10-QPeriod: Q2 FY2010

AMERIPRISE FINANCIAL INC Quarterly Report for Q2 Ended Jun 30, 2010

Filed August 4, 2010For Securities:AMP

Summary

Ameriprise Financial Inc. reported strong financial results for the second quarter and first half of 2010, demonstrating significant year-over-year growth. For the three months ended June 30, 2010, total revenues increased by 38% to $2.6 billion, and net income attributable to Ameriprise Financial shareholders more than doubled to $259 million from $95 million in the prior year. This growth was driven by higher asset-based revenues, particularly in management and financial advice fees, benefiting from market appreciation and the strategic acquisition of Columbia Management's asset management business in April 2010. The company also saw substantial increases in its operating metrics, with operating net revenues up 27% and operating pretax income up significantly across its key segments, including Advice & Wealth Management, Asset Management, Annuities, and Protection. The company's balance sheet remains robust, with total assets increasing to $121.1 billion. Despite a notable increase in long-term debt due to a new note issuance and the Columbia Management acquisition, the company maintained a strong capital position. Management highlighted its commitment to shareholder value through a $1.5 billion share repurchase program authorized in May 2010 and consistent dividend payments. The company is well-positioned to navigate future market conditions, supported by its diversified business model and strategic initiatives.

Financial Highlights

36 data points
Beta

Revenue

$2.48B

Net Income

$259.00M

10.4% Net Margin

EPS (Diluted)

$0.98

Total Assets

$121.11B

Cash & Equivalents

$3.83B

Free Cash Flow

$1.28B

Financial Statements
Beta
Revenue$2.48B
Operating Expenses$2.00B
Operating Income$469.00M
Net Income$259.00M
EPS (Basic)$0.99
EPS (Diluted)$0.98
Shares Outstanding (Basic)261.10M
Shares Outstanding (Diluted)265.30M

Key Highlights

  • 1Total revenues for Q2 2010 grew 38% year-over-year to $2.6 billion.
  • 2Net income attributable to Ameriprise Financial shareholders surged to $259 million in Q2 2010, a significant increase from $95 million in Q2 2009.
  • 3The company completed the acquisition of Columbia Management's long-term asset management business on April 30, 2010, which is expected to enhance its asset management scale and performance.
  • 4Operating net revenues increased by 27% year-over-year in Q2 2010, driven by higher asset levels and client activity.
  • 5Advice & Wealth Management segment pretax income improved significantly, turning positive at $85 million in Q2 2010 from a loss of $3 million in the prior year period.
  • 6The company repurchased approximately 5.7 million shares of common stock for $220 million in the first half of 2010, demonstrating a commitment to returning capital to shareholders.
  • 7Total assets grew to $121.1 billion as of June 30, 2010, up from $113.8 billion at December 31, 2009.

Frequently Asked Questions

The primary drivers of revenue growth were increased asset-based revenues, particularly management and financial advice fees, which benefited from period-over-period market appreciation and the acquisition of Columbia Management's asset management business. Distribution fees also saw a significant increase due to higher asset levels and client activity.

The acquisition of Columbia Management's long-term asset management business on April 30, 2010, contributed positively to the company's results, enhancing the scale and performance of its asset management operations. This acquisition contributed to the significant increase in asset management revenues and overall company earnings in Q2 2010.

Ameriprise Financial maintained a strong capital position with total assets of $121.1 billion at June 30, 2010. The company demonstrated its commitment to shareholder returns through consistent quarterly dividend payments and a significant share repurchase program, with $1.3 billion remaining authorized for repurchases as of June 30, 2010. The company also issued $750 million in senior notes, with a portion intended to retire maturing debt.

The company is involved in various legal and regulatory proceedings in the normal course of business. A notable matter involves a lawsuit regarding allegedly excessive fees paid to the company by mutual funds, which is currently remanded for further consideration by the district court following Supreme Court and Eighth Circuit rulings. Additionally, the company faces litigation and regulatory inquiries related to the sale of private placement interests through its subsidiary, Securities America, Inc.