Ameriprise Financial Reports First Quarter 2017 Results | Business Wire

MINNEAPOLIS–(BUSINESS WIRE)–Ameriprise Financial, Inc. (NYSE: AMP) today reported first quarter 2017

net income of $403 million, up 11 percent compared to a year ago.

$2.52 per diluted share, up 21 percent. Operating earnings were $432

million, up 14 percent compared to a year ago, with operating earnings

per diluted share of $2.70, up 24 percent.

GAAP Results – First quarter
Net

revenues of $2.9 billion increased 5 percent. $136 million, from a

year ago primarily due to strong net revenue growth in Advice &. Wealth

Management from growth in client assets. Net investment income also

increased due to gains on investment securities in the quarter compared

to losses on securities and negative market impact of hedges on

investments a year ago.

Expenses of $2.4 billion increased 6 percent compared to a year ago

reflecting the market impact on variable annuity guaranteed benefits and

higher distribution expenses from increased advisor productivity.

General and administrative expense increased 3 percent compared to a

year ago and reflected the impacts of elevated DOL transition expenses,

a renegotiated vendor arrangement and the beneficial impact of foreign

exchange translation.

Operating Results – First quarter
Operating

net revenues of $2.9 billion increased 3 percent. $72 million,

compared to a year ago. Excluding the impact of transitioning advisory

accounts to share classes without 12b-1 fees, one fewer fee day and

foreign exchange, operating net revenue would've increased by 5

percent due to strong net revenue growth in Advice &. Wealth Management

from growth in client assets.

Operating expenses of $2.3 billion increased 2 percent. General and

administrative expense increased 3 percent compared to a year ago and

reflected the impacts of elevated DOL transition expenses, a

renegotiated vendor arrangement and the beneficial impact of foreign

exchange translation.

The company continued to deliver a strong return to shareholders through

share repurchases and dividends of $478 million in the quarter.

(1) Unlocking represents the company’s annual review of insurance and

annuity valuation assumptions and model changes and the long term care

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review conducted in the third quarter.

“Ameriprise had a strong first quarter led by wealth management—the

primary growth engine of the company,” said Jim Cracchiolo, chairman and

chief executive officer.

“Client activity was strong and assets increased across the firm. Net

inflows into fee-based investment advisory accounts more than doubled

from last year. Our advisors are growing productivity and benefiting

from both our position as the leader in advice as well as the

investments we’ve made in our technology, financial planning tools and

leadership support.

“Our fee-based businesses are growing and will be larger contributors to

our total earnings over time. This transition generates strong free cash

flow that we invest in the business and return to shareholders.

“Our operating return on equity is consistently among the best in the

industry. In fact, we’ve announced an additional $2.5 billion share

repurchase authorization and another increase to our quarterly dividend,

raising it 11 percent—the tenth increase in the past eight years.”

 

Ameriprise Financial, Inc.

First Quarter Summary

 

(in millions, except per share amounts, unaudited)

 

 

Quarter Ended
March 31,

 

 

Per Diluted Share
Quarter Ended
March

31,

 

2017

 

 

2016

 

 

%
Better/
(Worse)

2017

 

 

2016

 

%
Better/
(Worse)

Net income

$

403

$

364

11

%

$

2.52

$

2.09

21

%

Adjustments, net of tax ((1))

(see reconciliation on p. 14)

 

29

 

14

 

0.18

 

0.08

Operating earnings (2)

$

432

$

378

14

%

$

2.70

$

2.17

24

%

Weighted average common shares outstanding:

Basic

157.5

172.6

Diluted

160.1

174.4

 

(1) After-tax is calculated using the statutory tax rate of 35%.

 

(2) The company believes the presentation of operating earnings

best represents the economics of the business. Operating earnings,

after-tax, exclude the consolidation of certain investment

entities. Net realized investment gains or losses, net of deferred

sales inducement costs (“DSIC”) and deferred acquisition costs

(“DAC”) amortization, unearned revenue amortization and the

reinsurance accrual. Integration and restructuring charges. The

market impact on variable annuity guaranteed benefits, net of

hedges and related DSIC and DAC amortization. The market impact on

indexed universal life benefits, net of hedges and related DAC

amortization, unearned revenue amortization. The reinsurance

accrual. The market impact of hedges to offset interest rate

changes on unrealized gains or losses for certain investments.

income or loss from discontinued operations.