10-QPeriod: Q1 FY2012

AMERIPRISE FINANCIAL INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 10, 2012For Securities:AMP

Summary

Ameriprise Financial, Inc. (AMP) reported steady performance for the first quarter of 2012, with total net revenues increasing slightly by 1% to $2.561 billion compared to the same period in 2011. Net income attributable to Ameriprise Financial was $244 million, a modest increase of 1% from the prior year. The company's Advice & Wealth Management segment showed resilience with a 4% increase in net revenues, driven by growth in assets under management. Asset Management experienced a 4% decline in net revenues, primarily due to a decrease in assets under management. The company continued to navigate a challenging low-interest-rate environment, which impacted net investment income. However, strategic adjustments, including updates to variable annuity models and management of deferred acquisition costs, helped mitigate some of these pressures. The company also maintained a strong liquidity position, with $2.3 billion in cash and cash equivalents at the end of the quarter, and continued its share repurchase program.

Financial Highlights

33 data points
Beta

Revenue

$2.57B

Net Income

$244.00M

9.5% Net Margin

EPS (Diluted)

$1.05

Total Assets

$136.76B

Cash & Equivalents

$2.31B

Free Cash Flow

$175.00M

Financial Statements
Beta
Revenue$2.57B
Operating Expenses$2.24B
Operating Income$245.00M
Net Income$244.00M
EPS (Basic)$1.07
EPS (Diluted)$1.05
Shares Outstanding (Basic)227.30M
Shares Outstanding (Diluted)231.70M

Key Highlights

  • 1Total net revenues increased 1% to $2.561 billion, with growth in asset-based fees from retail client net inflows and market appreciation contributing positively.
  • 2Net income attributable to Ameriprise Financial grew 1% to $244 million, indicating stable profitability despite market conditions.
  • 3The Advice & Wealth Management segment demonstrated strength with a 4% increase in net revenues, supported by wrap account net inflows and market appreciation.
  • 4Asset Management segment net revenues decreased by 4%, largely due to a decline in assets under management from net outflows.
  • 5The company maintained a solid liquidity position with $2.3 billion in cash and cash equivalents.
  • 6Ameriprise Financial continued its share repurchase program, buying back 5.4 million shares of common stock in the quarter.

Frequently Asked Questions

Total net revenues increased by 1% to $2.561 billion for the three months ended March 31, 2012, compared to $2.532 billion for the same period in 2011. This increase was primarily driven by growth in asset-based fees from retail client net inflows and market appreciation, which offset a decline in net investment income due to low interest rates.

The low-interest-rate environment had a negative impact, particularly on net investment income and the spread income generated on interest-sensitive products like annuities and banking products. This led to a decline in net investment income and impacted profitability in certain segments, although strategic adjustments helped to mitigate some of these effects.

Ameriprise Financial continued its share repurchase program, repurchasing approximately 5.4 million shares of common stock for $311 million during the quarter. The company also paid dividends totaling $64 million. These actions, along with dividend payments from subsidiaries, demonstrate a continued focus on returning capital to shareholders while maintaining sufficient liquidity.

The Advice & Wealth Management segment's performance is primarily driven by asset-based fees, which are influenced by market movements and net asset flows. In the first quarter of 2012, net revenues increased by 4% due to higher asset-based fees stemming from wrap account net inflows and market appreciation, along with growth in invested assets.