Toggle SGML Header (+)


Section 1: 8-K (8-K)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)  October 25, 2016

 

AMERIPRISE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-32525

 

13-3180631

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

55 Ameriprise Financial Center

Minneapolis, Minnesota

 

55474

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code  (612) 671-3131

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02                   Results of Operations and Financial Condition.

 

On October 25, 2016, Ameriprise Financial, Inc. (the “Company,” “we,” or “our”) issued a press release announcing its financial results for the third quarter of 2016.  A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference and furnished herewith. In addition, the Company furnishes herewith, as Exhibit 99.2, its Statistical Supplement for the quarterly period ended September 30, 2016.

 

We follow accounting principles generally accepted in the United States (“GAAP”). The press release furnished as Exhibit 99.1 and the financial information furnished as Exhibit 99.2 include information on both a GAAP and non-GAAP adjusted basis. Certain non-GAAP performance measures in these exhibits exclude the impact of consolidating certain investment entities (“CIEs”), as well as certain integration/restructuring charges, the impact of our annual review of insurance and annuity valuation assumptions and model changes (“unlocking”), market impact on variable annuity guaranteed benefits, market impact on indexed universal life benefits, market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, net realized investment gains (losses) and income (loss) from discontinued operations. Management believes that the presentation of these non-GAAP financial measures better reflects the underlying performance of our 2016 and 2015 core operations and facilitates a more meaningful trend analysis. Exhibits 99.1 and 99.2 also contain certain non-GAAP debt, capital and shareholders’ equity measures, along with financial ratios incorporating such measures that exclude amounts related to one or more of the following: accumulated other comprehensive income (“AOCI”), fair value of hedges, unamortized discount, debt issuance costs, capital lease obligations and the impact of consolidating the assets and liabilities of certain CIEs.  Management believes that these non-GAAP debt, capital and shareholders’ equity measures, and the corresponding ratios, better represent our capital structure.  Management uses certain of these non-GAAP measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors. Also, certain of these non-GAAP measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters.

 

Our non-GAAP financial measures included in Exhibits 99.1 and 99.2, which our management views as important indicators of financial performance, include the following: adjusted net pretax operating margin; adjusted operating earnings; adjusted operating revenues; Ameriprise Financial shareholders’ equity excluding AOCI; Ameriprise Financial shareholders’ equity excluding CIEs; Ameriprise Financial shareholders’ equity excluding CIEs and AOCI; basic operating earnings per share; effective tax rate excluding noncontrolling interests; operating earnings; operating earnings per diluted share; operating effective tax rate; operating expenses; operating general and administrative expense; operating return on equity excluding AOCI; operating total net revenues; pretax operating earnings; pretax operating margin; return on equity excluding AOCI; total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, debt issuance costs, capital lease obligations and equity of CIEs; total Ameriprise Financial long-term debt excluding fair value of hedges, unamortized discount, debt issuance costs and capital lease obligations; total Ameriprise Financial long-term debt to total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, debt issuance costs, capital lease obligations and equity of CIEs; and various financial measures that exclude the impact of unlocking.

 

Item 9.01                   Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

 

Description

 

 

 

Exhibit 99.1

 

Press Release dated October 25, 2016 announcing financial results for the third quarter of 2016

 

 

 

Exhibit 99.2

 

Statistical Supplement for the quarterly period ended September 30, 2016

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

 

AMERIPRISE FINANCIAL, INC.

 

(Registrant)

 

 

 

 

Date: October 25, 2016

By

/s/ Walter S. Berman

 

 

Walter S. Berman

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

3


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

Ameriprise Financial, Inc.

Ameriprise Financial Center

Minneapolis, MN 55474

 

 

 

 

 

News Release

 

Ameriprise Financial Reports

Third Quarter 2016 Results

 

Third quarter 2016 net income(1) per diluted share was $1.30

Operating EPS was $1.37

 

Third quarter 2016 return on equity excluding AOCI was 19.0 percent
 Operating ROE excluding AOCI was 21.5 percent

 

Excluding annual unlocking(2), operating EPS was $2.29

Operating ROE excluding AOCI was 23.8 percent

 

MINNEAPOLIS — October 25, 2016 — Ameriprise Financial, Inc. (NYSE: AMP) today reported third quarter 2016 net income(1) of $215 million, or $1.30 per diluted share. Operating earnings were $227 million, with operating earnings per diluted share of $1.37. Excluding the non-cash impact of annual unlocking(2) in both periods, operating earnings per diluted share increased 4 percent to $2.29 with operating earnings of $380 million in the quarter.

 

GAAP Results

 

Net revenues of $3.0 billion increased 4 percent reflecting the cumulative impact of wrap net inflows, higher average equity markets and an impact from annual unlocking, partially offset by asset management outflows and lower client transactional activity.

 

Expenses of $2.8 billion increased 14 percent as a result of higher expenses related to unlocking as general and administrative expenses remained well controlled.

 

Operating Results

 

Operating net revenues of $3.0 billion increased 3 percent. Excluding annual unlocking in both quarters, operating net revenues were essentially flat, reflecting the cumulative impact of wrap net inflows and higher average equity markets compared to the year ago, offset by the cumulative impact of asset management outflows and lower client transactional activity.

 

Operating expenses of $2.7 billion increased 16 percent. Excluding annual unlocking in both quarters, operating expenses increased 1 percent from higher distribution expenses and well controlled general and administrative expenses.

 

In the quarter, the company continued to deliver a strong return to shareholders through share repurchases and dividends of $502 million.

 


(1)             Net income represents net income attributable to Ameriprise Financial.

(2)             Unlocking represents the company’s annual review of insurance and annuity valuation assumptions and model changes and the long term care review.

 

1



 

“Ameriprise delivered solid results in the third quarter on an operating basis, led by Advice and Wealth Management,” said Jim Cracchiolo, chairman and chief executive officer.

 

“With good inflows in investment advisory accounts, retail client assets grew to a record high. Experienced advisors continue to move their practices to Ameriprise as our advice value proposition, level of support and capital strength are attractive in this environment. In Asset Management, retail flows have improved in the U.S., and the July volatility in the UK and Europe subsided in the quarter.”

 

“In a more volatile climate and period of change for the industry, we are managing expenses well and have a strong business to serve our clients and advisors while consistently delivering meaningful shareholder value.”

 

2



 

Ameriprise Financial, Inc.

Third Quarter Summary

 

 

 

Quarter Ended
September 30,

 

%
Better/

 

Per Diluted Share
Quarter Ended
September 30,

 

%
Better/

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

(Worse)

 

2016

 

2015

 

(Worse)

 

Net income from continuing operations attributable to Ameriprise Financial

 

$

215

 

$

397

 

(46

)%

$

1.30

 

$

2.17

 

(40

)%

Adjustments, net of tax (1) 
(see reconciliation on p. 14)

 

12

 

32

 

 

 

0.07

 

0.18

 

 

 

Operating earnings (2)

 

$

227

 

$

429

 

(47

)%

$

1.37

 

$

2.35

 

(42

)%

Less: annual unlocking impact, net of tax (1)

 

(153

)

27

 

 

 

(0.92

)

0.15

 

 

 

Operating earnings, excluding annual unlocking

 

$

380

 

$

402

 

(5

)%

$

2.29

 

$

2.20

 

4

%

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

164.0

 

180.4

 

 

 

 

 

 

 

 

 

Diluted

 

165.8

 

182.7

 

 

 

 

 

 

 

 

 

 


(1)     After-tax is calculated using the statutory tax rate of 35%.

 

(2)     The company believes the presentation of operating earnings best represents the economics of the business.  Operating earnings, after-tax, exclude the consolidation of certain investment entities; net realized investment gains or losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; integration and restructuring charges; the market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; and income or loss from discontinued operations.

 

In the third quarter of the year, the company conducts its annual review of insurance and annuity valuation assumptions relative to current experience and management expectations. To the extent that expectations change as a result of this review, the company updates valuation assumptions and models and the impact is reflected as part of annual unlocking and the long term care review. As discussed in the segment commentary to follow, the continued low interest rate environment, as well as policyholder behavior impact on living benefit reserves, more than offset benefits from persistency on annuity contracts without living benefits and other model updates.

 

Catastrophe losses in the Auto and Home business were $29 million compared to $8 million a year ago. Catastrophe losses were $7 million in excess of our expectations for the third quarter.

 

3



 

Third quarter operating earnings also included the following after-tax items(1):

 

 

 

Quarter Ended
September 30,

 

%
Better/

 

Per Diluted Share
Quarter Ended
September 30,

 

%
Better/

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

(Worse)

 

2016

 

2015

 

(Worse)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Impact on DAC/DSIC

 

7

 

(20

)

NM

 

0.04

 

(0.11

)

NM

 

Long term care claim reserve adjustment

 

(19

)

8

 

NM

 

(0.11

)

0.04

 

NM

 

Life and health reinsurance premium correction

 

 

(7

)

NM

 

 

(0.04

)

NM

 

Auto & Home catastrophe losses

 

(19

)

(5

)

NM

 

(0.11

)

(0.03

)

NM

 

Auto & Home prior year reserve development

 

7

 

 

NM

 

0.04

 

 

NM

 

DOL planning and implementation expenses

 

(5

)

 

NM

 

(0.03

)

 

NM

 

Affordable housing investment adjustment

 

(5

)

 

NM

 

(0.03

)

 

NM

 

Total items

 

$

(34

)

$

(24

)

(42

)%

$

(0.20

)

$

(0.14

)

(43

)%

 


(1)All items are shown after-tax using the statutory tax rate of 35%.

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

 

4



 

Third Quarter 2016 Business Highlights

 

·                  Total assets under management and administration increased to $796 billion as Ameriprise advisor client net inflows and market appreciation more than offset asset management net outflows and the unfavorable impact of foreign exchange rates.

 

·                  Advice & Wealth Management advisor client assets increased to $476 billion, reflecting continued strength in fee-based investment advisory net inflows, with net inflows of $2.8 billion in the quarter.

 

·                  On a trailing 12-month basis, operating net revenue per advisor declined 1 percent to $511,000, as higher advisory fee revenue was more than offset by lower transactional client activity.

 

·                  Total advisors were 9,747, reflecting strong advisor retention and ongoing experienced advisor recruiting. The company added 80 experienced, productive advisors in the quarter.

 

·                  Asset Management segment AUM declined to $468 billion, primarily driven by net outflows and the unfavorable impact of foreign exchange rates.

 

·                  Investment performance remained strong with 110 four- and five-star funds at Columbia Threadneedle Investments.

 

·                  Columbia Threadneedle Investments completed its acquisition of Emerging Global Advisors, LLC, a New York-based registered investment advisor and provider of smart beta portfolios focused on emerging markets.

 

·                  Variable annuity policyholder account balances were $76 billion with sales of $1.2 billion in the quarter.

 

·                  Excess capital was above $2 billion. In the quarter, the company repurchased 3.9 million shares of common stock for $378 million and paid $124 million in quarterly dividends.

 

·                  During the quarter, the company issued $500 million of 10-year senior notes to enhance its capital structure given attractive rates. The proceeds are for general corporate purposes.

 

·                  The company announced that it will match donations to Feeding America up to $500,000 through Thanksgiving. The annual Ameriprise Financial Challenge, which kicked off in September, makes it easy for people to double the impact of their donations to Feeding America, the nation’s leading hunger-relief organization.

 

·                  Ameriprise Financial received the Corporate Philanthropy — Financial Institutions award at the annual Invest in Others Community Leadership Awards. The award is presented to a company that has demonstrated an ongoing commitment to encouraging philanthropic activities among its employees, financial advisors and senior leaders.

 

5



 

Ameriprise Financial, Inc.
Advice & Wealth Management Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Advice & Wealth Management

 

 

 

 

 

 

 

Net revenues

 

$

1,272

 

$

1,245

 

2

%

Expenses

 

1,041

 

1,026

 

(1

)%

Pretax operating earnings

 

$

231

 

$

219

 

5

%

 

 

 

 

 

 

 

 

Pretax operating margin

 

18.2

%

17.6

%

 

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Retail client assets (billions)

 

$

476

 

$

433

 

10

%

Wrap net flows (billions)

 

$

2.8

 

$

3.0

 

(8

)%

Operating net revenue per branded advisor (trailing 12 months - thousands)

 

$

511

 

$

514

 

(1

)%

 

Advice & Wealth Management pretax operating earnings increased 5 percent to $231 million driven by growth in assets and higher earnings on cash balances. Third quarter 2016 pretax operating margin increased to 18.2 percent from 17.6 percent a year ago.

 

Operating net revenues of $1.3 billion increased 2 percent from wrap account net inflows and higher earnings on cash balances. Client asset growth remains good as the company continues to see asset growth in fee-based wrap accounts outpacing growth in brokerage account balances.

 

Operating expenses increased 1 percent to $1.0 billion primarily from higher distribution expenses related to increased wrap fees. General and administrative expenses were down 1 percent compared to a year ago. The company is dedicating significant internal resources to prepare for the Department of Labor fiduciary rule and maintaining targeted growth investments.

 

Total retail client assets increased to $476 billion, driven by client net inflows and new client acquisition, as well as market appreciation. Wrap net inflows were $2.8 billion in the quarter, which contributed to a 14 percent year-over-year increase in wrap balances to $197 billion. Total advisors were 9,747 reflecting strong retention and another successful recruiting quarter, with 80 experienced advisors moving their practices to Ameriprise. Operating net revenue per advisor decreased 1 percent on a trailing 12-month basis to $511,000.

 

6



 

Ameriprise Financial, Inc.

Asset Management Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Asset Management

 

 

 

 

 

 

 

Net revenues

 

$

740

 

$

782

 

(5

)%

Expenses

 

585

 

602

 

3

%

Pretax operating earnings

 

$

155

 

$

180

 

(14

)%

 

 

 

 

 

 

 

 

Pretax operating margin

 

20.9

%

23.0

%

 

 

Adjusted net pretax operating margin (1)

 

35.8

%

39.1

%

 

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Total segment AUM (billions)

 

$

468

 

$

471

 

(1

)%

 

 

 

 

 

 

 

 

Total segment net flows (billions)

 

$

(4.3

)

$

(7.4

)

41

%

Global Retail net flows, excl. former parent flows

 

$

(1.9

)

$

(3.5

)

45

%

Global Institutional net flows, excl. former parent flows

 

$

(2.0

)

$

(1.3

)

(53

)%

Former parent company related flows

 

$

(1.4

)

$

(2.6

)

44

%

Inflows from acquisitions

 

$

1.0

 

$

 

NM

 

 


(1)See reconciliation on page 16

 

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

 

Asset Management pretax operating earnings decreased 14 percent to $155 million, primarily from the cumulative impact of net outflows. The decline in the British pound resulted in lower revenues and expenses but had a minimal impact to pretax operating earnings.

 

Third quarter pretax operating margin was 20.9 percent compared to 23.0 percent a year ago. Adjusted net pretax operating margin was 35.8 percent compared to 39.1 percent a year ago.

 

Operating net revenues declined to $740 million compared to a year ago, reflecting the impact of lower asset levels and foreign exchange rates. AUM declined 1 percent to $468 billion from net outflows and unfavorable foreign exchange rates, partially offset by higher equity markets.

 

Operating expenses of $585 million declined 3 percent due to well managed general and administrative expenses and lower distribution expenses.

 

Net outflows were $4.3 billion in the quarter compared to outflows of $7.4 billion a year ago. Global retail outflows, excluding former parent related assets, were $1.9 billion reflecting improvement in intermediary and RIA distribution despite continued industry pressure on active equity strategies in the U.S., as well as lower retail activity among UK and European investors in July following the UK referendum. Global institutional outflows were $2 billion, including $0.7 billion from Acorn strategies. Funding of global institutional mandates slowed in the quarter and is expected to improve in the fourth quarter. In addition, flows in the quarter included $1 billion of inflows related to the acquisition of Emerging Global Advisors and $1.4 billion of former parent related outflows, primarily from legacy insurance mandates.

 

7



 

Ameriprise Financial, Inc.

Annuities Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Annuities

 

 

 

 

 

 

 

Net revenues

 

$

631

 

$

632

 

 

Expenses

 

699

 

456

 

(53

)%

Pretax operating earnings

 

$

(68

)

$

176

 

NM

 

 

 

 

 

 

 

 

 

Variable Annuities:

 

 

 

 

 

 

 

Pretax operating earnings

 

$

(97

)

$

151

 

NM

 

Annual unlocking

 

(220

)

64

 

NM

 

Pretax operating earnings, excluding annual unlocking

 

123

 

87

 

41

%

Fixed Annuities:

 

 

 

 

 

 

 

Pretax operating earnings

 

29

 

25

 

16

%

Annual unlocking

 

5

 

2

 

NM

 

Pretax operating earnings, excluding annual unlocking

 

24

 

23

 

4

%

Total pretax operating earnings, excluding annual unlocking

 

$

147

 

$

110

 

34

%

 

 

 

 

 

 

 

 

Item included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC and DSIC (mean reversion)

 

$

9

 

$

(29

)

NM

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Variable annuity ending account balances (billions)

 

$

75.9

 

$

72.8

 

4

%

Variable annuity net flows (millions)

 

$

(650

)

$

(259

)

NM

 

Fixed annuity ending account balances (billions)

 

$

10.2

 

$

10.9

 

(7

)%

Fixed annuity net flows (millions)

 

$

(240

)

$

(375

)

36

%

 

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

 

Annuities pretax operating loss was $68 million compared to earnings of $176 million a year ago, primarily reflecting the unfavorable unlocking. Excluding unlocking in both periods, operating earnings were $147 million, up 34 percent, reflecting a favorable market impact on DAC and DSIC.

 

Variable annuity operating loss was $97 million, reflecting an unfavorable $220 million annual unlocking impact, which was primarily driven by continued low interest rates and policyholder behavior. Variable annuity cash sales declined to $1.2 billion in the quarter, which is consistent with recent industry trends. Account balances increased 4 percent to $76 billion, reflecting market appreciation, partially offset by net outflows.

 

Fixed annuity operating earnings increased to $29 million from $25 million, as a small benefit from annual unlocking was partially offset by continued older policy lapses and the interest rate environment remains challenging for investment yields and new product sales.

 

8



 

Ameriprise Financial, Inc.

Protection Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Protection

 

 

 

 

 

 

 

Net revenues

 

$

679

 

$

586

 

16

%

Expenses

 

668

 

561

 

(19

)%

Pretax operating earnings

 

$

11

 

$

25

 

(56

)%

Annual unlocking — other life and health

 

17

 

(24

)

NM

 

Annual long term care review

 

(37

)

 

NM

 

Pretax operating earnings, excluding unlocking

 

$

31

 

$

49

 

(37

)%

 

 

 

 

 

 

 

 

Items included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC (mean reversion)

 

$

1

 

$

(2

)

NM

 

Long term care claim reserve adjustment

 

(29

)

13

 

NM

 

Life and health reinsurance premium correction

 

 

(11

)

NM

 

Auto and Home catastrophe losses

 

(29

)

(8

)

NM

 

Auto and Home prior year reserve development

 

10

 

 

NM

 

Total protection impact

 

$

(47

)

$

(8

)

NM

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Life insurance in force (billions)

 

$

196

 

$

196

 

 

VUL/UL ending account balances (billions)

 

$

11.5

 

$

10.9

 

5

%

Auto & Home policies in force (thousands)

 

950

 

958

 

(1

)%

 

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

 

Protection pretax operating earnings were $11 million compared to $25 million a year ago.

 

Life and Health insurance earnings, excluding long term care and the items noted above, increased from a year ago. VUL/UL cash sales declined to $70 million and VUL/UL account balances increased 5 percent.

 

Long term care had an operating loss of $73 million in the quarter driven by $66 million from two items: a $37 million impact primarily from loss recognition and an unfavorable $29 million correction related to a claim utilization assumption. The loss recognition related to low interest rates and higher reinsurance expense. Excluding these items, operating results were within expectations.

 

Auto & Home had a loss of $8 million driven by higher than anticipated catastrophe losses. The quarter included a $10 million favorable prior year reserve development reflecting improved trends from changes made to underwriting, claims and pricing. Management will continue to evaluate prior year and 2016 emerging loss experience to determine future actions.

 

9



 

Ameriprise Financial, Inc.

Corporate & Other Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Corporate & Other

 

 

 

 

 

 

 

Net revenues

 

$

(15

)

$

(4

)

NM

 

Expenses

 

57

 

38

 

(50

)%

Pretax operating loss

 

$

(72

)

$

(42

)

(71

)%

 

 

 

 

 

 

 

 

Items included in operating earnings:

 

 

 

 

 

 

 

DOL planning and implementation expenses

 

$

(7

)

$

 

NM

 

Affordable housing investment adjustment

 

(7

)

 

NM

 

Total corporate impact

 

$

(14

)

$

 

NM

 

 

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

 

Corporate & Other pretax operating loss was $72 million for the quarter compared to a $42 million loss a year ago. Included in the current quarter’s results was an adjustment for an affordable housing investment to align it with the remaining tax benefit cash flows that lowered net investment income by $7 million. Results in the quarter included $7 million of incremental expenses related to the planning and implementation of the Department of Labor’s fiduciary standard.

 

Taxes

 

The third quarter 2016 operating effective tax rate was 11.7 percent reflecting lower earnings in the quarter related to the unfavorable unlocking as well as discrete tax items, primarily from the finalization of the 2015 tax return. Excluding the impact from unlocking, the operating effective tax rate was 22.8 percent. The operating effective tax rate was 23.1 percent a year ago.

 

Contacts

 

Investor Relations:

 

Media Relations:

 

 

 

Alicia A. Charity

 

Paul W. Johnson

Ameriprise Financial

 

Ameriprise Financial

(612) 671-2080

 

(612) 671-0625

alicia.a.charity@ampf.com

 

paul.w.johnson@ampf.com

 

 

 

Chad J. Sanner

 

 

Ameriprise Financial

 

 

(612) 671-4676

 

 

chad.j.sanner@ampf.com

 

 

 


 

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 120 years. With a nationwide network of 10,000 financial advisors and extensive asset management, advisory and insurance capabilities, we have the strength and expertise to serve the full range of individual and institutional investors’ financial needs. For more information, visit ameriprise.com.

 

10



 

Ameriprise Financial Services, Inc. offers financial planning services, investments, insurance and annuity products. Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an SEC- and FCA-registered investment adviser affiliate of Columbia Management Investment Advisers, LLC based in the U.K. Auto and home insurance is underwritten by IDS Property Casualty Insurance Company, or in certain states, Ameriprise Insurance Company, both in De Pere, WI. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company, and in New York only by RiverSource Life Insurance Co. of New York, Albany, New York. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuity products in the state of New York. These companies are all part of Ameriprise Financial, Inc. CA License #0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.

 

Forward-Looking Statements

 

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

 

·                  statements in this news release concerning the expecting funding of mandates in the fourth quarter;

·                  the statements in this news release concerning the expected financial impact, and time during which impacts might be realized, of business trends in Auto and Home underwriting, pricing and claims practices;

·                  statements of the company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;

·                  other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and

·                  statements of assumptions underlying such statements.

 

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on pace,” “project” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements.

 

Such factors include, but are not limited to:

 

·                  conditions in the interest rate, credit default, equity market and foreign exchange environments, including changes in valuations, liquidity and volatility;

·                  changes in and the adoption of relevant accounting standards and securities rating agency standards and processes, as well as changes in the litigation and regulatory environment, including ongoing legal proceedings and regulatory actions, the frequency and extent of legal claims threatened or initiated by clients, other persons and regulators, and developments in regulation and legislation, including the rules, exemptions and regulations implemented or that may be implemented in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or in light of the U.S. Department of Labor rule and exemptions pertaining to the fiduciary status of investment advice providers to 401(k) plan, plan sponsors, plan participants and the holders of individual retirement or health savings accounts;

 

11



 

·                  investment management performance and distribution partner and consumer acceptance of the company’s products;

·                  effects of competition in the financial services industry, including pricing pressure, the introduction of new products and services and changes in product distribution mix and distribution channels;

·                  changes to the company’s reputation that may arise from employee or advisor misconduct, legal or regulatory actions, perceptions of the financial services industry generally, improper management of conflicts of interest or otherwise;

·                  the company’s capital structure, including indebtedness, limitations on subsidiaries to pay dividends, and the extent, manner, terms and timing of any share or debt repurchases management may effect as well as the opinions of rating agencies and other analysts and the reactions of market participants or the company’s regulators, advisors, distribution partners or customers in response to any change or prospect of change in any such opinion;

·                  changes to the availability and cost of liquidity and the Company’s credit capacity that may arise due to shifts in market conditions, the Company’s credit ratings and the overall availability of credit;

·                  risks of default, capacity constraint or repricing by issuers or guarantors of investments the company owns or by counterparties to hedge, derivative, insurance or reinsurance arrangements or by manufacturers of products the company distributes, experience deviations from the company’s assumptions regarding such risks, the evaluations or the prospect of changes in evaluations of any such third parties published by rating agencies or other analysts, and the reactions of other market participants or the company’s regulators, advisors, distribution partners or customers in response to any such evaluation or prospect of changes in evaluation;

·                  experience deviations from the company’s assumptions regarding morbidity, mortality and persistency in certain annuity and insurance products, or from assumptions regarding market returns assumed in valuing or unlocking DAC and DSIC or market volatility underlying our valuation and hedging of guaranteed living benefit annuity riders, or from assumptions regarding interest rates assumed in our loss recognition testing of our Long Term Care business, or from assumptions regarding anticipated claims and losses relating to our automobile and home insurance products;

·                  changes in capital requirements that may be indicated, required or advised by regulators or rating agencies;

·                  the impacts of the company’s efforts to improve distribution economics and to grow third-party distribution of its products;

·                  the ability to pursue and complete strategic transactions and initiatives, including acquisitions, divestitures, restructurings, joint ventures and the development of new products and services;

·                  the ability to realize the financial, operating and business fundamental benefits of strategic transactions and initiatives the company has completed, is pursuing or may pursue in the future, which may be impacted by the ability to obtain regulatory approvals, the ability to effectively manage related expenses and by market, business partner and consumer reactions to such strategic transactions and initiatives;

·                  the ability and timing to realize savings and other benefits from re-engineering and tax planning;

·                  interruptions or other failures in our communications, technology and other operating systems, including errors or failures caused by third party service providers, interference or failures caused by third party attacks on our systems, or the failure to safeguard the privacy or confidentiality of sensitive information and data on such systems; and

·                  general economic and political factors, including consumer confidence in the economy and the financial industry, the ability and inclination of consumers generally to invest as well as their ability and inclination to invest in financial instruments and products other than cash and cash equivalents, the costs of products and services the company consumes in the conduct of its business, and applicable legislation and regulation and changes therein (such as the June 2016 UK referendum on membership in the European Union), 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.

 

12



 

Management cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that management is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management undertakes no obligation to update publicly or revise any forward-looking statements. The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion under Part 1, Item 1A of and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2015 available at ir.ameriprise.com and the “Risk Factors” discussion included in Part II, Item 1A and elsewhere in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2016 and March 31, 2016.

 

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, 2016. For information about Ameriprise Financial entities, please refer to the Third Quarter 2016 Statistical Supplement available at ir.ameriprise.com and the tables that follow in this news release.

 

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

 

13



 

Reconciliation Tables

 

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

 

 

 

Quarter Ended
September 30,

 

Per Diluted Share
Quarter Ended
September 30,

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

2016

 

2015

 

Net income attributable to Ameriprise Financial

 

$

215

 

$

397

 

$

1.30

 

$

2.17

 

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

 

 

 

 

 

Add: Integration/restructuring charges(1)

 

 

3

 

 

0.02

 

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

 

37

 

5

 

0.22

 

0.03

 

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

 

(7

)

1

 

(0.04

)

0.01

 

Add: Market impact of hedges on investments(1)

 

(5

)

31

 

(0.03

)

0.17

 

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

 

(6

)

10

 

(0.04

)

0.05

 

Add: Tax effect of adjustments (2)

 

(7

)

(18

)

(0.04

)

(0.10

)

Operating earnings

 

227

 

429

 

1.37

 

2.35

 

Less: Pretax impact of unlocking

 

(235

)

42

 

(1.42

)

0.23

 

Less: Tax effect of unlocking (2)

 

82

 

(15

)

0.50

 

(0.08

)

Operating earnings excluding unlocking

 

$

380

 

$

402

 

$

2.29

 

$

2.20

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

164.0

 

180.4

 

 

 

 

 

Diluted

 

165.8

 

182.7

 

 

 

 

 

 


(1)     Pretax operating adjustment.

(2)     Calculated using the statutory tax rate of 35%.

 

Ameriprise Financial, Inc.

Reconciliation Table: Total Net Revenues

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

Total net revenues

 

$

2,998

 

$

2,886

 

Less: CIEs revenue

 

27

 

43

 

Less: Net realized investment gains (losses)

 

6

 

(10

)

Less: Market impact on indexed universal life benefits

 

6

 

9

 

Less: Market impact of hedges on investments

 

5

 

(31

)

Operating total net revenues

 

2,954

 

2,875

 

Less: Unlocking

 

64

 

(8

)

Operating total net revenues excluding unlocking

 

$

2,890

 

$

2,883

 

 

14



 

Ameriprise Financial, Inc.

Reconciliation Table: Total Expenses

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

Total expenses

 

$

2,760

 

$

2,423

 

Less: CIEs expenses

 

27

 

88

 

Less: Integration/restructuring charges

 

 

3

 

Less: Market impact on variable annuity guaranteed benefits

 

37

 

5

 

Less: Market impact on indexed universal life benefits

 

(1

)

10

 

Operating expenses

 

2,697

 

2,317

 

Less: Unlocking

 

299

 

(50

)

Operating expenses excluding unlocking

 

$

2,398

 

$

2,367

 

 

 Ameriprise Financial, Inc.

Reconciliation Table: Pretax Operating Earnings

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

Operating total net revenues

 

$

2,954

 

$

2,875

 

Operating expenses

 

2,697

 

2,317

 

Pretax operating earnings

 

$

257

 

$

558

 

 

Ameriprise Financial, Inc.
Reconciliation Table: General and Administrative Expense

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

General and administrative expense

 

$

731

 

$

744

 

Less: CIEs expenses

 

2

 

20

 

Less: Integration/restructuring charges

 

 

3

 

Operating general and administrative expense

 

$

729

 

$

721

 

 

Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate

 

 

 

Quarter Ended September 30, 2016

 

(in millions, unaudited)

 

GAAP

 

Operating

 

Pretax Income

 

$

238

 

$

257

 

Income tax provision

 

$

23

 

$

30

 

Effective tax rate

 

9.7

%

11.7

%

 

15



 

Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate

 

 

 

Quarter Ended
September 30,
2016

 

(in millions, unaudited)

 

Operating

 

Pretax Income

 

$

257

 

Less: Pretax income attributable to unlocking

 

(235

)

Pretax income excluding unlocking

 

$

492

 

Income tax provision

 

$

30

 

Less: Income tax provision attributable to unlocking

 

(82

)

Income tax provision excluding unlocking

 

$

112

 

Effective tax rate

 

11.7

%

Effective tax rate excluding unlocking

 

22.8

%

 

Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate

 

 

 

Quarter Ended September 30, 2015

 

(in millions, unaudited)

 

GAAP

 

Operating

 

Pretax Income

 

$

463

 

$

558

 

Less: Pretax income attributable to noncontrolling interests

 

(45

)

 

Pretax income excluding consolidated investment entities

 

$

508

 

$

558

 

Income tax provision

 

$

111

 

$

129

 

Effective tax rate

 

24.1

%

23.1

%

Effective tax rate excluding noncontrolling interests

 

21.9

%

23.1

%

 

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Adjusted Net Pretax Operating Margin

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

Operating total net revenues

 

$

740

 

$

782

 

Less: Distribution pass through revenues

 

211

 

214

 

Less: Subadvisory and other pass through revenues

 

85

 

95

 

Adjusted operating revenues

 

$

444

 

$

473

 

 

 

 

 

 

 

Pretax operating earnings

 

$

155

 

$

180

 

Less: Operating net investment income

 

1

 

1

 

Add: Amortization of intangibles

 

5

 

6

 

Adjusted operating earnings

 

$

159

 

$

185

 

 

 

 

 

 

 

Pretax operating margin

 

20.9

%

23.0

%

Adjusted net pretax operating margin

 

35.8

%

39.1

%

 

16



 

Ameriprise Financial, Inc.

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

 

 

 

Twelve Months Ended
September 30,

 

(in millions, unaudited)

 

2016

 

2015

 

Net income attributable to Ameriprise Financial

 

$

1,271

 

$

1,630

 

Less: Loss from discontinued operations, net of tax

 

 

(1

)

Net income from continuing operations attributable to Ameriprise Financial, as reported

 

1,271

 

1,631

 

Less: Adjustments (1)

 

(154

)

(84

)

Operating earnings

 

1,425

 

1,715

 

Less: Unlocking, net of tax (2)

 

(153

)

27

 

Operating earnings excluding unlocking

 

$

1,578

 

$

1,688

 

 

 

 

 

 

 

Total Ameriprise Financial, Inc. shareholders’ equity

 

$

7,165

 

$

8,017

 

Less: Accumulated other comprehensive income, net of tax

 

478

 

615

 

Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI

 

6,687

 

7,402

 

Less: Equity impacts attributable to the consolidated investment entities

 

62

 

250

 

Operating equity

 

$

6,625

 

$

7,152

 

 

 

 

 

 

 

Return on equity excluding AOCI

 

19.0

%

22.0

%

Operating return on equity excluding AOCI (3)

 

21.5

%

24.0

%

Operating return on equity excluding AOCI and unlocking

 

23.8

%

23.6

%

 


(1)     Adjustments reflect the trailing twelve months’ sum of after-tax net realized investment gains/losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration/restructuring charges; and the impact of consolidating certain investment entities.  After-tax is calculated using the statutory tax rate of 35%.

(2)     After-tax is calculated using the statutory tax rate of 35%.

(3)     Operating return on equity excluding accumulated other comprehensive income (AOCI) is calculated using the trailing twelve months of earnings excluding the after-tax net realized investment gains/losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration/restructuring charges; the impact of consolidating certain investment entities; and discontinued operations in the numerator, and Ameriprise Financial shareholders’ equity excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator.  After-tax is calculated using the statutory tax rate of 35%.

 

17



 

Ameriprise Financial, Inc.
Consolidated GAAP Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Revenues

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,464

 

$

1,465

 

%

Distribution fees

 

455

 

451

 

1

 

Net investment income

 

387

 

321

 

21

 

Premiums

 

374

 

360

 

4

 

Other revenues

 

330

 

296

 

11

 

Total revenues

 

3,010

 

2,893

 

4

 

Banking and deposit interest expense

 

12

 

7

 

(71

)

Total net revenues

 

2,998

 

2,886

 

4

 

Expenses

 

 

 

 

 

 

 

Distribution expenses

 

798

 

806

 

1

 

Interest credited to fixed accounts

 

161

 

171

 

6

 

Benefits, claims, losses and settlement expenses

 

855

 

471

 

(82

)

Amortization of deferred acquisition costs

 

163

 

133

 

(23

)

Interest and debt expense

 

52

 

98

 

47

 

General and administrative expense

 

731

 

744

 

2

 

Total expenses

 

2,760

 

2,423

 

(14

)

Pretax income

 

238

 

463

 

(49

)

Income tax provision

 

23

 

111

 

79

 

Net income

 

215

 

352

 

(39

)

Less: Net income attributable to noncontrolling interests

 

 

(45

)

NM

 

Net income attributable to Ameriprise Financial

 

$

215

 

$

397

 

(46

)

 

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

 

18


(Back To Top)

Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

GRAPHIC

Statistical Supplement Package

(unaudited)

 

Third Quarter 2016

 

1



 

Ameriprise Financial, Inc.

Statistical Supplement Information

Table of Contents

 

 

Page

Ameriprise Financial, Inc.

 

Statistical Supplement Presentation

4

Consolidated GAAP Income Statements

5

Consolidated Operating Results and Highlights

6

Common Share and Capital Summary

8

Segment Summary

10

Advice & Wealth Management Segment

 

Segment Operating Income Statements

12

Segment Metrics

13

Asset Management Segment

 

Segment Operating Income Statements

15

Segment Metrics

16

Global Asset Management Products

17

Retail Fund Performance - Columbia

18

Retail Fund Performance - Threadneedle

19

Annuities Segment

 

Segment Operating Income Statements

21

Segment Metrics

22

Protection Segment

 

Segment Operating Income Statements

24

Segment Metrics

25

Corporate & Other Segment

 

Segment Operating Income Statements

27

Eliminations

 

Operating Income Statements

28

Balance Sheet and Ratings Information

 

Consolidated Balance Sheets

30

Capital and Ratings Information

31

Investments

32

Non-GAAP Financial Information

33

Glossary of Selected Terminology

 

Glossary of Selected Terminology - Segments

34

Glossary of Selected Terminology

35

Exhibit A

 

Disclosed Items

38

Exhibit B

 

Non-GAAP Financial Measure Reconciliations

44

 

2



GRAPHIC

Statistical Supplement Package

(unaudited)

 

Third Quarter 2016

 

Consolidated Results

 

3



 

Ameriprise Financial, Inc.

Statistical Supplement Presentation

Third Quarter 2016

 

Ameriprise Financial, Inc. (“Ameriprise Financial” or “the Company”) prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”). Management believes that operating measures, which exclude net realized investment gains or losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; the market impact on variable annuity guaranteed benefits, net of hedges and the related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration and restructuring charges; income (loss) from discontinued operations; and the impact of consolidating certain investment entities (“CIEs”), best reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis. The Company also uses a number of non-GAAP financial measures to evaluate its financial performance on a basis comparable to that used by some securities analysts and investors. However, these measures are not a substitute for GAAP. Therefore, reconciliations to GAAP measures are provided on page 6 and in Exhibit B “Non-GAAP Financial Measure Reconciliations” on pages 44 and 45.

 

The market impact on variable annuity guaranteed benefits and indexed universal life benefits includes changes in liability values caused by changes in financial market conditions, net of changes in economic hedge values.  The market impact also includes certain valuation adjustments made in accordance with Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820”), including the impact on liability values of discounting projected benefits to reflect a current estimate of RiverSource Life Insurance Company’s nonperformance spread.  Further, the market impact is net of related impacts on DAC, DSIC and unearned revenue amortization as well as a reinsurance accrual for indexed universal life.  The market impact relates to guaranteed minimum accumulation benefits, non-life contingent guaranteed minimum withdrawal benefits and indexed universal life benefits accounted for at fair value as embedded derivatives.

 

Operating earnings is the measure of segment profit or loss management uses to evaluate segment performance.  Operating earnings should not be viewed as a substitute for GAAP income from continuing operations before income tax provision.  Management believes the presentation of segment operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis.

 

In addition, management uses adjusted net pretax operating margin in the Asset Management segment to evaluate segment performance on a basis comparable to other asset managers.  In the Asset Management segment, operating revenues are adjusted to exclude distribution pass through revenues and subadvisory and other pass through revenues, and operating earnings are adjusted to exclude operating net investment income and amortization of intangibles.

 

4



 

Ameriprise Financial, Inc.

Consolidated GAAP Income Statements

Third Quarter 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Year Comparisons

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-Date

 

Qtr Chg - 3Q

 

YTD Chg - 3Q

 

Seq Qtr Chg - 3Q

 

(in millions, except per share amounts, unaudited)

 

3 Qtr 2015

 

4 Qtr 2015

 

1 Qtr 2016

 

2 Qtr 2016

 

3 Qtr 2016

 

2015

 

2016

 

Diff.

 

%

 

Diff.

 

%

 

Diff.

 

%

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,465

 

$

1,499

 

$

1,386

 

$

1,439

 

$

1,464

 

$

4,451

 

$

4,289

 

$

(1

)

 

$

(162

)

(4

)%

$

25

 

2

%

Distribution fees

 

451

 

458

 

435

 

448

 

455

 

1,389

 

1,338

 

4

 

1

%

(51

)

(4

)%

7

 

2

%

Net investment income

 

321

 

460

 

331

 

372

 

387

 

1,228

 

1,090

 

66

 

21

%

(138

)

(11

)%

15

 

4

%

Premiums

 

360

 

374

 

368

 

372

 

374

 

1,081

 

1,114

 

14

 

4

%

33

 

3

%

2

 

1

%

Other revenues

 

296

 

321

 

254

 

248

 

330

 

939

 

832

 

34

 

11

%

(107

)

(11

)%

82

 

33

%

Total revenues

 

2,893

 

3,112

 

2,774

 

2,879

 

3,010

 

9,088

 

8,663

 

117

 

4

%

(425

)

(5

)%

131

 

5

%

Banking and deposit interest expense

 

7

 

9

 

9

 

8

 

12

 

21

 

29

 

5

 

71

%

8

 

38

%

4

 

50

%

Total net revenues

 

2,886

 

3,103

 

2,765

 

2,871

 

2,998

 

9,067

 

8,634

 

112

 

4

%

(433

)

(5

)%

127

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution expenses

 

806

 

816

 

770

 

803

 

798

 

2,460

 

2,371

 

(8

)

(1

)%

(89

)

(4

)%

(5

)

(1

)%

Interest credited to fixed accounts

 

171

 

165

 

146

 

158

 

161

 

503

 

465

 

(10

)

(6

)%

(38

)

(8

)%

3

 

2

%

Benefits, claims, losses and settlement expenses

 

471

 

714

 

482

 

597

 

855

 

1,547

 

1,934

 

384

 

82

%

387

 

25

%

258

 

43

%

Amortization of deferred acquisition costs

 

133

 

52

 

110

 

87

 

163

 

302

 

360

 

30

 

23

%

58

 

19

%

76

 

87

%

Interest and debt expense

 

98

 

116

 

55

 

53

 

52

 

271

 

160

 

(46

)

(47

)%

(111

)

(41

)%

(1

)

(2

)%

General and administrative expense

 

744

 

794

 

727

 

763

 

731

 

2,288

 

2,221

 

(13

)

(2

)%

(67

)

(3

)%

(32

)

(4

)%

Total expenses

 

2,423

 

2,657

 

2,290

 

2,461

 

2,760

 

7,371

 

7,511

 

337

 

14

%

140

 

2

%

299

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

463

 

446

 

475

 

410

 

238

 

1,696

 

1,123

 

(225

)

(49

)%

(573

)

(34

)%

(172

)

(42

)%

Income tax provision

 

111

 

66

 

111

 

75

 

23

 

389

 

209

 

(88

)

(79

)%

(180

)

(46

)%

(52

)

(69

)%

Net income

 

352

 

380

 

364

 

335

 

215

 

1,307

 

914

 

(137

)

(39

)%

(393

)

(30

)%

(120

)

(36

)%

Less: Net income (loss) attributable to noncontrolling interests

 

(45

)

23

 

 

 

 

102

 

 

45

 

#

 

(102

)

#

 

 

 

Net income attributable to Ameriprise Financial

 

$

397

 

$

357

 

$

364

 

$

335

 

$

215

 

$

1,205

 

$

914

 

$

(182

)

(46

)%

$

(291

)

(24

)%

$

(120

)

(36

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income on fixed maturities

 

$

346

 

$

348

 

$

343

 

$

343

 

$

342

 

$

1,055

 

$

1,028

 

$

(4

)

(1

)%

$

(27

)

(3

)%

$

(1

)

 

Realized investment gains (losses)

 

(10

)

(1

)

(16

)

5

 

6

 

5

 

(5

)

16

 

#

 

(10

)

#

 

1

 

20

%

Affordable housing

 

(7

)

7

 

(7

)

(11

)

(17

)

(25

)

(35

)

(10

)

#

 

(10

)

(40

)%

(6

)

(55

)%

Other (including seed money)

 

(10

)

36

 

(17

)

5

 

25

 

32

 

13

 

35

 

#

 

(19

)

(59

)%

20

 

#

 

Consolidated investment entities

 

2

 

70

 

28

 

30

 

31

 

161

 

89

 

29

 

#

 

(72

)

(45

)%

1

 

3

%

Total net investment income

 

$

321

 

$

460

 

$

331

 

$

372

 

$

387

 

$

1,228

 

$

1,090

 

$

66

 

21

%

$

(138

)

(11

)%

$

15

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.20

 

$

2.02

 

$

2.11

 

$

1.99

 

$

1.31

 

$

6.57

 

$

5.43

 

$

(0.89

)

(40

)%

$

(1.14

)

(17

)%

$

(0.68

)

(34

)%

Earnings per diluted share

 

$

2.17

 

$

2.00

 

$

2.09

 

$

1.97

 

$

1.30

 

$

6.48

 

$

5.37

 

$

(0.87

)

(40

)%

$

(1.11

)

(17

)%

$

(0.67

)

(34

)%

Earnings per diluted share growth

 

 

(10.3

)%

0.5

%

(11.7

)%

(40.1

)%

6.4

%

(17.1

)%

(40.1

)%

 

 

(23.5

)%

 

 

(28.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

180.4

 

176.6

 

172.6

 

168.3

 

164.0

 

183.5

 

168.3

 

(16.4

)

(9

)%

(15.2

)

(8

)%

(4.3

)

(3

)%

Effect of potentially dilutive nonqualified stock options and other share-based awards

 

2.3

 

2.3

 

1.8

 

1.8

 

1.8

 

2.5

 

1.8

 

(0.5

)

(22

)%

(0.7

)

(28

)%

 

 

Diluted weighted average common shares outstanding

 

182.7

 

178.9

 

174.4

 

170.1

 

165.8

 

186.0

 

170.1

 

(16.9

)

(9

)%

(15.9

)

(9

)%

(4.3

)

(3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue growth

 

(7.2

)%

0.5

%

(9.4

)%

(8.2

)%

3.9

%

(1.2

)%

(4.8

)%

11.1

%

 

 

(3.6

)%

 

 

12.1

%

 

 

Pretax income margin

 

16.0

%

14.4

%

17.2

%

14.3

%

7.9

%

18.7

%

13.0

%

(8.1

)%

 

 

(5.7

)%

 

 

(6.4

)%

 

 

Effective tax rate

 

24.1

%

14.8

%

23.3

%

18.4

%

9.7

%

23.0

%

18.6

%

(14.4

)%<