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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 | |
---|---|---|---|---|---|---|---|---|
1.65 | 0.40% | 413.44 | 420.64 | 409.21 | 411.79 | 490,533 | 22:30:00 |
Fourth quarter 2014 net income(1) per diluted share was $2.23, operating EPS up 23 percent to $2.30
Full Year 2014 net income(1) per diluted share was $8.31, operating EPS up 21 percent to $8.52
Fourth quarter 2014 return on equity excluding AOCI was 21.5 percentOperating ROE excluding AOCI increased 330 bps to a record high 23.0 percent
Ameriprise Financial, Inc. (NYSE: AMP) today reported fourth quarter 2014 net income(1) of $426 million, or $2.23 per diluted share. Operating earnings were $440 million, up 16 percent from a year ago, with operating earnings per diluted share increasing 23 percent to $2.30.
Operating net revenues increased 5 percent to $3.0 billion driven by strong fee-based business growth from client net inflows and market appreciation.
Operating expenses increased 5 percent to $2.4 billion reflecting higher distribution expense and higher benefits to policyholders in the insurance and annuities businesses. General and administrative expenses decreased 2 percent compared to a year ago reflecting the company’s ongoing expense discipline.
On a full-year basis, the company generated strong operating results and revenue growth. Compared to 2013, operating net revenues grew 7 percent to $11.6 billion, operating earnings grew 14 percent to $1.7 billion, and operating earnings per diluted share increased 21 percent to $8.52.
In the quarter, the company returned $444 million to shareholders through share repurchases and dividends. For the full year, the company returned $1.8 billion to shareholders.
“Ameriprise delivered another good quarter to complete a strong year, led by our Advice and Wealth Management business,” said Jim Cracchiolo, chairman and chief executive officer. “We’re bringing in significant client net inflows, growing our assets under management and increasing advisor productivity.”
“Our operating return on equity for the year increased to 23.0 percent – another record high. With our excellent financial foundation and ability to generate significant free cash flow, Ameriprise continues to return a differentiated level of capital to shareholders. 2014 marked the fourth consecutive year when we’ve returned more than 100 percent of our operating earnings to shareholders.”
(1) Net income represents net income from continuing operations attributable to Ameriprise Financial.
Ameriprise Financial, Inc. Fourth Quarter and Full Year Summary(in millions, except per share amounts, unaudited)
Quarter EndedDecember 31,
Year EndedDecember 31,
2014 2013% Better/(Worse)
2014 2013% Better/(Worse)
Net income from continuing operations attributable to Ameriprise Financial
$ 426 $ 298 43 % $ 1,621 $ 1,337 21 %Adjustments, net of tax (1)
(see reconciliation on p. 11) 14 80 41 123Operating earnings (2)
$ 440 $ 378 16 % $ 1,662 $ 1,460 14 % Earnings Per Diluted Share Income from continuing operations $ 2.23 $ 1.47 52 % $ 8.31 $ 6.46 29 %Adjustments, net of tax (1)
(see reconciliation on p. 11) 0.07 0.40 0.21 0.59Operating earnings (2)
$ 2.30 $ 1.87 23 % $ 8.52 $ 7.05 21 % Weighted average common shares outstanding: Basic 187.9 198.3 191.6 203.2 Diluted 191.2 202.3 195.0 207.1(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 were strong and included a favorable $8 million pretax market impact on DAC and DSIC compared to a $17 million pretax benefit a year ago. Results also included a benefit from lower taxes that was largely offset by an increase in Auto and Home reserves and an actuarial model correction, both in the Protection segment. The net effect of these items was an unfavorable impact of $6 million after-tax, or $0.03 per diluted share.
In addition, the results in the year ago quarter included a favorable $26 million pretax impact from variable annuity product changes.
Taxes
The fourth quarter 2014 operating effective tax rate was 20.3 percent compared to 27.2 percent a year ago. The 2014 full year operating effective tax rate was 25.4 percent. The lower tax rate reflects the impact of an increase in the dividends received deduction and lower state income taxes. These changes reduced taxes by approximately $32 million. The company estimates that its full year 2015 operating effective tax rate will be in the 26 to 28 percent range.
Fourth Quarter 2014 Business Highlights
(1) Excludes Corporate & Other segment
Ameriprise Financial, Inc. Advice & Wealth Management Segment Operating Results (in millions, unaudited)Quarter EndedDecember 31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013 Advice & Wealth Management Net revenues $ 1,249 $ 1,127 11 % $ 4,806 $ 4,295 12 % Expenses 1,037 967 (7 ) 4,014 3,703 (8 ) Pretax operating earnings $ 212 $ 160 33 $ 792 $ 592 34 Pretax operating margin 17.0 % 14.2 % 16.5 % 13.8 % Quarter Ended December 31,% Better/(Worse)
2014 2013 Retail client assets (billions) $ 444 $ 409 9 % Mutual fund wrap net flows (billions) $ 3.1 $ 2.8 10 % Operating net revenue per branded advisor (trailing 12 months - thousands) $ 496 $ 440 13 %Advice & Wealth Management pretax operating earnings increased 33 percent to $212 million reflecting strong revenue growth and expense controls. Fourth quarter 2014 pretax operating margin reached a record high of 17.0 percent compared to 14.2 percent a year ago.
Operating net revenues grew 11 percent to $1.2 billion driven by asset growth in fee-based accounts from client inflows and market appreciation.
Operating expenses increased 7 percent to $1 billion as business growth resulted in higher distribution expenses. General and administrative expenses were flat compared to a year ago as investments in the business were offset by ongoing expense discipline.
Total retail client assets grew 9 percent to $444 billion driven by client net inflows, new client acquisition and market appreciation. Wrap net inflows remained strong at $3.1 billion with wrap balances increasing 14 percent to $175 billion. The combination of asset growth and client activity drove a 13 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 EndedDecember 31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013 Asset Management Net revenues $ 830 $ 824 1 % $ 3,320 $ 3,169 5 % Expenses 632 637 1 2,532 2,478 (2 ) Pretax operating earnings $ 198 $ 187 6 $ 788 $ 691 14 Adjusted net pretax operating margin 40.0 % 38.8 % 39.8 % 36.5 % Quarter Ended December 31,% Better/(Worse)
2014 2013 Total segment AUM(1) (billions) $ 506 $ 501 1 % Columbia Management AUM $ 361 $ 357 1 % Threadneedle AUM $ 148 $ 147 — Total segment net flows (billions) $ 5.7 $ 5.5 3 % Retail net flows $ 4.9 $ 4.5 10 % Institutional net flows $ 0.3 $ 0.8 (68 )% Alternative net flows $ 0.5 $ 0.2 NM(1) Subadvisory eliminations between Columbia Management and Threadneedle are included in the company’s Fourth Quarter 2014 Statistical Supplement available at ir.ameriprise.com
NM Not Meaningful — variance of greater than 100%Asset Management pretax operating earnings increased 6 percent to $198 million driven by market appreciation and continued expense management, partially offset by the cumulative impact of net outflows.
Fourth quarter adjusted net pretax operating margin remained strong at 40.0 percent compared to 38.8 percent a year ago.
Operating net revenues grew 1 percent to $830 million primarily driven by asset growth from market appreciation, partially offset by the cumulative impact of net outflows.
Operating expenses decreased 1 percent to $632 million reflecting lower general and administrative expenses and flat distribution expenses.
AUM grew 1 percent to $506 billion as market appreciation more than offset the cumulative impact of net outflows and the impact from foreign exchange. For the quarter, net inflows were $5.7 billion reflecting robust inflows from third party institutional mandates, the launch of a CLO, and strong reinvested dividends. Third party institutional inflows of $1.7 billion were primarily offset by former parent company related outflows at both Columbia and Threadneedle. Retail flows continued to be pressured from outflows in a large fund, former parent company affiliated distribution, and certain subadvised funds.
Ameriprise Financial, Inc. Annuities Segment Operating Results (in millions, unaudited)Quarter EndedDecember 31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013 Annuities Net revenues $ 649 $ 653 (1 )% $ 2,591 $ 2,561 1 % Expenses 490 481 (2 ) 1,958 1,932 (1 ) Pretax operating earnings $ 159 $ 172 (8 ) $ 633 $ 629 1 Variable annuity pretax operating earnings $ 123 $ 151 (19 )% $ 489 $ 514 (5 )% Fixed annuity pretax operating earnings 36 21 71 144 115 25 Total pretax operating earnings $ 159 $ 172 (8 ) $ 633 $ 629 1 Quarter Ended December 31,% Better/(Worse)
2014 2013 Items included in operating earnings: Market impact on DAC and DSIC (mean reversion) $ 7 $ 16 (56 )% Impact of variable annuity product changes 2 26 (92 )% Total annuities impact $ 9 $ 42 (79 )% Variable annuity ending account balances (billions) $ 77.0 $ 75.5 2 % Variable annuity net flows (millions) $ (406 ) $ (275 ) (48 )% Fixed annuity ending account balances (billions) $ 12.1 $ 13.3 (8 )% Fixed annuity net flows (millions) $ (315 ) $ (292 ) (8 )%Annuities pretax operating earnings were $159 million compared to $172 million a year ago, as the year ago period included $33 million of higher benefits from the market impact on DAC and DSIC and a variable annuity product change.
Variable annuity operating earnings were $123 million in the quarter reflecting $33 million of lower benefits from a product change in the year ago period and the market impact on DAC and DSIC, as well as the negative impact of interest rates. Without these items, variable annuity earnings increased 8 percent from growth in account balances. Account balances grew 2 percent to $77 billion driven by market appreciation, partially offset by net outflows. Variable annuity cash sales were $1.2 billion for the quarter and were $4.9 billion for the year.
Fixed annuity operating earnings increased to $36 million primarily driven by higher spreads due to lower crediting rates, partially offset by the cumulative decline in account balances. Fixed annuity account balances decreased 8 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 EndedDecember 31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013 Protection Net revenues $ 600 $ 564 6 % $ 2,287 $ 2,186 5 % Expenses 570 490 (16 ) 2,041 1,850 (10 ) Pretax operating earnings $ 30 $ 74 (59 ) $ 246 $ 336 (27 ) Quarter Ended December 31,% Better/(Worse)
2014 2013 Items included in operating earnings: Market impact on DAC (mean reversion) $ 1 $ 1 — Actuarial model correction (7 ) — NM Auto & Home reserves (60 ) (20 ) NM Total protection impact $ (66 ) $ (19 ) NM Life insurance in force (billions) $ 196 $ 194 1 % VUL/UL ending account balances (billions) $ 11.3 $ 10.9 3 % Auto & Home policies in force (thousands) 929 838 11 % NM Not Meaningful — variance of greater than 100%Protection pretax operating earnings were $30 million compared to $74 million a year ago. Included in the current quarter’s results were a $60 million Auto and Home reserve increase and a $7 million actuarial model correction in Life and Health. Without these items, operating earnings would have been $97 million in the quarter.
Life and Health earnings, without the actuarial model correction, were solid and reflect normal quarterly claims fluctuations. VUL/UL account balances grew 3 percent primarily from market appreciation. VUL/UL cash sales were $85 million, up 2 percent.
Reserves in Auto and Home increased primarily related to higher claims frequency and severity levels in the auto product line. Improvements in underwriting, operational and claims processes, and pricing actions were taken in 2014 and will continue in 2015. The benefits of these actions are anticipated to be realized over the next several years. Auto and Home policy growth remains strong with home policies in force up 16 percent and auto policies up 7 percent.
Ameriprise Financial, Inc. Corporate & Other Segment Operating Results (in millions, unaudited)Quarter EndedDecember 31,
% Better/(Worse)
Year EndedDecember 31,
% Better/(Worse)
2014 2013 2014 2013 Corporate & Other Net revenues $ 1 $ 7 (86 )% $ 4 $ 15 (73 )% Expenses 48 81 41 234 244 4 Pretax operating loss $ (47 ) $ (74 ) 36 $ (230 ) $ (229 ) —
Quarter Ended December 31,
% Better/(Worse)
2014
2013 Items included in operating earnings: Debt retirement expense
$
— $ (19 )NM
NM Not Meaningful — variance of greater than 100%
Corporate & Other pretax operating loss was $47 million for the quarter compared to a $74 million loss a year ago. The year ago quarter included a $19 million make whole expense associated with the retirement of debt.
At Ameriprise Financial, we have been helping people feel confident about their financial future for 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, 2013 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 Annual Report on Form 10-K for the year ended December 31, 2014. For information about Ameriprise Financial entities, please refer to the Fourth Quarter 2014 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: Earnings Quarter EndedDecember 31,
Per Diluted ShareQuarter Ended
December 31,
(in millions, except per share amounts, unaudited) 2014 2013 2014 2013 Net income attributable to Ameriprise Financial $ 425 $ 296 $ 2.22 $ 1.46 Less: Loss from discontinued operations, net of tax (1 ) (2 ) (0.01 ) (0.01 )Net income from continuing operations attributable to Ameriprise Financial
426 298 2.23 1.47Add: Market impact on variable annuity guaranteed benefits, net of tax(1)
21 68 0.11 0.34 Add: Market impact on indexed universal life benefits, net of tax(1) 10 5 0.05 0.03Add: Integration/restructuring charges, net of tax(1)
— 7 — 0.03 Add: Net realized (gains) losses, net of tax(1) (17 ) — (0.09 ) — Operating earnings $ 440 $ 378 $ 2.30 $ 1.87 Weighted average common shares outstanding: Basic 187.9 198.3 Diluted 191.2 202.3(1) Calculated using the statutory tax rate of 35%.
Ameriprise Financial, Inc. Reconciliation Table: Earnings Year EndedDecember 31,
Per Diluted ShareYear Ended
December 31,
(in millions, except per share amounts, unaudited) 2014 2013 2014 2013 Net income attributable to Ameriprise Financial $ 1,619 $ 1,334 $ 8.30 $ 6.44 Less: Loss from discontinued operations, net of tax (2 ) (3 ) (0.01 ) (0.02 )Net income from continuing operations attributable to Ameriprise Financial
1,621 1,337 8.31 6.46Add: Market impact on variable annuity guaranteed benefits, net of tax(1)
61 111 0.31 0.53 Add: Market impact on indexed universal life benefits, net of tax(1) 4 8 0.02 0.04 Add: Integration/restructuring charges, net of tax(1) — 9 — 0.04 Add: Net realized (gains) losses, net of tax(1) (24 ) (5 ) (0.12 ) (0.02 ) Operating earnings $ 1,662 $ 1,460 $ 8.52 $ 7.05 Weighted average common shares outstanding: Basic 191.6 203.2 Diluted 195.0 207.1(1) Calculated using the statutory tax rate of 35%.
Ameriprise Financial, Inc. Reconciliation Table: Total Net RevenuesQuarter EndedDecember 31,
Year EndedDecember 31,
(in millions, unaudited) 2014 2013 2014 2013 Total net revenues $ 3,089 $ 2,946 $ 12,268 $ 11,199 Less: CIEs revenue 108 137 651 345 Less: Net realized gains (losses) 27 — 37 7 Less: Market impact on indexed universal life benefits (11 ) (7 ) (11 ) (10 ) Operating total net revenues $ 2,965 $ 2,816 $ 11,591 $ 10,857 Ameriprise Financial, Inc. Reconciliation Table: Total ExpensesQuarter EndedDecember 31,
Year EndedDecember 31,
(in millions, unaudited) 2014 2013 2014 2013 Total expenses $ 2,531 $ 2,467 $ 9,721 $ 9,229 Less: CIEs expenses 80 53 270 204 Less: Market impact on variable annuity guaranteed benefits 34 104 94 170 Less: Market impact on indexed universal life benefits 4 2 (5 ) 3 Less: Integration/restructuring charges — 11 — 14 Operating expenses $ 2,413 $ 2,297 $ 9,362 $ 8,838 Ameriprise Financial, Inc. Reconciliation Table: Pretax Operating EarningsQuarter EndedDecember 31,
Year EndedDecember 31,
(in millions, unaudited) 2014 2013 2014 2013 Operating total net revenues $ 2,965 $ 2,816 $ 11,591 $ 10,857 Operating expenses 2,413 2,297 9,362 8,838 Pretax operating earnings $ 552 $ 519 $ 2,229 $ 2,019 Ameriprise Financial, Inc. Reconciliation Table: General and Administrative Expense Quarter Ended December 31, (in millions, unaudited) 2014 2013 General and administrative expense $ 775 $ 793 Less: CIEs expenses 20 15 Less: Integration/restructuring charges — 11 Operating general and administrative expense $ 755 $ 767 Ameriprise Financial, Inc. Reconciliation Table: Variable Annuity Pretax Operating Earnings Quarter Ended December 31, (in millions, unaudited) 2014 2013 Pretax operating earnings $ 123 $ 151 Less: Market impact on DAC and DSIC (mean reversion) 7 16 Less: Impact of variable annuity product changes 2 26 Less: Impact of interest rates (4 ) — Pretax operating earnings excluding impact of mean reversion, variable annuity product changes, and interest rates $ 118 $ 109 Ameriprise Financial, Inc. Reconciliation Table: Effective Tax Rate Quarter Ended December 31, 2014 (in millions, unaudited) GAAP Operating Income from continuing operations before income tax provision $ 558 $ 552 Less: Pretax income attributable to noncontrolling interests 28 — Income from continuing operations before income tax provision excluding consolidated investment entities $ 530 $ 552 Income tax provision from continuing operations $ 104 $ 112 Effective tax rate 18.7 % 20.3 % Effective tax rate excluding noncontrolling interests 19.7 % 20.3 % Ameriprise Financial, Inc. Reconciliation Table: Effective Tax Rate Quarter Ended December 31, 2013 (in millions, unaudited) GAAP Operating Income from continuing operations before income tax provision $ 479 $ 519 Less: Pretax income attributable to noncontrolling interests 84 — Income from continuing operations before income tax provision excluding consolidated investment entities $ 395 $ 519 Income tax provision from continuing operations $ 97 $ 141 Effective tax rate 20.5 % 27.2 % Effective tax rate excluding noncontrolling interests 24.8 % 27.2 % Ameriprise Financial, Inc. Reconciliation Table: Effective Tax Rate Year Ended December 31, 2014 (in millions, unaudited) GAAP Operating Income from continuing operations before income tax provision $ 2,547 $ 2,229 Less: Pretax income attributable to noncontrolling interests 381 — Income from continuing operations before income tax provision excluding consolidated investment entities $ 2,166 $ 2,229 Income tax provision from continuing operations $ 545 $ 567 Effective tax rate 21.4 % 25.4 % Effective tax rate excluding noncontrolling interests 25.2 % 25.4 % Ameriprise Financial, Inc. Reconciliation Table: Asset Management Adjusted Net Pretax Operating Margin Quarter Ended December 31,(in millions, unaudited)
2014 2013 Operating total net revenues $ 830 $ 824 Less: Distribution pass through revenues 231 229 Less: Subadvisory and other pass through revenues 99 100 Adjusted operating revenues $ 500 $ 495 Pretax operating earnings $ 198 $ 187 Less: Operating net investment income 6 4 Add: Amortization of intangibles 8 9 Adjusted operating earnings $ 200 $ 192 Adjusted net pretax operating margin 40.0 % 38.8 % Ameriprise Financial, Inc. Reconciliation Table: Asset Management Adjusted Net Pretax Operating MarginYear Ended December 31,
(in millions, unaudited) 2014 2013 Operating total net revenues $ 3,320 $ 3,169 Less: Distribution pass through revenues 929 892 Less: Subadvisory and other pass through revenues 400 430 Adjusted operating revenues $ 1,991 $ 1,847 Pretax operating earnings $ 788 $ 691 Less: Operating net investment income 30 54 Add: Amortization of intangibles 34 38 Adjusted operating earnings $ 792 $ 675 Adjusted net pretax operating margin 39.8 % 36.5 % Ameriprise Financial, Inc. Reconciliation Table: Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI”Twelve Months EndedDecember 31,
(in millions, unaudited)
2014 2013 Net income attributable to Ameriprise Financial $ 1,619 $ 1,334 Less: Loss from discontinued operations, net of tax (2 ) (3 ) Net income from continuing operations attributable toAmeriprise Financial, as reported 1,621 1,337Less: Adjustments (1)
(41 ) (123 ) Operating earnings $ 1,662 $ 1,460 Total Ameriprise Financial, Inc. shareholders’ equity $ 8,270 $ 8,582 Less: Accumulated other comprehensive income, net of tax 734 821 Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI 7,536 7,761 Less: Equity impacts attributable to the consolidated investment entities 311 333 Operating equity $ 7,225 $ 7,428 Return on equity excluding AOCI 21.5 % 17.2 %Operating return on equity excluding AOCI (2)
23.0 % 19.7 %(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 December 31,% Better/(Worse)
2014 2013 Revenues Management and financial advice fees $ 1,489 $ 1,397 7 % Distribution fees 484 448 8 Net investment income 409 458 (11 ) Premiums 359 333 8 Other revenues 355 317 12 Total revenues 3,096 2,953 5 Banking and deposit interest expense 7 7 — Total net revenues 3,089 2,946 5 Expenses Distribution expenses 827 764 (8 ) Interest credited to fixed accounts 184 206 11 Benefits, claims, losses and settlement expenses 568 563 (1 ) Amortization of deferred acquisition costs 86 54 (59 ) Interest and debt expense 91 87 (5 ) General and administrative expense 775 793 2 Total expenses 2,531 2,467 (3 ) Income from continuing operations before income tax provision 558 479 16 Income tax provision 104 97 (7 ) Income from continuing operations 454 382 19 Loss from discontinued operations, net of tax (1 ) (2 ) 50 Net income 453 380 19 Less: Net income attributable to noncontrolling interests 28 84 (67 ) Net income attributable to Ameriprise Financial $ 425 $ 296 44 Ameriprise Financial, Inc. Consolidated GAAP Results (in millions, unaudited) Year Ended December 31,% Better/(Worse)
2014 2013 Revenues Management and financial advice fees $ 5,810 $ 5,253 11 % Distribution fees 1,894 1,771 7 Net investment income 1,741 1,889 (8 ) Premiums 1,385 1,282 8 Other revenues 1,466 1,035 42 Total revenues 12,296 11,230 9 Banking and deposit interest expense 28 31 10 Total net revenues 12,268 11,199 10 Expenses Distribution expenses 3,236 2,925 (11 ) Interest credited to fixed accounts 713 806 12 Benefits, claims, losses and settlement expenses 1,982 1,954 (1 ) Amortization of deferred acquisition costs 367 207 (77 ) Interest and debt expense 328 281 (17 ) General and administrative expense 3,095 3,056 (1 ) Total expenses 9,721 9,229 (5 ) Income from continuing operations before income tax provision 2,547 1,970 29 Income tax provision 545 492 (11 ) Income from continuing operations 2,002 1,478 35 Loss from discontinued operations, net of tax (2 ) (3 ) 33 Net income 2,000 1,475 36 Less: Net income attributable to noncontrolling interests 381 141 NM Net income attributable to Ameriprise Financial $ 1,619 $ 1,334 21 NM Not Meaningful — variance of greater than 100%
Ameriprise FinancialInvestor Relations:Alicia A. Charity, 612-671-2080alicia.a.charity@ampf.comorChad J. Sanner, 612-671-4676chad.j.sanner@ampf.comorMedia Relations:Paul W. Johnson, 612-671-0625paul.w.johnson@ampf.com
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