First quarter 2010 net income attributable to Ameriprise Financial
increased 65 percent to $214 million, or $0.81 per diluted share, up 40
percent
First quarter 2010 operating earnings increased 62 percent to $215
million, or $0.81 per diluted share, up 35 percent
Raised quarterly dividend to $0.18, up $0.01 from the prior quarter
MINNEAPOLIS--(BUSINESS WIRE)--
Ameriprise Financial, Inc. (NYSE: AMP):
Ameriprise Financial, Inc.
First Quarter Results
(in millions, except per Per Diluted Share
share amounts,
unaudited) 2010 2009 % Change 2010 2009 % Change
GAAP
Net revenues $ 2,271 $ 1,716 32 %
Net income attributable $ 214 $ 130 65 % $ 0.81 $ 0.58 40 %
to Ameriprise Financial
Operating
Net revenues $ 2,139 $ 1,713 25 %
Earnings $ 215 $ 133 62 % $ 0.81 $ 0.60 35 %
Weighted average common
shares outstanding:
Basic 260.8 222.3
Diluted 265.0 223.5
See reconciliation tables included in this release.
Ameriprise Financial, Inc. (NYSE: AMP) today reported net income
attributable to Ameriprise Financial of $214 million for the first
quarter of 2010 compared to $130 million for the first quarter of 2009.
Net income per diluted share for the first quarter of 2010 was $0.81
compared to $0.58 a year ago.
The company has introduced new operating financial measures to provide
continued transparency of the underlying performance of the business.
Operating measures exclude the impact of a new accounting standard that
required the company to consolidate client assets in certain investment
entities on the Ameriprise Financial balance sheet and income statement;
as well as integration expenses and net realized gains/losses.
Operating earnings increased 62 percent to $215 million in the first
quarter of 2010 compared to $133 million a year ago. Operating earnings
per diluted share were $0.81 in the first quarter of 2010, up 35 percent
from $0.60 a year ago. The increase in operating earnings was driven by
higher asset-based revenues, higher income from spread products and
re-engineering benefits.
Operating net revenues were $2.1 billion in the first quarter of 2010,
up 25 percent from a year ago, driven by growth in management fees from
market appreciation on assets and net inflows in wrap accounts and asset
management, as well as increased net investment income from higher fixed
annuity account balances and higher investment yields.
As of March 31, 2010, the company's excess capital position was more
than $2.5 billion, including approximately $1 billion for the company's
pending acquisition of Columbia Management's long-term asset management
business, which is expected to be completed on May 1, 2010. As of March
31, 2010, the company had $1.0 billion in net unrealized investment
gains, reflecting the quality and diversity of its investment portfolio.
Book value per share, excluding accumulated other comprehensive income
(AOCI) and the equity impact of the required consolidation in certain
investment entities, increased 5 percent from a year ago to $35.19.
Return on equity excluding AOCI was 9.3 percent for the 12 months ended
March 31, 2010. Operating return on equity was 9.7 percent for the same
period. Operating return on equity was negatively impacted by including
the June 2009 share issuance in equity, the proceeds of which are being
used for the Columbia Management acquisition while the related earnings
will not be included in returns until the acquisition closes.
"We had a solid quarter aided by equity market appreciation and improved
client activity," said Jim Cracchiolo, chairman and chief executive
officer. "We generated positive retail client asset flows, driven by
particular strength in our mutual fund wrap business, and we had good
new client acquisition growth. These improvements led to a 31 percent
increase in client assets and continued progress in the profitability of
our Advice & Wealth Management and Asset Management businesses.
"Despite lower absolute market levels and slower client activity
compared with prior years, we generated our best first quarter earnings
as a public company. The re-engineering and expense reductions we
executed in 2009 have generated meaningful earnings leverage as
conditions continue to improve. I am confident that our expense
discipline, along with our strong balance sheet and capital, position us
well for the current environment.
"We are on track to complete our acquisition of Columbia Management on
May 1, 2010, and we're focused on executing a seamless integration. We
believe the combined asset manager will possess an exceptional depth of
investment talent and product capability, and we feel good about our
ability to generate solid returns from that business."
First Quarter 2010 Business Highlights
-- The company had a strong quarter for new client acquisition, the highest
level since second quarter 2008.
-- The introduction of the company's MORE WITHIN REACHSMbrand platform in
the quarter increased Ameriprise Financial brand awareness.
-- Operating net revenue per financial advisor increased 25 percent
compared to a year ago, primarily driven by the gradual improvement in
client activity and market appreciation on assets.
-- Total advisors declined 5 percent year-over-year to 11,837, primarily
due to the continuing departure of low-producing advisors. Franchise
advisor retention rates remain strong. The company continued to recruit
experienced advisors, although at a slower rate than in 2009.
-- Total owned, managed and administered assets were $463 billion at March
31, 2010, up 31 percent from a year ago, primarily due to market
appreciation and strong wrap net inflows.
-- Total managed assets reached $332 billion, an increase of 31 percent
from a year ago, driven by market appreciation and solid asset flows.
o First quarter 2010 wrap net inflows were $2.5 billion, up 93 percent
from a year ago. Net inflows and market appreciation increased total
wrap assets to approximately $100 billion at March 31, 2010, an
all-time high.
o Total domestic asset management net outflows were $0.9 billion in the
quarter as a result of $1.1 billion in retail net outflows. Hedge fund
net inflows remained strong, and institutional net inflows of $0.1
billion included negative synergies of $0.6 billion in expected
outflows from the Columbia Management acquisition, offset by new
institutional mandates.
o Total international asset management retail net inflows of $1.3
billion in the quarter were largely offset by $1.3 billion in
institutional net outflows, driven by $1.5 billion in Zurich-related
net outflows. Threadneedle continues to shift AUM toward higher fee
asset classes.
-- Variable annuity ending balances increased 37 percent to $57 billion at
quarter end driven by market appreciation on assets. Slower sales in the
quarter resulted in net inflows of $98 million. Fixed annuity balances
were $14.6 billion, up 6 percent from a year ago reflecting strong sales
growth in the first two quarters of 2009. Fixed annuity net outflows of
$166 million in the first quarter of 2010 were primarily due to the
company's decision to lower crediting rates on new contracts, which
lowered sales.
-- Variable universal life / universal life (VUL/UL) ending policyholder
account balances were up 23 percent to $9 billion compared to a year
ago. VUL/UL sales were $54 million in the quarter, up 64 percent from a
year ago with increases in both variable and universal life insurance.
-- Ameriprise Auto & Home premiums increased 7 percent from a year ago,
primarily due to growth in policy counts.
-- The company expects to complete the acquisition of Columbia Management's
long-term asset management business on May 1, 2010. Operational and
financial expectations are on track.
Liquidity and Balance Sheet as of March 31, 2010
The company continued to maintain strong balance sheet fundamentals,
excess capital and financial flexibility to capture additional growth
opportunities.
Conservative capital management
-- On April 26, 2010, the Ameriprise Financial Board of Directors increased
the regular quarterly dividend per common share to $0.18 per share, a
$0.01 increase compared to the prior quarter's cash dividend. The
dividend will be payable on May 21, 2010 to shareholders of record at
the close of business on May 7, 2010.
-- The company's excess capital position was more than $2.5 billion, which
included approximately $1 billion for the Columbia Management
acquisition.
-- At the end of the first quarter of 2010, RiverSource Life's estimated
risk-based capital ratio remained well in excess of 400 percent.
-- The company will continue to use enterprise risk management capabilities
and product hedging to anticipate and mitigate risk. The company's
variable annuity hedging program continued to perform well.
Substantial liquidity
-- Cash and cash equivalents were $4.8 billion, with $2.5 billion at the
holding company level and $4.3 billion in free cash.
-- Holding company cash increased sequentially, primarily as a result of
the company's $750 million debt issuance during the quarter, as well as
the $425 million dividend received from RiverSource Life.
-- RiverSource Life increased cash by approximately $600 million in
preparation to implement an enhanced variable annuity asset allocation
program designed to help the company manage variable annuity subaccounts
more efficiently and effectively. The implementation will require a
portion of fixed account assets to move from the general account to
separate accounts.
High-quality investment portfolio
-- The $31 billion available-for-sale portfolio remained well diversified
and high-quality.
-- The investment portfolio remained in a net unrealized gain position,
with $1.0 billion in net unrealized gains.
-- During the quarter, the company recorded realized gains as it prepared
to introduce an enhanced variable annuity asset allocation program.
These gains were offset by realized losses as the company repositioned
and strengthened its investment portfolio.
-- The total investment portfolio, including cash and cash equivalents, was
$40.6 billion and remained well positioned. Detailed information about
the portfolio is available online at ir.ameriprise.com.
Conservative capital ratios
-- The debt-to-total capital ratio attributable to Ameriprise Financial was
20.5 percent. The debt-to-total capital ratio was 19.3 percent excluding
non-recourse debt, the impact of consolidated investment entities and
the 75 percent equity credit for the hybrid securities.
-- The company issued $750 million of 10-year senior notes during the
quarter. A portion of those proceeds will be used to retire $340 million
of debt maturing in November 2010.
Taxes
The effective tax rate on net income including net income (loss)
attributable to noncontrolling interests was 17.9 percent for the first
quarter of 2010. The effective tax rate on net income excluding net
income (loss) attributable to noncontrolling interests and the required
consolidation in certain investment entities was 23.2 percent in the
first quarter of 2010.
The company reduced its expected full-year operating tax rate from
approximately 28 to 30 percent to approximately 25 to 27 percent based
on expected benefits from tax planning. The company expects to record a
large portion of these tax planning benefits in the first and second
quarters of 2010.
Summary
Ameriprise Financial, Inc.
First Quarter Summary
Per Diluted Share
(in millions, except per 2010 2009 % %
share amounts, unaudited) Change 2010 2009 Change
Net income attributable to $ 214 $ 130 65 % $ 0.81 $ 0.58 40 %
Ameriprise Financial
Add: Integration charges, 4 12 (67 ) 0.01 0.05 (80 )
after-tax(1)
Less: Net realized gains, 3 9 (67 ) 0.01 0.03 (67 )
after-tax(1)
Operating earnings $ 215 $ 133 62 % $ 0.81 $ 0.60 35 %
Weighted average common
shares outstanding:
Basic 260.8 222.3
Diluted 265.0 223.5
(1) After-tax is calculated using the statutory tax rate of 35%.
During the first quarter of 2010, the company adopted a new accounting
standard that required the consolidation of approximately $6 billion of
client assets in certain investment entities on its balance sheet with
the related income reported through its income statement. As noted
previously, the company believes that operating results, which exclude
the impact of the consolidation, as well as integration expenses and net
realized gains/losses, improve transparency of the underlying
performance of the business.
In addition, first quarter 2010 operating results included the following
after-tax impacts:
-- $18 million, or $0.07 per share, expense related to recognizing a
substantial increase in Threadneedle's estimated market valuation
attributable to its incentive compensation program compared to the 2009
market valuation. The charge reflects a valuation that increased more
than 100 percent from the prior year and is higher than the year-end
2007 estimated valuation.
-- $14 million, or $0.05 per share, benefit from payments related to the
Reserve Funds matter.
-- $3 million, or $0.01 per share, impact from the decline in net
investment income from raising cash in the quarter in preparation for
the introduction of an enhanced variable annuity asset allocation
program.
Ameriprise Financial, Inc.
Advice & Wealth Management Segment Results
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in
millions, GAAP Less: Operating GAAP Less: Operating
unaudited) Earnings Adjustments Earnings Earnings Adjustments Earnings
(1) (1)
Advice &
Wealth
Management
Net $ 879 $ (1 ) $ 880 $ 726 $ (10 ) $ 736
revenues
Expenses 828 2 826 787 12 775
Pretax
income $ 51 $ (3 ) $ 54 $ (61 ) $ (22 ) $ (39 )
(loss)
Disclosed items included in operating earnings(2)
Reserve
Funds $ 2
recovery
(1) Includes net realized losses and integration charges.
(2) Positive disclosed items increased operating earnings; negative disclosed items
decreased operating earnings.
Advice & Wealth Management reported pretax income of $51
million for the first quarter of 2010 compared to a pretax loss of $61
million a year ago. Segment operating earnings were $54 million compared
to a $39 million loss a year ago. Pretax operating margin for the first
quarter of 2010 was 6.1 percent.
Operating net revenues increased 20 percent, or $144 million, to $880
million. Wrap account assets increased to $100 billion, an all-time high
driven by market appreciation and continued strong net inflows. While
brokerage cash balances remain high, at $13 billion, cash spreads
increased slightly to 53 basis points. These positives were partially
offset by slow sales of annuities compared to a year ago.
Operating expenses increased 7 percent primarily as a result of higher
distribution expenses. Segment operating general and administrative
expenses declined 7 percent driven by expense controls partially offset
by the introduction of a new advertising campaign and increased
investment in the business, primarily the continued roll-out of an
enhanced brokerage platform.
The company had a strong quarter for new client acquisition. Net retail
inflows combined with market appreciation drove total retail client
assets up 31 percent to $304 billion. The company continued to recruit
experienced advisors, although at a slower rate than in 2009.
Ameriprise Financial, Inc.
Asset Management Segment Results
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in
millions, GAAP Less: Operating GAAP Less: Operating
unaudited) Earnings Adjustments Earnings Earnings Adjustments Earnings
(1) (1)
Asset
Management
Net revenues $ 370 $ 1 $ 369 $ 260 $ (3 ) $ 263
Expenses 352 5 347 268 7 261
Pretax
income $ 18 $ (4 ) $ 22 $ (8 ) $ (10 ) $ 2
(loss)
Disclosed items included in operating earnings(2)
Threadneedle
valuation $ (27 ) $ 10
adjustment
(1) Includes net realized gains (losses) and integration charges.
(2) Positive disclosed items increased operating earnings; negative disclosed items
decreased operating earnings.
Asset Management reported pretax income of $18 million for the
quarter compared to an $8 million loss a year ago. Segment operating
earnings were $22 million and included a $27 million negative impact
related to recognizing the more than 100 percent year-over-year increase
in Threadneedle's estimated market value attributable to its incentive
compensation program. The company uses this annual valuation to
mark-to-market all current and historical reserves for the program.
Asset Management pretax operating margin for the first quarter of 2010
was 6.0 percent or 13.3 percent when excluding the Threadneedle
valuation change.
Operating net revenues increased 40 percent, or $106 million, to $369
million, driven by higher management fees due to market appreciation on
assets and net inflows in prior quarters. Excluding the impact of the
Threadneedle valuation increase, segment operating general and
administrative expenses increased 14 percent, primarily due to
year-over-year timing differences in investment performance compensation
accruals.
RiverSource Investments continued to improve equity investment
performance and reported more than half of equity and fixed income
assets above Lipper peer group medians for 1-, 3- and 5-year time
periods, as of March 31, 2010. Threadneedle continues to maintain strong
longer-term track records in both equity and fixed income portfolios.
Total managed assets were $246 billion, up 29 percent compared to a year
ago. Domestic asset management experienced solid net inflows in hedge
funds and positive institutional net inflows. Domestic institutional net
inflows included $0.6 billion in outflows reflecting expected negative
synergies from the Columbia Management acquisition, offset by solid
growth in institutional mandates. Domestic asset management also
experienced $1.1 billion in retail net outflows, which included the
negative impact of lower year-over-year flows into variable products.
Threadneedle continued to shift toward higher yielding asset classes.
International retail net inflows continued to be strong at $1.3 billion,
while institutional net outflows of $1.3 billion were driven by
Zurich-related net outflows.
Ameriprise Financial, Inc.
Annuities Segment Results
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in GAAP Less: Operating GAAP Less: Operating
millions, Earnings Adjustments Earnings Earnings Adjustments Earnings
unaudited) (1) (1)
Annuities
Net $ 602 $ 3 $ 599 $ 492 $ 20 $ 472
revenues
Expenses 482 -- 482 363 -- 363
Pretax $ 120 $ 3 $ 117 $ 129 $ 20 $ 109
income
Disclosed items included in operating earnings(2)
Decline in net investment income $ (5 )
(1) Includes net realized gains.
(2) Positive disclosed items increased operating earnings; negative disclosed
items decreased operating earnings.
Annuities segment operating earnings increased 7 percent to $117
million compared to a year ago. Market volatility materially impacted
DAC amortization expense, benefits expense and pretax operating earnings
in the first quarter of 2009, making comparisons to the year-ago period
less meaningful.
In the first quarter of 2010, the company took action related to the
introduction of an enhanced variable annuity asset allocation program,
increasing liquidity in general account assets in preparation to move
those assets to separate accounts. This negatively impacted net
investment income by $5 million. In addition, net investment income was
negatively impacted in the quarter by lower commercial mortgage loan
fees and the absence of consent fees and call premiums.
The mark-to-market impact of variable annuity living benefits increased
benefits expense by $24 million in the first quarter of 2010, primarily
driven by model changes, FAS 157 valuation impacts and basis risk. The
enhanced variable annuity asset allocation program the company will
introduce in 2010 is designed to improve the mitigation of basis risk.
While variable annuity inflows were low at $98 million in the quarter,
variable annuity exit rates improved over 150 basis points from the
prior-year period. Fixed annuities net outflows of $166 million in the
first quarter of 2010 were primarily due to lower sales from the
company's decision to lower crediting rates on new contracts. Fixed
annuity redemption rates also improved materially from the prior-year
period.
Ameriprise Financial, Inc.
Protection Segment Results
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in
millions, GAAP Less: Operating GAAP Less: Operating
unaudited) Earnings Adjustments Earnings Earnings Adjustments Earnings
(1) (1)
Protection
Net $ 507 $ 1 $ 506 $ 496 $ 8 $ 488
revenues
Expenses 388 -- 388 384 -- 384
Pretax $ 119 $ 1 $ 118 $ 112 $ 8 $ 104
income
(1) Includes net realized gains.
Protection reported pretax income of $119 million for the first
quarter of 2010 compared to pretax income of $112 million a year ago.
Segment operating earnings were $118 million, up 13 percent compared to
$104 million a year ago.
Operating revenues increased 4 percent, or $18 million, to $506 million,
compared to a year ago, primarily driven by auto and home premium
growth, as well as increased net investment income due to higher
investment yields and increased general account assets.
Operating expenses increased slightly to $388 million from $384 million
a year ago, as higher benefit expenses were partially offset by lower
DAC amortization. The increase in benefits expenses was primarily driven
by weather-related auto and home claims, offset by favorable life and
disability income insurance claims. The decline in DAC amortization
expenses was primarily the result of the unfavorable market impact a
year ago.
VUL / UL account balances were up 23 percent year-over-year to $9
billion, primarily driven by equity market appreciation on VUL balances.
VUL / UL sales of $54 million increased 64 percent from a year ago. Auto
and home policy counts grew at a steady pace, up 9 percent from the
prior-year period.
Ameriprise Financial, Inc.
Corporate & Other Segment Results
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in GAAP Less: Operating GAAP Less: Operating
millions, Earnings Adjustments Earnings Earnings Adjustments Earnings
unaudited) (1) (1)
Corporate
& Other
Net $ 157 $ 137 $ 20 $ 17 $ (12 ) $ 29
revenues
Expenses 104 54 50 55 2 53
Pretax
income $ 53 $ 83 $ (30 ) $ (38 ) $ (14 ) $ (24 )
(loss)
Disclosed items included in operating earnings(2)
Gain on
hybrid $ 50
repurchase
Benefit
from $ 20
Reserve
Funds
(1) Includes the revenues and expenses of the consolidated investment entities
and net realized gains.
(2) Positive disclosed items increased operating earnings; negative disclosed
items decreased operating earnings.
Corporate & Other reported pretax income of $53 million for
the quarter of 2010 compared to a $38 million pretax loss in the
prior-year period. Pretax income included $82 million attributable to
noncontrolling interests and $1 million in realized gains compared to a
$14 million loss attributable to noncontrolling interests in the
prior-year period. Segment pretax operating loss was $30 million in the
first quarter compared to a pretax loss of $24 million in the prior-year
period.
Operating earnings in the first quarter of 2009 included a $50 million
benefit from repurchasing the company's hybrid securities at a discount.
In the first quarter of 2010, operating earnings included a $20 million
benefit from payments related to the Reserve Funds matter.
Operating interest and debt expense was down $2 million year-over-year.
On March 11, 2010, the company issued $750 million in 10-year notes with
a 5.3 percent coupon. In addition, the company swapped $1.375 billion of
debt from fixed to floating, consistent with its asset-liability
matching strategy.
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 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.
Examples of such forward-looking statements include:
-- the statement of belief in this news release that the company is
expected to deploy approximately $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 on May 1, 2010 and that
related operational and financial expectations are on track;
-- the statement of belief in this news release regarding the capabilities
of the combined asset management business;
-- the statement of belief in this news release that the company will
continue to use enterprise risk management capabilities and product
hedging to anticipate and mitigate risk;
-- the statements in this news release regarding the expected
implementation of an enhanced variable annuity asset allocation program
designed to improve the mitigation of basis risk;
-- the statement of belief in this news release that a portion of the
proceeds from the company's issuance of $750 million of 10-year senior
notes will be used to retire $340 million in debt maturing in November
2010;
-- the statement of belief in this news release that the company expects
its 2010 full-year effective tax rate will be approximately 25 to 27
percent;
-- the statement of belief in this news release that a large portion of tax
planning benefits expected for 2010 will be recorded during the first
and second quarters;
-- 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;
-- changes to the company's reputation that may arise from employee or
affiliated advisor misconduct, legal or regulatory actions, improper
management of conflicts of interest or otherwise;
-- the company's capital structure, including indebtedness, limitations on
subsidiaries to pay dividends, and the extent, manner, terms and timing
of any share or debt repurchases management may effect as well as the
opinions of rating agencies and other analysts and the reactions of
market participants or the company's regulators, advisors, distribution
partners or customers in response to any change or prospect of change in
any such opinion;
-- risks of default, capacity constraint or repricing by issuers or
guarantors of investments the company owns or by counterparties to
hedge, derivative, insurance or reinsurance arrangements or by
manufacturers of products the company distributes, experience deviations
from the company's assumptions regarding such risks, the evaluations or
the prospect of changes in evaluations of any such third parties
published by rating agencies or other analysts, and the reactions of
other market participants or the company's regulators, advisors,
distribution partners or customers in response to any such evaluation or
prospect of changes in evaluation;
-- experience deviations from the company's assumptions regarding
morbidity, mortality and persistency in certain annuity and insurance
products, or from assumptions regarding market returns assumed in
valuing 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 the year ended December 31, 2009
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 March 31, 2010. For information about Ameriprise
Financial entities, please refer to the First Quarter 2010 Statistical
Supplement available at ir.ameriprise.com
and the tables that follow in this news release.
Ameriprise Financial, Inc.
Reconciliation Table: GAAP Income Statement to Operating Income Statement
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in millions,
unaudited) GAAP Less: Operating GAAP Less: Operating Operating
Earnings Adjustments Earnings Earnings Adjustments Earnings Earnings
(1) (1) % Change
Revenues
Management and
financial $ 774 $ (9 ) $ 783 $ 554 $ -- $ 554 41 %
advice fees
Distribution 391 -- 391 311 -- 311 26
fees
Net investment 590 84 506 418 16 402 26
income
Premiums 282 -- 282 266 -- 266 6
Other revenues 255 57 198 209 (12 ) 221 (10 )
Total revenues 2,292 132 2,160 1,758 4 1,754 23
Banking and
deposit 21 -- 21 42 1 41 (49 )
interest
expense
Total net 2,271 132 2,139 1,716 3 1,713 25
revenues
Expenses
Distribution 525 -- 525 384 -- 384 37
expenses
Interest
credited to 228 -- 228 205 -- 205 11
fixed accounts
Benefits,
claims, losses 354 -- 354 100 -- 100 NM
and settlement
expenses
Amortization
of deferred 118 -- 118 286 -- 286 (59 )
acquisition
costs
Interest and 64 40 24 26 -- 26 (8 )
debt expense
General and
administrative 621 12 609 581 21 560 9
expense
Total expenses 1,910 52 1,858 1,582 21 1,561 19
Pretax income 361 80 281 134 (18 ) 152 85
Income tax 65 (1 ) 66 18 (1 ) 19 NM
provision
Net income 296 81 215 116 (17 ) 133 62
Less: Net
income (loss)
attributable 82 82 -- (14 ) (14 ) -- --
to
noncontrolling
interests
Net income
attributable $ 214 $ (1 ) $ 215 $ 130 $ (3 ) $ 133 62
to Ameriprise
Financial
NM Not Meaningful
(1) Includes the elimination of management fees earned by the company from the consolidated
investment entities and the related expense, the revenues and expenses of the consolidated
investment entities, net realized gains/losses and integration charges.
Ameriprise Financial, Inc.
Additional GAAP to Operating reconciliations
Quarter Ended March 31, 2010 Quarter Ended March 31, 2009
(in millions,
unaudited) GAAP Less: Operating GAAP Less: Operating
Expenses Adjustments Expenses Expenses Adjustments Expenses
(1)(2) (1)
Advice &
Wealth
Management
General and
administrative $ 292 $ 2 $ 290 $ 325 $ 12 $ 313
expense
Asset
Management
General and
administrative $ 240 $ 5 $ 235 $ 180 $ 7 $ 173
expense
Corporate and
Other
Interest and
debt expense $ 64 $ 40 $ 24 $ 26 $ -- $ 26
(2)
(1) Includes integration charges.
(2) Includes the expenses of the consolidated investment entities.
Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate
(in millions, unaudited) Quarter Ended
March 31, 2010
Pretax income $ 361
Less: Pretax income attributable to noncontrolling interests 82
Pretax income excluding CIEs $ 279
Income tax provision $ 65
Effective tax rate 17.9%
Effective tax rate excluding noncontrolling interests 23.2%
Ameriprise Financial, Inc.
Reconciliation Table: Ameriprise Financial Debt to Ameriprise Financial Capital
Ratio
March 31, 2010
GAAP Measure
GAAP Measure Excluding
Non-recourse Excluding Non-recourse
Debt and Non-recourse Debt and Equity
of
Equity of Debt and Consolidated
Equity
Consolidated of Impact of Investment
Consolidated
GAAP Investment Investment 75% Equity Entities with
75%
(in Equity Credit
millions, Measure Entities(1) Entities Credit(2) (1)(2)
unaudited)
Ameriprise
Financial $ 2,612 $ 6 $ 2,606 $ 242 $ 2,364
Debt
Ameriprise
Financial $ 12,720 $ 488 $ 12,232 $ 12,232
Capital
Ameriprise
Financial
Debt to 20.5 % 21.3 % 19.3 %
Ameriprise
Financial
Capital
(1) Includes non-recourse debt of muni inverse floaters and equity impacts
attributable to consolidated investment entities.
(2) The company's junior subordinated notes receive an equity credit of at
least 75% by the majority of the rating agencies.
Ameriprise Financial, Inc.
Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income (AOCI)
Calculation for the 12 Months as of March 31, 2010
ROE
(in millions, unaudited) excluding AOCI Less: Adjustments(1) Operating ROE(2)
Return $ 806 $ (28 ) $ 834
Equity excluding AOCI $ 8,708 $ 101 $ 8,607
Return on Equity 9.3 % 9.7 %
excluding AOCI
Ameriprise Financial, Inc.
Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income (AOCI)
Calculation for the 12 Months as of March 31, 2009
ROE
(in millions, unaudited) excluding AOCI Less: Adjustments(1) Operating ROE(2)
Return $ (99 ) $ (505 ) $ 406
Equity excluding AOCI $ 7,637 $ -- $ 7,637
Return on Equity (1.3) % 5.3 %
excluding AOCI
(1) Adjustments reflect the trailing twelve months' sum of after-tax net
realized gains/losses and integration charges less the equity impacts
attributable to the consolidated investment entities.
(2) Operating return on equity excluding accumulated other comprehensive loss
and consolidated investment entities is calculated using the trailing twelve
months of earnings excluding the after-tax net realized gains/losses and
integration charges in the numerator, and Ameriprise Financial shareholders'
equity excluding the impact of consolidated investment entities using a five
point average of quarter-end equity in the denominator.
Ameriprise Financial, Inc.
Reconciliation Table: Book Value
March 31, March 31, %
(in millions, except per share amounts, unaudited) 2010 2009 Change
Total Ameriprise Financial shareholders' equity $ 10,108 $ 6,384 58 %
Less: Accumulated other comprehensive income 365 -- NM
(AOCI)
Add: Accumulated other comprehensive loss -- 1,134 NM
Less: Appropriated retained earnings of CIEs 508 -- NM
Total Ameriprise Financial shareholders' equity $ 9,235 $ 7,518 23
excluding AOCI and CIEs
Basic common shares outstanding 262.4 223.7 NM
Book value per share $ 38.52 $ 28.54 35
Book value per share excluding AOCI and CIEs $ 35.19 $ 33.61 5 %
NM Not Meaningful
Source: Ameriprise Financial, Inc.
Contact: Ameriprise Financial, Inc.
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