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Business Wire 24-Jul-2018 4:15 PM
Second quarter 2018 net income per diluted share was $3.10Adjusted operating EPS was $3.60, up 29 percent
Second quarter 2018 return on equity excluding AOCI was 29.6 percentAdjusted operating ROE excluding AOCI was 31.1 percent, up 590 bps
Ameriprise Financial, Inc. (NYSE:AMP) today reported second quarter 2018 net income of $462 million, up 18 percent compared to a year ago, or $3.10 per diluted share, up 24 percent. Adjusted operating earnings were $536 million, up 22 percent compared to a year ago, with adjusted operating earnings per diluted share of $3.60, up 29 percent.
"Ameriprise had a strong second quarter and a record first half of the year for financial results," said Jim Cracchiolo, chairman and chief executive officer. "In the quarter, we grew earnings per share by 29 percent and delivered a return on equity of 31.1 percent. We continue to generate strong free cash flow that we invest in the business and return to shareholders at a high level."
"We remain focused on delivering an exceptional client-advisor experience and serving more clients in personal relationships. Ameriprise was recognized as number one in trust and forgiveness in the industry, and we continue to invest to further our leading advice-based value proposition."
GAAP Results – Second quarterNet revenues of $3.2 billion increased 6 percent, or $184 million, from a year ago primarily due to strong net revenue growth in Advice & Wealth Management from growth in client assets.
Expenses of $2.6 billion increased 6 percent compared to a year ago reflecting increased distribution expense from higher advisor productivity.
Adjusted Operating Results – Second quarterAdjusted operating net revenues increased 6 percent to $3.1 billion. Advice & Wealth Management net revenues increased 12 percent driven by growth in client assets from continued strength in client net inflows and market appreciation.
Adjusted operating expenses of $2.5 billion increased 5 percent reflecting increased distribution expense from higher advisor productivity. General and administrative expense increased 2 percent reflecting ongoing expense discipline and growth investments.
Ameriprise Financial, Inc.Second Quarter Summary |
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(in millions, except per share amounts, unaudited) |
Quarter EndedJune 30, |
Per Diluted ShareQuarter EndedJune 30, |
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2018 | 2017 |
% Better/(Worse) |
2018 | 2017 |
% Better/(Worse) |
|||||||||||||||
GAAP net income | $ | 462 | $ | 393 | 18 | % | $ | 3.10 | $ | 2.50 | 24 | % | ||||||||
Adjusted operating earnings (1) (see reconciliation on p. 13) |
$ | 536 | $ | 441 | 22 | % | $ | 3.60 | $ | 2.80 | 29 | % | ||||||||
Percent of pretax adjusted operating earnings from Advice & Wealth Management | 50 | % | 44 | % | ||||||||||||||||
Percent of pretax adjusted operating earnings from Advice & Wealth Management and Asset Management | 75 | % | 71 | % | ||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 147.0 | 155.1 | ||||||||||||||||||
Diluted | 149.0 | 157.5 | ||||||||||||||||||
(1) The company believes the presentation of adjusted operating earnings best represents the economics of the business. Adjusted 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 on fixed index annuity benefits, net of hedges and the related DAC amortization; 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. | ||||||||||||||||||||
Taxes
The adjusted operating effective tax rate in the quarter was 16.5 percent compared to 24.5 percent a year ago. The lower effective tax rate reflects the reduction in the federal income tax rate. The company estimates that its full year 2018 adjusted operating effective tax rate will be approximately 17 percent.
Second Quarter 2018 Highlights
Ameriprise delivered strong financial results and excess capital, while returning $532 million to shareholders
The firm's comprehensive and personal client focus, combined with its broad solution set, resulted in strong client flows and asset growth
Ameriprise continued to invest to drive productivity, business growth and client satisfaction
Values-based, client-focused firm
Ameriprise Financial, Inc.Advice & Wealth Management Segment Adjusted Operating Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
||||||||
2018 | 2017 | |||||||||
Advice & Wealth Management | ||||||||||
Net revenues | $ | 1,543 | $ | 1,376 | 12 | % | ||||
Expenses | 1,193 | 1,085 | (10 | )% | ||||||
Pretax adjusted operating earnings | $ | 350 | $ | 291 | 20 | % | ||||
Pretax adjusted operating margin | 22.7 | % | 21.1 | % | ||||||
Quarter Ended June 30, |
% Better/(Worse) |
|||||||||
2018 | 2017 | |||||||||
Retail client assets (billions) | $ | 566 | $ | 512 | 10 | % | ||||
Wrap net flows (billions) | $ | 5.3 | $ | 4.5 | 18 | % | ||||
Brokerage cash balance (billions) | $ | 24.5 | $ | 25.6 | (4 | )% | ||||
Adjusted operating net revenue per advisor normalizing for the net impact of 12b-1 fee changes (trailing 12 months - thousands) | $ | 599 | $ | 536 | 12 | % | ||||
Advice & Wealth Management pretax adjusted operating earnings increased 20 percent to $350 million driven by asset growth and higher earnings on cash balances. Advice & Wealth Management represented 50 percent of the company's pretax adjusted operating earnings. Pretax adjusted operating margin reached a new high of 22.7 percent, up 160 basis points from a year ago.
Adjusted operating net revenues increased 12 percent to $1.5 billion, reflecting strong client activity, higher earnings on cash balances and market appreciation.
Adjusted operating expenses increased 10 percent to $1.2 billion primarily from higher distribution expenses related to growth in client assets. General and administrative expenses were up 8 percent compared to a year ago, approximately half of which were related to investments for business growth.
Total retail client assets increased 10 percent to $566 billion driven by client net inflows, client acquisition and market appreciation. Wrap net inflows were $5.3 billion and total wrap assets increased 16 percent to $259 billion. Client brokerage cash balances were $24.5 billion, down slightly from a year ago as clients allocated cash to other investments.
Adjusted operating net revenue per advisor on a trailing 12-month basis increased 12 percent to $599,000 after normalizing for the net impact from eliminating 12b-1 fees in advisory accounts. Total advisors increased to 9,906, with 76 experienced advisors moving their practices to Ameriprise in the quarter and advisor retention remained strong.
Ameriprise Financial, Inc.Asset Management Segment Adjusted Operating Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
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2018 | 2017 | ||||||||||
Asset Management | |||||||||||
Net revenues | $ | 755 | $ | 747 | 1 | % | |||||
Expenses | 572 | 571 | — | ||||||||
Pretax adjusted operating earnings | $ | 183 | $ | 176 | 4 | % | |||||
Pretax adjusted operating margin | 24.2 | % | 23.6 | % | |||||||
Net pretax adjusted operating margin (1) | 38.0 | % | 37.7 | % | |||||||
Quarter Ended June 30, |
% Better/(Worse) |
||||||||||
2018 | 2017 | ||||||||||
Total segment AUM (billions) | $ | 482 | $ | 473 | 2 | % | |||||
Net Flows (billions) |
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Former parent company related net new flows | $ | (2.2 | ) | $ | (7.1 | ) | 68 | % | |||
Global Retail net flows, excl. former parent flows | 2.0 | (0.6 | ) | NM | |||||||
Global Institutional net flows, excl. former parent flows | (1.5 | ) | (1.0 | ) | (39 | )% | |||||
Total segment net flows | $ | (1.7 | ) | $ | (8.7 | ) | 80 | % | |||
(1)See reconciliation on page 15 |
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NM Not Meaningful — variance equal to or greater than 100% | |||||||||||
Asset Management pretax adjusted operating earnings increased 4 percent to $183 million, reflecting market appreciation and disciplined expense management, partially offset by the cumulative impact of net outflows, increased investments for business growth and higher regulatory related expense. Results in the prior year quarter included higher CLO fees. Second quarter net pretax adjusted operating margin grew to 38.0 percent from 37.7 percent a year ago.
Adjusted operating net revenues grew 1 percent to $755 million driven by asset growth from market appreciation and the Lionstone acquisition, partially offset by the cumulative impact of net outflows.
Adjusted operating expenses of $572 million were flat compared to a year ago, reflecting lower distribution-related expenses and well-managed general and administrative expenses. General and administrative expense increased 2 percent and included the Lionstone acquisition and investment for growth and higher regulatory expense.
AUM increased 2 percent to $482 billion. Total net outflows in the quarter improved by $7.0 billion to $1.7 billion of net outflows compared to $8.7 billion of net outflows a year ago. Flows in the prior year quarter included elevated former parent-related outflows. Flows in the current quarter reflect improved global retail flows and favorable rebalances in model portfolios. Third party institutional net outflows were $1.5 billion, primarily from $1.1 billion of CLO redemptions.
Ameriprise Financial, Inc.Annuities Segment Adjusted Operating Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
|||||||||
2018 | 2017 | ||||||||||
Annuities | |||||||||||
Net revenues | $ | 622 | $ | 627 | (1 | )% | |||||
Expenses | 493 | 485 | (2 | )% | |||||||
Pretax adjusted operating earnings | $ | 129 | $ | 142 | (9 | )% | |||||
Variable annuity pretax adjusted operating earnings | $ | 117 | $ | 127 | (8 | )% | |||||
Fixed annuity pretax adjusted operating earnings | 12 | 15 | (20 | )% | |||||||
Total pretax adjusted operating earnings | $ | 129 | $ | 142 | (9 | )% | |||||
Item included in adjusted operating earnings: | |||||||||||
Market impact on DAC and DSIC (mean reversion) | $ | 2 | $ | 9 | (78 | )% | |||||
Quarter Ended June 30, |
% Better/(Worse) |
||||||||||
2018 | 2017 | ||||||||||
Variable annuity ending account balances (billions) | $ | 78.3 | $ | 77.4 | 1 | % | |||||
Variable annuity net flows (billions) | $ | (0.8 | ) | $ | (1.0 | ) | 24 | % | |||
Fixed deferred annuity ending account balances (billions) | $ | 9.0 | $ | 9.6 | (7 | )% | |||||
Fixed deferred annuity net flows (billions) | $ | (0.2 | ) | $ | (0.2 | ) | 12 | % | |||
Annuities pretax adjusted operating earnings were $129 million compared to $142 million a year ago.
Variable annuity earnings of $117 million were lower primarily from a decline in the benefit from the market impact on DAC and DSIC compared to the year ago period, as well as higher sales. Variable annuity cash sales continued to have positive momentum, up 16 percent, with nearly 30 percent of sales without living benefit features. Variable annuity account balances increased 1 percent to $78 billion from market appreciation, partially offset by net outflows. Variable annuity net amount at risk as a percent of account values was 0.5 percent for living benefits and 0.2 percent for death benefits, which is one of the lowest among major variable annuity writers.
Fixed annuity adjusted operating earnings were $12 million reflecting continued spread compression from the extended period of low interest rates and lower account balances. Account balances declined 7 percent from limited new product sales and continued lapses.
Ameriprise Financial, Inc.Protection Segment Adjusted Operating Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
|||||||||
2018 | 2017 | ||||||||||
Protection | |||||||||||
Net revenues | $ | 533 | $ | 517 | 3 | % | |||||
Expenses | 488 | 466 | (5 | )% | |||||||
Pretax adjusted operating earnings | $ | 45 | $ | 51 | (12 | )% | |||||
Life and Health insurance: | |||||||||||
Net revenues | $ | 255 | $ | 256 | — | ||||||
Expenses | 191 | 187 | (2 | )% | |||||||
Pretax adjusted operating earnings | $ | 64 | $ | 69 | (7 | )% | |||||
Auto and Home: | |||||||||||
Net revenues | $ | 278 | $ | 261 | 7 | % | |||||
Expenses | 297 | 279 | (6 | )% | |||||||
Pretax adjusted operating loss | $ | (19 | ) | $ | (18 | ) | (6 | )% | |||
Items included in adjusted operating earnings: | |||||||||||
Market impact on DAC (mean reversion) | $ | 1 | $ | — | NM | ||||||
Auto and Home catastrophe losses | (40 | ) | (44 | ) | 9 | % | |||||
Total protection impact | $ | (39 | ) | $ | (44 | ) | 11 | % | |||
|
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Quarter Ended June 30, |
% Better/(Worse) |
||||||||||
2018 | 2017 | ||||||||||
Life insurance in force (billions) | $ | 196 | $ | 196 | — | ||||||
VUL/UL ending account balances (billions) | $ | 12.5 | $ | 12.0 | 4 | % | |||||
Auto and Home policies in force (thousands) | 911 | 937 | (3 | )% | |||||||
NM Not Meaningful — variance equal to or greater than 100% | |||||||||||
Protection pretax adjusted operating earnings were $45 million compared to $51 million a year ago.
Life and Health insurance earnings were $64 million reflecting the low interest rate environment and increased net claims expense as a result of claims that had limited reinsurance coverage. Overall claims were within expected ranges. VUL/UL cash sales were $75 million, down 4 percent.
Auto and Home had a pretax adjusted operating loss in the quarter driven by net catastrophe losses of $40 million, primarily from wind and hail storms in Colorado and Texas in June. Gross catastrophe losses were $46 million, which reflects a lower benefit from reinsurance. If catastrophe activity continues in the balance of the year, reinsurance will provide significant protection to the company. Favorable development from product management, pricing, underwriting and claims improvements to date has not been fully reflected in reserve estimates and management will continue to monitor development as the year progresses.
Ameriprise Financial, Inc.Corporate & Other Segment Adjusted Operating Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
|||||||||
2018 | 2017 | ||||||||||
Corporate & Other, Excluding Long Term Care | |||||||||||
Pretax adjusted operating loss | $ | (60 | ) | $ | (73 | ) | 18 | % | |||
Long Term Care | |||||||||||
Pretax adjusted operating loss | $ | (5 | ) | $ | (3 | ) | (67 | )% | |||
Item included in adjusted operating earnings: | |||||||||||
DOL planning and implementation expenses | $ | (3 | ) | $ | (8 | ) | 63 | % | |||
Corporate & Other pretax adjusted operating loss excluding long term care improved to $60 million from lower losses on tax preferenced investments. In addition, DOL-related expenses and compensation-related accruals were lower compared to a year ago.
Long Term Care pretax adjusted operating loss was $5 million in the quarter primarily from lower portfolio yields. Overall claims experience was within expected ranges. The company continues to diligently manage this closed block of business with a consistent strategy for premium increases, application of extensive credible actuarial experience to determine reserves and significant protections related to the portion of the block that is reinsured to a third party.
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 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:
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, 2017 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2018. For information about Ameriprise Financial entities, please refer to the Second Quarter 2018 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.
Temkin ratings based on responses to a consumer survey as part of the 2018 Temkin Trust Ratings, www.temkinratings.com.
Ameriprise Financial, Inc.Reconciliation Table: Earnings |
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Quarter EndedJune 30, |
Per Diluted ShareQuarter EndedJune 30, |
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(in millions, except per share amounts, unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 462 | $ | 393 | $ | 3.10 | $ | 2.50 | ||||||||
Less: Net income (loss) attributable to consolidated investment entities | — | — | — | — | ||||||||||||
Add: Integration/restructuring charges (1) | 4 | — | 0.03 | — | ||||||||||||
Add: Market impact on variable annuity guaranteed benefits (1) |
80 | 80 | 0.53 | 0.51 | ||||||||||||
Add: Market impact on indexed universal life benefits (1) | 20 | 6 | 0.13 | 0.04 | ||||||||||||
Add: Market impact of hedges on investments (1) | (5 | ) | 8 | (0.03 | ) | 0.05 | ||||||||||
Add: Net realized investment (gains) losses (1) | (5 | ) | (20 | ) | (0.03 | ) | (0.13 | ) | ||||||||
Add: Tax effect of adjustments (2) | (20 | ) | (26 | ) | (0.13 | ) | (0.17 | ) | ||||||||
Adjusted operating earnings | $ | 536 | $ | 441 | $ | 3.60 | $ | 2.80 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 147.0 | 155.1 | ||||||||||||||
Diluted | 149.0 | 157.5 | ||||||||||||||
(1) Pretax adjusted operating adjustment. |
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(2) Calculated using the statutory tax rate of 21% in 2018 and 35% in 2017. |
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Ameriprise Financial, Inc.Reconciliation Table: Total Net Revenues |
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Quarter EndedJune 30, |
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(in millions, unaudited) | 2018 | 2017 | ||||||
Total net revenues | $ | 3,196 | $ | 3,012 | ||||
Less: CIEs revenue | 49 | 25 | ||||||
Less: Net realized investment gains (losses) | 5 | 21 | ||||||
Less: Market impact on indexed universal life benefits | (10 | ) | (3 | ) | ||||
Less: Market impact of hedges on investments | 5 | (8 | ) | |||||
Adjusted operating total net revenues | $ | 3,147 | $ | 2,977 | ||||
|
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Ameriprise Financial, Inc.Reconciliation Table: Total Expenses |
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Quarter EndedJune 30, |
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(in millions, unaudited) | 2018 | 2017 | ||||||
Total expenses | $ | 2,648 | $ | 2,501 | ||||
Less: CIEs expenses | 49 | 24 | ||||||
Less: Integration/restructuring charges | 4 | — | ||||||
Less: Market impact on variable annuity guaranteed benefits | 80 | 80 | ||||||
Less: Market impact on indexed universal life benefits | 10 | 3 | ||||||
Less: DAC/DSIC offset to net realized investment gains (losses) | — | 1 | ||||||
Adjusted operating expenses | $ | 2,505 | $ | 2,393 | ||||
Ameriprise Financial, Inc.Reconciliation Table: Pretax Adjusted Operating Earnings |
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Quarter EndedJune 30, |
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(in millions, unaudited) | 2018 | 2017 | ||||||
Adjusted operating total net revenues | $ | 3,147 | $ | 2,977 | ||||
Adjusted operating expenses | 2,505 | 2,393 | ||||||
Pretax adjusted operating earnings | $ | 642 | $ | 584 | ||||
Ameriprise Financial, Inc.Reconciliation Table: General and Administrative Expense |
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Quarter EndedJune 30, |
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(in millions, unaudited) | 2018 | 2017 | ||||||
General and administrative expense | $ | 788 | $ | 767 | ||||
Less: CIEs expenses | — | 2 | ||||||
Less: Integration/restructuring charges | 4 | — | ||||||
Adjusted operating general and administrative expense | $ | 784 | $ | 765 | ||||
Ameriprise Financial, Inc.Reconciliation Table: Effective Tax Rate |
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Quarter Ended June 30, 2018 |
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(in millions, unaudited) | GAAP |
AdjustedOperating |
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Pretax income | $ | 548 | $ | 642 | ||||
Income tax provision | $ | 86 | $ | 106 | ||||
Effective tax rate | 15.7 | % | 16.5 | % | ||||
Ameriprise Financial, Inc.Reconciliation Table: Effective Tax Rate |
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Quarter Ended June 30, 2017 |
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(in millions, unaudited) | GAAP |
AdjustedOperating |
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Pretax income | $ | 511 | $ | 584 | ||||
Income tax provision | $ | 118 | $ | 143 | ||||
Effective tax rate | 23.1 | % | 24.5 | % | ||||
Ameriprise Financial, Inc.Reconciliation Table: Advice & Wealth Management Adjusted Operating Net Revenues (trailing 12 months) |
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Quarter Ended June 30, | ||||||||
(in millions, unaudited) | 2018 | 2017 | ||||||
Adjusted operating net revenues | $ | 5,963 | $ | 5,341 | ||||
Less: Net impact of transitioning advisory accounts to share classes without 12b-1 fees | 40 | 164 | ||||||
Adjusted operating total net revenues normalized for 12b-1 impact | $ | 5,923 | $ | 5,177 | ||||
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Ameriprise Financial, Inc.Reconciliation Table: Asset Management Net Pretax Adjusted Operating Margin |
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Quarter Ended June 30, | ||||||||
(in millions, unaudited) |
2018 | 2017 | ||||||
Adjusted operating total net revenues | $ | 755 | $ | 747 | ||||
Less: Distribution pass through revenues | 196 | 194 | ||||||
Less: Subadvisory and other pass through revenues | 88 | 91 | ||||||
Net adjusted operating revenues | $ | 471 | $ | 462 | ||||
Pretax adjusted operating earnings | $ | 183 | $ | 176 | ||||
Less: Adjusted operating net investment income | 8 | 6 | ||||||
Add: Amortization of intangibles | 4 | 4 | ||||||
Net adjusted operating earnings | $ | 179 | $ | 174 | ||||
Pretax adjusted operating margin | 24.2 | % | 23.6 | % | ||||
Net pretax adjusted operating margin | 38.0 | % | 37.7 | % | ||||
Ameriprise Financial, Inc.Reconciliation Table: Return on Equity (ROE) Excluding AccumulatedOther Comprehensive Income "AOCI" |
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Twelve Months EndedJune 30, |
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(in millions, unaudited) |
2018 | 2017 | ||||||
Net income | $ | 1,740 | $ | 1,410 | ||||
Less: Adjustments (1) | (89 | ) | (132 | ) | ||||
Adjusted operating earnings | $ | 1,829 | $ | 1,542 | ||||
Total Ameriprise Financial, Inc. shareholders' equity | $ | 6,004 | $ | 6,518 | ||||
Less: Accumulated other comprehensive income, net of tax | 131 | 390 | ||||||
Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI | 5,873 | 6,128 | ||||||
Less: Equity impacts attributable to the consolidated investment entities | 1 | 1 | ||||||
Adjusted operating equity | $ | 5,872 | $ | 6,127 | ||||
Return on equity excluding AOCI | 29.6 | % | 23.0 | % | ||||
Adjusted operating return on equity excluding AOCI (2) | 31.1 | % | 25.2 | % | ||||
(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 on fixed index annuity benefits, net of hedges and the related DAC amortization; 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 21% in 2018 and 35% in 2017. |
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(2) Adjusted 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 on fixed index annuity benefits, net of hedges and the related DAC amortization; 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 21% in 2018 and 35% in 2017. |
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Ameriprise Financial, Inc.Consolidated GAAP Results |
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(in millions, unaudited) | Quarter Ended June 30, |
% Better/(Worse) |
|||||||
2018 | 2017 | ||||||||
Revenues | |||||||||
Management and financial advice fees | $ | 1,691 | $ | 1,568 | 8 | % | |||
Distribution fees | 465 | 425 | 9 | ||||||
Net investment income | 419 | 391 | 7 | ||||||
Premiums | 357 | 348 | 3 | ||||||
Other revenues | 284 | 292 | (3 | ) | |||||
Total revenues | 3,216 | 3,024 | 6 | ||||||
Banking and deposit interest expense | 20 | 12 | (67 | ) | |||||
Total net revenues | 3,196 | 3,012 | 6 | ||||||
Expenses | |||||||||
Distribution expenses | 902 | 831 | (9 | ) | |||||
Interest credited to fixed accounts | 180 | 171 | (5 | ) | |||||
Benefits, claims, losses and settlement expenses | 635 | 611 | (4 | ) | |||||
Amortization of deferred acquisition costs | 63 | 69 | 9 | ||||||
Interest and debt expense | 80 | 52 | (54 | ) | |||||
General and administrative expense | 788 | 767 | (3 | ) | |||||
Total expenses | 2,648 | 2,501 | (6 | ) | |||||
Pretax income | 548 | 511 | 7 | ||||||
Income tax provision | 86 | 118 | 27 | ||||||
Net income | $ | 462 | $ | 393 | 18 | % | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180724005919/en/