10-QPeriod: Q1 FY2009

AMERIPRISE FINANCIAL INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 6, 2009For Securities:AMP

Summary

Ameriprise Financial, Inc. (AMP) reported a net income of $130 million for the first quarter of 2009, a decrease from $191 million in the same period of the prior year, reflecting challenging market conditions. Total net revenues declined 14% to $1.72 billion, primarily due to lower asset levels resulting from significant equity market depreciation and a preference for lower-fee investment products. Expenses also decreased by 12%, but the combined effect of lower revenues and increased amortization of deferred acquisition costs led to the decline in profitability. The company's balance sheet remained substantial with total assets of $94.6 billion. Despite market headwinds, Ameriprise Financial maintained strong advisor and client retention rates, indicating resilience in its core business model. The company also reported significant net inflows into fixed annuities, driven by client demand for guaranteed returns, while navigating outflows in other product lines due to market volatility. Management remains focused on long-term shareholder value through its stated financial targets.

Financial Highlights

24 data points
Beta

Revenue

$1.76B

Net Income

$130.00M

7.4% Net Margin

EPS (Diluted)

$0.58

Cash & Equivalents

$5.80B

Free Cash Flow

-$572.00M

Financial Statements
Beta
Revenue$1.76B
Operating Expenses$1.58B
Net Income$130.00M
EPS (Basic)$0.58
EPS (Diluted)$0.58
Shares Outstanding (Basic)222.30M
Shares Outstanding (Diluted)223.50M

Key Highlights

  • 1Net income attributable to Ameriprise Financial decreased by 32% to $130 million in Q1 2009 compared to $191 million in Q1 2008.
  • 2Total net revenues decreased by 14% to $1.72 billion, primarily driven by a 30% drop in management and financial advice fees and a 28% decrease in distribution fees.
  • 3Total expenses decreased by 12% to $1.59 billion, largely due to lower distribution expenses and benefits, claims, losses, and settlement expenses.
  • 4Amortization of deferred acquisition costs (DAC) significantly increased by 86% to $286 million, impacting profitability.
  • 5The company reported strong net inflows in fixed annuities ($1.5 billion), but experienced net outflows in other asset management areas.
  • 6Ameriprise Financial maintained solid client (94%) and advisor (93%) retention rates as of March 31, 2009.
  • 7Total assets stood at $94.6 billion as of March 31, 2009, a slight decrease from $95.6 billion at year-end 2008.

Frequently Asked Questions

Ameriprise Financial reported a net income attributable to Ameriprise Financial of $130 million for the first quarter of 2009, down from $191 million in the same period of 2008. This represents a decrease of 32%.

The decline in revenues was primarily driven by weaker equity markets, which reduced asset-based fees. Management and financial advice fees fell 30% and distribution fees decreased 28%. Clients also shifted towards lower-fee investment products.

Total expenses decreased by 12% to $1.59 billion, largely due to reductions in distribution expenses and lower benefits, claims, losses, and settlement expenses. However, amortization of deferred acquisition costs increased significantly, impacting overall profitability.

As of March 31, 2009, Ameriprise Financial had total assets of $94.6 billion and total liabilities of $87.9 billion, resulting in total equity of $6.6 billion. The company maintained substantial liquidity with $5.8 billion in cash and cash equivalents and had an additional $750 million available under its revolving credit facility.