Ameriprise Financial Reports First Quarter 2021 Results

0


MINNEAPOLIS–()–Ameriprise Financial, Inc. (NYSE: AMP):

Earnings Per Diluted Share

 

Return on Equity, ex AOCI (1)

 

Q1 2021

 

 

Q1 2021

GAAP

$3.58

 

GAAP

(1.1)%

Adjusted Operating

$5.43

 

Adjusted Operating

29.9%

Ameriprise increased its quarterly dividend 9 percent to $1.13 per share

  • First quarter adjusted operating earnings per diluted share was $5.43. The prior year period included a tax benefit from a projected net operating loss (NOL) of $1.12 per diluted share. Excluding this impact, adjusted operating EPS increased 27 percent from $4.29 reflecting strong business growth.

 

Perspective from Jim Cracchiolo, Chairman and Chief Executive Officer

 

 

“Ameriprise delivered an excellent first quarter, building on our momentum from 2020. We continue to execute our strategy well, invest for business growth and deliver meaningful results. And, as economies reopen globally and activity increases, there’s a large and growing opportunity to help more consumers and institutions achieve their goals.

 

“Our priority is to deliver a differentiated client experience and reach more people through our leading advice value proposition at Ameriprise, as well as through the broad capabilities and perspective at Columbia Threadneedle. This consistent focus is resulting in strong organic growth, including generating more than $14 billion of client net inflows in the quarter.

 

“As we recently announced, we will be complementing our growth with the strategic acquisition of BMO’s EMEA asset management business. This will increase Columbia Threadneedle’s presence in the European institutional market and expand our investment capabilities and solutions to meet growing client demand.

 

“With our consistent level of free-cash flow generation and financial strength, we were again able to increase our dividend another 9 percent – our 17th increase over the past 16 years – use cash for the acquisition and ensure our capital return plans are on track, all while maintaining our strong financial foundation.”

  • First quarter GAAP net income per diluted share was $3.58, which was negatively impacted by market changes that affected the valuation of derivatives. In the prior year period, the severe market dislocation, steep interest rate reduction and credit spread widening related to COVID-19 resulted in a substantial increase in GAAP results. See details on page 2.

 

  • Adjusted operating net revenue was $3.3 billion, a 10 percent increase from strong organic growth, an excellent result in the face of significant headwinds from low short-term interest rates.

 

  • General and administrative expenses were well managed in light of business growth, up 7 percent. Excluding the impact of share price appreciation on compensation expense, G&A was up 2 percent.

 

  • Assets under management and administration were up 36 percent to $1.14 trillion, a record high from strong client flows in Wealth and Asset Management, as well as market appreciation.

 

  • The company continues to generate strong organic growth, with more than $14 billion of client net inflows from Advice & Wealth Management and Asset Management.

 

  • The advisor network grew to 10,031 with 93 new experienced advisors joining the company in the quarter.

 

  • Investment performance at Columbia Threadneedle Investments remains excellent with 103 funds with 4- and 5-star Morningstar ratings.

 

  • The company returned $491 million of capital to shareholders in the quarter and announced a 9 percent increase in its quarterly dividend to $1.13 per share.

 

  • On April 12, Ameriprise announced the acquisition of BMO’s EMEA Asset Management business for approximately $845 million in cash. This acquisition expands key capabilities in attractive and growing market segments where BMO EMEA Asset Management has leading positions.

 

(1) Return on equity excluding AOCI is calculated on a trailing 12-month basis.

As indicated, the severe market dislocation and steep interest rate reduction in the first quarter of 2020 related to COVID-19 distorted the company’s prior year GAAP and operating results. This included a tax benefit in the year ago quarter from a projected net operating loss (NOL) that was not ultimately realized.

Ameriprise Financial, Inc.

First Quarter Summary

 

Quarter Ended

March 31,

% Over/

(Under)

(in millions, except per share amounts, unaudited)

2021

2020

GAAP net income

$

437

 

 

$

2,036

 

 

(79)%

Adjusted operating earnings (see reconciliation on p. 25)

$

663

 

 

$

694

 

 

(4)%

Adjusted operating earnings excluding Net Operating Loss (NOL) tax benefit (see reconciliation on p. 25)

$

663

 

 

$

550

 

 

21%

 

 

 

 

 

 

GAAP net income per diluted share (1)

$

3.58

 

 

$

15.88

 

 

(77)%

Adjusted operating earnings per diluted share (see reconciliation on p. 25)

$

5.43

 

 

$

5.41

 

 

Adjusted operating earnings per diluted share excluding Net Operating Loss (NOL) tax benefit (see reconciliation on p. 25) (2)

$

5.43

 

 

$

4.29

 

 

27%

 

 

 

 

 

 

GAAP Return on Equity, ex. AOCI

(1.1

)

%

59.5

 

%

 

Adjusted Operating Return on Equity, ex. AOCI

29.9

 

%

39.7

 

%

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

Basic

119.8

 

126.4

 

 

Diluted

122.2

 

128.2

 

 

 

 

 

 

 

 

 

(1) GAAP EPS of $3.58, a reduction of 77 percent.

  • Primarily driven by the prior year quarter, which was positively impacted by the significant change in the company’s credit spread and valuation of derivatives used to hedge the company’s variable annuity living benefit guarantees due to severe market dislocation.
  • Current year quarter results were negatively impacted by market changes that affected the valuation of derivatives.

(2) Adjusted operating earnings per diluted share excluding net operating loss (NOL) tax benefit of $5.43, up 27 percent.

  • The significant equity market dislocation in the prior year period created a tax benefit of $1.12 per diluted share associated with the utilization of a NOL that was ultimately not utilized.

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Adjusted Operating Results

 

Quarter Ended

March 31,

% Over/

(Under)

Adjusted(1)

% Over/

(Under)

(in millions, unaudited)

2021

2020

Net revenues

$

1,879

 

$

1,695

 

11%

16%

Distribution expenses

1,135

 

970

 

(17)%

(17)%

G&A / other expense

355

 

347

 

(2)%

(2)%

Pretax adjusted operating earnings

$

389

 

$

378

 

3%

30%

 

 

 

 

 

 

 

Pretax adjusted operating margin

20.7

%

22.3

%

(160) bps

215 bps

 

 

 

 

 

 

 

(1) Adjusted for $78 million impact from interest rates. See reconciliation on page 28.

 

Quarter Ended

March 31,

% Over/

(Under)

(in billions, unless otherwise noted)

2021

 

2020

Total client assets

$

762

 

$

560

36%

Total client net flows (1)

$

9.3

 

$

7.7

21%

Wrap net flows (1)

$

10.4

 

$

6.7

55%

AWM cash balance

$

40.4

 

$

40.0

1%

Average gross yield on cash balances (in bps)

65

 

172

 

Adjusted operating net revenue per advisor (TTM in thousands)

$

689

 

$

680

1%

Adjusted for interest rates (2)

$

689

 

$

640

8%

 

 

 

 

 

(1) See definition on page 12.

(2) Adjusted for impact from interest rates. See reconciliation on page 28.

Advice & Wealth Management pretax adjusted operating earnings were $389 million, driven by strong flows, higher transactional activity and strong expense management. Excluding the impact from the decline in short-term interest rates of $78 million, adjusted operating earnings increased 30 percent and pretax adjusted operating margin increased 215 basis points. On a sequential basis, pretax operating earnings increased 11 percent and pretax adjusted operating margin expanded 90 basis points.

Adjusted operating net revenues were $1.9 billion, reflecting strong net flows and market appreciation. Excluding the decline in short-term interest rates, revenues increased 16 percent. On a sequential basis, revenues increased 6 percent from strong flows and market appreciation, partially offset by fewer fee days in the current quarter.

Total expenses were $1.5 billion. General and administrative expense was well managed and increased 2 percent, which was in line with expectations based upon the cost associated with increased activity and the impact of share price appreciation on compensation expense.

Total client assets grew 36 percent to $762 billion, with continued strong total client flows of $9.3 billion in the quarter. The company’s ability to meet client needs efficiently and effectively is translating into excellent organic growth. Advisor productivity remains high with a 55 percent increase in flows in the investment advisory business and a 12 percent increase in transactional activity. Wrap net flows reached a record $10.4 billion. Cash balances remain elevated at $40.4 billion with a substantial opportunity for clients to put cash back to work in the future.

Adjusted operating net revenue per advisor on a trailing 12-month basis was $689,000. Excluding the decline in short-term interest rates, adjusted net revenue per advisor increased 8 percent. Total advisors were 10,031 from a combination of high advisor retention and the addition of 93 experienced advisors in the quarter.

Ameriprise Financial, Inc.

Asset Management Segment Adjusted Operating Results

 

Quarter Ended

March 31,

% Over/

(Under)

(in millions, unaudited)

2021

 

2020

 

Net revenues

$

828

 

 

$

686

 

 

21%

Distribution expenses

268

 

 

231

 

 

(16)%

G&A / other expenses

332

 

 

298

 

 

(11)%

Pretax adjusted operating earnings

$

228

 

 

$

157

 

 

45%

 

 

 

 

 

 

Net pretax adjusted operating margin (1)

43.9

 

%

37.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

March 31,

% Over/

(Under)

(in billions)

2021

 

2020

 

Total segment AUM

$

564

 

 

$

426

 

 

32%

 

 

 

 

 

 

Net Flows

 

 

 

 

 

Global Retail net flows

$

4.6

 

 

$

(2.9

)

 

NM

Global Institutional net flows, ex. legacy insurance partners flows

1.6

 

 

1.1

 

 

45%

Legacy insurance partners flows

(1.3

)

 

(0.6

)

 

NM

Total segment net flows

$

4.9

 

 

$

(2.4

)

 

NM

 

 

 

 

 

 

Model delivery AUA Flows (2)

$

0.3

 

 

$

0.1

 

 

NM

 

 

 

 

 

 

(1) See reconciliation on page 13.

 

 

 

 

 

(2) Estimated based on the period to period change in assets less calculated performance based on strategy returns on a one-quarter lag.

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

Asset Management pretax adjusted operating earnings were $228 million, up 45 percent, reflecting our investment engine, which is driving revenue growth through consistent investment performance and compelling thought leadership leading to increased customer engagement. The prior year quarter included an unfavorable performance fee adjustment. The net pretax adjusted operating margin was 43.9 percent.

Adjusted operating revenues increased 21 percent to $828 million from the cumulative benefit of inflows, a favorable mix shift and higher equity markets. The overall fee rate remained strong at 52 basis points.

Adjusted operating expenses increased 13 percent. General and administrative expenses grew 12 percent driven primarily from higher compensation expense related to stronger business performance and Ameriprise share price appreciation compared to last year, as well as the costs associated with increased activity levels.

Total assets under management increased 32 percent reflecting higher equity markets and net inflows. Investment performance remained strong across equity, fixed income and asset-allocation strategies.

In the quarter, net inflows were $4.9 billion, an improvement of $7.3 billion from a year ago. Excluding legacy insurance partners outflows, net inflows were $6.2 billion, reflecting a continuation of positive flow trends across multiple distribution channels and strategies.

  • Retail net inflows were $4.6 billion. Net inflows in North America were $4.8 billion with notable inflows in the broker-dealer channel partially offset by modest outflows in EMEA.
  • Global institutional net inflows were $1.6 billion, with gross sales across multiple strategies.

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment (1) Adjusted Operating Results

 

Quarter Ended

March 31,

% Over/

(Under)

(in millions, unaudited)

2021

 

2020

Net revenues

$

787

 

 

$

759

 

4%

Expenses

604

 

 

592

 

(2)%

Pretax adjusted operating earnings

$

183

 

 

$

167

 

10%

 

 

 

 

 

Retirement & Protection Solutions pretax adjusted operating earnings increased 10 percent to $183 million. Results were strong from market appreciation, partially offset by higher claims versus an abnormally low level in the year ago period. Overall claims remain within expected ranges.

Retirement sales increased 30 percent year-over-year to $1.5 billion. Retirement sales without living benefit guarantees represented 64 percent of variable annuity sales, driven by our lower-risk structured product, as well as our RAVA 5 product without living benefit guarantees. This sales shift is having a gradual impact on our inforce block, with account values with living benefit riders down nearly 2 percentage points year-over-year to 63 percent. This sales trend is expected to continue and meaningfully shift the mix of the business over time to lower-risk products that do not have living benefit guarantees. Annuity net amount at risk as a percent of account values was de minimis at 0.4 percent for living benefits and 0.1 percent for death benefits, which management believes is one of the lowest among major variable annuity writers, reflecting the high quality of the book.

Sales of protection products were flat to a year ago with a product mix shift that is consistent with our focused approach. Sales of higher-margin accumulation VUL products increased more than 75 percent and sales shifted away from indexed UL products as expected given pricing changes that reflect the low interest rate environment.

(1) Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). Fixed Annuities moved to the Corporate & Other segment in Q3 2020 as a closed block. Prior periods have been restated.

Ameriprise Financial, Inc.

Corporate & Other Segment (1) Adjusted Operating Results

 

Quarter Ended

March 31,

% Over/

(Under)

(in millions, unaudited)

2021

 

2020

Corporate & Other, excluding Closed Blocks

$

(63

)

 

$

(52

)

(21)%

Closed Blocks (2)

42

 

 

2

 

NM

Pretax adjusted operating earnings

$

(21

)

 

$

(50

)

58%

 

 

 

 

 

Long Term Care

$

46

 

 

$

2

 

NM

Fixed Annuities

(4

)

 

 

Closed Blocks pretax adjusted operating earnings

$

42

 

 

$

2

 

NM

 

 

 

 

 

(1) Fixed Annuities was moved into the Corporate & Other segment as a closed block. Prior periods have been restated.

(2) Long Term Care and Fixed Annuities.

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

Total Corporate & Other pretax adjusted operating loss was $21 million, a $29 million improvement from the prior year.

Corporate & Other, excluding Closed Blocks, pretax adjusted operating loss was $63 million. Results in the quarter included $11 million of higher compensation expense related to the impact of Ameriprise share price appreciation and $15 million from a strategic investment gain. The year ago quarter included an $11 million benefit from Ameriprise share price depreciation.

Long Term Care pretax adjusted operating earnings were $46 million from higher mortality and terminations, primarily related to COVID-19, which had a decreasing impact as we moved through the quarter.

Fixed Annuities pretax adjusted operating loss was $4 million from narrowed spreads related to continued low interest rates.

Taxes

The operating effective tax rate was 14.9 percent for the first quarter. The full year operating effective tax rate is expected to be approximately 17 percent.

About Ameriprise Financial

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 125 years. With extensive advisory, asset management and insurance capabilities and a nationwide network of approximately 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors’ financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.

Ameriprise Financial Services, LLC 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. 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.

Non-GAAP Financial Measures

The company believes the presentation of adjusted operating earnings and other non-GAAP financial measures, and the corresponding ratios, best represents the underlying performance of our core operations and facilitates a more meaningful trend analysis without the distortion of various adjustment items. Management uses non-GAAP financial measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors and to provide a valuable perspective for investors. These non-GAAP financial measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures. Non-GAAP financial measure reconciliations can be found on the subsequent pages.

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:

  • statements of the company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;
  • statements about the expected trend in the shift of the retirement product sales business to lower risk products without living benefit guarantees over time;
  • other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and
  • statements estimating the expected full year operating effective tax rate;
  • statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” ”continue,” “able to remain”, “resume,” “deliver,” “develop,” “evolve,” “drive,” ”enable,” “flexibility,” “scenario, “case,” “appear” 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.

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 cautions readers to carefully consider the risks described in 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, 2020, Part 1, Item 1A available at ir.ameriprise.com. Management undertakes no obligation to update publicly or revise any forward-looking statements.

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 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, 2021.

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.

Consolidated GAAP Results

(in millions, except per share amounts, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

Revenues

 

 

 

 

 

 

Management and financial advice fees

$

2,102

 

 

$

1,770

 

19%

$

2,003

 

5%

Distribution fees

458

 

 

464

 

(1)%

422

 

9%

Net investment income

377

 

 

328

 

15%

318

 

19%

Premiums, policy and contract charges

347

 

 

395

 

(12)%

375

 

(7)%

Other revenues

71

 

 

69

 

3%

71

 

Total revenues

3,355

 

 

3,026

 

11%

3,189

 

5%

Banking and deposit interest expense

5

 

 

25

 

80%

6

 

17%

Total net revenues

3,350

 

 

3,001

 

12%

3,183

 

5%

 

Expenses

 

 

 

 

 

 

Distribution expenses

1,175

 

 

995

 

(18)%

1,096

 

(7)%

Interest credited to fixed accounts

159

 

 

91

 

(75)%

121

 

(31)%

Benefits, claims, losses and settlement expenses

653

 

 

(1,747

)

NM

982

 

34%

Amortization of deferred acquisition costs

5

 

 

512

 

99%

(72

)

NM

Interest and debt expense

42

 

 

46

 

9%

38

 

(11)%

General and administrative expense

823

 

 

753

 

(9)%

828

 

1%

Total expenses

2,857

 

 

650

 

NM

2,993

 

5%

Pretax income

493

 

 

2,351

 

(79)%

190

 

NM

Income tax provision

56

 

 

315

 

82%

13

 

NM

Net income

$

437

 

 

$

2,036

 

(79)%

$

177

 

NM

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic earnings per share

$

3.65

 

 

$

16.11

 

 

$

1.46

 

 

Earnings per diluted share

$

3.58

 

 

$

15.88

 

 

$

1.43

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

Basic

119.8

 

 

126.4

 

 

120.9

 

 

Diluted

122.2

 

 

128.2

 

 

123.4

 

 

 

 

 

 

 

 

 

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

Ameriprise Financial, Inc.

Consolidated Highlights and Capital Summary

(in millions unless otherwise noted, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Assets Under Management and Administration

 

 

 

 

 

Advice & Wealth Management AUM

$

396,533

 

 

$

273,072

 

45%

$

376,811

 

5%

Asset Management AUM

564,131

 

 

426,163

 

32%

546,613

 

3%

Corporate AUM

97

 

 

48

 

NM

82

 

18%

Eliminations

(39,655

)

 

(27,923

)

(42)%

(37,483

)

(6)%

Total Assets Under Management

921,106

 

 

671,360

 

37%

886,023

 

4%

Total Assets Under Administration

222,887

 

 

167,760

 

33%

216,066

 

3%

Total AUM and AUA

$

1,143,993

 

 

$

839,120

 

36%

$

1,102,089

 

4%

 

 

 

 

 

 

 

S&P 500

 

 

 

 

 

 

Daily average

3,861

 

 

3,069

 

26%

3,555

 

9%

Period end

3,973

 

 

2,585

 

54%

3,756

 

6%

 

 

 

 

 

 

 

Weighted Equity Index (WEI) (1)

 

 

 

 

 

 

Daily average

2,662

 

 

2,111

 

26%

2,414

 

10%

Period end

2,725

 

 

1,753

 

55%

2,573

 

6%

 

 

 

 

 

 

 

Common shares

 

 

 

 

 

 

Beginning balance

116.8

 

 

123.9

 

(6)%

118.6

 

(2)%

Repurchases

(1.7

)

 

(2.5

)

32%

(2.1

)

19%

Issuances

1.8

 

 

1.8

 

1.0

 

80%

Other

(0.9

)

 

(0.9

)

(0.7

)

(29)%

Total common shares outstanding

116.0

 

 

122.3

 

(5)%

116.8

 

(1)%

Restricted stock units

3.0

 

 

3.1

 

(3)%

3.2

 

(6)%

Total basic common shares outstanding

119.0

 

 

125.4

 

(5)%

120.0

 

(1)%

Total potentially dilutive shares

2.5

 

 

0.9

 

NM

2.5

 

Total diluted shares

121.5

 

 

126.3

 

(4)%

122.5

 

(1)%

 

 

 

 

 

 

 

Capital Returned to Shareholders

 

 

 

 

 

 

Dividends paid

$

128

 

 

$

126

 

2%

$

126

 

2%

Common stock share repurchases

363

 

 

386

 

(6)%

376

 

(3)%

Total Capital Returned to Shareholders

$

491

 

 

$

512

 

(4)%

$

502

 

(2)%

 

 

 

 

 

 

 

(1) Weighted Equity Index is an Ameriprise calculated proxy for equity market movements calculated using a weighted average of the S&P 500, Russell 2000, Russell Midcap and MSCI EAFE indices based on North America distributed equity assets.

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

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Adjusted Operating Results

(in millions, unaudited)

1 Qtr 2021

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Management and financial advice fees:

 

 

 

 

 

 

 

 

Advisory fees

$

1,028

 

$

854

 

20%

$

953

 

8%

Financial planning fees

88

 

81

 

9%

100

 

(12)%

Transaction and other fees

89

 

89

 

88

 

1%

Total management and financial advice fees

1,205

 

1,024

 

18%

1,141

 

6%

Distribution fees:

 

 

 

 

 

 

 

 

Mutual funds

207

 

184

 

13%

197

 

5%

Insurance and annuity

240

 

208

 

15%

229

 

5%

Other products

112

 

156

 

(28)%

96

 

17%

Total distribution fees

559

 

548

 

2%

522

 

7%

Net investment income

64

 

100

 

(36)%

66

 

(3)%

Other revenues

56

 

48

 

17%

53

 

6%

Total revenues

1,884

 

1,720

 

10%

1,782

 

6%

Banking and deposit interest expense

5

 

25

 

80%

6

 

17%

Adjusted operating total net revenues

1,879

 

1,695

 

11%

1,776

 

6%

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Distribution expenses

1,135

 

970

 

(17)%

1,065

 

(7)%

Interest and debt expense

3

 

2

 

(50)%

2

 

(50)%

General and administrative expense

352

 

345

 

(2)%

357

 

1%

Adjusted operating expenses

1,490

 

1,317

 

(13)%

1,424

 

(5)%

Pretax adjusted operating earnings

$

389

 

$

378

 

3%

$

352

 

11%

 

 

 

 

 

 

 

 

 

Pretax adjusted operating margin

20.7

%

22.3

%

 

19.8

%

 

 

 

 

 

 

 

 

 

 

Pretax adjusted operating earnings by product

 

 

 

 

 

 

 

 

Certificates and Banking – Combined

$

19

 

$

17

 

12%

$

21

 

(10)%

Wealth Management & Distribution

370

 

361

 

2%

331

 

12%

Pretax adjusted operating earnings

$

389

 

$

378

 

3%

$

352

 

11%

 

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Operating Metrics

(in millions unless otherwise noted, unaudited)

1 Qtr 2021

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

 

 

AWM Total Client Assets

$

761,566

 

 

$

559,808

 

 

36%

$

732,171

 

 

4%

 

 

 

 

 

 

 

 

 

Total Client Flows (1)

$

9,305

 

 

$

7,675

 

 

21%

$

9,697

 

 

(4)%

 

 

 

 

 

 

 

 

 

Total Wrap Accounts

 

 

 

 

 

 

 

 

Beginning assets

$

380,013

 

 

$

317,536

 

 

20%

$

339,950

 

 

12%

Net flows (2)

10,413

 

 

6,712

 

 

55%

8,999

 

 

16%

Market appreciation (depreciation) and other (2)

9,391

 

 

(48,743

)

 

NM

31,064

 

 

(70)%

Total wrap ending assets

$

399,817

 

 

$

275,505

 

 

45%

$

380,013

 

 

5%

 

 

 

 

 

 

 

 

 

Advisory wrap account assets ending balance (3)

$

395,299

 

 

$

272,263

 

 

45%

$

375,657

 

 

5%

 

 

 

 

 

 

 

 

 

Brokerage Cash & Certificates Balances

 

 

 

 

 

 

 

 

On-balance sheet (Net Investment Income)

 

 

 

 

 

 

 

 

On-balance sheet – broker dealer

$

3,385

 

 

$

3,517

 

 

(4)%

$

3,487

 

 

(3)%

On-balance sheet – bank

7,985

 

 

6,160

 

 

30%

7,405

 

 

8%

On-balance sheet – certificate

6,258

 

 

7,336

 

 

(15)%

6,760

 

 

(7)%

Total on-balance sheet

$

17,628

 

 

$

17,013

 

 

4%

$

17,652

 

 

Off-balance sheet (Distribution Fees)

 

 

 

 

 

 

 

 

Off-balance sheet – broker dealer

$

22,733

 

 

$

22,988

 

 

(1)%

$

23,842

 

 

(5)%

Total brokerage cash & certificates balances

$

40,361

 

 

$

40,001

 

 

1%

$

41,494

 

 

(3)%

 

 

 

 

 

 

 

 

 

Gross Fee Yield

 

 

 

 

 

 

 

 

On-balance sheet – broker dealer

0.10

 

%

1.17

 

%

 

0.11

 

%

 

On-balance sheet – bank

1.37

 

%

2.15

 

%

 

1.45

 

%

 

On-balance sheet – certificates

1.22

 

%

2.43

 

%

 

1.32

 

%

 

Off-balance sheet – broker dealer

0.28

 

%

1.40

 

%

 

0.29

 

%

 

 

 

 

 

 

 

 

 

 

Weighted Average Gross Fee Yield

0.65

 

%

1.72

 

%

 

0.69

 

%

 

 

 

 

 

 

 

 

 

 

Financial Advisors

 

 

 

 

 

 

 

 

Employee advisors

2,107

 

2,102

 

2,117

 

Franchisee advisors

7,924

 

7,776

 

2%

7,805

 

2%

Total financial advisors

10,031

 

9,878

 

2%

9,922

 

1%

 

 

 

 

 

 

 

 

 

Advisor Retention

 

 

 

 

 

 

 

 

Employee

92.0

 

%

90.2

 

%

 

92.1

 

%

 

Franchisee

94.4

 

%

92.8

 

%

 

94.0

 

%

 

 

 

 

 

 

 

 

 

 

(1) Total client flows represent inflows of client cash and securities less client outfows. Inflows include dividends and interest; outflows include fees. Excludes short-term and long-term capital gain distributions.

(2) Beginning in Q1 2021, wrap net flows is calculated including dividends, interest and fees, which were previously recorded in market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

(3) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

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

Ameriprise Financial, Inc.

Asset Management Segment Adjusted Operating Results

(in millions, unaudited)

1 Qtr 2021

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Management and financial advice fees:

 

 

 

 

 

 

 

 

Asset management fees:

 

 

 

 

 

 

 

 

Retail

$

531

 

 

$

447

 

 

19%

$

492

 

 

8%

Institutional

123

 

 

85

 

 

45%

134

 

 

(8)%

Transaction and other fees

52

 

 

47

 

 

11%

51

 

 

2%

Revenue from other sources (1)

7

 

 

4

 

 

75%

4

 

 

75%

Total management and financial advice fees

713

 

 

583

 

 

22%

681

 

 

5%

Distribution fees:

 

 

 

 

 

 

 

 

Mutual funds

67

 

 

60

 

 

12%

63

 

 

6%

Insurance and annuity

47

 

 

43

 

 

9%

45

 

 

4%

Total distribution fees

114

 

 

103

 

 

11%

108

 

 

6%

Net investment income

1

 

 

 

 

8

 

 

(88)%

Other revenues

 

 

 

 

1

 

 

NM

Total revenues

828

 

 

686

 

 

21%

798

 

 

4%

Banking and deposit interest expense

 

 

 

 

 

 

Adjusted operating total net revenues

828

 

 

686

 

 

21%

798

 

 

4%

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Distribution expenses

268

 

 

231

 

 

(16)%

254

 

 

(6)%

Amortization of deferred acquisition costs

3

 

 

3

 

 

3

 

 

Interest and debt expense

1

 

 

1

 

 

1

 

 

General and administrative expense

328

 

 

294

 

 

(12)%

339

 

 

3%

Adjusted operating expenses

600

 

 

529

 

 

(13)%

597

 

 

(1)%

Pretax adjusted operating earnings

$

228

 

 

$

157

 

 

45%

$

201

 

 

13%

 

 

 

 

 

 

 

 

 

Net Pretax Adjusted Operating Margin Reconciliation

 

 

 

 

 

 

 

Adjusted operating total net revenues

$

828

 

 

$

686

 

 

21%

$

798

 

 

4%

Distribution pass thru revenues

(217

)

 

(186

)

 

(17)%

(205

)

 

(6)%

Subadvisory and other pass thru revenues

(87

)

 

(78

)

 

(12)%

(94

)

 

7%

Net adjusted operating revenues

$

524

 

 

$

422

 

 

24%

$

499

 

 

5%

 

 

 

 

 

 

 

 

 

Pretax adjusted operating earnings

$

228

 

 

$

157

 

 

45%

$

201

 

 

13%

Adjusted operating net investment income

(1

)

 

 

 

(8

)

 

88%

Amortization of intangibles

3

 

 

3

 

 

4

 

 

(25)%

Net adjusted operating earnings

$

230

 

 

$

160

 

 

44%

$

197

 

 

17%

 

 

 

 

 

 

 

 

 

Pretax adjusted operating margin

27.5

 

%

22.9

 

%

 

25.2

 

%

 

Net pretax adjusted operating margin (2)

43.9

 

%

37.9

 

%

 

39.5

 

%

 

 

 

 

 

 

 

 

 

 

Performance fees (3)

 

 

 

 

 

 

 

 

Performance fees

$

1

 

 

$

 

 

$

17

 

 

(94)%

Performance fee related to general and administrative expense

 

 

 

 

4

 

 

NM

Net performance fees

$

1

 

 

$

 

 

$

13

 

 

(92)%

 

 

 

 

 

 

 

 

 

(1) Includes revenue from separate accounts that qualify as investment contracts under insurance accounting standards.

(2) Calculated as net adjusted operating earnings as a percentage of net adjusted operating revenues.

(3) Performance fees do not include CLO incentive fees.

NM Not Meaningful – variance equal to or greater than 100%.

Ameriprise Financial, Inc.

Asset Management Segment Operating Metrics

(in millions, unaudited)

1 Qtr 2021

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

 

 

Total Managed Assets by Type

 

 

 

 

 

 

 

 

Equity

$

319,446

 

 

$

210,463

 

 

52%

$

302,563

 

 

6%

Fixed income

195,020

 

 

174,012

 

 

12%

196,501

 

 

(1)%

Money market

5,766

 

 

4,947

 

 

17%

5,899

 

 

(2)%

Alternative

3,841

 

 

2,745

 

 

40%

3,623

 

 

6%

Hybrid and other

40,058

 

 

33,996

 

 

18%

38,027

 

 

5%

Total managed assets by type

$

564,131

 

 

$

426,163

 

 

32%

$

546,613

 

 

3%

 

 

 

 

 

 

 

 

 

Average Managed Assets by Type (1)

 

 

 

 

 

 

 

 

Equity

$

308,816

 

 

$

246,757

 

 

25%

$

279,128

 

 

11%

Fixed income

195,823

 

 

181,159

 

 

8%

192,196

 

 

2%

Money market

5,921

 

 

4,745

 

 

25%

5,397

 

 

10%

Alternative

3,775

 

 

3,030

 

 

25%

3,512

 

 

7%

Hybrid and other

39,212

 

 

35,397

 

 

11%

36,748

 

 

7%

Total average managed assets by type

$

553,547

 

 

$

471,088

 

 

18%

$

516,981

 

 

7%

 

 

 

 

 

 

 

 

 

Managed Assets Rollforward

 

 

 

 

 

 

 

 

Global Retail Funds

 

 

 

 

 

 

 

 

Beginning assets

$

323,483

 

 

$

287,452

 

 

13%

$

289,922

 

 

12%

Inflows

22,549

 

 

17,371

 

 

30%

16,922

 

 

33%

Outflows

(17,637

)

 

(20,028

)

 

12%

(14,518

)

 

(21)%

Net VP/VIT fund flows

(1,019

)

 

(737

)

 

(38)%

(840

)

 

(21)%

Net new flows

3,893

 

 

(3,394

)

 

NM

1,564

 

 

NM

Reinvested dividends

717

 

 

502

 

 

43%

6,219

 

 

(88)%

Net flows

4,610

 

 

(2,892

)

 

NM

7,783

 

 

(41)%

Distributions

(858

)

 

(669

)

 

(28)%

(7,088

)

 

88%

Market appreciation (depreciation) and other

13,187

 

 

(43,485

)

 

NM

30,847

 

 

(57)%

Foreign currency translation (2)

(152

)

 

(1,368

)

 

89%

2,019

 

 

NM

Total ending assets

340,270

 

 

239,038

 

 

42%

323,483

 

 

5%

% of total retail assets sub-advised

16.4

 

%

19.2

 

%

 

17.7

 

%

 

 

 

 

 

 

 

 

 

 

Global Institutional

 

 

 

 

 

 

 

 

Beginning assets

223,130

 

 

206,729

 

 

8%

208,082

 

 

7%

Inflows (3)

7,741

 

 

8,561

 

 

(10)%

5,378

 

 

44%

Outflows (3)

(7,462

)

 

(8,028

)

 

7%

(6,177

)

 

(21)%

Net flows

279

 

 

533

 

 

(48)%

(799

)

 

NM

Market appreciation (depreciation) and other (4)

176

 

 

(16,698

)

 

NM

11,388

 

 

(98)%

Foreign currency translation (2)

276

 

 

(3,439

)

 

NM

4,459

 

 

(94)%

Total ending assets

223,861

 

 

187,125

 

 

20%

223,130

 

 

 

 

 

 

 

 

 

 

 

Total managed assets

$

564,131

 

 

$

426,163

 

 

32%

$

546,613

 

 

3%

 

 

 

 

 

 

 

 

 

Total net flows

$

4,889

 

 

$

(2,359

)

 

NM

$

6,984

 

 

(30)%

 

 

 

 

 

 

 

 

 

Legacy insurance partners flows

$

(1,262

)

 

$

(602

)

 

NM

$

(1,350

)

 

7%

 

 

 

 

 

 

 

 

 

Total Assets Under Advisement (5)

$

16,036

 

 

$

12,796

 

 

25%

$

13,929

 

 

15%

Model delivery AUA flows (6)

$

294

 

 

$

66

 

 

NM

$

226

 

 

30%

 

 

 

 

 

 

 

 

 

(1) Average ending balances are calculated using the average of the prior period’s ending balance and all months in the current period.

(2) Amounts represent local currency to US dollar translation for reporting purposes.

(3) Global Institutional inflows and outflows include net flows from our RiverSource Structured Annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.

(4) Included in Market appreciation (depreciation) and other for Global Institutional is the change in affiliated general account balance excluding net flows related to our Structured Annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.

(5) Assets are presented on a one-quarter lag.

(6) Estimated flows based on the period to period change in assets less calculated performance based on strategy returns on a one-quarter lag.

NM Not Meaningful – variance equal to or greater than 100%.

Ameriprise Financial, Inc.

Asset Management Segment Performance Metrics

 

1 Qtr 2021

 

 

 

 

 

Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark – Asset Weighted

1 year

3 year

5 year

10 year

Equity

60%

87%

81%

88%

Fixed Income

80%

69%

88%

89%

Asset Allocation

31%

88%

95%

89%

 

 

 

 

 

4- or 5-star Morningstar rated funds

Overall

3 year

5 year

10 year

Number of Rated Funds

103

92

92

89

Percent of Rated Assets

68%

61%

58%

72%

 

 

 

 

 

Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index. Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees. Comparisons to Index are measured Gross of Fees.

 

 

 

 

 

To calculate asset weighted performance, the sum of the total assets of the funds with above median ranking are divided by total assets of all funds. Funds with more assets will receive a greater share of the total percentage above or below median.

 

 

 

 

 

Aggregated Asset Allocation Funds may include funds that invest in other Columbia or Threadneedle branded mutual funds included in both equity and fixed income.

 

 

 

 

 

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment (1) Adjusted Operating Results

(in millions, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Management and financial advice fees

$

222

 

 

$

199

 

12%

$

219

 

1%

Distribution fees

116

 

 

105

 

10%

115

 

1%

Net investment income

126

 

 

130

 

(3)%

128

 

(2)%

Premiums, policy and contract charges

323

 

 

325

 

(1)%

337

 

(4)%

Other revenues

 

 

 

 

Total revenues

787

 

 

759

 

4%

799

 

(2)%

Banking and deposit interest expense

 

 

 

 

Adjusted operating total net revenues

787

 

 

759

 

4%

799

 

(2)%

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Distribution expenses

129

 

 

110

 

(17)%

124

 

(4)%

Interest credited to fixed accounts

96

 

 

100

 

4%

97

 

1%

Benefits, claims, losses and settlement expenses

234

 

 

245

 

4%

253

 

8%

Amortization of deferred acquisition costs

63

 

 

54

 

(17)%

59

 

(7)%

Interest and debt expense

10

 

 

10

 

11

 

9%

General and administrative expense

72

 

 

73

 

1%

75

 

4%

Adjusted operating expenses

604

 

 

592

 

(2)%

619

 

2%

Pretax adjusted operating earnings

$

183

 

 

$

167

 

10%

$

180

 

2%

 

 

 

 

 

 

 

(1) Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). Fixed Annuities moved to the Corporate & Other segment in Q3 2020 as a closed block. Prior periods have been restated.

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

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment Operating Metrics

(in millions, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Variable Annuities Rollforwards

 

 

 

 

 

 

Beginning balance

$

85,774

 

 

$

80,068

 

7%

$

79,846

 

7%

Deposit

1,428

 

 

1,072

 

33%

1,327

 

8%

Withdrawals and terminations

(1,984

)

 

(1,784

)

(11)%

(1,786

)

(11)%

Net flows

(556

)

 

(712

)

22%

(459

)

(21)%

Investment performance and interest credited

1,746

 

 

(9,397

)

NM

6,387

 

(73)%

Other

 

 

 

 

Total ending balance – contract accumulation values

$

86,964

 

 

$

69,959

 

24%

$

85,774

 

1%

 

 

 

 

 

 

 

Variable annuities fixed sub-accounts

$

5,075

 

 

$

5,125

 

(1)%

$

5,104

 

(1)%

 

 

 

 

 

 

 

Payout Annuities Reserve Balance

$

1,908

 

 

$

2,037

 

(6)%

$

1,948

 

(2)%

 

 

 

 

 

 

 

Life Insurance In Force

$

196,164

 

 

$

194,617

 

1%

$

195,750

 

 

 

 

 

 

 

 

Net Amount at Risk (Life)

$

37,636

 

 

$

40,075

 

(6)%

$

37,817

 

 

 

 

 

 

 

 

Net Policyholder Reserves

 

 

 

 

 

 

VUL/UL

$

14,106

 

 

$

11,224

 

26%

$

13,738

 

3%

Term and whole life

172

 

 

180

 

(4)%

174

 

(1)%

Disability insurance

503

 

 

508

 

(1)%

504

 

Other insurance

637

 

 

668

 

(5)%

643

 

(1)%

Total net policyholder reserves

$

15,418

 

 

$

12,580

 

23%

$

15,059

 

2%

 

 

 

 

 

 

 

DAC Ending Balances

 

 

 

 

 

 

Variable Annuities DAC

$

1,792

 

 

$

1,397

 

28%

$

1,711

 

5%

Life and Health DAC

$

839

 

 

$

894

 

(6)%

$

766

 

10%

 

 

 

 

 

 

 

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

Ameriprise Financial, Inc.

Corporate Segment Adjusted Operating Results and Metrics

(in millions, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Corporate Excluding Long Term Care and Fixed Annuities Adjusted Operating Income Statements

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Management and financial advice fees

$

 

 

$

 

$

 

Distribution fees

 

 

 

 

Net investment income

(1

)

 

(10

)

90%

(13

)

92%

Premiums, policy and contract charges

 

 

 

 

Other revenues

1

 

 

6

 

(83)%

2

 

(50)%

Total revenues

 

 

(4

)

NM

(11

)

NM

Banking and deposit interest expense

 

 

1

 

NM

1

 

NM

Adjusted operating total net revenues

 

 

(5

)

NM

(12

)

NM

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Distribution expenses

 

 

 

 

Interest credited to fixed accounts

 

 

 

 

Benefits, claims, losses and settlement expenses

 

 

 

(1

)

NM

Amortization of deferred acquisition costs

 

 

 

 

Interest and debt expense

7

 

 

9

 

22%

10

 

30%

General and administrative expense

56

 

 

38

 

(47)%

58

 

3%

Adjusted operating expenses

63

 

 

47

 

(34)%

67

 

6%

Pretax adjusted operating earnings (loss)

$

(63

)

 

$

(52

)

(21)%

$

(79

)

20%

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Ameriprise Financial, Inc.

Corporate Segment Adjusted Operating Results and Metrics

(in millions, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Long Term Care Adjusted Operating Income Statements

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Management and financial advice fees

$

 

 

$

 

$

 

Distribution fees

 

 

 

 

Net investment income

38

 

 

42

 

(10)%

38

 

Premiums, policy and contract charges

24

 

 

25

 

(4)%

26

 

(8)%

Other revenues

 

 

 

 

Total revenues

62

 

 

67

 

(7)%

64

 

(3)%

Banking and deposit interest expense

 

 

 

 

Adjusted operating total net revenues

62

 

 

67

 

(7)%

64

 

(3)%

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Distribution expenses

(3

)

 

(2

)

50%

(3

)

Interest credited to fixed accounts

 

 

 

 

Benefits, claims, losses and settlement expenses

11

 

 

57

 

81%

39

 

72%

Amortization of deferred acquisition costs

 

 

 

 

Interest and debt expense

3

 

 

3

 

1

 

NM

General and administrative expense

5

 

 

7

 

29%

6

 

17%

Adjusted operating expenses

16

 

 

65

 

75%

43

 

63%

Pretax adjusted operating earnings (loss)

$

46

 

 

$

2

 

NM

$

21

 

NM

 

 

 

 

 

 

 

Long Term Care Policyholder Reserves, net of reinsurance (1)

 

 

 

 

 

 

Active Life Reserves

$

2,431

 

 

$

2,061

 

18%

$

2,539

 

(4)%

Disabled Life Reserves

540

 

 

574

 

(6)%

564

 

(4)%

Total long term care policyholder reserves, net of reinsurance

$

2,971

 

 

$

2,635

 

13%

$

3,103

 

(4)%

 

 

 

 

 

 

 

(1) SFAS 115 requires GAAP reserves to include all unrealized gains on available for sale securities in the portfolio to be reported as if they were realized on the last day of the accounting period with all financial impacts flowing through other comprehensive income.

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

Ameriprise Financial, Inc.

Corporate Segment (1) Adjusted Operating Results and Metrics

(in millions, unaudited)

1 Qtr 2021

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

 

 

Fixed Annuities Adjusted Operating Income Statements

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Management and financial advice fees

$

 

 

$

 

 

$

 

 

Distribution fees

 

 

 

 

 

 

Net investment income

63

 

 

72

 

 

(13)%

67

 

 

(6)%

Premiums, policy and contract charges

 

 

 

 

 

 

Other revenues

14

 

 

15

 

 

(7)%

15

 

 

(7)%

Total revenues

77

 

 

87

 

 

(11)%

82

 

 

(6)%

Banking and deposit interest expense

 

 

 

 

 

 

Adjusted operating total net revenues

77

 

 

87

 

 

(11)%

82

 

 

(6)%

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Distribution expenses

1

 

 

1

 

 

1

 

 

Interest credited to fixed accounts

61

 

 

66

 

 

8%

65

 

 

6%

Benefits, claims, losses and settlement expenses

2

 

 

2

 

 

1

 

 

NM

Amortization of deferred acquisition costs

4

 

 

2

 

 

NM

3

 

 

(33)%

Interest and debt expense

5

 

 

7

 

 

29%

5

 

 

General and administrative expense

8

 

 

9

 

 

11%

9

 

 

11%

Adjusted operating expenses

81

 

 

87

 

 

7%

84

 

 

4%

Pretax adjusted operating earnings (loss)

$

(4

)

 

$

 

 

$

(2

)

 

NM

 

 

 

 

 

 

 

 

 

Fixed Deferred Annuities – ending balance – contract accumulation values

$

7,850

 

 

$

8,165

 

 

(4)%

$

7,964

 

 

(1)%

 

 

 

 

 

 

 

 

 

Tax Equivalent Spread – Fixed Deferred Annuities (2)

 

 

 

 

 

 

 

 

Gross rate of return of invested assets

3.1

 

%

3.7

 

%

 

3.3

 

%

 

Crediting rate excluding capitalized interest

(3.3

)

%

(3.3

)

%

 

(3.3

)

%

 

Tax equivalent margin spread

(0.2

)

%

0.4

 

%

 

 

%

 

 

 

 

 

 

 

 

 

 

Fixed Deferred Annuities DAC Ending Balance

$

48

 

 

$

68

 

 

(29)%

$

50

 

 

(4)%

 

 

 

 

 

 

 

 

 

(1) Fixed annuities was moved into the Corporate & Other segment as a closed block. Prior periods have been restated.

(2) Attributable to interest sensitive products only, which has been approximately 99% of the total ending fixed deferred annuities accumulation values in the periods reported. The asset earnings rate is a calculated yield based on specifically assigned assets.

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

Ameriprise Financial, Inc.

Eliminations (1) Adjusted Operating Results

(in millions, unaudited)

1 Qtr 2021

 

1 Qtr 2020

% Over/

(Under)

4 Qtr 2020

% Over/

(Under)

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Management and financial advice fees

$

(36

)

 

$

(35

)

(3)%

$

(36

)

Distribution fees

(331

)

 

(292

)

(13)%

(323

)

(2)%

Net investment income

(4

)

 

(4

)

(5

)

20%

Premiums, policy and contract charges

(8

)

 

(8

)

(8

)

Other revenues

 

 

 

 

Total revenues

(379

)

 

(339

)

(12)%

(372

)

(2)%

Banking and deposit interest expense

 

 

(1

)

NM

(1

)

NM

Adjusted operating total net revenues

(379

)

 

(338

)

(12)%

(371

)

(2)%

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Distribution expenses

(355

)

 

(315

)

13%

(345

)

3%

Interest credited to fixed accounts

 

 

 

 

Benefits, claims, losses and settlement expenses

(4

)

 

(5

)

(20)%

(5

)

(20)%

Amortization of deferred acquisition costs

 

 

 

 

Interest and debt expense

(3

)

 

(3

)

(4

)

(25)%

General and administrative expense

(17

)

 

(15

)

13%

(17

)

Adjusted operating expenses

(379

)

 

(338

)

12%

(371

)

2%

Pretax adjusted operating earnings (loss)

$

 

 

$

 

$

 

 

 

 

 

 

 

 

(1) The majority of the amounts represent the impact of inter-segment transfer pricing for both revenues and expenses.

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

Ameriprise Financial, Inc.

Capital Information

(in millions, unaudited)

March 31,

2021

March 31,

2020

December 31,

2020

 

 

 

 

 

 

 

Long-term Debt Summary

 

 

 

 

 

 

Senior notes (1)

$

2,800

 

 

$

2,300

 

 

$

2,800

 

 

Finance lease liabilities

46

 

 

54

 

 

44

 

 

 

Fair value of hedges, unamortized discount and debt issuance costs

(12

)

 

(10

)

 

(13

)

 

Total Ameriprise Financial long-term debt

2,834

 

 

2,344

 

 

2,831

 

 

Non-recourse debt of consolidated investment entities

2,671

 

 

1,376

 

 

1,913

 

 

Total long-term debt

$

5,505

 

 

$

3,720

 

 

$

4,744

 

 

 

 

 

 

 

 

 

Total Ameriprise Financial long-term debt

$

2,834

 

 

$

2,344

 

 

$

2,831

 

 

 

Fair value of hedges, unamortized discount and debt issuance costs

12

 

 

10

 

 

13

 

 

Finance lease liabilities

(46

)

 

(54

)

 

(44

)

 

Total Ameriprise Financial long-term debt excluding fair value of hedges, unamortized discount, debt issuance costs and finance lease liabilities

$

2,800

 

 

$

2,300

 

 

$

2,800

 

 

 

 

 

 

 

 

 

Total equity (2)

$

5,502

 

 

$

6,693

 

 

$

5,867

 

 

Equity of consolidated investment entities

(1

)

 

(2

)

 

(3

)

 

Total equity excluding CIEs

$

5,501

 

 

$

6,691

 

 

$

5,864

 

 

 

 

 

 

 

 

 

Total Ameriprise Financial capital

$

8,334

 

 

$

9,037

 

 

$

8,698

 

 

Total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, debt issuance costs, finance lease liabilities and equity of CIEs

$

8,299

 

 

$

8,991

 

 

$

8,664

 

 

 

 

 

 

 

 

 

Debt to capital

 

 

 

 

 

 

Total Ameriprise Financial long-term debt to total Ameriprise Financial capital (1)

34.0

 

%

25.9

 

%

32.5

 

%

Total Ameriprise Financial long-term debt to total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, best issuance costs, finance lease liabilities and equity of CIEs (1)(2)

33.7

 

%

25.6

 

%

32.3

 

%

 

 

 

 

 

 

 

(1) The first quarter of 2020 does not include $500 million of debt issuance that settled on April 2, 2020.

 

(2) Includes accumulated other comprehensive income, net of tax.

 

Ameriprise Financial, Inc.

Consolidated Balance Sheets

(in millions, unaudited)

March 31,

2021

 

December 31,

2020

 

 

 

 

Assets

 

 

 

Cash and cash equivalents

$

5,462

 

 

$

6,751

 

Cash of consolidated investment entities

325

 

 

94

 

Investments

40,437

 

 

41,031

 

Investments of consolidated investment entities

2,642

 

 

1,918

 

Separate account assets

93,483

 

 

92,611

 

Receivables

8,038

 

 

7,819

 

Receivables of consolidated investment entities

17

 

 

16

 

Deferred acquisition costs

2,685

 

 

2,532

 

Restricted and segregated cash and investments

2,564

 

 

2,558

 

Other assets

10,082

 

 

10,551

 

Other assets of consolidated investment entities

2

 

 

2

 

Total Assets

$

165,737

 

 

$

165,883

 

 

 

 

 

Liabilities

 

 

 

Policyholder account balances, future policy benefits and claims

$

32,702

 

 

$

33,992

 

Separate account liabilities

93,483

 

 

92,611

 

Customer deposits

17,619

 

 

17,641

 

Short-term borrowings

200

 

 

200

 

Long-term debt

2,834

 

 

2,831

 

Debt of consolidated investment entities

2,671

 

 

1,913

 

Accounts payable and accrued expenses

1,832

 

 

1,998

 

Other liabilities

8,638

 

 

8,737

 

Other liabilities of consolidated investment entities

256

 

 

93

 

Total Liabilities

160,235

 

 

160,016

 

 

 

 

 

Equity

 

 

 

Ameriprise Financial

 

 

 

Common shares ($.01 par)

3

 

 

3

 

Additional paid-in capital

8,982

 

 

8,822

 

Retained earnings

15,600

 

 

15,292

 

Treasury stock

(19,400

)

 

(18,879

)

Accumulated other comprehensive income, net of tax

317

 

 

629

 

Total Equity

5,502

 

 

5,867

 

Total Liabilities and Equity

$

165,737

 

 

$

165,883

 

 

 

 

 

Ameriprise Financial, Inc.

Disclosed Items – Included in Adjusted Operating Earnings

(in millions, unaudited)

 

1 Qtr 2021

 

 

 

 

 

Corporate

 

 

Gain on

Investment (1)

Revenues

 

 

Management and financial advice fees

 

$

 

Distribution fees

 

 

Net investment income

 

15

 

Premiums, policy and contract charges

 

 

Other revenues

 

 

Total revenues

 

15

 

Banking and deposit interest expense

 

 

Adjusted operating total net revenues

 

15

 

 

 

 

Expenses

 

 

Distribution expenses

 

 

Interest credited to fixed accounts

 

 

Benefits, claims, losses and settlement expenses

 

 

Amortization of deferred acquisition costs

 

 

Interest and debt expense

 

 

General and administrative expense

 

 

Adjusted operating expenses

 

 

Pretax adjusted operating earnings (loss)

 

$

15

 

 

 

 

(1) Gain on strategic investment.

 

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

 

Quarter Ended

March 31,

 

Per Diluted Share

Quarter Ended

March 31,

 

% Over/

(Under)

(in millions, except per share amounts, unaudited)

2021

 

2020

 

2021

 

2020

 

Net income

$

437

 

 

$

2,036

 

 

$

3.58

 

 

$

15.88

 

 

(77)%

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

55

 

 

(20

)

 

0.45

 

 

(0.16

)

 

 

Add: Market impact on non-traditional long-duration products (1)

396

 

 

(1,783

)

 

3.24

 

 

(13.91

)

 

 

Add: Mean reversion-related impacts (1)

(56

)

 

61

 

 

(0.46

)

 

0.47

 

 

 

Add: Market impact of hedges on investments (1)

 

 

 

 

 

 

 

 

 

Add: Integration/restructuring charges (1)

 

 

1

 

 

 

 

0.01

 

 

 

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

(1

)

 

(2

)

 

(0.01

)

 

(0.02

)

 

 

Add: Tax effect of adjustments (2)

(60

)

 

357

 

 

(0.49

)

 

2.78

 

 

 

Adjusted operating earnings

$

663

 

 

$

694

 

 

$

5.43

 

 

$

5.41

 

 

Less: NOL tax benefit

 

 

144

 

 

 

 

1.12

 

 

 

 

Adjusted operating earnings excluding NOL tax benefit

$

663

 

 

$

550

 

 

$

5.43

 

 

$

4.29

 

 

27%

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

119.8

 

 

126.4

 

 

 

 

 

 

 

Diluted

122.2

 

 

128.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Pretax adjusted operating adjustment.

 

 

 

 

 

 

 

 

 

(2) Calculated using the statutory tax rate of 21%.

Ameriprise Financial, Inc.

Reconciliation Table: Pretax Adjusted Operating Earnings and Pretax Adjusted Operating Margin

 

Quarter Ended

March 31,

 

(in millions, unaudited)

2021

 

2020

 

Total net revenues

$

3,350

 

 

$

3,001

 

 

Less: Net realized investment gains (losses)

57

 

 

(20

)

 

Less: Market impact on non-traditional long-duration products

5

 

 

55

 

 

Less: Mean Reversion related impacts

 

 

(1

)

 

Less: Market impact of hedges on investments

 

 

 

 

Less: Integration/restructuring charges

 

 

 

 

Less: CIEs revenue

34

 

 

16

 

 

Adjusted operating total net revenues

$

3,254

 

 

$

2,951

 

 

 

 

 

 

 

Total expenses

$

2,857

 

 

$

650

 

 

Less: CIEs expenses

35

 

 

18

 

 

Less: Integration/restructuring charges

 

 

1

 

 

Less: Market impact on non-traditional long-duration products

401

 

 

(1,728

)

 

Less: Mean reversion-related impacts

(56

)

 

60

 

 

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

2

 

 

 

 

Adjusted operating expenses

$

2,475

 

 

$

2,299

 

 

 

 

 

 

 

Pretax income

$

493

 

 

$

2,351

 

 

Pretax adjusted operating earnings

$

779

 

 

$

652

 

 

 

 

 

 

 

Pretax income margin

14.7

 

%

78.3

 

%

Pretax adjusted operating margin

23.9

 

%

22.1

 

%

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: General and Administrative Expense

 

Quarter Ended

March 31,

% Over/

(Under)

(in millions, unaudited)

2021

 

2020

General and administrative expense

$

823

 

 

$

753

 

(9)%

Less: CIEs expenses

19

 

 

1

 

 

Less: Integration/restructuring charges

 

 

1

 

 

Adjusted operating general and administrative expense

$

804

 

 

$

751

 

(7)%

Less: Share-based compensation

17

 

 

(17

)

 

Adjusted operating general and administrative expense excluding share-based compensation

$

787

 

 

$

768

 

(2)%

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Effective Tax Rate

 

Quarter Ended

March 31, 2020

 

(in millions, unaudited)

GAAP

 

Adjusted Operating

Pretax income

$

2,351

 

$

652

 

 

Income tax provision

$

315

 

$

(42

)

 

 

 

 

 

 

Effective tax rate

13.4

%

(6.4

)

%

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Effective Tax Rate

 

Quarter Ended

March 31, 2021

 

(in millions, unaudited)

GAAP

 

Adjusted Operating

Pretax income

$

493

 

$

779

 

 

Income tax provision

$

56

 

$

116

 

 

 

 

 

 

 

Effective tax rate

11.3

%

14.9

%

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Operating Revenues and Earnings

 

Quarter Ended

March 31,

 

% Over/

(Under)

(in millions, unaudited)

2021

 

2020

 

Ameriprise Financial, Inc. Net revenues

$

3,254

 

 

$

2,951

 

 

10%

Less: Short-Term interest rate impact

 

 

78

 

 

 

Ameriprise Financial, Inc. Net revenues excluding Short-Term interest rate impact

$

3,254

 

 

$

2,873

 

 

13%

 

 

 

 

 

 

Ameriprise Financial, Inc. Pretax operating earnings

$

779

 

 

$

652

 

 

19%

Less: Short-Term interest rate impact

 

 

78

 

 

 

Ameriprise Financial, Inc. Pretax operating earnings excluding Short-Term interest rate impact

$

779

 

 

$

574

 

 

36%

 

 

 

 

 

 

AWM Net revenues

$

1,879

 

 

$

1,695

 

 

11%

Less: Short-Term interest rate impact

 

 

78

 

 

 

AWM Net revenues excluding Short-Term interest rate impact

$

1,879

 

 

$

1,617

 

 

16%

 

 

 

 

 

 

AWM Pretax operating earnings

$

389

 

 

$

378

 

 

3%

Less: Short-Term interest rate impact

 

 

78

 

 

 

AWM Pretax operating earnings excluding Short-Term interest rate impact

$

389

 

 

$

300

 

 

30%

 

 

 

 

 

 

Pretax Adjusted operating margin excluding Short-Term Interest rate impact

20.7

 

%

18.6

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Advice & Wealth Management Adjusted Revenue Per Advisor

(unaudited)

2Q

2019

3Q

2019

4Q

2019

1Q

2020

2Q

2020

3Q

2020

4Q

2020

1Q

2021

% Over/

(Under)

Total Net Revenue ($ in M)

$

1,653

 

$

1,682

 

$

1,710

 

$

1,695

 

$

1,537

 

$

1,667

 

$

1,776

 

$

1,879

 

 

Interest Revenue ($ in M)

$

(122

)

$

(116

)

$

(92

)

$

(78

)

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Advisor Count

9,951

9,930

9,871

9,878

9,894

9,905

9,922

10,031

 

 

 

 

 

 

 

 

 

 

 

Revenue Per Advisor ($ in K)

$

166

 

$

169

 

$

173

 

$

172

 

$

155

 

$

168

 

$

179

 

$

187

 

9%

Revenue Per Advisor excluding short-term interest rate impact ($ in K)

$

154

 

$

158

 

$

164

 

$

164

 

$

155

 

$

168

 

$

179

 

$

187

 

14%

 

 

 

 

 

 

 

 

 

 

Revenue Per Advisor TTM ($ in K)

 

 

 

$

680

 

 

 

 

$

689

 

1%

Revenue Per Advisor excluding short-term interest rate impact TTM ($ in K)

 

 

 

$

640

 

 

 

 

$

689

 

8%

 

 

 

 

 

 

 

 

 

 

Ameriprise Financial, Inc.

Reconciliation Table: Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI”

 

Twelve Months Ended

March 31,

 

(in millions, unaudited)

2021

 

2020

 

Net income

$

(65

)

 

$

3,534

 

 

Less: Adjustments (1)

(1,804

)

 

1,175

 

 

Adjusted operating earnings

$

1,739

 

 

$

2,359

 

 

 

 

 

 

 

Total Ameriprise Financial, Inc. shareholders’ equity

$

6,126

 

 

$

6,058

 

 

Less: Accumulated other comprehensive income, net of tax

312

 

 

121

 

 

Total Ameriprise Financial, Inc. shareholders’ equity excluding AOCI

5,814

 

 

5,937

 

 

Less: Equity impacts attributable to the consolidated investment entities

1

 

 

1

 

 

Adjusted operating equity

$

5,813

 

 

$

5,936

 

 

 

 

 

 

 

Return on equity excluding AOCI

(1.1

)

%

59.5

%

Adjusted operating return on equity excluding AOCI (2)

29.9

 

%

39.7

 

%

 

 

 

 

 

(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; the market impact on non-traditional long-duration products, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts; gain on disposal of business; 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%.

(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 DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on non-traditional long-duration products, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts; gain on the disposal of business; 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%.

 



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