10-QPeriod: Q3 FY2015

AMERIPRISE FINANCIAL INC Quarterly Report for Q3 Ended Sep 30, 2015

Filed November 2, 2015For Securities:AMP

Summary

Ameriprise Financial, Inc. (AMP) reported its third-quarter 2015 results, showcasing a mixed financial performance. Total revenues saw a decline of 7% year-over-year for the quarter, primarily driven by lower net investment income and other revenues. Expenses increased slightly by 1% for the quarter, leading to a 38% decrease in income from continuing operations before income tax provision. Despite the quarterly revenue dip, the company highlighted growth in its Advice & Wealth Management segment, with operating earnings up 7% due to increased wrap account assets and expense management. The Asset Management segment experienced a 13% decline in operating earnings, largely due to net outflows and unfavorable foreign currency impacts. The Annuities segment saw a significant 38% increase in operating earnings, benefiting from favorable "unlocking" impacts related to valuation assumptions. The Protection segment's operating earnings decreased by 62%, primarily impacted by higher auto and home losses and increased life insurance claims. For the nine months ended September 30, 2015, total net revenues saw a modest 1% decrease. However, net income attributable to Ameriprise Financial increased slightly by 1%, demonstrating resilience. The company continued to focus on capital returns, with share repurchases and dividend payments, and maintained a strong liquidity position.

Financial Highlights

35 data points
Beta

Revenue

$2.89B

Net Income

$397.00M

13.7% Net Margin

EPS (Diluted)

$2.17

Total Assets

$145.32B

Cash & Equivalents

$2.78B

Free Cash Flow

$371.00M

Financial Statements
Beta
Revenue$2.89B
Operating Expenses$2.42B
Operating Income$1.21B
Net Income$397.00M
EPS (Basic)$2.20
EPS (Diluted)$2.17
Shares Outstanding (Basic)180.40M
Shares Outstanding (Diluted)182.70M

Key Highlights

  • 1Total net revenues decreased by 7% to $2.9 billion for Q3 2015 compared to $3.1 billion in Q3 2014, primarily due to decreases in net investment income and other revenues.
  • 2Income from continuing operations before income tax provision decreased by 36% to $463 million for Q3 2015, down from $720 million in Q3 2014.
  • 3Operating earnings in the Advice & Wealth Management segment increased by 7% to $219 million for Q3 2015, driven by growth in wrap account assets and expense management.
  • 4The Annuities segment's operating earnings increased by 38% to $176 million for Q3 2015, significantly boosted by favorable "unlocking" impacts from valuation assumption updates.
  • 5The Protection segment experienced a 62% decrease in operating earnings to $25 million for Q3 2015, mainly due to higher auto and home losses and increased life insurance claims.
  • 6Assets Under Management and Administration (AUM and AUA) decreased by 4% to $765.8 billion as of September 30, 2015, compared to $796.8 billion as of September 30, 2014, primarily driven by decreases in Asset Management AUM.
  • 7The company continued its share repurchase program, repurchasing 9.8 million shares for $1.2 billion during the nine months ended September 30, 2015.

Frequently Asked Questions

Ameriprise Financial reported a mixed financial performance for Q3 2015. While total net revenues decreased by 7% year-over-year due to lower net investment income and other revenues, operating earnings in key segments like Advice & Wealth Management and Annuities showed positive growth. However, the Asset Management and Protection segments saw declines in operating earnings, influenced by market conditions, outflows, and higher claims.

The Advice & Wealth Management segment showed a 7% increase in operating earnings, driven by growth in wrap account assets and effective expense management. The Annuities segment reported a significant 38% increase in operating earnings, largely due to favorable "unlocking" impacts from valuation assumption updates. Conversely, the Asset Management segment's operating earnings fell by 13% due to net outflows and unfavorable foreign currency impacts, while the Protection segment's operating earnings decreased by 62% due to higher claims and auto/home losses.

Total AUM and AUA decreased by 4% to $765.8 billion as of September 30, 2015, compared to the prior year period. This decline was primarily driven by a 7% decrease in Asset Management AUM, influenced by net outflows, market depreciation, and negative foreign currency translation. The company anticipates continued outflows in low-margin assets from former parent-affiliated relationships.

Ameriprise Financial continues to return capital to shareholders through regular quarterly dividends and share repurchases. During the nine months ended September 30, 2015, the company repurchased approximately 9.8 million shares of its common stock for $1.2 billion. The company also maintained substantial liquidity, with $2.8 billion in cash and cash equivalents as of September 30, 2015, and had $553 million remaining under its share repurchase authorization.