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Business Wire 24-Apr-2019 4:10 PM
First quarter 2019 net income per diluted share was $2.82
Adjusted operating EPS was $3.75
First quarter 2019 return on equity excluding AOCI was 32.5 percent
Adjusted operating ROE excluding AOCI was 36.4 percent
Regular quarterly dividend raised 8 percent to $0.97 per diluted share, representing the twelfth increase during the past ten years
Ameriprise Financial, Inc. (NYSE:AMP) today reported first quarter 2019 net income of $395 million, or $2.82 per diluted share. Adjusted operating earnings were $525 million, with adjusted operating earnings per diluted share of $3.75, up 2 percent. Normalizing for the tax rate and a vendor settlement in the prior year period, adjusted operating earnings per diluted share was up 8 percent.
"Ameriprise delivered a solid quarter led by double-digit earnings growth in our Advice and Wealth Management business," said Jim Cracchiolo, chairman and chief executive officer. "Overall, I'm pleased with our results given at the beginning of the year markets drove lower fee levels and muted client activity. As volatility settled, client activity returned to historical levels in line with what we expected. We ended the quarter with strong Ameriprise client net inflows and steady growth in advisor productivity."
"Consistent with our stated objectives, we continue to invest and optimize our capital base. We're taking action to accelerate an ongoing transformation of our business mix by adding capabilities that will drive future growth and freeing-up capital to invest in the business while returning to shareholders at a differentiated level. We announced the sale of Ameriprise Auto & Home Insurance, enhanced the overall risk profile of our fixed annuity business and returned more than $480 million to shareholders through share repurchases and dividends. And, we announced an eight percent increase in our regular quarterly dividend –- the twelfth increase in the past ten years –- as well as a new $2.5 billion share repurchase authorization. We're in a strong position and will continue to take steps to enhance it."
GAAP Results – First quarterNet revenues were $3.1 billion reflecting solid growth in Advice & Wealth Management, offset by lower average markets and the cumulative impact of net outflows in Asset Management.
Expenses were $2.6 billion, which included a higher market impact on variable annuity guaranteed benefits.
Adjusted Operating Results – First quarterAdjusted operating net revenues of $3.1 billion were driven by continued growth in Advice & Wealth Management, offset by lower average equity markets and the cumulative impact of net outflows in Asset Management. Following a period of volatility in late 2018, activity levels in Advice & Wealth Management were slower at the beginning of the quarter and recovered to historical levels by the end of the quarter.
Adjusted operating expenses of $2.5 billion increased 1 percent. General and administrative expense increased 2 percent reflecting the mark-to-market impact on share based compensation and ongoing growth investments that were partially offset by continued expense discipline.
TaxesThe adjusted operating effective tax rate in the quarter was 17.3 percent versus 14.3 percent in the prior year, primarily due to share based accounting. The full year adjusted operating effective tax rate is estimated to be in the 16 percent range, consistent with the prior year.
Ameriprise Financial, Inc.First Quarter Summary |
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(in millions, except per share amounts, unaudited) |
Quarter EndedMarch 31, |
Per Diluted ShareQuarter EndedMarch 31, |
||||||||||||||||||||||||
2019 | 2018 |
% Over/(Under) |
2019 | 2018 |
% Over/(Under) |
|||||||||||||||||||||
GAAP net income | $ | 395 | $ | 594 | (34 | %) | $ | 2.82 | $ | 3.91 | (28 | %) | ||||||||||||||
Adjusted operating earnings |
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(see reconciliation on p.13) |
$ | 525 | $ | 558 | (6 | %) | $ | 3.75 | $ | 3.67 | 2 | % | ||||||||||||||
Percent of pretax adjusted operating earnings from Advice & Wealth Management, excluding Corporate & Other | 50 | % | 45 | % | ||||||||||||||||||||||
Percent of pretax adjusted operating earnings from Advice & Wealth Management and Asset Management, excluding Corporate & Other | 71 | % | 73 | % | ||||||||||||||||||||||
Weighted average common shares outstanding: |
138.8 | 149.5 | ||||||||||||||||||||||||
Basic |
||||||||||||||||||||||||||
Diluted | 140.1 | 152.1 | ||||||||||||||||||||||||
First Quarter 2019 Highlights
Ameriprise delivered good financial results with Advice & Wealth Management as the core growth driver
Ameriprise executed on strategic actions to optimize its capital and risk position, while accelerating its shift to its core growth area of Advice & Wealth Management
Ameriprise strengthened its balance sheet and excess capital position, returned $482 million to shareholders and increased its quarterly dividend
Ameriprise continued to invest to drive productivity, business growth and client satisfaction, resulting in strong client flows and asset growth
(1) Net of expected $300 million debt repayment in June 2019
Ameriprise Financial, Inc. | ||||||||||||
Advice & Wealth Management Segment Adjusted Operating Results | ||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
||||||||||
2019 | 2018 | |||||||||||
Advice & Wealth Management | ||||||||||||
Net revenues | $ | 1,554 | $ | 1,501 | 4 | % | ||||||
Expenses | 1,204 | 1,185 | (2 | %) | ||||||||
Pretax adjusted operating earnings | $ | 350 | $ | 316 | 11 | % | ||||||
Pretax adjusted operating margin | 22.5 | % | 21.1 | % | ||||||||
Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||
Retail client assets (billions) | $ | 588 | $ | 557 | 6 | % | ||||||
Wrap net flows (billions) | $ | 4.3 | $ | 5.7 | (24 | %) | ||||||
Brokerage cash balance (billions) | $ | 25.3 | $ | 25.4 | — | |||||||
Adjusted operating net revenue per advisor (trailing 12 months - thousands) | $ | 628 | $ | 590 | 6 | % | ||||||
Advice & Wealth Management pretax adjusted operating earnings increased 11 percent to $350 million driven by continued strength in client net inflows and increased earnings on cash balances partially offset by lower average equity markets. Pretax adjusted operating margin was 22.5 percent, up 140 basis points from a year ago. Advice & Wealth Management represented 50 percent of the company's pretax adjusted operating earnings(1).
Adjusted operating net revenues increased 4 percent to $1.6 billion, reflecting strong client activity, increased advisor productivity and higher earnings on cash balances that offset the impact of lower average markets. Transactional activity levels improved appreciably each month of the quarter following a period of heightened market volatility. The average weighted equity index (WEI) decreased 3 percent year-over-year.
Adjusted operating expenses increased 2 percent to $1.2 billion. General and administrative expenses increased 6 percent as a result of the level and timing of several investments for growth being pulled forward in the year.
Total retail client assets increased 6 percent to $588 billion. Total wrap assets increased 11 percent to $279 billion from wrap net inflows, which increased nicely off January lows, and market appreciation. Client brokerage cash balances were little changed from a year ago at $25.3 billion.
Adjusted operating net revenue per advisor on a trailing 12-month basis increased 6 percent to $628,000. Total advisors increased to 9,979 and advisor retention remained strong. 90 experienced advisors moved their practices to Ameriprise in the quarter, with record levels of productivity.
(1) Excludes Corporate & Other segment
Ameriprise Financial, Inc. | ||||||||||||
Asset Management Segment Adjusted Operating Results | ||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||
Asset Management | ||||||||||||
Net revenues | $ | 689 | $ | 778 | (11 | %) | ||||||
Expenses | 543 | 583 | 7 | % | ||||||||
Pretax adjusted operating earnings | $ | 146 | $ | 195 | (25 | %) | ||||||
Pretax adjusted operating margin | 21.2 | % | 25.1 | % | ||||||||
Net pretax adjusted operating margin (1) | 33.6 | % | 40.2 | % | ||||||||
Item included in adjusted operating earnings: | ||||||||||||
Net benefit from EMEA initiatives | $ | — | $ | 9 | NM | |||||||
Quarter Ended March 31, |
% Over/(Under) |
|||||||||||
2019 | 2018 | |||||||||||
Total segment AUM (billions) | $ | 459 | $ | 485 | (5 | %) | ||||||
Net Flows (billions) |
||||||||||||
Former parent company related net new flows | $ | (1.1 | ) | $ | (1.6 | ) | 30 | % | ||||
Global Retail net flows, excl. former parent flows | (3.4 | ) | (3.5 | ) | 2 | % | ||||||
Global Institutional net flows, excl. former parent flows | (2.7 | ) | (2.6 | ) | (5 | %) | ||||||
Total segment net flows | $ | (7.2 | ) | $ | (7.7 | ) | 6 | % | ||||
(1)See reconciliation on page 15 |
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NM Not Meaningful — variance equal to or greater than 100% |
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Asset Management pretax adjusted operating earnings were $146 million, down $49 million from the prior year period, reflecting the cumulative impact of outflows, lower average equity markets, unfavorable foreign exchange translation and a $9 million net benefit related to EMEA initiatives in the year ago quarter. First quarter net pretax adjusted operating margin was 33.6 percent. While expenses were well managed, the decline in revenue outpaced expense reductions.
Adjusted operating revenues declined 11 percent driven by the cumulative impact of net outflows, lower average equity markets, unfavorable foreign exchange translation and a one-time benefit in the year ago period. Adjusted operating expenses declined 7 percent reflecting lower distribution expenses and well managed general and administrative expenses. General and administrative expenses decreased 4 percent from expense reengineering initiatives and the favorable impact of foreign exchange. AUM declined 5 percent to $459 billion.
Net outflows in the quarter were $7.2 billion with $3.4 billion of retail outflows, $2.7 billion of institutional outflows and $1.1 billion related to former parent related assets. In North America, retail net outflows reflected continued outflows in active equity funds, consistent with the industry. In EMEA, net outflows increased reflecting negative consumer sentiment associated with Brexit and geopolitical concerns in Europe. Institutional outflows were elevated from redemptions and lower mandate fundings.
Ameriprise Financial, Inc. | ||||||||||||||
Annuities Segment Adjusted Operating Results | ||||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
||||||||||||
2019 | 2018 | |||||||||||||
Annuities | ||||||||||||||
Net revenues | $ | 604 | $ | 613 | (1 | %) | ||||||||
Expenses | 476 | 487 | 2 | % | ||||||||||
Pretax adjusted operating earnings | $ | 128 | $ | 126 | 2 | % | ||||||||
Variable annuity pretax adjusted operating earnings | $ | 115 | $ | 110 | 5 | % | ||||||||
Fixed annuity pretax adjusted operating earnings | 13 | 16 | (19 | %) | ||||||||||
Total pretax adjusted operating earnings | $ | 128 | $ | 126 | 2 | % | ||||||||
Quarter Ended March 31, |
% Over/(Under) |
|||||||||||||
2019 | 2018 | |||||||||||||
Variable annuity ending account balances (billions) | $ | 76.9 | $ | 78.7 | (2 | %) | ||||||||
Variable annuity net flows (billions) | $ | (0.9 | ) | $ | (0.9 | ) | 7 | % | ||||||
Fixed deferred annuity ending account balances (billions) | $ | 8.6 | $ | 9.1 | (6 | %) | ||||||||
Fixed deferred annuity net flows (billions) | $ | (0.2 | ) | $ | (0.2 | ) | 20 | % | ||||||
Annuities pretax adjusted operating earnings were $128 million, up 2 percent reflecting volatile markets and low interest rates.
Variable annuity pretax adjusted operating earnings were $115 million, up 5 percent. Sales declined and were related to lower client transactional activity associated with the recent market disruption. Variable annuity account balances were $77 billion. Variable annuity net amount at risk as a percent of account values was 0.8 percent for living benefits and 0.2 percent for death benefits, which decreased in the quarter and remained one of the lowest among major variable annuity writers.
Fixed annuity pretax adjusted operating earnings were $13 million, reflecting continued spread compression from the extended period of low interest rates, lower account balances and the reinsurance of 20 percent of the block during the quarter. The reinsurance transaction generated $200 million of excess capital in the quarter and had a marginal impact on fixed annuity adjusted pretax operating earnings, which is offset by the Corporate benefit. Account balances declined 6 percent from limited new product sales and continued lapses.
Ameriprise Financial, Inc. | ||||||||||||
Protection Segment Adjusted Operating Results | ||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||
Protection | ||||||||||||
Net revenues | $ | 262 | $ | 253 | 4 | % | ||||||
Expenses | 188 | 188 | — | |||||||||
Pretax adjusted operating earnings | $ | 74 | $ | 65 | 14 | % | ||||||
Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||
Life insurance in force (billions) | $ | 195 | $ | 196 | — | |||||||
VUL/UL ending account balances (billions) | $ | 12.6 | $ | 12.5 | 1 | % | ||||||
Protection pretax adjusted operating earnings were $74 million compared to $65 million a year ago. Continued low interest rates remain a headwind, but the impact is manageable.
Overall claims were favorable to the prior year and remain within expected ranges. Life insurance claims improved 14 percent from the prior year, while disability income insurance claims were unfavorable relative to an unusually strong prior year period.
VUL/UL cash sales were $56 million, down 21 percent, primarily due to lower indexed universal life lump sum and installment sales.
Ameriprise Financial, Inc. | ||||||||||||||
Corporate & Other Segment Adjusted Operating Results | ||||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||||
Corporate & Other | ||||||||||||||
Pretax adjusted operating earnings/(loss): | ||||||||||||||
Corporate & Other (ex. LTC and Auto & Home) | $ | (78 | ) | $ | (58 | ) | (34 | %) | ||||||
Long Term Care | $ | 6 | $ | 2 | NM | |||||||||
Auto & Home | $ | 9 | $ | 5 | 80 | % | ||||||||
Items included in adjusted operating earnings/(loss): | ||||||||||||||
Auto and Home catastrophe losses | $ | (14 | ) | $ | (14 | ) | — | |||||||
DOL planning and implementation expenses | ? | (3 | ) | NM | ||||||||||
Quarter Ended March 31, |
% Over/(Under) |
|||||||||||||
2019 | 2018 | |||||||||||||
Auto & Home policies in force (thousands) | 853 | 934 | (9 | %) | ||||||||||
NM Not Meaningful — variance equal to or greater than 100% | ||||||||||||||
Corporate & Other pretax adjusted operating loss excluding Long Term Care and Auto & Home was in line with expectations at $78 million, primarily related to the higher mark-to-market impact on share based compensation expenses, as well as investments in growth initiatives, including technology infrastructure and expenses associated with the establishment of the bank.
Long Term Care pretax adjusted operating earnings were $6 million in the quarter and reflected favorable claims experience and higher net investment income.
Auto & Home moved to the Corporate & Other segment this quarter, reflecting the previously announced planned sale of the business. The company will continue to manage the business prudently and work to ensure a seamless transition of this business in the second half of the year. Pretax adjusted operating earnings were $9 million in the quarter, which included $14 million of catastrophe losses.
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, 2018 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 Form 10-Q for the quarter ended March 31, 2019. For information about Ameriprise Financial entities, please refer to the First Quarter 2019 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.
Source: Wants & Pricing Report (April 2019) from the Hearts & Wallets IQ™ Database Hearts & Wallets conducts an annual syndicated survey in which respondents are asked to rate their financial services providers in a variety of areas on a scale of 1 (not at all satisfied) to 10 (extremely satisfied). In 2018, 5,441 respondents provided 8,748 sets of ratings. The report designates Hearts & Wallets Top Performer™ in areas where customer ratings for one or more provider are "distinctively higher than customer ratings of other providers." In areas where no provider ratings are distinctively higher, no Top Performers are designated. This rating is not indicative of future performance and may not be representative of any one client's experience, as the rating is an average of a sample of client experiences. Ameriprise paid a fee to Hearts & Wallets to cite the results of the survey.
Ameriprise Financial, Inc. | |||||||||||||||||||
Reconciliation Table: Earnings | |||||||||||||||||||
Per Diluted Share | |||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||
(in millions, except per share amounts, unaudited) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Net income | $ | 395 | $ | 594 | $ | 2.82 | $ | 3.91 | |||||||||||
Less: Net income (loss) attributable to consolidated investment entities | — | — | — | — | |||||||||||||||
Add: Integration/restructuring charges (1) | 7 | 3 | 0.05 | 0.02 | |||||||||||||||
Add: Market impact on variable annuity guaranteed benefits (1) |
142 | 5 | 1.02 | 0.03 | |||||||||||||||
Add: Market impact on fixed index annuity benefits (1) | — | — | — | — | |||||||||||||||
Add: Mean reversion-related impacts (1) | (36 | ) | (6 | ) | (0.26 | ) | (0.04 | ) | |||||||||||
Add: Market impact on indexed universal life benefits (1) | 51 | (25 | ) | 0.36 | (0.16 | ) | |||||||||||||
Add: Market impact of hedges on investments (1) | 10 | (16 | ) | 0.07 | (0.11 | ) | |||||||||||||
Add: Net realized investment (gains) losses (1) | (9 | ) | (6 | ) | (0.06 | ) | (0.04 | ) | |||||||||||
Add: Tax effect of adjustments (2) | (35 | ) | 9 | (0.25 | ) | 0.06 | |||||||||||||
Adjusted operating earnings | $ | 525 | $ | 558 | $ | 3.75 | $ | 3.67 | |||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 138.8 | 149.5 | |||||||||||||||||
Diluted | 140.1 | 152.1 | |||||||||||||||||
(1) Pretax adjusted operating adjustment. |
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(2) Calculated using the statutory tax rate of 21%. |
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Ameriprise Financial, Inc. | ||||||||||||||||||||
Reconciliation Table: Normalized Earnings | ||||||||||||||||||||
(in millions, except per share amounts, unaudited) |
Quarter EndedMarch 31, |
Per Diluted ShareQuarter Ended March 31, |
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2019 | 2018 | 2019 | 2018 |
% Over/(Under) |
||||||||||||||||
Pretax adjusted operating earnings | $ | 635 | $ | 651 | ||||||||||||||||
Adjusted operating earnings | $ | 525 | $ | 558 | $ | 3.75 | $ | 3.67 | 2 | % | ||||||||||
Net Income variance attributable to taxes (1) | 20 | - | 0.14 | - | ||||||||||||||||
Less: Vendor settlement | - | 11 | - | 0.07 | ||||||||||||||||
Normalized adjusted operating earnings | $ | 545 | $ | 547 | $ | 3.89 | $ | 3.60 | 8 | % | ||||||||||
Weighted average common shares outstanding:Basic | 138.8 | 149.5 | ||||||||||||||||||
Diluted | 140.1 | 152.1 | ||||||||||||||||||
(1) Pretax adjusted operating earnings were down $16 million and down $13 million after-tax (based on a 21% marginal tax rate). The additional $20 million decline in adjusted operating earnings was related to taxes. |
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Ameriprise Financial, Inc. | |||||||||
Reconciliation Table: Total Net Revenues | |||||||||
Quarter Ended | |||||||||
March 31, | |||||||||
(in millions, unaudited) | 2019 | 2018 | |||||||
Total net revenues | $ | 3,118 | $ | 3,168 | |||||
Less: CIEs revenue | 21 | 22 | |||||||
Less: Integration/restructuring charges | (3 | ) | — | ||||||
Less: Net realized investment gains (losses) | 9 | 6 | |||||||
Less: Market impact on indexed universal life benefits | (17 | ) | 13 | ||||||
Less: Market impact of hedges on investments | (10 | ) | 16 | ||||||
Adjusted operating total net revenues | $ | 3,118 | $ | 3,111 | |||||
Ameriprise Financial, Inc. | ||||||||||
Reconciliation Table: Total Expenses | ||||||||||
Quarter EndedMarch 31, |
||||||||||
(in millions, unaudited) | 2019 | 2018 | ||||||||
Total expenses | $ | 2,648 | $ | 2,472 | ||||||
Less: CIEs expenses | 21 | 22 | ||||||||
Less: Integration/restructuring charges | 4 | 3 | ||||||||
Less: Market impact on variable annuity guaranteed benefits | 142 | 5 | ||||||||
Less: Market impact on indexed universal life benefits | 34 | (12 | ) | |||||||
Less: Market impact on fixed index annuity benefits | — | — | ||||||||
Less: Mean reversion-related impacts | (36 | ) | (6 | ) | ||||||
Less: DAC/DSIC offset to net realized investment gains (losses) | — | — | ||||||||
Adjusted operating expenses | $ | 2,483 | $ | 2,460 | ||||||
Ameriprise Financial, Inc. | ||||||||
Reconciliation Table: Pretax Adjusted Operating Earnings | ||||||||
Quarter Ended | ||||||||
March 31, | ||||||||
(in millions, unaudited) | 2019 | 2018 | ||||||
Adjusted operating total net revenues | $ | 3,118 | $ | 3,111 | ||||
Adjusted operating expenses | 2,483 | 2,460 | ||||||
Pretax adjusted operating earnings | $ | 635 | $ | 651 | ||||
Ameriprise Financial, Inc. | ||||||||
Reconciliation Table: General and Administrative Expense | ||||||||
Quarter Ended | ||||||||
March 31, | ||||||||
(in millions, unaudited) | 2019 | 2018 | ||||||
General and administrative expense | $ | 805 | $ | 789 | ||||
Less: CIEs expenses | 1 | 1 | ||||||
Less: Integration/restructuring charges | 4 | 3 | ||||||
Adjusted operating general and administrative expense | $ | 800 | $ | 785 | ||||
Ameriprise Financial, Inc. | ||||||||||
Reconciliation Table: Effective Tax Rate | ||||||||||
Quarter Ended March 31, 2019 | ||||||||||
(in millions, unaudited) | GAAP |
AdjustedOperating |
||||||||
Pretax income | $ | 470 | $ | 635 | ||||||
Income tax provision | $ | 75 | $ | 110 | ||||||
Effective tax rate | 15.9 | % | 17.3 | % | ||||||
Ameriprise Financial, Inc. | ||||||||||
Reconciliation Table: Effective Tax Rate | ||||||||||
Quarter Ended March 31, 2018 | ||||||||||
(in millions, unaudited) | GAAP |
AdjustedOperating |
||||||||
Pretax income | $ | 696 | $ | 651 | ||||||
Income tax provision | $ | 102 | $ | 93 | ||||||
Effective tax rate | 14.7 | % | 14.3 | % | ||||||
Ameriprise Financial, Inc. | ||||||||||
Reconciliation Table: Asset Management Net Pretax Adjusted Operating Margin | ||||||||||
|
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Quarter Ended March 31, |
||||||||||
(in millions, unaudited) |
2019 | 2018 | ||||||||
Adjusted operating total net revenues | $ | 689 | $ | 778 | ||||||
Less: Distribution pass through revenues | 179 | 201 | ||||||||
Less: Subadvisory and other pass through revenues | 81 | 85 | ||||||||
Net adjusted operating revenues | $ | 429 | $ | 492 | ||||||
Pretax adjusted operating earnings | $ | 146 | $ | 195 | ||||||
Less: Adjusted operating net investment income | 6 | 2 | ||||||||
Add: Amortization of intangibles | 4 | 5 | ||||||||
Net adjusted operating earnings | $ | 144 | $ | 198 | ||||||
Pretax adjusted operating margin | 21.2 | % | 25.1 | % | ||||||
Net pretax adjusted operating margin | 33.6 | % | 40.2 | % | ||||||
Ameriprise Financial, Inc. | ||||||||||
Reconciliation Table: Return on Equity (ROE) Excluding Accumulated | ||||||||||
Other Comprehensive Income "AOCI" | ||||||||||
Twelve Months Ended | ||||||||||
March 31, | ||||||||||
(in millions, unaudited) |
2019 | 2018 | ||||||||
Net income | $ | 1,899 | $ | 1,671 | ||||||
Less: Adjustments (1) | (229 | ) | (16 | ) | ||||||
Adjusted operating earnings | 2,128 | 1,687 | ||||||||
Total Ameriprise Financial, Inc. shareholders' equity | $ | 5,704 | $ | 6,122 | ||||||
Less: Accumulated other comprehensive income, net of tax | 137 | 210 | ||||||||
Total Ameriprise Financial, Inc. shareholders' equity excluding AOCI | 5,841 | 5,912 | ||||||||
Less: Equity impacts attributable to the consolidated investment entities | 1 | 1 | ||||||||
Adjusted operating equity | $ | 5,840 | $ | 5,911 | ||||||
Return on equity excluding AOCI | 32.5 | % | 28.3 | % | ||||||
Adjusted operating return on equity excluding AOCI (2) | 36.4 | % | 28.5 | % | ||||||
(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; mean reversion related impacts; integration/restructuring charges; and the impact of consolidating certain investment entities. After-tax is calculated using the statutory tax rate of 21%. |
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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; mean reversion related impacts; 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%. |
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Ameriprise Financial, Inc. | ||||||||||||
Consolidated GAAP Results | ||||||||||||
(in millions, unaudited) | Quarter Ended March 31, |
% Over/(Under) |
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2019 | 2018 | |||||||||||
Revenues | ||||||||||||
Management and financial advice fees | $ | 1,627 | $ | 1,669 | (3 | %) | ||||||
Distribution fees | 480 | 468 | 3 | % | ||||||||
Net investment income | 397 | 396 | — | % | ||||||||
Premiums | 371 | 343 | 8 | % | ||||||||
Other revenues | 278 | 308 | (10 | %) | ||||||||
Total revenues | 3,153 | 3,184 | (1 | %) | ||||||||
Banking and deposit interest expense | 35 | 16 | NM | |||||||||
Total net revenues | 3,118 | 3,168 | (2 | %) | ||||||||
Expenses | ||||||||||||
Distribution expenses | 900 | 905 | 1 | % | ||||||||
Interest credited to fixed accounts | 204 | 141 | (45 | %) | ||||||||
Benefits, claims, losses and settlement expenses | 670 | 494 | (36 | %) | ||||||||
Amortization of deferred acquisition costs | 16 | 92 | 83 | % | ||||||||
Interest and debt expense | 53 | 51 | (4 | %) | ||||||||
General and administrative expense | 805 | 789 | (2 | %) | ||||||||
Total expenses | 2,648 | 2,472 | (7 | %) | ||||||||
Pretax income | 470 | 696 | (32 | %) | ||||||||
Income tax provision | 75 | 102 | 26 | % | ||||||||
Net income | $ | 395 | $ | 594 | (34 | %) | ||||||
NM Not Meaningful — variance equal to or greater than 100% | ||||||||||||
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