Why do the headline EPS figures differ so much from GAAP EPS?

GAAP Q4 EPS of $10.58 included favorable market impacts of about $1.67 per share on non-traditional long-duration products and derivatives, driven by higher interest rates. Management's adjusted operating measures strip out these market-driven and one-time items, as well as realized gains and losses, to show core performance. Adjusted operating EPS was $9.36, and $9.54 excluding severance, share-based compensation mark-to-market and a prior-year regulatory accrual. Investors should weigh both, since non-GAAP measures are not substitutes for GAAP results.

What is 'unlocking,' and how does it affect full-year results?

Unlocking reflects the company's annual review of insurance and annuity valuation assumptions and model changes. For FY 2024 it reduced adjusted operating pretax earnings by $94 million, or $0.91 per diluted share after tax effects. Excluding unlocking, full-year adjusted operating EPS was $35.07, compared with $34.35 including it. Because unlocking is an annual, assumption-driven item, its size can vary meaningfully from year to year.

Is the Q4 client flow decline a sign of weakening demand?

Not necessarily. Q4 2023 total client net flows of $22.7 billion included $14.7 billion from the Comerica partnership, so the year-over-year comparison is distorted. Q4 2024 flows of $11.3 billion were still positive and rose sequentially from $8.6 billion in Q3 2024. Wrap net inflows of $11.1 billion grew 59%, and trailing 12-month net inflows totaled $35 billion. Institutional outflows in Asset Management remained a drag, however.

How is the bank and cash business affected by lower interest rates?

Management expects lower interest rates to reduce interest revenue, citing a more than 60 basis point decline in the average federal funds effective rate year over year. Total client cash was $85.4 billion, and bank assets grew 4% to $23.6 billion, which management says provides sustainable net investment income in the forecast lower-rate environment. Certificate balances fell $0.8 billion sequentially, as expected. Cash sweep balances rose to $29.8 billion.

Is this 8-K announcing a new transaction or material event?

No. Item 2.02 furnishes the January 29, 2025 earnings press release on Exhibit 99.1, which reports Q4 and full-year 2024 results. The furnished information is not deemed 'filed' for Exchange Act liability purposes. The financial data are unaudited, and the press release notes figures may be revised in the company's 2024 Form 10-K. The 8-K does not disclose new dividends, buybacks, guidance or acquisitions beyond the capital return amounts already reported.

AMP 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 29, 2025. Cited figures are marked; the original filing is the authoritative source.

Ameriprise Financial (AMP) reported record full-year 2024 results and a strong fourth quarter in an 8-K furnishing its January 29, 2025 earnings press release (Exhibit 99.1).

Q4 2024 GAAP net income was $1,071 million^a, or $10.58 per diluted share, versus $3.57 a year earlier, aided by favorable market impacts on derivatives and market risk benefits. Adjusted operating EPS was $9.36 (up 30%), and $9.54 excluding severance, a share-based compensation mark-to-market, and a prior-year regulatory accrual (up 23%). For full-year 2024, GAAP EPS was $33.05 and adjusted operating EPS excluding unlocking and other items was $35.79, up 17%.

Adjusted operating net revenues rose 13% in Q4, driven by asset growth and higher transactional activity. The operating story is broad-based. Total assets under management, administration and advisement reached $1.52 trillion^b, up 10%, with trailing 12-month client net inflows of $35 billion.

Advice & Wealth Management (AWM) generated Q4 pretax adjusted operating earnings of $823 million^c (up 18%) at a 29% margin, with wrap net inflows of $11.1 billion (up 59% year over year) and advisor headcount of 10,427. Asset Management pretax adjusted operating earnings rose 29% to $251 million, though institutional outflows of $3.9 billion and $0.9 billion of expected Lionstone outflows weighed on flows. Retirement & Protection Solutions sales grew 13%.

Q4 total client net flows were $11.3 billion^d, down from $22.7 billion a year earlier, which included $14.7 billion from the Comerica partnership. Capital management remained a priority. Ameriprise returned $768 million to shareholders in Q4 and $2.8 billion for the year.

Senior notes fell to $2.85 billion from $3.40 billion, and the ratio of Ameriprise long-term debt to total capital dropped to 35.2% from 41.8%. Management cited higher sustainable net investment income at the bank, expected lower interest rates as a headwind, and continued improvement in long-term care earnings. The filing is furnished rather than filed, and the figures are unaudited and subject to revision in the 2024 Form 10-K.

02—Key points

Key Highlights

Q4 2024 GAAP EPS of $10.58 versus $3.57 a year ago; adjusted operating EPS of $9.54 excluding severance, share-based compensation mark-to-market and a prior-year regulatory accrual, up 23%.
FY 2024 adjusted operating EPS excluding unlocking and other items of $35.79, up 17%; GAAP EPS of $33.05 versus $23.71.
Total AUM, AUA and AUM&A reached $1.52 trillion, up 10%, with $35 billion of trailing 12-month client net inflows.
AWM Q4 pretax adjusted operating earnings of $823 million (up 18%) at a 29% margin; wrap net inflows of $11.1 billion (up 59%); adjusted operating net revenue per advisor reached a record $1.0 million (TTM).
Asset Management pretax adjusted operating earnings up 29% to $251 million, but institutional net outflows of $3.9 billion and $0.9 billion of expected Lionstone outflows offset retail inflows of $6.1 billion.
Returned $768 million to shareholders in Q4 and $2.8 billion for FY 2024; reduced senior notes to $2.85 billion and debt-to-capital to 35.2% from 41.8%.
Q4 client net flows of $11.3 billion were down 50% year over year, but this comparison includes $14.7 billion from the Comerica partnership in Q4 2023.

03—Questions

Frequently Asked Questions

Why do the headline EPS figures differ so much from GAAP EPS?
GAAP Q4 EPS of $10.58 included favorable market impacts of about $1.67 per share on non-traditional long-duration products and derivatives, driven by higher interest rates. Management's adjusted operating measures strip out these market-driven and one-time items, as well as realized gains and losses, to show core performance. Adjusted operating EPS was $9.36, and $9.54 excluding severance, share-based compensation mark-to-market and a prior-year regulatory accrual. Investors should weigh both, since non-GAAP measures are not substitutes for GAAP results.
What is 'unlocking,' and how does it affect full-year results?
Unlocking reflects the company's annual review of insurance and annuity valuation assumptions and model changes. For FY 2024 it reduced adjusted operating pretax earnings by $94 million, or $0.91 per diluted share after tax effects. Excluding unlocking, full-year adjusted operating EPS was $35.07, compared with $34.35 including it. Because unlocking is an annual, assumption-driven item, its size can vary meaningfully from year to year.
Is the Q4 client flow decline a sign of weakening demand?
Not necessarily. Q4 2023 total client net flows of $22.7 billion included $14.7 billion from the Comerica partnership, so the year-over-year comparison is distorted. Q4 2024 flows of $11.3 billion were still positive and rose sequentially from $8.6 billion in Q3 2024. Wrap net inflows of $11.1 billion grew 59%, and trailing 12-month net inflows totaled $35 billion. Institutional outflows in Asset Management remained a drag, however.
How is the bank and cash business affected by lower interest rates?
Management expects lower interest rates to reduce interest revenue, citing a more than 60 basis point decline in the average federal funds effective rate year over year. Total client cash was $85.4 billion, and bank assets grew 4% to $23.6 billion, which management says provides sustainable net investment income in the forecast lower-rate environment. Certificate balances fell $0.8 billion sequentially, as expected. Cash sweep balances rose to $29.8 billion.
Is this 8-K announcing a new transaction or material event?
No. Item 2.02 furnishes the January 29, 2025 earnings press release on Exhibit 99.1, which reports Q4 and full-year 2024 results. The furnished information is not deemed 'filed' for Exchange Act liability purposes. The financial data are unaudited, and the press release notes figures may be revised in the company's 2024 Form 10-K. The 8-K does not disclose new dividends, buybacks, guidance or acquisitions beyond the capital return amounts already reported.

04—Continue

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