of default, capacity constraint or repricing by issuers or
guarantors of investments the company owns or by counterparties to
hedge, derivative, insurance or reinsurance arrangements or by
manufacturers of products the company distributes, experience deviations
from the company's assumptions regarding such risks, the evaluations or
the prospect of changes in evaluations of any such third parties
published by rating agencies or other analysts, and the reactions of
other market participants or the company's regulators, advisors,
distribution partners or customers in response to any such evaluation or
prospect of changes in evaluation;
-- experience deviations from the company's assumptions regarding
morbidity, mortality and persistency in certain annuity and insurance
products, or from assumptions regarding market returns assumed in
valuing DAC and DSIC or market volatility underlying our valuation and
hedging of guaranteed living benefit annuity riders;
-- 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 ability to complete the acquisition opportunities the company
negotiates (including the transaction with Columbia Management);
-- 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 have
contracted to complete, as well as the amount and timing of integration
expenses;
-- the ability and timing to realize savings and other benefits from
re-engineering and tax planning;
-- changes in the capital markets and competitive environments induced or
resulting from the partial or total ownership or other support by
central governments of certain financial services firms or financial
assets; and
-- general economic and political factors, including consumer confidence in
the economy, the ability and inclination of consumers generally to
invest as well as their ability and inclination to invest in financial
instruments and products other than cash and cash equivalents, the costs
of products and services the company consumes in the conduct of its
business, and applicable legislation and regulation and changes therein,
including tax laws, tax treaties, fiscal and central government treasury
policy, and policies regarding the financial services industry and
publicly-held firms, and regulatory rulings and pronouncements.
Management cautions the reader that the foregoing list of factors is not
exhaustive. There may also be other risks that management is unable to
predict at this time that may cause actual results to differ materially
from those in forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date on which they are made. Management undertakes no
obligation to update publicly or revise any forward-looking statements.
The foregoing list of factors should be read in conjunction with the
"Risk Factors" discussion 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 September 30, 2009. For information about Ameriprise
Financial entities, please refer to the Third 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 September 30, 2009 Quarter Ended September 30, 2008
(in millions,
unaudited) GAAP Core GAAP Core
Earnings Adjustments Operating Earnings Adjustments Operating
Earnings Earnings
Revenues
Management and
financial $ 689 $ -- $ 689 $ 721 $ -- $ 721
advice fees
Distribution 367 -- 367 376 12 (6) 388
fees
Net investment 542 (14 )(1) 528 62 333 (7) 395
income
Premiums 276 -- 276 264 -- 264
Other revenues 109 -- 109 249 -- 249
Total revenues 1,983 (14 ) 1,969 1,672 345 2,017
Banking and
deposit 33 -- 33 43 -- 43
interest
expense
Total net 1,950 (14 ) 1,936 1,629 345 1,974
revenues
Expenses
Distribution 466 -- 466 461 -- 461
expenses
Interest
credited to 232 -- 232 200 -- 200
fixed accounts
Benefits,
claims, losses 306 (48 )(2) 258 196 17 (8) 213
and settlement
expenses
Amortization
of deferred (64 ) 76 (3) 12 240 (52 )(9) 188
acquisition
costs
Interest and 45 (13 )(4) 32 27 -- 27
debt expense
General and )
administrative 625 (42 )(5) 583 681 (113 (10) 568
expense
Total expenses 1,610 (27 ) 1,583 1,805 (148 ) 1,657
Pretax income 340 13 353 (176 ) 493 317
(loss)
Income tax
provision 80 5 (11) 85 (92 ) 172 (11) 80
(benefit)
Net income 260 8 268 (84 ) 321 237
(loss)
Less: Net loss
attributable
to -- -- -- (14 ) -- (14 )
noncontrolling
interest
Net income
(loss)
attributable $ 260 $ 8 $ 268 $ (70 ) $ 321 $ 251
to Ameriprise
Financial
(1) Includes net realized gains and losses on Available-for-Sale 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 decrease in GMDB, GMIB and GMWB for Life reserves, net of
hedges 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.
(4) Includes costs related to the early retirement of $450 million of the
company's notes due in 2010
(5) Includes integration charges and support costs related to RiverSource 2a-7
money market funds.
(6) Includes write-off of distribution revenue receivable from unaffiliated
money market funds.
Includes securities losses related to the Lehman Brothers bankruptcy,
(7) Washington Mutual and non-agency, residential mortgage-backed securities
and realized losses related to other securities.
Includes an increase in DSIC amortization from lower period ending account
(8) values, the impact of variable annuity living benefit riders, net of
hedges, and a loss on derivatives related to the Lehman Brothers
bankruptcy.
Includes increases in DAC amortization from lower period ending account
(9) values and from the impact of variable annuity living benefit riders, net
of hedges.
(10) Includes support costs related to RiverSource 2a-7 money market funds and
unaffiliated money market funds.
(11) Reflects tax at the statutory rate of 35%.
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Pretax Segment Income to Core Operating Earnings
Quarter Ended September 30, 2009
(in millions, unaudited) GAAP Core
Earnings Adjustments Operating
Earnings
Pretax income attributable to Ameriprise
Financial
Advice & Wealth Management $ 12 $ 16 $ 28
Asset Management 10 7 17
Annuities 268 (27 ) 241
Protection 145 (8 ) 137
Corporate & Other (95 ) 25 (70 )
Pretax income attributable to Ameriprise 340 13 353
Financial
Income tax provision 80 5 85
Net income attributable to Ameriprise $ 260 $ 8 $ 268
Financial
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Pretax Segment Income to Core Operating Earnings
Quarter Ended September 30, 2008
(in millions, unaudited) GAAP Core
Earnings Adjustments Operating
Earnings
Pretax income (loss) attributable to
Ameriprise Financial
Advice & Wealth Management $ (77 ) $ 134 $ 57
Asset Management 15 -- 15
Annuities (34 ) 187 153
Protection 104 48 152
Corporate & Other (170 ) 124 (46 )
Pretax income (loss) attributable to (162 ) 493 331
Ameriprise Financial
Income tax provision (benefit) (92 ) 172 80
Net income (loss) attributable to $ (70 ) $ 321 $ 251
Ameriprise Financial
Ameriprise Financial, Inc.
Reconciliation Table: Debt to Total Capital
September 30, 2009
(in Debt Less Impact of 75% Debt Less
millions, GAAP Non-recourse Non-recourse Equity Non-recourse
unaudited) Measure Debt Debt Credit(1) with Equity
Credit(1)
Debt $ 2,076 $ 214 $ 1,862 $ 242 $ 1,620
Total $ 11,125 $ 214 $ 10,911 $ 10,911
Capital
Debt to
Total 18.7 % 17.1 % 14.8 %
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