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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ameriprise Financial Inc | NYSE:AMP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.90 | -0.22% | 410.01 | 412.47 | 408.57 | 408.57 | 453,520 | 21:30:17 |
First quarter 2015 net income(1) per diluted share was $2.08, operating EPS up 7 percent to $2.18
First quarter 2015 return on equity excluding AOCI was 21.5 percentOperating ROE excluding AOCI increased 230 bps to a record high 23.1 percent
Company raises regular quarterly dividend 16 percent to $0.67 per share
Ameriprise Financial, Inc. (NYSE: AMP) today reported first quarter 2015 net income(1) of $393 million, or $2.08 per diluted share. Operating earnings were $412 million, up 1 percent from a year ago, with operating earnings per diluted share increasing 7 percent to $2.18. First quarter 2015 results included an $0.11 per diluted share unfavorable impact of a long term care reserve increase.
Operating net revenues increased 3 percent to $2.9 billion as business growth was partially offset by the negative impact of foreign exchange, a decline in net investment income and lower activity due to market volatility.
Operating expenses increased 3 percent to $2.3 billion, primarily driven by a $32 million long term care reserve increase in the current quarter and a $29 million reserve reduction in the year ago quarter from policyholder behavior related to a product change. Without these items, operating expenses were essentially flat. General and administrative expenses decreased 1 percent compared to a year ago reflecting the company’s ongoing expense discipline.
In the quarter, the company returned $459 million to shareholders through share repurchases and dividends.
“Ameriprise continues to deliver good performance with our Advice & Wealth Management and Asset Management businesses generating 64 percent of operating earnings in the quarter,” said Jim Cracchiolo, chairman and chief executive officer. “Retail client asset growth was strong from net inflows, new client acquisition and experienced advisor recruiting. And while the operating environment was more challenging in the quarter with increased equity market volatility and continued low interest rates, we’re executing our strategy and remain focused on serving our clients and advisors.”
“With our business growth and strong capital position, we continue to return capital to shareholders through share repurchases and dividends, including raising our regular quarterly dividend 16 percent – the eighth increase over the past six years.”
(1) Net income represents net income from continuing operations attributable to Ameriprise Financial.
Ameriprise Financial, Inc. First Quarter Summary(in millions, except per share amounts, unaudited)
Quarter EndedMarch 31,
% Better/(Worse)
Per Diluted ShareQuarter EndedMarch 31,
% Better/(Worse)
2015 2014 2015 2014Net income from continuing operations attributable to Ameriprise Financial $ 393 $ 401 (2 )% $ 2.08 $ 2.01 3 %
Adjustments, net of tax (1) (see reconciliation on p. 11)
19 6 0.10 0.03 Operating earnings (2) $ 412 $ 407 1 % $ 2.18 $ 2.04 7 % Weighted average common shares outstanding: Basic 186.3 195.5 Diluted 189.1 199.1 (1) After-tax is calculated using the statutory tax rate of 35%. (2) The company believes the presentation of operating earnings best represents the economics of the business. Operating earnings, after-tax, exclude the consolidation of certain investment entities; net realized gains or losses; integration and restructuring charges; the market impact on variable annuity guaranteed benefits net of hedges and related deferred acquisition costs (DAC) and deferred sales inducement costs (DSIC) amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; and income or loss from discontinued operations.Results in the quarter reflected $0.13 per diluted share of unfavorable items – a reserve increase of $0.11 per share related to our closed block of long term care insurance and a net $0.02 per share unfavorable impact from other items discussed in the segment commentaries.
In addition, the market impact on DAC and DSIC was a $0.04 per diluted share benefit compared to a $0.03 per diluted share benefit a year ago.
Taxes
The first quarter 2015 operating effective tax rate was 26.7 percent compared to 25.2 percent a year ago. The company estimates that its full year 2015 operating effective tax rate will be in the 26 to 28 percent range.
First Quarter 2015 Business Highlights
(1) Excludes Corporate & Other segment
Ameriprise Financial, Inc. Advice & Wealth Management Segment Operating Results (in millions, unaudited) Quarter Ended March 31,% Better/(Worse)
2015 2014 Advice & Wealth Management Net revenues $ 1,228 $ 1,149 7 % Expenses 1,018 968 (5 ) Pretax operating earnings $ 210 $ 181 16 Pretax operating margin 17.1 % 15.8 % Quarter Ended March 31,% Better/(Worse)
2015 2014 Retail client assets (billions) $ 453 $ 418 8 % Mutual fund wrap net flows (billions) $ 2.8 $ 4.2 (33 )% Operating net revenue per branded advisor (trailing 12 months - thousands) $ 505 $ 454 11 %Advice & Wealth Management pretax operating earnings increased 16 percent to $210 million reflecting strong revenue growth and expense controls. First quarter 2015 pretax operating margin reached a record high of 17.1 percent compared to 15.8 percent a year ago. On a sequential basis, first quarter 2015 results reflected two fewer fee days.
Operating net revenues grew 7 percent to $1.2 billion driven by asset growth in fee-based accounts from client net inflows and market appreciation, partially offset by lower activity reflecting increased market volatility.
Operating expenses increased 5 percent to $1 billion as business growth resulted in higher distribution expenses. General and administrative expenses were flat compared to a year ago.
Total retail client assets grew 8 percent to $453 billion driven by client net inflows, new client acquisition and market appreciation. Wrap net inflows remained strong at $2.8 billion with wrap balances increasing 13 percent to $180 billion. The combination of asset growth and client activity drove an 11 percent increase in operating net revenue per advisor on a trailing 12-month basis.
Ameriprise Financial, Inc. Asset Management Segment Operating Results (in millions, unaudited) Quarter Ended March 31,% Better/(Worse)
2015 2014 Asset Management Net revenues $ 807 $ 807 — Expenses 616 624 1 % Pretax operating earnings $ 191 $ 183 4 Adjusted net pretax operating margin 39.7 % 39.0 % Quarter Ended March 31,% Better/(Worse)
2015 2014 Total segment AUM(1) (billions) $ 506 $ 504 — Columbia Management AUM $ 364 $ 358 2 % Threadneedle AUM $ 147 $ 149 (1 )% Total segment net flows (billions) $ (5.8 ) $ (3.9 ) (49 )% Retail net flows $ (3.0 ) $ (3.4 ) 11 % Institutional net flows $ (2.8 ) $ (0.8 ) NM Alternative net flows $ — $ 0.3 NM(1) Subadvisory eliminations between Columbia Management and Threadneedle are included in the company’s First Quarter 2015 Statistical Supplement available at ir.ameriprise.com
NM Not Meaningful — variance of greater than 100%Asset Management pretax operating earnings increased 4 percent to $191 million driven by market appreciation and continued expense management, partially offset by net outflows, the negative impact of foreign exchange and costs associated with the move to a new London office.
First quarter adjusted net pretax operating margin remained strong at 39.7 percent compared to 39.0 percent a year ago.
Operating net revenues were flat at $807 million as asset growth from market appreciation was offset by net outflows and the negative impact of foreign exchange.
Operating expenses decreased 1 percent to $616 million reflecting well-controlled general and administrative expenses and lower distribution expenses.
AUM grew slightly to $506 billion as market appreciation more than offset the impact of net outflows and a more than $17 billion unfavorable impact from foreign exchange. For the quarter, net outflows were $5.8 billion reflecting elevated outflows in the Columbia Acorn Fund, continued outflows from former parent company affiliated distribution, and low basis point fee institutional and insurance mandates. Initiatives to improve U.S. retail intermediary flows are gaining traction, including initiatives to increase wholesaler productivity and earn greater share with key clients and platforms. Retail net inflows of $0.5 billion at Threadneedle included increased flows into Asian equity products. Net outflows in third party institutional reflected the timing of certain large mandate fundings, which are now expected to fund in the second quarter.
Ameriprise Financial, Inc. Annuities Segment Operating Results (in millions, unaudited) Quarter Ended March 31,% Better/(Worse)
2015 2014 Annuities Net revenues $ 631 $ 636 (1 )% Expenses 459 460 — Pretax operating earnings $ 172 $ 176 (2 ) Variable annuity pretax operating earnings $ 144 $ 145 (1 )% Fixed annuity pretax operating earnings 28 31 (10 ) Total pretax operating earnings $ 172 $ 176 (2 ) Items included in operating earnings: Market impact on DAC and DSIC (mean reversion) $ 10 $ 8 25 % Impact of variable annuity product changes 2 29 (93 )% Total annuities impact $ 12 $ 37 (68 )% Quarter Ended March 31,% Better/(Worse)
2015 2014 Variable annuity ending account balances (billions) $ 77.9 $ 75.9 3 % Variable annuity net flows (millions) $ (385 ) $ (400 ) 4 % Fixed annuity ending account balances (billions) $ 11.7 $ 12.9 (10 )% Fixed annuity net flows (millions) $ (565 ) $ (415 ) (36 )%Annuities pretax operating earnings were $172 million compared to $176 million a year ago, as the year ago period included a $37 million benefit from the market impact on DAC and DSIC and from policyholder behavior related to a variable annuity product change.
Variable annuity operating earnings were $144 million in the quarter reflecting $25 million of lower benefits from policyholder behavior related to a product change in the year ago period and the market impact on DAC and DSIC. Account balances grew 3 percent to $78 billion driven by market appreciation, partially offset by net outflows. Variable annuity cash sales were $1.2 billion for the quarter.
Fixed annuity operating earnings decreased to $28 million primarily driven by the cumulative decline in account balances, partially offset by higher spreads due to lower crediting rates. Fixed annuity account balances decreased 10 percent given limited new sales from low rates and lapse rates consistent with the company’s expectations.
Ameriprise Financial, Inc. Protection Segment Operating Results (in millions, unaudited) Quarter Ended March 31,% Better/(Worse)
2015 2014 Protection Net revenues $ 590 $ 555 6 % Expenses 539 496 (9 ) Pretax operating earnings $ 51 $ 59 (14 ) Items included in operating earnings: Market impact on DAC (mean reversion) $ 1 $ — NM Long term care reserves (32 ) — NM Auto and home reserves — (30 ) NM Disability insurance discount rate change 7 — NM Total auto and home weather-related losses(1) (12 ) (20 ) 40 % Total protection impact $ (36 ) $ (50 ) 28 % Quarter Ended March 31,% Better/(Worse)
2015 2014 Life insurance in force (billions) $ 196 $ 194 1 % VUL/UL ending account balances (billions) $ 11.4 $ 11.0 4 % Auto & Home policies in force (thousands) 943 861 10 %(1) Q1 2015 includes $4 million related to 2014 catastrophe losses
NM Not Meaningful — variance of greater than 100%Protection pretax operating earnings were $51 million compared to $59 million a year ago. Included in the current quarter’s results were a $32 million long term care reserve increase, a loss ratio assumption at Auto and Home that was consistent with the run rate for the fourth quarter of 2014, and a $7 million favorable impact from a change in the discount rate for disability insurance products.
Life and Health insurance earnings, excluding unusual items, were solid and included elevated claims experience that was within normal quarterly claims fluctuations. VUL/UL account balances grew 4 percent primarily from market appreciation. VUL/UL cash sales were $66 million, down 15 percent.
As anticipated, the company obtained additional information from its long term care reinsurance provider during the quarter regarding benefit utilization and claim terminations. The new information, along with a review of the discount rate, resulted in a revised management best estimate for long term care claims reserves. The impact was a $32 million increase in the claims reserves. The company has exercised its contractual right to engage an outside actuarial firm to conduct additional analysis of claims experience that is expected to be completed in the second quarter.
Auto and Home had a modest operating loss in the quarter compared to a significant loss a year ago. The improved results reflected lower weather-related losses and increased reserves a year ago, partially offset by higher 2015 accident year loss ratio assumptions consistent with the fourth quarter 2014 accident year level. The company continues to make improvements in underwriting, operational and claims processes, and pricing actions to improve performance. These actions are expected to have an incremental impact on financial results in 2015 and a more substantial financial benefit in 2016.
Ameriprise Financial, Inc. Corporate & Other Segment Operating Results (in millions, unaudited) Quarter Ended March 31,% Better/(Worse)
2015 2014 Corporate & Other Net revenues $ (6 ) $ 6 NM Expenses 56 61 8 % Pretax operating loss $ (62 ) $ (55 ) (13 ) NM Not Meaningful — variance of greater than 100%Corporate & Other pretax operating loss was $62 million for the quarter compared to a $55 million loss a year ago.
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, 2014 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 March 31, 2015. For information about Ameriprise Financial entities, please refer to the First Quarter 2015 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.
Ameriprise Financial, Inc. Reconciliation Table: EarningsQuarter EndedMarch 31,
Per Diluted ShareQuarter EndedMarch 31,
(in millions, except per share amounts, unaudited) 2015 2014 2015 2014 Net income attributable to Ameriprise Financial $ 393 $ 400 $ 2.08 $ 2.01 Less: Loss from discontinued operations, net of tax — (1 ) — —Net income from continuing operations attributable to Ameriprise Financial
393 401 2.08 2.01Add: Market impact on variable annuity guaranteed benefits, net of tax(1)
22 10 0.12 0.05Add: Market impact on indexed universal life benefits, net of tax(1)
4 (1 ) 0.02 — Add: Net realized (gains) losses, net of tax(1) (7 ) (3 ) (0.04 ) (0.02 ) Operating earnings $ 412 $ 407 $ 2.18 $ 2.04 Weighted average common shares outstanding: Basic 186.3 195.5 Diluted 189.1 199.1(1) Calculated using the statutory tax rate of 35%.
Ameriprise Financial, Inc. Reconciliation Table: Total Net Revenues Quarter Ended March 31, (in millions, unaudited) 2015 2014 Total net revenues $ 3,053 $ 2,996 Less: CIEs revenue 149 177 Less: Net realized gains (losses) 10 5 Less: Market impact on indexed universal life benefits (4 ) 2 Operating total net revenues $ 2,898 $ 2,812 Ameriprise Financial, Inc. Reconciliation Table: Total Expenses Quarter Ended March 31, (in millions, unaudited) 2015 2014 Total expenses $ 2,435 $ 2,346 Less: CIEs expenses 63 62 Less: Market impact on variable annuity guaranteed benefits 34 15 Less: Market impact on indexed universal life benefits 2 1 Operating expenses $ 2,336 $ 2,268 Ameriprise Financial, Inc. Reconciliation Table: Pretax Operating Earnings Quarter Ended March 31, (in millions, unaudited) 2015 2014 Operating total net revenues $ 2,898 $ 2,812 Operating expenses 2,336 2,268 Pretax operating earnings $ 562 $ 544 Ameriprise Financial, Inc. Reconciliation Table: General and Administrative Expense Quarter Ended March 31, (in millions, unaudited) 2015 2014 General and administrative expense $ 752 $ 758 Less: CIEs expenses 10 12 Operating general and administrative expense $ 742 $ 746 Ameriprise Financial, Inc. Reconciliation Table: Effective Tax Rate Quarter Ended March 31, 2015 (in millions, unaudited) GAAP Operating Income from continuing operations before income tax provision $ 618 $ 562 Less: Pretax income attributable to noncontrolling interests 86 — Income from continuing operations before income tax provision excluding consolidated investment entities $ 532 $ 562 Income tax provision from continuing operations $ 139 $ 150 Effective tax rate 22.5 % 26.7 % Effective tax rate excluding noncontrolling interests 26.1 % 26.7 % Ameriprise Financial, Inc. Reconciliation Table: Effective Tax Rate Quarter Ended March 31, 2014 (in millions, unaudited) GAAP Operating Income from continuing operations before income tax provision $ 650 $ 544 Less: Pretax income attributable to noncontrolling interests 115 —Income from continuing operations before income tax provision excluding consolidated investment entities
$ 535 $ 544 Income tax provision from continuing operations $ 134 $ 137 Effective tax rate 20.7 % 25.2 % Effective tax rate excluding noncontrolling interests 25.1 % 25.2 % Ameriprise Financial, Inc. Reconciliation Table: Asset Management Adjusted Net Pretax Operating Margin Quarter Ended March 31,(in millions, unaudited)
2015 2014 Operating total net revenues$
807 $ 807 Less: Distribution pass through revenues 218 228 Less: Subadvisory and other pass through revenues 103 97 Adjusted operating revenues $ 486 $ 482 Pretax operating earnings $ 191 $ 183 Less: Operating net investment income 6 4 Add: Amortization of intangibles 8 9 Adjusted operating earnings $ 193 $ 188 Adjusted net pretax operating margin 39.7 % 39.0 %Ameriprise Financial, Inc.Reconciliation Table: Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI”
Twelve Months EndedMarch 31,
(in millions, unaudited)
2015 2014 Net income attributable to Ameriprise Financial $ 1,612 $ 1,399 Less: Loss from discontinued operations, net of tax (1 ) (3 )Net income from continuing operations attributable to Ameriprise Financial, as reported
1,613 1,402Less: Adjustments (1)
(54 ) (127 ) Operating earnings $ 1,667 $ 1,529 Total Ameriprise Financial, Inc. shareholders’ equity $ 8,270 $ 8,432 Less: Accumulated other comprehensive income, net of tax 755 731 Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI 7,515 7,701 Less: Equity impacts attributable to the consolidated investment entities 300 337 Operating equity $ 7,215 $ 7,364 Return on equity excluding AOCI 21.5 % 18.2 %Operating return on equity excluding AOCI (2)
23.1 % 20.8 %(1) Adjustments reflect the trailing twelve months’ sum of after-tax net realized gains/losses; 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; and integration/restructuring charges. After-tax is calculated using the statutory tax rate of 35%.
(2) 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 gains/losses; 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; integration/restructuring charges; 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%
Ameriprise Financial, Inc. Consolidated GAAP Results
(in millions, unaudited)
Quarter Ended March 31,% Better/(Worse)
2015 2014 Revenues Management and financial advice fees $ 1,468 $ 1,386 6 % Distribution fees 466 476 (2 ) Net investment income 484 471 3 Premiums 353 330 7 Other revenues 289 340 (15 ) Total revenues 3,060 3,003 2 Banking and deposit interest expense 7 7 — Total net revenues 3,053 2,996 2 Expenses Distribution expenses 819 786 (4 ) Interest credited to fixed accounts 172 186 8 Benefits, claims, losses and settlement expenses 533 450 (18 ) Amortization of deferred acquisition costs 75 87 14 Interest and debt expense 84 79 (6 ) General and administrative expense 752 758 1 Total expenses 2,435 2,346 (4 ) Income from continuing operations before income tax provision 618 650 (5 ) Income tax provision 139 134 (4 ) Income from continuing operations 479 516 (7 ) Loss from discontinued operations, net of tax — (1) NM Net income 479 515 (7 ) Less: Net income attributable to noncontrolling interests 86 115 (25 ) Net income attributable to Ameriprise Financial $ 393 $ 400 (2 ) NM Not Meaningful — variance of greater than 100%
Ameriprise Financial, Inc.Investor Relations:Alicia A. Charity, 612-671-2080orChad J. Sanner, 612-671-4676chad.j.sanner@ampf.comorMedia Relations:Paul W. Johnson, 612-671-0625
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