AMERIPRISE FINANCIAL INC Quarterly Report for Q3 Ended Sep 30, 2020

Summary

Ameriprise Financial, Inc. (AMP) reported a net loss of $140 million ($1.14 per diluted share) for the third quarter of 2020, a significant decline from a net income of $543 million ($4.04 per diluted share) in the same period of 2019. This downturn was largely driven by substantial "unlocking" adjustments and negative market impacts on variable annuity guaranteed benefits, which collectively amounted to a $454 million unfavorable impact, compared to a $16 million unfavorable impact in the prior year. Despite the quarterly loss, the company's financial condition remains robust, with total assets increasing to $158.7 billion and total equity growing to $6.1 billion. Management highlights strong performance in the Advice & Wealth Management segment, with revenues up 6% driven by higher average wrap account balances and net inflows. However, the Retirement & Protection Solutions segment experienced a significant decline in adjusted operating earnings, largely due to the aforementioned unlocking and market impact adjustments. The company also continues to manage its capital effectively, with substantial share repurchase authorizations remaining. Investors should note the significant non-cash adjustments impacting quarterly earnings, primarily related to actuarial assumption updates and market volatility. The company's core Advice & Wealth Management business demonstrates resilience, while the insurance and annuity segments are more sensitive to market movements and actuarial assumptions.

Key Highlights

• 1Net loss of $140 million ($1.14 per diluted share) for Q3 2020, compared to a net income of $543 million ($4.04 per diluted share) in Q3 2019.
• 2Significant unfavorable impact of $454 million from "unlocking" and market impacts on variable annuity guaranteed benefits in Q3 2020.
• 3Total assets grew to $158.7 billion, and total equity increased to $6.1 billion.
• 4Advice & Wealth Management segment showed resilience with a 6% increase in management and financial advice fees, driven by higher wrap account assets and net inflows.
• 5Retirement & Protection Solutions segment reported an adjusted operating loss of $89 million, impacted by unlocking and market adjustments.
• 6Company maintained substantial liquidity with $7.4 billion in cash and cash equivalents (excluding CIEs and restricted cash).
• 7Share repurchase program remains active, with $2.7 billion remaining under authorizations as of September 30, 2020.

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