10-QPeriod: Q3 FY2014

AMERIPRISE FINANCIAL INC Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 3, 2014For Securities:AMP

Summary

Ameriprise Financial, Inc. (AMP) reported a strong third quarter for 2014, with net income attributable to Ameriprise Financial increasing 10% year-over-year to $420 million, translating to diluted earnings per share of $2.17. This growth was driven by a 11% increase in total net revenues, reaching $3.1 billion, fueled by robust performance in "Management and financial advice fees" and "Other revenues". The "Advice & Wealth Management" segment, in particular, demonstrated significant growth with a 35% increase in pretax operating earnings, attributed to strong wrap account growth and effective expense management. The company's Assets Under Management and Administration (AUM/AUA) grew by 8% to $796.8 billion, indicating positive client inflows and market appreciation across its Advice & Wealth Management and Asset Management segments. While net investment income saw a decline due to the low interest rate environment, the company's proactive management of its fixed annuity crediting rates and a successful re-pricing of a significant guarantee block helped mitigate some of the spread compression impact. Overall, Ameriprise Financial delivered solid financial results, with key segments showing positive revenue and earnings growth.

Financial Highlights

34 data points
Beta

Revenue

$3.12B

Net Income

$420.00M

13.5% Net Margin

EPS (Diluted)

$2.17

Total Assets

$147.19B

Cash & Equivalents

$2.88B

Free Cash Flow

$1.62B

Financial Statements
Beta
Revenue$3.12B
Operating Expenses$2.39B
Operating Income$1.20B
Net Income$420.00M
EPS (Basic)$2.21
EPS (Diluted)$2.17
Shares Outstanding (Basic)190.30M
Shares Outstanding (Diluted)193.70M

Key Highlights

  • 1Net income attributable to Ameriprise Financial increased by 10% to $420 million for the three months ended September 30, 2014.
  • 2Diluted earnings per share were $2.17 for the three months ended September 30, 2014, up from $1.86 in the prior year period.
  • 3Total net revenues increased 11% to $3.11 billion for the three months ended September 30, 2014.
  • 4Assets Under Management and Administration (AUM/AUA) grew 8% to $796.8 billion as of September 30, 2014.
  • 5The Advice & Wealth Management segment showed strong performance, with pretax operating earnings increasing 35% to $205 million.
  • 6Distribution expenses increased 11% to $813 million, primarily due to higher compensation related to asset growth.
  • 7Net investment income decreased 13% to $428 million, largely attributed to the low interest rate environment.

Frequently Asked Questions

Ameriprise Financial reported a strong third quarter for 2014. Net income attributable to Ameriprise Financial rose 10% year-over-year to $420 million, resulting in diluted earnings per share of $2.17. Total net revenues increased by 11% to $3.11 billion, driven by growth in management and financial advice fees, and other revenues. The company's Assets Under Management and Administration also grew by 8% to $796.8 billion.

The "Advice & Wealth Management" segment demonstrated particularly strong performance, with pretax operating earnings increasing by 35% to $205 million. This growth was primarily driven by a 21% increase in management and financial advice fees, attributed to robust wrap account net inflows and market appreciation, coupled with effective expense management.

The low interest rate environment negatively impacted "Net investment income," which decreased by 13% to $428 million for the quarter. This was mainly due to lower investment income on fixed maturities and a decrease in net investment income from consolidated investment entities. The company's Annuities segment also saw a decrease in net investment income, impacted by lower invested assets and lower interest rates. However, Ameriprise took steps to mitigate spread compression by adjusting crediting rates on its fixed annuity products.

Ameriprise Financial's total AUM/AUA grew by 8% to $796.8 billion as of September 30, 2014, compared to the prior year. This growth was primarily driven by a significant increase in "Advice & Wealth Management" AUM, fueled by wrap account net inflows and market appreciation, as well as growth in "Asset Management" AUM due to market appreciation. The company expressed confidence in its ability to capitalize on trends driving demand for financial advice and solutions.