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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) October 24, 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 



 

Item 2.02                   Results of Operations and Financial Condition.

 

On October 24, 2017, Ameriprise Financial, Inc. (the “Company,” “we,” or “our”) issued a press release announcing its financial results for the third quarter of 2017.  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, 2017.

 

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 2017 and 2016 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; basic operating earnings per share; 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; total equity excluding AOCI; total equity excluding CIEs; total equity excluding CIEs and AOCI; 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 24, 2017 announcing financial results for the third quarter of 2017

 

 

 

Exhibit 99.2

 

Statistical Supplement for the quarterly period ended September 30, 2017

 

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 24, 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

Third Quarter 2017 Results

Third quarter 2017 net income per diluted share was a record $3.24

Operating EPS was a record $3.53

 

Third quarter 2017 return on equity excluding AOCI was 28.1 percent

Operating ROE excluding AOCI was 30.8 percent

 

Excluding annual unlocking(1), operating EPS was $3.12

Operating ROE excluding AOCI was 29.8 percent

 

MINNEAPOLIS — October 24, 2017 — Ameriprise Financial, Inc. (NYSE: AMP) today reported third quarter 2017 net income of $503 million, up $288 million compared to a year ago, or $3.24 per diluted share, up $1.94. Operating earnings were $548 million, up $321 million compared to a year ago, with operating earnings per diluted share of $3.53, up $2.16. Excluding the non-cash impact of annual unlocking(1) in both periods, operating earnings were up 27 percent to $484 million in the quarter and operating earnings per diluted share increased 36 percent to $3.12.

 

GAAP Results — Third quarter

 

Net revenues were $3.0 billion driven by strong growth in Advice & Wealth Management that was more than offset by impacts from unlocking and 12b-1 fees. Normalizing for those items, net revenues increased 5 percent due to a strong increase in net revenue in Advice & Wealth Management from growth in client assets.

 

Expenses of $2.4 billion decreased 15 percent, or $407 million, from a year ago, reflecting the year-over-year benefit from annual unlocking, partially offset by increased distribution expenses from increased advisor productivity. General and administrative expenses increased 3 percent.

 

Operating Results — Third quarter

 

Operating net revenue increased 6 percent to $3.0 billion after normalizing for the net impacts of unlocking and 12b-1 fees. Advice & Wealth Management net revenues increased 14 percent driven by growth in client assets.

 

Operating expenses of $2.3 billion decreased 16 percent, or $428 million, from a year ago, largely due to unlocking impacts. General and administrative expenses increased 3 percent reflecting the timing of accruals for performance-related compensation.

 

The company continued to deliver a strong return to shareholders through share repurchases and dividends of $462 million in the quarter.

 

“Ameriprise delivered a record third quarter driven by significant momentum in our Advice & Wealth Management business and asset growth across the firm,” said Jim Cracchiolo, chairman and chief executive officer.

 


(1)                  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



 

“We reported new highs in retail client flows, assets and advisor productivity, and for the sixth consecutive quarter, increased client net inflows into fee-based investment advisory accounts. We’re serving more clients in our target markets of the affluent and mass affluent, as well as attracting quality advisors to Ameriprise.

 

“In Asset Management, we’re consistently delivering strong investment performance for clients while managing industry change and generating competitive financial results.

 

“We’re benefiting from our scale and effective expense management and investing for near-and long-term growth. We’re also consistently returning capital to shareholders through dividends and share repurchases and achieved a new high for return on equity at nearly 30 percent.”

 

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)

 

2017

 

2016

 

(Worse)

 

2017

 

2016

 

(Worse)

 

GAAP net income

 

$

503

 

$

215

 

NM

 

$

3.24

 

$

1.30

 

NM

 

Operating earnings (1) 
(see reconciliation on page 13)

 

$

548

 

$

227

 

NM

 

$

3.53

 

$

1.37

 

NM

 

Less: annual unlocking impact, net of tax (2)

 

64

 

(153

)

 

 

0.41

 

(0.92

)

 

 

Operating earnings, excluding annual unlocking

 

$

484

 

$

380

 

27

%

$

3.12

 

$

2.29

 

36

%

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

153.0

 

164.0

 

 

 

 

 

 

 

 

 

Diluted

 

155.4

 

165.8

 

 

 

 

 

 

 

 

 

 


(1)                  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.

 

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

 

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

 

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.

 

Operating results in the quarter included certain notable items that are discussed in the segment commentary.

 

2



 

Third Quarter 2017 Highlights

 

Ameriprise is transforming its business mix

 

·                  Total assets under management and administration increased 9 percent to $869 billion reflecting ongoing strength in Ameriprise advisor client net inflows.

 

·                  Advice and Wealth Management and Asset Management generated 68 percent of pretax operating earnings this quarter, excluding unlocking.

 

·                  The company delivered a differentiated level of capital return to shareholders while maintaining strong balance sheet fundamentals and excess capital position. In the quarter, the company repurchased 2.3 million shares of common stock for $333 million and paid $129 million in quarterly dividends.

 

Wealth manager generating strong results

 

·                  Advice & Wealth Management client assets increased to a record $539 billion reflecting strong client engagement and net inflows, as well as its acquisition of Investment Professionals, Inc. (IPI).

 

·                  Fee-based investment advisory (wrap) net inflows were $6.1 billion in the quarter, bringing platform AUM to $235 billion, one of the largest in the industry. Wrap inflows grew for the sixth consecutive quarter and reached a new high.

 

·                  Operating net revenue per advisor increased 14 percent normalizing for net 12b-1 impacts and IPI reflecting the full service financial planning advisors provide clients with industry-leading technology and tools, as well as dedicated field leadership and support. The company is an attractive destination for productive advisors, with 88 experienced advisors joining the firm during the quarter.

 

·                  On July 1, the company closed its acquisition of IPI, an independent broker-dealer specializing in the on-site delivery of investment programs for financial institutions, including banks and credit unions. The acquisition added 215 financial advisors and $8 billion in assets.

 

Global asset manager with broad capabilities and competitive margins

 

·                  Asset Management AUM grew to $484 billion, reflecting market appreciation partially offset by net outflows.

 

·                  Investment performance in retail and institutional equity, fixed income and multi-asset portfolios and strategies remains strong. At quarter end, the company had 115 four- and five-star Morningstar-rated funds.

 

·                  On September 20, the company announced its acquisition of Lionstone Investments, a leading national real estate investment firm. The acquisition will add approximately $6 billion in assets and is expected to close later this year.

 

·                  Columbia Threadneedle continues to build upon its multi-asset and strategic beta product offerings. The Columbia Adaptive Risk Allocation Fund and the Threadneedle Dynamic Real Return Fund had approximately $500 million in gross sales in the U.S. and U.K., and in October, the company launched its first fixed income strategic beta ETF — the Columbia Diversified Fixed Income Allocation ETF.

 

3



 

Annuities and Protection businesses focused on our wealth management clients

 

·                  Variable annuity account balances increased 4 percent to $79 billion.

 

·                  Variable universal life/universal life insurance sales grew 3 percent with ending account balances up 7 percent to $12 billion.

 

·                  The Auto & Home combined ratio improved 5 points reflecting improved underlying loss performance and effective risk mitigation of the recent hurricanes.

 

Values-based, client-focused firm

 

·                  Ameriprise advisors continue to earn industry recognition: 12 Ameriprise advisors were named to the 2017 Barron’s Top 100 Independent Financial Advisors ranking, 13 Ameriprise advisors were named to Forbes America’s Top Next-Generation Wealth Advisors list, seven Ameriprise advisors were named to the 2017 Barron’s Top 100 Women Financial Advisors list and eight Ameriprise advisors were recognized on a new ranking, Working Mother Top Wealth Advisor Moms.

 

·                  Ameriprise has long supported hunger and disaster relief efforts through ongoing philanthropic partnerships with Feeding America, The American Red Cross and other nonprofits, which is complemented by high levels of employee and advisor volunteerism in the communities where we live and work.

 

4



 

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

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Advice & Wealth Management

 

 

 

 

 

 

 

Net revenues

 

$

1,383

 

$

1,272

 

9

%

Expenses

 

1,085

 

1,041

 

(4

)%

Pretax operating earnings

 

$

298

 

$

231

 

29

%

 

 

 

 

 

 

 

 

Pretax operating margin

 

21.5

%

18.2

%

 

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2017

 

2016

 

(Worse)

 

Retail client assets (billions)

 

$

539

 

$

476

 

13

%

Wrap net flows (billions)

 

$

6.1

 

$

2.8

 

NM

 

Brokerage cash balance (billions)

 

$

25.5

 

$

24.0

 

6

%

Operating net revenue per advisor normalizing for the net impact of 12b-1 fee changes (1) (trailing 12 months - thousands)

 

$

541

 

$

484

 

12

%

Operating net revenue per advisor normalizing for the net impact of 12b-1 fee changes (1) (quarterly - thousands)

 

$

141

 

$

124

 

14

%

 


(1) Excludes IPI

 

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

 

Advice & Wealth Management pretax operating earnings increased 29 percent to $298 million driven by asset growth, higher earnings on cash balances and well-controlled expenses. This resulted in strong 330 basis points of margin expansion and a pretax operating margin of 21.5 percent, up from 18.2 percent a year ago.

 

Operating net revenues of $1.4 billion grew 14 percent, normalizing for the 12b-1 fee net impacts, reflecting strong net inflows into wrap accounts, higher earnings on cash balances and market appreciation. Client asset growth remains strong with growth in fee-based wrap accounts outpacing growth in brokerage account balances.

 

Operating expenses increased 4 percent to $1.1 billion primarily from higher distribution expenses related to growth in client assets. General and administrative expenses were up 5 percent compared to a year ago, reflecting the timing of accruals for performance-related compensation, the addition of IPI in the current quarter and investments in the business.

 

Total retail client assets increased to a high of $539 billion driven by client net inflows, client acquisition, market appreciation and the acquisition of IPI. Wrap net inflows reached a new high of $6.1 billion in the quarter, which contributed to a 19 percent year-over-year increase in balances to $235 billion. Client cash balances were $25.5 billion, up from a year ago, and certificates balances grew 13 percent to $6.4 billion.

 

Operating net revenue per advisor on a trailing 12-month basis increased to $541,000 after normalizing for the net impact from eliminating 12b-1 fees in advisory accounts and IPI. Operating net revenue per advisor on a quarterly basis increased 14 percent after normalizing for those items.

 

Total advisors increased to 9,890 reflecting good recruiting and retention of advisors, with 88 experienced advisors moving their practices to Ameriprise in the quarter and 215 joining through the IPI acquisition.

 

5



 

Ameriprise Financial, Inc.
Asset Management Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Asset Management

 

 

 

 

 

 

 

Net revenues

 

$

778

 

$

740

 

5

%

Expenses

 

578

 

585

 

1

%

Pretax operating earnings

 

$

200

 

$

155

 

29

%

 

 

 

 

 

 

 

 

Pretax operating margin

 

25.7

%

20.9

%

 

 

Adjusted net pretax operating margin (1)

 

40.4

%

35.8

%

 

 

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2017

 

2016

 

(Worse)

 

Total segment AUM (billions)

 

$

484

 

$

468

 

3

%

 

 

 

 

 

 

 

 

Net Flows (billions)

 

 

 

 

 

 

 

Former parent company related net new flows

 

$

(3.0

)

$

(1.5

)

(98

)%

Global Retail net flows, excl. former parent flows

 

(1.1

)

(1.9

)

42

%

Global Institutional net flows, excl. former parent flows

 

(0.6

)

(1.9

)

69

%

Inflows from acquisitions

 

 

1.0

 

NM

 

Total segment net flows

 

$

(4.7

)

$

(4.3

)

(7

)%

 


(1) See reconciliation on page 17

 

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

 

Asset Management pretax operating earnings increased 29 percent to $200 million, reflecting market appreciation and expense discipline, partially offset by the cumulative impact of net outflows. Earnings in the quarter also included $18 million in performance fees from property funds in the U.K. and the unwinding of several CLOs. Third quarter adjusted net pretax operating margin grew to 40.4 percent from 35.8 percent a year ago.

 

Operating net revenues grew 5 percent to $778 million driven by asset growth from market appreciation, partially offset by the cumulative impact of net outflows. Normalizing for the 12b-1 fee change, operating net revenues grew 7 percent. AUM increased 3 percent to $484 billion.

 

Operating expenses of $578 million decreased 1 percent reflecting well managed general and administrative expenses, lower distribution expenses from the 12b-1 fee change and ongoing investments in the business.

 

Net outflows of $4.7 billion in the quarter included $3.0 billion of former-parent assets, which represented 64 percent of total outflows. Global retail net outflows were $1.1 billion, excluding former parent relationships, and included net inflows of $400 million in EMEA wholesale. Global third party institutional net outflows were $600 million.

 

6



 

Ameriprise Financial, Inc.
Annuities Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Annuities

 

 

 

 

 

 

 

Net revenues

 

$

626

 

$

631

 

(1

)%

Expenses

 

345

 

699

 

51

%

Pretax operating earnings

 

$

281

 

$

(68

)

NM

 

 

 

 

 

 

 

 

 

Excluding unlocking:

 

 

 

 

 

 

 

 

 

Net revenues

 

$

626

 

$

631

 

(1

)%

Expenses

 

465

 

484

 

4

%

Pretax operating earnings

 

$

161

 

$

147

 

10

%

Variable Annuities:

 

 

 

 

 

 

 

Pretax operating earnings

 

$

262

 

$

(97

)

NM

 

Annual unlocking

 

120

 

(220

)

NM

 

Pretax operating earnings, excluding annual unlocking

 

142

 

123

 

15

%

Fixed Annuities:

 

 

 

 

 

 

 

Pretax operating earnings

 

19

 

29

 

(34

)%

Annual unlocking

 

 

5

 

NM

 

Pretax operating earnings, excluding annual unlocking

 

19

 

24

 

(21

)%

Total pretax operating earnings, excluding annual unlocking

 

$

161

 

$

147

 

10

%

Item included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC and DSIC (mean reversion)

 

$

12

 

$

9

 

33

%

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2017

 

2016

 

(Worse)

 

Variable annuity ending account balances (billions)

 

$

78.7

 

$

75.9

 

4

%

Variable annuity net flows (millions)

 

$

(885

)

$

(650

)

(36

)%

Fixed deferred annuity ending account balances (billions)

 

$

9.5

 

$

10.2

 

(7

)%

Fixed deferred annuity net flows (millions)

 

$

(213

)

$

(240

)

11

%

 

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

 

Annuities pretax operating earnings were $281 million compared to a pretax loss of $68 million a year ago. Adjusting for unlocking, earnings increased 10 percent to $161 million. The year-over-year improvement in unlocking was primarily related to client behavioral experience that was more in line with our expectations and updated market-related assumptions.

 

Variable annuity earnings, excluding unlocking, increased 15 percent to $142 million from growth in account balances and market appreciation. Variable annuity account balances increased 4 percent to $79 billion due to market appreciation, partially offset by net outflows.

 

Fixed annuity operating earnings decreased to $19 million reflecting continued spread compression given the extended period of low interest rates and lower account balances. Account balances declined 7 percent from limited new product sales and continued lapses.

 

7



 

Ameriprise Financial, Inc.

Protection Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Protection

 

 

 

 

 

 

 

Net revenues

 

$

478

 

$

613

 

(22

)%

Expenses

 

423

 

529

 

20

%

Pretax operating earnings

 

$

55

 

$

84

 

(35

)%

 

 

 

 

 

 

 

 

Excluding unlocking:

 

 

 

 

 

 

 

Net revenues

 

$

525

 

$

549

 

(4

)%

Expenses

 

450

 

482

 

7

%

Pretax operating earnings

 

$

75

 

$

67

 

12

%

Life and Health insurance:

 

 

 

 

 

 

 

Net revenues

 

$

209

 

$

327

 

(36

)%

Expenses

 

161

 

235

 

31

%

Pretax operating earnings

 

48

 

92

 

(48

)%

Annual unlocking

 

(20

)

17

 

NM

 

Pretax operating earnings, excluding annual unlocking

 

$

68

 

$

75

 

(9

)%

Auto and Home:

 

 

 

 

 

 

 

Operating net revenues

 

$

269

 

$

286

 

(6

)%

Expenses

 

262

 

294

 

11

%

Pretax operating earnings/(loss)

 

$

7

 

$

(8

)

NM

 

 

 

 

 

 

 

 

 

Items included in operating earnings:

 

 

 

 

 

 

 

Market impact on DAC (mean reversion)

 

$

1

 

$

1

 

 

Auto and Home catastrophe losses

 

(15

)

(29

)

48

%

Auto and Home prior year reserve development

 

 

10

 

NM

 

Total protection impact

 

$

(14

)

$

(18

)

22

%

 

 

 

Quarter Ended September 30,

 

% Better/

 

 

 

2017

 

2016

 

(Worse)

 

Life insurance in force (billions)

 

$

196

 

$

196

 

 

VUL/UL ending account balances (billions)

 

$

12.2

 

$

11.5

 

7

%

Auto and Home policies in force (thousands)

 

939

 

950

 

(1

)%

 

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

 

Protection pretax operating earnings were $55 million compared to $84 million a year ago. Pretax operating earnings increased 12 percent to $75 million excluding unlocking.

 

Life and Health insurance earnings, excluding unlocking, declined to $68 million from $75 million a year ago reflecting the low interest rate environment. Overall claims experience remains within expected ranges. VUL/UL cash sales increased 3 percent to $72 million. The unfavorable year-over-year impact from unlocking was primarily related to updates to mortality experience.

 

Auto & Home results improved, with earnings of $7 million in the quarter compared to an $8 million loss a year ago that included $10 million of favorable reserve development. Results reflected the benefit of continued rate increases, enhanced underwriting and claims processing, as well as additional use of reinsurance to manage catastrophe risk. Net catastrophe losses in the quarter were

 

8



 

$15 million, primarily related to Hurricanes Harvey and Irma. There was a substantial benefit in the period from the reinsurance arrangements established earlier this year.

 

Ameriprise Financial, Inc.

Corporate & Other Segment Operating Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Corporate & Other, Excluding Long Term Care

 

 

 

 

 

 

 

Pretax operating loss

 

$

(78

)

$

(72

)

(8

)%

 

 

 

 

 

 

 

 

Long Term Care

 

 

 

 

 

 

 

Pretax operating loss

 

$

(58

)

$

(73

)

21

%

Loss recognition/annual unlocking

 

(58

)

(37

)

(57

)%

Pretax operating loss excluding loss recognition/annual unlocking

 

$

 

$

(36

)

NM

 

 

 

 

 

 

 

 

 

Items included in operating earnings:

 

 

 

 

 

 

 

DOL planning and implementation expenses

 

$

(5

)

$

(7

)

29

%

Affordable housing investment adjustment

 

(4

)

(7

)

43

%

Long term care reserve adjustment

 

 

(29

)

NM

 

Total corporate & other impact

 

$

(9

)

$

(43

)

79

%

 

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

 

Corporate & Other pretax operating loss excluding long term care was $78 million for the quarter. Incremental DOL expenses were $5 million, down from $7 million a year ago.

 

Long Term Care pretax operating loss was $58 million in the quarter due to a reserve increase driven by loss recognition testing.

 

Taxes

 

The operating effective tax rate in the quarter was 21.5 percent compared to 11.7 percent a year ago. Taxes in the current quarter reflect the adoption of stock compensation accounting guidance in the first quarter of 2017, which had a favorable $25 million impact in the quarter. Excluding this impact, the operating effective tax rate was 25.1 percent. The company estimates that its full year 2017 operating effective tax rate will be approximately 22 percent.

 

9



 

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

 

 

Stephanie Rabe

 

Ameriprise Financial

 

(612) 671-0485

 

stephanie.m.rabe@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 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:

 

·                  the statement in this news release that the acquisition of Lionstone Investments is expected to close later this year;

 

·                  the statement that the company estimates that its full year 2017 operating effective tax rate will be approximately 22 percent;

 

·                  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

 

10



 

·                  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;

·                  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;

 

11



 

·                  the ability to pursue and complete strategic transactions and initiatives, including acquisitions, divestitures, restructurings, joint ventures and the development of new products and services (such as the pending acquisition of Lionstone Investments which is subject to customary closing conditions);

·                  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” discussion under Part 1, Item 1A of and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2016 available at ir.ameriprise.com.

 

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 Quarter Report on Form 10-Q for the quarter ended September 30, 2017. For information about Ameriprise Financial entities, please refer to the Third Quarter 2017 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.
Reconciliation Table: Earnings

 

 

 

 

 

Per Diluted Share

 

 

 

Quarter Ended

 

Quarter Ended

 

 

 

September 30,

 

September 30,

 

(in millions, except per share amounts, unaudited)

 

2017

 

2016

 

2017

 

2016

 

Net income

 

$

503

 

$

215

 

$

3.24

 

$

1.30

 

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

 

 

 

 

 

Add: Integration/restructuring charges (1)

 

1

 

 

0.01

 

 

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

 

55

 

37

 

0.35

 

0.22

 

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

 

10

 

(7

)

0.06

 

(0.04

)

Add: Market impact of hedges on investments (1)

 

1

 

(5

)

0.01

 

(0.03

)

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

 

3

 

(6

)

0.02

 

(0.04

)

Add: Tax effect of adjustments (2)

 

(25

)

(7

)

(0.16

)

(0.04

)

Operating earnings

 

548

 

227

 

3.53

 

1.37

 

Less: Pretax impact of unlocking

 

99

 

(235

)

0.64

 

(1.42

)

Less: Tax effect of unlocking (2)

 

(35

)

82

 

(0.23

)

0.50

 

Operating earnings excluding unlocking

 

$

484

 

$

380

 

$

3.12

 

$

2.29

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

153.0

 

164.0

 

 

 

 

 

Diluted

 

155.4

 

165.8

 

 

 

 

 

 


(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)

 

2017

 

2016

 

Total net revenues

 

$

2,981

 

$

2,998

 

Less: CIEs revenue

 

23

 

27

 

Less: Net realized investment gains (losses)

 

(3

)

6

 

Less: Market impact on indexed universal life benefits

 

(5

)

6

 

Less: Market impact of hedges on investments

 

(1

)

5

 

Operating total net revenues

 

2,967

 

2,954

 

Less: Unlocking

 

(47

)

64

 

Less: Net impacts of transitioning advisory accounts to share classes without 12b-1 fees

 

10

 

64

 

Operating total net revenues excluding unlocking and 12b-1 impact

 

$

3,004

 

$

2,826

 

 

13



 

Ameriprise Financial, Inc.

Reconciliation Table: Total Net Revenues

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Total net revenues

 

$

2,981

 

$

2,998

 

Less: Unlocking

 

(47

)

64

 

Less: Net impacts of transitioning advisory accounts to share classes without 12b-1 fees

 

10

 

64

 

Total net revenues excluding unlocking and 12b-1 impact

 

$

3,018

 

$

2,870

 

 

Ameriprise Financial, Inc.
Reconciliation Table: Total Expenses

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Total expenses

 

$

2,353

 

$

2,760

 

Less: CIEs expenses

 

23

 

27

 

Less: Integration/restructuring charges

 

1

 

 

Less: Market impact on variable annuity guaranteed benefits

 

55

 

37

 

Less: Market impact on indexed universal life benefits

 

5

 

(1

)

Less: DAC/DSIC offset to net realized investment gains (losses)

 

 

 

Operating expenses

 

2,269

 

2,697

 

Less: Unlocking

 

(146

)

299

 

Operating expenses excluding unlocking

 

$

2,415

 

$

2,398

 

 

Ameriprise Financial, Inc.
Reconciliation Table: Pretax Operating Earnings

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating total net revenues

 

$

2,967

 

$

2,954

 

Operating expenses

 

2,269

 

2,697

 

Pretax operating earnings

 

$

698

 

$

257

 

 

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

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

General and administrative expense

 

$

753

 

$

731

 

Less: CIEs expenses

 

1

 

2

 

Less: Integration/restructuring charges

 

1

 

 

Operating general and administrative expense

 

$

751

 

$

729

 

 

14



 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management and Asset Management

Percent of Pretax Operating Earnings(1)

 

 

 

 

Quarter Ended
September 30,

 

(in millions, unaudited)

 

2017

 

Advice & Wealth Management and Asset Management pretax operating earnings

 

$

498

 

Less: Unlocking

 

 

Advice & Wealth Management and Asset Management pretax operating earnings excluding unlocking

 

$

498

 

Annuities and Protection pretax operating earnings

 

$

336

 

Less: Unlocking

 

100

 

Annuities and Protection pretax operating earnings excluding unlocking

 

$

236

 

 

 

 

 

Percent pretax operating earnings from Advice & Wealth Management and Asset Management

 

60

%

Percent pretax operating earnings from Annuities and Protection

 

40

%

Percent pretax operating earnings from Advice & Wealth Management and Asset Management excluding unlocking

 

68

%

Percent pretax operating earnings from Annuities and Protection excluding unlocking

 

32

%

 


(1) Excludes Corporate & Other segment

 

Ameriprise Financial, Inc.
Reconciliation Table: Effective Tax Rate

 

 

 

Quarter Ended September 30, 2017

 

(in millions, unaudited)

 

GAAP

 

Operating

 

Pretax income

 

$

628

 

$

698

 

Income tax provision

 

$

125

 

$

150

 

Effective tax rate

 

19.9

%

21.5

%

 

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

 

(in millions, unaudited)

 

Quarter Ended
September 30,
2017

 

Pretax operating earnings

 

$

698

 

 

 

 

 

Operating income tax provision

 

$

150

 

Benefit from adoption of stock compensation accounting guidance

 

(25

)

Operating income tax provision excluding benefit

 

$

175

 

Operating effective tax rate

 

21.5

%

Operating effective tax rate excluding income tax benefit

 

25.1

%

 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management Operating Net Revenues

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating net revenues

 

$

1,383

 

$

1,272

 

Less: Net impact of transitioning advisory accounts to share classes without 12b-1 fees

 

10

 

64

 

Operating total net revenues normalized for 12b-1 impact

 

1,373

 

1,208

 

Less: IPI

 

12

 

 

Operating total net revenues normalized for 12b-1 impact and IPI

 

$

1,361

 

$

1,208

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management Operating Net Revenues (trailing 12 months)

 

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating net revenues

 

$

5,342

 

$

4,986

 

Less: IPI

 

12

 

 

Less: Net impact of transitioning advisory accounts to share classes without 12b-1 fees

 

111

 

260

 

Operating total net revenues normalized for IPI and 12b-1 impact

 

$

5,219

 

$

4,726

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Operating Net Revenues

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating net revenues

 

$

778

 

$

740

 

Less: Net impact of transitioning advisory accounts to share classes without 12b-1 fees

 

 

13

 

Operating total net revenues normalized for 12b-1 impact

 

$

778

 

$

727

 

 

16



 

Ameriprise Financial, Inc.

Reconciliation Table: Asset Management Adjusted Net Pretax Operating Margin

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating total net revenues

 

$

778

 

$

740

 

Less: Distribution pass through revenues

 

197

 

211

 

Less: Subadvisory and other pass through revenues

 

91

 

85

 

Adjusted operating revenues

 

$

490

 

$

444

 

 

 

 

 

 

 

Pretax operating earnings

 

$

200

 

$

155

 

Less: Operating net investment income

 

6

 

1

 

Add: Amortization of intangibles

 

4

 

5

 

Adjusted operating earnings

 

$

198

 

$

159

 

 

 

 

 

 

 

Pretax operating margin

 

25.7

%

20.9

%

Adjusted net pretax operating margin

 

40.4

%

35.8

%

 

Ameriprise Financial, Inc.

Reconciliation Table: Annuities Excluding Unlocking

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating net revenues

 

$

626

 

$

631

 

Less: Unlocking

 

 

 

Operating net revenues excluding unlocking

 

$

626

 

$

631

 

 

 

 

 

 

 

Operating expenses

 

$

345

 

$

699

 

Less: Unlocking

 

(120

)

215

 

Operating expenses excluding unlocking

 

$

465

 

$

484

 

Pretax operating earnings

 

$

281

 

$

(68

)

Less: Unlocking

 

120

 

(215

)

Pretax operating earnings excluding unlocking

 

$

161

 

$

147

 

 

17



 

Ameriprise Financial, Inc.

Reconciliation Table: Protection Excluding Unlocking

 

 

 

Quarter Ended September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Operating net revenues

 

$

478

 

$

613

 

Less: Unlocking

 

(47

)

64

 

Operating total net revenues excluding unlocking

 

$

525

 

$

549

 

Operating expenses

 

$

423

 

$

529

 

Less: Unlocking

 

(27

)

47

 

Operating expenses excluding unlocking

 

$

450

 

$

482

 

Pretax operating earnings

 

$

55

 

$

84

 

Less: Unlocking

 

(20

)

17

 

Pretax operating earnings excluding unlocking

 

$

75

 

$

67

 

 

18



 

Ameriprise Financial, Inc.

Reconciliation Table: Return on Equity (ROE) Excluding Accumulated

Other Comprehensive Income “AOCI”

 

 

 

Twelve Months Ended
September 30,

 

(in millions, unaudited)

 

2017

 

2016

 

Net income

 

$

1,699

 

$

1,271

 

Less: Adjustments (1)

 

(165

)

(154

)

Operating earnings

 

1,864

 

1,425

 

Less: Unlocking, net of tax (2)

 

64

 

(153

)

Operating earnings excluding unlocking

 

$

1,800

 

$

1,578

 

 

 

 

 

 

 

Total Ameriprise Financial, Inc. shareholders’ equity

 

$

6,369

 

$

7,139

 

Less: Accumulated other comprehensive income, net of tax

 

325

 

478

 

Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI

 

6,044

 

6,661

 

Less: Equity impacts attributable to the consolidated investment entities

 

1

 

62

 

Operating equity

 

$

6,043

 

$

6,599

 

 

 

 

 

 

 

Return on equity excluding AOCI

 

28.1

%

19.1

%

Operating return on equity excluding AOCI (3)

 

30.8

%

21.6

%

Operating return on equity excluding AOCI and unlocking

 

29.8

%

23.9

%

 


(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%.

 

19



 

Ameriprise Financial, Inc.
Consolidated GAAP Results

 

 

 

Quarter Ended September 30,

 

% Better/

 

(in millions, unaudited)

 

2017

 

2016

 

(Worse)

 

Revenues

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,626

 

$

1,464

 

11

%

Distribution fees

 

437

 

455

 

(4

)

Net investment income

 

372

 

387

 

(4

)

Premiums

 

348

 

374

 

(7

)

Other revenues

 

210

 

330

 

(36

)

Total revenues

 

2,993

 

3,010

 

(1

)

Banking and deposit interest expense

 

12

 

12

 

 

Total net revenues

 

2,981

 

2,998

 

(1

)

Expenses

 

 

 

 

 

 

 

Distribution expenses

 

850

 

798

 

(7

)

Interest credited to fixed accounts

 

176

 

161

 

(9

)

Benefits, claims, losses and settlement expenses

 

474

 

855

 

45

 

Amortization of deferred acquisition costs

 

48

 

163

 

71

 

Interest and debt expense

 

52

 

52

 

 

General and administrative expense

 

753

 

731

 

(3

)

Total expenses

 

2,353

 

2,760

 

15

 

Pretax income

 

628

 

238

 

NM

 

Income tax provision

 

125

 

23

 

NM

 

Net income

 

$

503

 

$

215

 

NM

 

 

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

 

20


(Back To Top)

Section 3: EX-99.2 (EX-99.2)

Exhibit 99.2

 

 

Statistical Supplement Package

(unaudited)

 

Third Quarter 2017

 



 

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

 

Corporate & Other Segment Details

44

Exhibit C

 

Non-GAAP Financial Measure Reconciliations

47

 

2



 

 

Statistical Supplement Package

(unaudited)

 

Third Quarter 2017

 

Consolidated Results

 

3



 

Ameriprise Financial, Inc.

Statistical Supplement Presentation

Third Quarter 2017

 

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 C “Non-GAAP Financial Measure Reconciliations” on pages 47 and 48.

 

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 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 2016

 

4 Qtr 2016

 

1 Qtr 2017

 

2 Qtr 2017

 

3 Qtr 2017

 

2016

 

2017

 

Diff.

 

%

 

Diff.

 

%

 

Diff.

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and financial advice fees

 

$

1,464

 

$

1,489

 

$

1,482

 

$

1,561

 

$

1,626

 

$

4,289

 

$

4,669

 

$

162

 

11

%

$

380

 

9

%

$

65

 

4

%

Distribution fees

 

455

 

457

 

443

 

430

 

437

 

1,338

 

1,310

 

(18

)

(4

)%

(28

)

(2

)%

7

 

2

%

Net investment income

 

387

 

486

 

391

 

391

 

372

 

1,090

 

1,154

 

(15

)

(4

)%

64

 

6

%

(19

)

(5

)%

Premiums

 

374

 

377

 

339

 

348

 

348

 

1,114

 

1,035

 

(26

)

(7

)%

(79

)

(7

)%

 

 

Other revenues

 

330

 

263

 

256

 

267

 

210

 

832

 

733

 

(120

)

(36

)%

(99

)

(12

)%

(57

)

(21

)%

Total revenues

 

3,010

 

3,072

 

2,911

 

2,997

 

2,993

 

8,663

 

8,901

 

(17

)

(1

)%

238

 

3

%

(4

)

 

Banking and deposit interest expense

 

12

 

10

 

10

 

12

 

12

 

29

 

34

 

 

 

5

 

17

%

 

 

Total net revenues

 

2,998

 

3,062

 

2,901

 

2,985

 

2,981

 

8,634

 

8,867

 

(17

)

(1

)%

233

 

3

%

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution expenses

 

798

 

831

 

823

 

832

 

850

 

2,371

 

2,505

 

52

 

7

%

134

 

6

%

18

 

2

%

Interest credited to fixed accounts

 

161

 

158

 

162

 

171

 

176

 

465

 

509

 

15

 

9

%

44

 

9

%

5

 

3

%

Benefits, claims, losses and settlement expenses

 

855

 

712

 

567

 

611

 

474

 

1,934

 

1,652

 

(381

)

(45

)%

(282

)

(15

)%

(137

)

(22

)%

Amortization of deferred acquisition costs

 

163

 

55

 

72

 

69

 

48

 

360

 

189

 

(115

)

(71

)%

(171

)

(48

)%

(21

)

(30

)%

Interest and debt expense

 

52

 

81

 

50

 

52

 

52

 

160

 

154

 

 

 

(6

)

(4

)%

 

 

General and administrative expense

 

731

 

756

 

752

 

739

 

753

 

2,221

 

2,244

 

22

 

3

%

23

 

1

%

14

 

2

%

Total expenses

 

2,760

 

2,593

 

2,426

 

2,474

 

2,353

 

7,511

 

7,253

 

(407

)

(15

)%

(258

)

(3

)%

(121

)

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

238

 

469

 

475

 

511

 

628

 

1,123

 

1,614

 

390

 

#

 

491

 

44

%

117

 

23

%

Income tax provision

 

23

 

69

 

72

 

118

 

125

 

209

 

315

 

102

 

#

 

106

 

51

%

7

 

6

%

Net income

 

$

215

 

$

400

 

$

403

 

$

393

 

$

503

 

$

914

 

$

1,299

 

$

288

 

#

 

$

385

 

42

%

$

110

 

28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income on fixed maturities

 

$

342

 

$

340

 

$

337

 

$

335

 

$

340

 

$

1,028

 

$

1,012

 

$

(2

)

(1

)%

$

(16

)

(2

)%

$

5

 

1

%

Realized investment gains (losses)

 

6

 

11

 

17

 

21

 

(3

)

(5

)

35

 

(9

)

#

 

40

 

#

 

(24

)

#

 

Affordable housing

 

(17

)

(9

)

(12

)

(13

)

(17

)

(35

)

(42

)

 

 

(7

)

(20

)%

(4

)

(31

)%

Other (including seed money)

 

25

 

78

 

24

 

20

 

26

 

13

 

70

 

1

 

4

%

57

 

#

 

6

 

30

%

Consolidated investment entities

 

31

 

66

 

25

 

28

 

26

 

89

 

79

 

(5

)

(16

)%

(10

)

(11

)%

(2

)

(7

)%

Total net investment income

 

$

387

 

$

486

 

$

391

 

$

391

 

$

372

 

$

1,090

 

$

1,154

 

$

(15

)

(4

)%

$

64

 

6

%

$

(19

)

(5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.31

 

$

2.49

 

$

2.56

 

$

2.53