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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)  February 1, 2017

 

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 February 1, 2017, Ameriprise Financial, Inc. (the “Company,” “we,” or “our”) issued a press release announcing its financial results for the fourth 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 December 31, 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 February 1, 2017 announcing financial results for the fourth quarter of 2016

 

 

 

Exhibit 99.2

 

Statistical Supplement for the quarterly period ended December 31, 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: February 1, 2017

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

Fourth Quarter and Full Year 2016 Results

 

Fourth quarter 2016 net income(1) per diluted share was $2.46

Operating EPS was $2.73

 

Full Year 2016 net income(1) per diluted share was $7.81

Operating EPS was $8.48

Excluding annual unlocking(2), operating EPS was $9.40

 

Fourth quarter 2016 return on equity excluding AOCI was 20.4 percent

Operating ROE excluding AOCI was 22.2 percent

Excluding annual unlocking(2), operating ROE excluding AOCI was 24.6 percent

 

MINNEAPOLIS — February 1, 2017 — Ameriprise Financial, Inc. (NYSE: AMP) today reported fourth quarter 2016 net income(1) of $400 million, or $2.46 per diluted share. Operating earnings were $443 million, with operating earnings per diluted share of $2.73.

 

GAAP Results — Fourth Quarter

 

Net revenues of $3.1 billion decreased 1 percent or $41 million from last year. The decrease in revenue related to the deconsolidation of certain collateralized loan obligations and property funds was offset by the increase in the market impact of hedges on investments. Operating net revenue decreased $41 million or 1 percent versus last year as described below.

 

Expenses of $2.6 billion decreased 2 percent as a result of lower general and administrative expenses and the deconsolidation of certain investment entities.

 

Operating Results — Fourth Quarter

 

Operating net revenues of $2.9 billion decreased 1 percent or $41 million versus last year. Strong net revenue growth in Advice & Wealth Management from growth in client assets was offset by lower Asset Management revenues relating to outflows, foreign exchange translation and elevated performance fees a year ago.

 

Operating expenses of $2.4 billion decreased 1 percent. General and administrative expense declined 4 percent, equally driven by continued focus on managing underlying operating expenses and lower foreign exchange rates.

 

The company continued to deliver a strong return to shareholders through share repurchases and dividends of $523 million in the quarter and $2.2 billion for the year.

 


(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 conducted in the third quarter.

 

1



 

“Ameriprise had a strong fourth quarter and a good year in light of the operating environment,” said Jim Cracchiolo, chairman and chief executive officer. “Our fee-based businesses continued to generate strong profitability. Advice & Wealth Management in particular led the way with a record high for retail client assets, strong net inflows into investment advisory accounts, as well as very good advisor productivity.”

 

“Our capital management actions continue to reflect the strength of our financial foundation and significant free cash flow generation, as well as our consistent investment in the business and approach to capital return. We delivered a differentiated operating return on equity of 22.2 percent at year end, or 24.6 percent when excluding annual unlocking. I am pleased to add that 2016 was the sixth consecutive year where we returned more than 100 percent of our operating earnings to shareholders while consistently investing in the business.”

 

Ameriprise Financial, Inc.

Fourth Quarter and Full Year Summary

 

 

 

Quarter Ended
December 31,

 

%
Better/

 

Per Diluted Share
Quarter Ended
December 31,

 

%
Better/

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

(Worse)

 

2016

 

2015

 

(Worse)

 

Net income attributable to Ameriprise Financial

 

$

400

 

$

357

 

12

%

$

2.46

 

$

2.00

 

23

%

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

 

43

 

84

 

 

 

0.27

 

0.47

 

 

 

Operating earnings (2)

 

$

443

 

$

441

 

%

$

2.73

 

$

2.47

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

160.4

 

176.6

 

 

 

 

 

 

 

 

 

Diluted

 

162.4

 

178.9

 

 

 

 

 

 

 

 

 

 


(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.

 

Results in the quarter included a number of notable items that are discussed in the segment commentary and detailed in a table on page 13.

 

Taxes

 

The operating effective tax rate in the quarter was 17.2 percent and included an unanticipated benefit from tax audit settlements related to the 1997 to 2011 federal returns. Excluding the tax settlements, the effective tax rate was 22.2 percent in the quarter.

 

2



 

Fourth Quarter 2016 Highlights

 

Ameriprise is a diversified financial services leader with a strong financial foundation

 

·                  Total assets under management and administration increased to $787 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.

 

·                  The company continued its shift to less capital intensive businesses with 69 percent of pretax operating earnings from Advice & Wealth Management and Asset Management.

 

·                  The company continued to deliver a differentiated level of capital return to shareholders while continuing to invest in the business. In 2016, the company returned over 150 percent of operating earnings to shareholders, which included dividends and repurchasing $1.7 billion of shares of its common stock.

 

·                  In the quarter, the company repurchased 3.8 million shares of common stock for $402 million and paid $121 million in quarterly dividends. Excess capital was approximately $2 billion at year end.

 

Leading U.S. wealth manager with a growing base of fee-based assets and expanding margins

 

·                  Advice & Wealth Management advisor client assets increased to a record $479 billion, reflecting continued strength in fee-based investment advisory (wrap) net inflows, with net inflows of $3.3 billion in the quarter bringing platform AUM to $201 billion, one of the largest in the industry.

 

·                  Ameriprise ended the year with approximately 9,700 advisors and maintains strong advisor retention as well as ongoing experienced advisor recruiting. The company added 77 experienced advisors in the quarter.

 

·                  On a trailing 12-month basis, operating net revenue per advisor increased 1 percent to $518,000 reflecting higher advisory fee revenue from growth in advisory assets.

 

·                  For the quarter, pretax operating margin in Advice & Wealth Management increased to 19.3 percent from 16.6 percent a year ago. For the full year, pretax operating margin increased to 18.1 percent from 17.1 percent in 2015.

 

High-quality Annuities and Protection businesses serving the needs of our wealth management clients

 

·                  Variable annuities, which provide an important solution for income in retirement for our clients, had policyholder account balances of $75 billion with sales of $1.1 billion in the quarter.

 

·                  Life insurance in force remained level at $196 billion.

 

Scalable global asset management platform with broad capabilities

 

·                  Asset Management segment AUM declined to $454 billion reflecting an unfavorable foreign exchange translation as market appreciation offset net outflows.

 

·                  At year end, the company had 112 four- and five-star Morningstar rated equity, fixed income and multi-asset funds.

 

3



 

Values-based, client-focused firm

 

·                  Ameriprise ranked #1 in the investment industry in Temkin Group’s 2016 Net Promoter Score Benchmark Study.

 

·                  Ameriprise is a top performer in customer ratings based on “unbiased and puts my interest first” in the investment firm category in the Hearts and Wallets 2016 Wants and Pricing survey.

 

·                  For the 11th consecutive year, Ameriprise received a 100% score on the Human Rights Campaign Corporate Equality Index.

 

·                  Nearly 10,000 Ameriprise employees, advisors, and clients volunteered to support Americans struggling with hunger as part of the company’s National Day of Service.

 

4



 

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Operating Results

 

 

 

Quarter Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Advice & Wealth Management

 

 

 

 

 

 

 

Net revenues

 

$

1,316

 

$

1,266

 

4

%

Expenses

 

1,062

 

1,056

 

(1

)%

Pretax operating earnings

 

$

254

 

$

210

 

21

%

Pretax operating margin

 

19.3

%

16.6

%

 

 

 

 

 

Quarter Ended December 31,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Retail client assets (billions)

 

$

479

 

$

447

 

7

%

Wrap net flows (billions)

 

$

3.3

 

$

2.1

 

58

%

Brokerage cash balance (billions)

 

$

26.8

 

$

23.5

 

14

%

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

 

$

518

 

$

514

 

1

%

 

Advice & Wealth Management pretax operating earnings increased 21 percent to $254 million driven by asset growth, higher earnings on cash balances and well controlled expenses. This resulted in strong margin expansion with fourth quarter 2016 pretax operating margin at a record 19.3 percent, up from 16.6 percent a year ago. For the full year, pretax operating margin increased to 18.1 percent from 17.1 percent.

 

Operating net revenues of $1.3 billion increased 4 percent from inflows into wrap accounts and higher earnings on cash balances. Client asset growth remains good as the company continues to experience a shift reflecting higher growth rates in fee-based wrap assets compared to brokerage.

 

Operating expenses increased 1 percent to $1.1 billion primarily from higher distribution expenses related to growth in wrap accounts. General and administrative expenses were down 5 percent compared to a year ago, reflecting strong expense controls.

 

Total retail client assets increased to a record $479 billion, driven by client net inflows, client acquisition and market appreciation. Wrap net inflows were $3.3 billion in the quarter, which contributed to an 11 percent year-over-year increase in balances to $201 billion. Client cash balances increased 14 percent to a record $26.8 billion and certificates balances grew to $5.9 billion. Total advisors were 9,675 reflecting strong retention and another successful recruiting quarter, with 77 experienced advisors moving their practices to Ameriprise. Operating net revenue per advisor increased 1 percent on a trailing 12-month basis to $518,000.

 

5



 

Ameriprise Financial, Inc.

Asset Management Segment Operating Results

 

 

 

Quarter Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Asset Management

 

 

 

 

 

 

 

Net revenues

 

$

761

 

$

833

 

(9

)%

Expenses

 

592

 

640

 

8

%

Pretax operating earnings

 

$

169

 

$

193

 

(12

)%

Pretax operating margin

 

22.2

%

23.2

%

 

 

Adjusted net pretax operating margin (1)

 

36.5

%

36.3

%

 

 

 

 

 

Quarter Ended December 31,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Item included in operating earnings:

 

 

 

 

 

 

 

Net performance fees

 

$

6

 

$

32

 

(81

)%

Total segment AUM (billions)

 

$

454

 

$

472

 

(4

)%

 

 

 

 

 

 

 

 

Net Flows (billions)

 

 

 

 

 

 

 

Global Retail net new flows, excl. former parent flows

 

$

(3.9

)

$

(1.4

)

NM

 

Reinvested dividends

 

4.4

 

8.6

 

(49

)%

Global Retail net flows, excl. former parent flows

 

0.5

 

7.2

 

(93

)%

Global Institutional net flows, excl. former parent flows

 

(0.7

)

(1.2

)

45

%

Former parent company related net new flows

 

(1.9

)

(6.7

)

72

%

Total segment net flows

 

$

(2.1

)

$

(0.7

)

NM

 

 


(1)     See reconciliation on page 16

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

 

Asset Management reported solid pretax operating earnings of $169 million. Results included a benefit from market appreciation that was more than offset by the cumulative impact of net outflows, as well as lower performance fees and CLO liquidation benefits than a year ago. Fourth quarter margin reflected effective expense management—pretax operating margin was 22.2 percent compared to 23.2 percent a year ago. Adjusted net pretax operating margin remains competitive at 36.5 percent compared to 36.3 percent a year ago.

 

Adjusting for $18 billion of unfavorable foreign exchange translation, AUM was unchanged year-over-year at $454 billion.

 

Operating net revenues declined to $761 million compared to a year ago, reflecting the impact of lower asset levels and higher performance fees and CLO liquidation benefits in the prior year period.

 

Operating expenses of $592 million declined 8 percent due to well managed general and administrative expenses, lower distribution expenses and the impact of foreign exchange rates.

 

Net outflows were $2.1 billion in the quarter. Retail net inflows, excluding former parent flows, were $500 million. Global retail net flows included $4.4 billion of reinvested dividends, elevated outflows in North America consistent with industry outflows for active strategies and lower retail activity among UK and European investors post the Brexit vote. Global institutional outflows, excluding former parent, were $700 million reflecting a slowdown in funding of global institutional mandates in the quarter, which is expected to improve in the first half of 2017. Former parent company related outflows were $1.9 billion in the quarter.

 

6



 

Ameriprise Financial, Inc.

Annuities Segment Operating Results

 

 

 

Quarter Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Annuities

 

 

 

 

 

 

 

Net revenues

 

$

617

 

$

627

 

(2

)%

Expenses

 

490

 

475

 

(3

)%

Pretax operating earnings

 

$

127

 

$

152

 

(16

)%

 

 

 

 

 

 

 

 

Variable annuity pretax operating earnings

 

$

107

 

$

129

 

(17

)%

Fixed annuity pretax operating earnings

 

20

 

23

 

(13

)%

Total pretax operating earnings

 

$

127

 

$

152

 

(16

)%

 

 

 

Quarter Ended December 31,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Item included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC and DSIC (mean reversion)

 

$

4

 

$

6

 

(33

)%

 

 

 

 

 

 

 

 

Variable annuity ending account balances (billions)

 

$

74.8

 

$

74.2

 

1

%

Variable annuity net flows (millions)

 

$

(732

)

$

(245

)

NM

 

Fixed annuity ending account balances (billions)

 

$

10.0

 

$

10.7

 

(6

)%

Fixed annuity net flows (millions)

 

$

(251

)

$

(296

)

15

%

 

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

 

Annuities pretax operating earnings were $127 million compared to $152 million a year ago, primarily reflecting the ongoing impacts of assumption changes made in the third quarter of 2016 unlocking for variable annuities as well as lower fixed annuity earnings.

 

Variable annuity operating earnings were $107 million compared to $129 million a year ago. Results included a net negative impact that had been anticipated from changes in assumptions in the third quarter unlocking process. Variable annuity cash sales declined to $1.1 billion in the quarter, reflecting recent industry trends. Account balances increased 1 percent from market appreciation, partially offset by net outflows.

 

Fixed annuity operating earnings decreased to $20 million from $23 million reflecting fixed annuity spread compression from continued low interest rates and lower account balances. Account balances declined 6 percent from limited new product sales and lapses of older policies.

 

7



 

Ameriprise Financial, Inc.

Protection Segment Operating Results

 

 

 

Quarter Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Protection

 

 

 

 

 

 

 

Net revenues

 

$

615

 

$

608

 

1

%

Expenses

 

556

 

573

 

3

%

Pretax operating earnings

 

$

59

 

$

35

 

69

%

 

 

 

Quarter Ended December 31,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Items included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC (mean reversion)

 

$

 

$

 

NM

 

Auto & Home reserve changes

 

12

 

(57

)

NM

 

Auto & Home catastrophe losses

 

(15

)

(8

)

(88

)%

Long term care adjustments

 

(10

)

 

NM

 

Life insurance assumption change

 

 

28

 

NM

 

Total protection impact

 

$

(13

)

$

(37

)

65

%

 

 

 

 

 

 

 

 

Life insurance in force (billions)

 

$

196

 

$

196

 

%

VUL/UL ending account balances (billions)

 

$

11.5

 

$

11.2

 

3

%

Auto & Home policies in force (thousands)

 

943

 

957

 

(1

)%

 

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

 

Protection pretax operating earnings were $59 million compared to $35 million a year ago.

 

Life and Health insurance earnings were lower than a year ago as the year ago period included a $28 million favorable life insurance assumption change and the current period included $10 million of unfavorable adjustments. Underlying results across the life and health products remain solid with claims experience within actuarial expectations. VUL/UL cash sales declined to $88 million and VUL/UL account balances increased 3 percent to $11.5 billion primarily from market appreciation.

 

Auto & Home earnings improved substantially in the quarter from improved loss performance trends that reflected changes made to pricing, underwriting and claims, as evidenced by an adjustment in reserves.

 

8



 

Ameriprise Financial, Inc.

Corporate & Other Segment Operating Results

 

 

 

Quarter Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Corporate & Other

 

 

 

 

 

 

 

Net revenues

 

$

(8

)

$

15

 

NM

 

Expenses

 

66

 

53

 

(25

)%

Pretax operating loss

 

$

(74

)

$

(38

)

(95

)%

 

 

 

Quarter Ended December 31,

 

% Better/

 

 

 

2016

 

2015

 

(Worse)

 

Items included in operating earnings:

 

 

 

 

 

 

 

DOL planning and implementation expenses

 

$

(11

)

$

 

NM

 

Severance expense

 

(12

)

 

NM

 

Total corporate impact

 

$

(23

)

$

 

NM

 

 

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

 

Corporate & Other pretax operating loss was $74 million for the quarter compared to a $38 million loss a year ago. Results in the quarter included $11 million of incremental expenses related to the planning and implementation of the Department of Labor’s fiduciary standard and $12 million related to severance expense reflecting the company’s expense discipline.

 

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.

 

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

 

9



 

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 expected funding of mandates in the first half of 2017;

 

·                  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 or modified 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;

 

·                  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;

 

10



 

·                  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 and the uncertain regulatory environment in the U.S. after the recent U.S. election), 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”

 

11



 

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 September 30, 2016, 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 Annual Report on Form 10-K for the year ended December 31, 2016. For information about Ameriprise Financial entities, please refer to the Fourth 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.

 

12



 

Ameriprise Financial, Inc.

After-tax(1) Items Included in Operating Earnings

 

(in millions, except per share amounts, unaudited)

 

Quarter Ended
December 31, 2016

 

Per Diluted Share
Quarter Ended
December 31, 2016

 

Market impact on DAC/DSIC

 

$

3

 

$

0.02

 

Auto & Home catastrophe losses

 

$

(10

)

$

(0.06

)

Auto & Home reserve changes

 

$

8

 

$

0.05

 

Long term care adjustments

 

$

(7

)

$

(0.04

)

DOL planning and implementation expenses

 

$

(7

)

$

(0.04

)

Severance expense

 

$

(8

)

$

(0.05

)

Tax settlement

 

$

27

 

$

0.17

 

 


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

 

13



 

Reconciliation Tables

 

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

 

 

 

Quarter Ended
December 31,

 

Per Diluted Share
Quarter Ended
December 31,

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

2016

 

2015

 

Net income attributable to Ameriprise Financial

 

$

400

 

$

357

 

$

2.46

 

$

2.00

 

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

 

(1

)

 

(0.01

)

 

Add: Integration/restructuring charges (1)

 

 

1

 

 

0.01

 

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

 

138

 

139

 

0.85

 

0.77

 

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

 

(5

)

(1

)

(0.03

)

(0.01

)

Add: Market impact of hedges on investments (1)

 

(57

)

(11

)

(0.35

)

(0.06

)

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

 

(11

)

1

 

(0.07

)

0.01

 

Add: Tax effect of adjustments (2)

 

(23

)

(45

)

(0.14

)

(0.25

)

Operating earnings

 

$

443

 

$

441

 

$

2.73

 

$

2.47

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

160.4

 

176.6

 

 

 

 

 

Diluted

 

162.4

 

178.9

 

 

 

 

 

 


(1)     Pretax operating adjustment

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

 

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

 

 

 

Year Ended
December 31,

 

Per Diluted Share
Year Ended
December 31,

 

(in millions, except per share amounts, unaudited)

 

2016

 

2015

 

2016

 

2015

 

Net income attributable to Ameriprise Financial

 

$

1,314

 

$

1,562

 

$

7.81

 

$

8.48

 

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

 

(2

)

 

(0.01

)

 

Add: Integration/restructuring charges (1)

 

 

5

 

 

0.03

 

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

 

216

 

214

 

1.28

 

1.16

 

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

 

(36

)

1

 

(0.21

)

0.01

 

Add: Market impact of hedges on investments (1)

 

(3

)

21

 

(0.02

)

0.11

 

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

 

(6

)

(4

)

(0.03

)

(0.02

)

Add: Tax effect of adjustments (2)

 

(60

)

(83

)

(0.36

)

(0.45

)

Operating earnings

 

1,427

 

1,716

 

8.48

 

9.32

 

Less: Pretax impact of unlocking

 

(235

)

42

 

(1.40

)

0.23

 

Less: Tax effect of unlocking (2)

 

82

 

(15

)

0.48

 

(0.08

)

Operating earnings excluding unlocking

 

$

1,580

 

$

1,689

 

$

9.40

 

$

9.17

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

166.3

 

181.7

 

 

 

 

 

Diluted

 

168.2

 

184.2

 

 

 

 

 

 


(1)     Pretax operating adjustment

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

 

14



 

Ameriprise Financial, Inc.

Reconciliation Table: Total Net Revenues

 

 

 

Quarter Ended
December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

Total net revenues

 

$

3,062

 

$

3,103

 

Less: CIEs revenue

 

51

 

113

 

Less: Net realized investment gains (losses)

 

11

 

(1

)

Less: Market impact on indexed universal life benefits

 

6

 

2

 

Less: Market impact of hedges on investments

 

57

 

11

 

Operating total net revenues

 

$

2,937

 

$

2,978

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Total Expenses

 

 

 

Quarter Ended
December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

Total expenses

 

$

2,593

 

$

2,657

 

Less: CIEs expenses

 

52

 

90

 

Less: Integration/restructuring charges

 

 

1

 

Less: Market impact on variable annuity guaranteed benefits

 

138

 

139

 

Less: Market impact on indexed universal life benefits

 

1

 

1

 

Operating expenses

 

$

2,402

 

$

2,426

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Pretax Operating Earnings

 

 

 

Quarter Ended
December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

Operating total net revenues

 

$

2,937

 

$

2,978

 

Operating expenses

 

2,402

 

2,426

 

Pretax operating earnings

 

$

535

 

$

552

 

 

 

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

 

 

 

Quarter Ended December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

General and administrative expense

 

$

756

 

$

794

 

Less: CIEs expenses

 

 

8

 

Less: Integration/restructuring charges

 

 

1

 

Operating general and administrative expense

 

$

756

 

$

785

 

 

15



 

Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate

 

 

 

Quarter Ended December 31, 2016

 

(in millions, unaudited)

 

GAAP

 

Operating

 

Pretax income

 

$

469

 

$

535

 

Income tax provision

 

$

69

 

$

92

 

Less: Tax settlement

 

(27

)

(27

)

Income tax provision excluding tax settlement

 

$

96

 

$

119

 

Effective tax rate

 

14.5

%

17.2

%

Effective tax rate excluding tax settlement

 

20.5

%

22.2

%

 

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Adjusted Net Pretax Operating Margin

 

 

 

Quarter Ended December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

Operating total net revenues

 

$

761

 

$

833

 

Less: Distribution pass through revenues

 

204

 

211

 

Less: Subadvisory and other pass through revenues

 

94

 

107

 

Adjusted operating revenues

 

$

463

 

$

515

 

 

 

 

 

 

 

Pretax operating earnings

 

$

169

 

$

193

 

Less: Operating net investment income

 

5

 

12

 

Add: Amortization of intangibles

 

5

 

6

 

Adjusted operating earnings

 

$

169

 

$

187

 

 

 

 

 

 

 

Pretax operating margin

 

22.2

%

23.2

%

Adjusted net pretax operating margin

 

36.5

%

36.3

%

 

16



 

Ameriprise Financial, Inc.

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

 

 

 

Twelve Months Ended
December 31,

 

(in millions, unaudited)

 

2016

 

2015

 

Net income attributable to Ameriprise Financial

 

$

1,314

 

$

1,562

 

Less: Adjustments (1)

 

(113

)

(154

)

Operating earnings

 

1,427

 

$

1,716

 

Less: Unlocking, net of tax (2)

 

(153

)

27

 

Operating earnings excluding unlocking

 

$

1,580

 

$

1,689

 

 

 

 

 

 

 

Total Ameriprise Financial, Inc. shareholders’ equity

 

$

6,877

 

$

7,782

 

Less: Accumulated other comprehensive income, net of tax

 

426

 

516

 

Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI

 

6,451

 

7,266

 

Less: Equity impacts attributable to the consolidated investment entities

 

27

 

216

 

Operating equity

 

$

6,424

 

$

7,050

 

 

 

 

 

 

 

Return on equity excluding AOCI

 

20.4

%

21.5

%

Operating return on equity excluding AOCI (3)

 

22.2

%

24.3

%

Operating return on equity excluding AOCI and unlocking

 

24.6

%

24.0

%

 


(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 December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Revenues

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,489

 

$

1,499

 

(1

)%

Distribution fees

 

457

 

458

 

 

Net investment income

 

486

 

460

 

6

 

Premiums

 

377

 

374

 

1

 

Other revenues

 

263

 

321

 

(18

)

Total revenues

 

3,072

 

3,112

 

(1

)

Banking and deposit interest expense

 

10

 

9

 

(11

)

Total net revenues

 

3,062

 

3,103

 

(1

)

Expenses

 

 

 

 

 

 

 

Distribution expenses

 

831

 

816

 

(2

)

Interest credited to fixed accounts

 

158

 

165

 

4

 

Benefits, claims, losses and settlement expenses

 

712

 

714

 

 

Amortization of deferred acquisition costs

 

55

 

52

 

(6

)

Interest and debt expense

 

81

 

116

 

30

 

General and administrative expense

 

756

 

794

 

5

 

Total expenses

 

2,593

 

2,657

 

2

 

Pretax income

 

469

 

446

 

5

 

Income tax provision

 

69

 

66

 

(5

)

Net income

 

400

 

380

 

5

 

Less: Net income attributable to noncontrolling interests

 

 

23

 

NM

 

Net income attributable to Ameriprise Financial

 

$

400

 

$

357

 

12

 

 

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

 

18



 

Ameriprise Financial, Inc.

Consolidated GAAP Results

 

 

 

Year Ended December 31,

 

% Better/

 

(in millions, unaudited)

 

2016

 

2015

 

(Worse)

 

Revenues

 

 

 

 

 

 

 

Management and financial advice fees

 

$

5,778

 

$

5,950

 

(3

)%

Distribution fees

 

1,795

 

1,847

 

(3

)

Net investment income

 

1,576

 

1,688

 

(7

)

Premiums

 

1,491

 

1,455

 

2

 

Other revenues

 

1,095

 

1,260

 

(13

)

Total revenues

 

11,735

 

12,200

 

(4

)

Banking and deposit interest expense

 

39

 

30

 

(30

)

Total net revenues

 

11,696

 

12,170

 

(4

)

Expenses

 

 

 

 

 

 

 

Distribution expenses

 

3,202

 

3,276

 

2

 

Interest credited to fixed accounts

 

623

 

668

 

7

 

Benefits, claims, losses and settlement expenses

 

2,646

 

2,261

 

(17

)

Amortization of deferred acquisition costs

 

415

 

354

 

(17

)

Interest and debt expense

 

241

 

387

 

38

 

General and administrative expense

 

2,977

 

3,082

 

3

 

Total expenses

 

10,104

 

10,028

 

(1

)

Pretax income

 

1,592

 

2,142

 

(26

)

Income tax provision

 

278

 

455

 

39

 

Net income

 

1,314

 

1,687

 

(22

)

Less: Net income attributable to noncontrolling interests

 

 

125

 

NM

 

Net income attributable to Ameriprise Financial

 

$

1,314

 

$

1,562

 

(16

)

 

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

 

19


(Back To Top)

Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

 

 

Statistical Supplement Package

(unaudited)

 

Fourth 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



 

 

Statistical Supplement Package

(unaudited)

 

Fourth Quarter 2016

 

Consolidated Results

 

3



 

Ameriprise Financial, Inc.

Statistical Supplement Presentation

Fourth 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

Fourth Quarter 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Year Comparisons

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-Date

 

Qtr Chg - 4Q

 

YTD Chg - 4Q

 

Seq Qtr Chg - 4Q

 

(in millions, except per share amounts, unaudited)

 

4 Qtr 2015

 

1 Qtr 2016

 

2 Qtr 2016

 

3 Qtr 2016

 

4 Qtr 2016

 

2015

 

2016

 

Diff.

 

%

 

Diff.

 

%

 

Diff.

 

%

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,499

 

$

1,386

 

$

1,439

 

$

1,464

 

$

1,489

 

$

5,950

 

$

5,778

 

$

(10

)

(1

)%

$

(172

)

(3

)%

$

25

 

2

%

Distribution fees

 

458

 

435

 

448

 

455

 

457

 

1,847

 

1,795

 

(1

)

 

(52

)

(3

)%

2

 

 

Net investment income

 

460

 

331

 

372

 

387

 

486

 

1,688

 

1,576

 

26

 

6

%

(112

)

(7

)%

99

 

26

%

Premiums

 

374

 

368

 

372

 

374

 

377

 

1,455

 

1,491

 

3

 

1

%

36

 

2

%

3

 

1

%

Other revenues

 

321

 

254

 

248

 

330

 

263

 

1,260

 

1,095

 

(58

)

(18

)%

(165

)

(13

)%

(67

)

(20

)%

Total revenues

 

3,112

 

2,774

 

2,879

 

3,010

 

3,072

 

12,200

 

11,735

 

(40

)

(1

)%

(465

)

(4

)%

62

 

2

%

Banking and deposit interest expense

 

9

 

9

 

8

 

12

 

10

 

30

 

39

 

1

 

11

%

9

 

30

%

(2

)

(17

)%

Total net revenues

 

3,103

 

2,765

 

2,871

 

2,998

 

3,062

 

12,170

 

11,696

 

(41

)

(1

)%

(474

)

(4

)%

64

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution expenses

 

816

 

770

 

803

 

798

 

831

 

3,276

 

3,202

 

15

 

2

%

(74

)

(2

)%

33

 

4

%

Interest credited to fixed accounts

 

165

 

146

 

158

 

161

 

158

 

668

 

623

 

(7

)

(4

)%

(45

)

(7

)%

(3

)

(2

)%

Benefits, claims, losses and settlement expenses

 

714

 

482

 

597

 

855

 

712

 

2,261

 

2,646

 

(2

)

 

385

 

17

%

(143

)

(17

)%

Amortization of deferred acquisition costs

 

52

 

110

 

87

 

163

 

55

 

354

 

415

 

3

 

6

%

61

 

17

%

(108

)

(66

)%

Interest and debt expense

 

116

 

55

 

53

 

52

 

81

 

387

 

241

 

(35

)

(30

)%

(146

)

(38

)%

29

 

56

%

General and administrative expense

 

794

 

727

 

763

 

731

 

756

 

3,082

 

2,977

 

(38

)

(5

)%

(105

)

(3

)%

25

 

3

%

Total expenses

 

2,657

 

2,290

 

2,461

 

2,760

 

2,593

 

10,028

 

10,104

 

(64

)

(2

)%

76

 

1

%

(167

)

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

446

 

475

 

410

 

238

 

469

 

2,142

 

1,592

 

23

 

5

%

(550

)

(26

)%

231

 

97

%

Income tax provision

 

66

 

111

 

75

 

23

 

69

 

455

 

278

 

3

 

5

%

(177

)

(39

)%

46

 

#

 

Net income

 

380

 

364

 

335

 

215

 

400

 

1,687

 

1,314

 

20

 

5

%

(373

)

(22

)%

185

 

86

%

Less: Net income (loss) attributable to noncontrolling interests

 

23

 

 

 

 

 

125

 

 

(23

)

#

 

(125

)

#

 

 

 

Net income attributable to Ameriprise Financial

 

$

357

 

$

364

 

$

335

 

$

215

 

$

400

 

$

1,562

 

$

1,314

 

$

43

 

12

%

$

(248

)

(16

)%

$

185

 

86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income on fixed maturities

 

$

348

 

$

343

 

$

343

 

$

342

 

$

340

 

$

1,403

 

$

1,368

 

$

(8

)

(2

)%

$

(35

)

(2

)%

$

(2

)

(1

)%

Realized investment gains (losses)

 

(1

)

(16

)

5

 

6

 

11

 

4

 

6

 

12

 

#

 

2

 

50

%

5

 

83

%

Affordable housing

 

7

 

(7

)

(11

)

(17

)

(9

)

(18

)

(44

)

(16

)

#

 

(26

)

#

 

8

 

47

%

Other (including seed money)

 

36

 

(17

)

5

 

25

 

78

 

68

 

91

 

42

 

#

 

23

 

34

%

53

 

#

 

Consolidated investment entities

 

70

 

28

 

30

 

31

 

66

 

231

 

155

 

(4

)

(6

)%

(76

)

(33

)%

35

 

#

 

Total net investment income

 

$

460

 

$

331

 

$

372

 

$

387

 

$

486

 

$

1,688

 

$

1,576

 

$

26

 

6

%

$

(112

)

(7

)%

$

99

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.02

 

$

2.11

 

$

1.99

 

$

1.31

 

$

2.49

 

$

8.60

 

$

7.90

 

$

0.47

 

23

%

$

(0.70

)

(8

)%

$

1.18

 

90

%

Earnings per diluted share

 

$

2.00

 

$

2.09

 

$

1.97

 

$

1.30

 

$

2.46

 

$

8.48

 

$

7.81

 

$

0.46

 

23

%

$

(0.67

)

(8

)%

$

1.16

 

89

%

Earnings per diluted share growth

 

(10.3

)%

0.5

%

(11.7

)%

(40.1

)%

23.0

%

2.0

%

(7.9

)%

33.3

%

 

 

(9.9

)%

 

 

63.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

176.6

 

172.6

 

168.3

 

164.0

 

160.4

 

181.7

 

166.3

 

(16.2

)

(9

)%

(15.4

)

(8

)%

(3.6

)

(2

)%

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

 

2.3

 

1.8

 

1.8

 

1.8

 

2.0

 

2.5

 

1.9

 

(0.3

)

(13

)%

(0.6

)

(24

)%

0.2

 

11

%

Diluted weighted average common shares outstanding

 

178.9

 

174.4

 

170.1

 

165.8

 

162.4

 

184.2

 

168.2

 

(16.5

)

(9

)%

(16.0

)

(9

)%

(3.4

)

(2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metrics