Ameriprise Financial(AMP) - 2024 Q1 - Quarterly Results

Executive Summary & Highlights Ameriprise Financial achieved strong Q1 2024 growth, with adjusted operating diluted EPS up 16% and AUM/AUA reaching $1.4 trillion Q1 2024 Key Financial Highlights Ameriprise Financial reported robust Q1 2024, with adjusted operating diluted EPS up 16% and AUM/AUA rising to $1.4 trillion Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | Change Rate | | :----------------------------------------- | :-------- | :-------- | :---------- | | Adjusted Operating Diluted EPS | $8.39 | $7.25 | 16% | | GAAP Diluted EPS | $9.46 | $3.79 | NM | | Adjusted Operating Net Revenue Growth | 11% | | | | Assets Under Management and Administration | $1.4T | | 15% | | Adjusted Operating Return on Equity (Excluding AOCI) | 49.0% | 49.5% | (0.5)% | | Capital Returned to Shareholders | $650M | | | - Company announced a 10% increase in quarterly dividend, reflecting its strong balance sheet and free cash flow generation[3] CEO Perspective CEO Jim Cracchiolo reported a strong quarter, with wealth management driving growth, record AUM/AUA, and robust capital for shareholder returns - Wealth management business is a primary growth driver, with Assets Under Management and Administration (AUM and AUA) reaching a new high of $1.4 trillion[3] - The company's strong capital position and significant free cash flow are ongoing differentiators, supporting investment in growth and capital return to shareholders[3] Consolidated Financial Performance The company demonstrated strong Q1 2024 consolidated financial performance, with significant GAAP and adjusted operating earnings growth Q1 2024 Summary Financials (GAAP & Adjusted Operating) Q1 2024 saw significant GAAP net income and diluted EPS growth, driven by market impacts and double-digit adjusted operating growth Q1 2024 GAAP and Adjusted Operating Financial Summary | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------------- | :--------------------- | :--------------------- | :---------- | | GAAP Net Income | $990 | $417 | NM | | Adjusted Operating Earnings | $878 | $798 | 10% | | GAAP Diluted EPS | $9.46 | $3.79 | NM | | Adjusted Operating Diluted EPS | $8.39 | $7.25 | 16% | | GAAP Return on Equity (Excluding AOCI) | 48.1% | 45.2% | | | Adjusted Operating Return on Equity (Excluding AOCI) | 49.0% | 49.5% | | | GAAP Equity (Excluding AOCI) | $6,809 | $6,129 | 11% | | Available Capital for Capital Adequacy | $5,135 | $5,377 | (5)% | | Diluted Weighted Average Common Shares | 104.6 | 110.0 | | - GAAP results were significantly boosted by market impacts on derivatives and market risk benefit valuations, while adjusted operating results reflect continued core business growth[5] Consolidated GAAP Income Statement Q1 2024 consolidated GAAP net income surged 137% to $990 million, with total net revenues up 11% to $4.146 billion Q1 2024 Consolidated GAAP Income Statement Key Data | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :--------------------------- | :--------------------- | :--------------------- | :---------- | | Total Revenues | $4,325 | $3,845 | 12% | | Bank and Deposit Interest Expense | $179 | $103 | (74)% | | Total Net Revenues | $4,146 | $3,742 | 11% | | Total Expenses | $2,927 | $3,246 | 10% | | Income Before Income Taxes | $1,219 | $496 | NM | | Provision for Income Taxes | $229 | $79 | NM | | Net Income | $990 | $417 | NM | | Diluted EPS | $9.46 | $3.79 | NM | - Management and financial advisory fees grew 12%, net investment income grew 29%, and premiums, policy and contract charges grew 8%, collectively driving total net revenue growth[29] Assets Under Management and Administration & Capital Metrics Total AUM and AUA reached $1.425 trillion, up 15% year-over-year, with wealth management AUM growing 20% Q1 2024 AUM, AUA, and Capital Returned | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------- | :--------------------- | :--------------------- | :---------- | | Wealth Management AUM | $518,080 | $431,438 | 20% | | Asset Management AUM | $652,077 | $607,679 | 7% | | Total Assets Under Management | $1,127,405 | $1,001,269 | 13% | | Total Assets Under Administration | $297,457 | $234,339 | 27% | | Total AUM and AUA | $1,424,862 | $1,235,608 | 15% | | Dividends Paid | $143 | $138 | 4% | | Common Stock Repurchases | $507 | $506 | - | | Total Capital Returned to Shareholders | $650 | $644 | 1% | - S&P 500 Index period-end and daily average values both achieved significant growth, up 28% and 25% year-over-year, positively impacting AUM growth[31] Segment Performance Each business segment demonstrated distinct Q1 2024 performance, with wealth management leading growth and retirement solutions showing sales strength Advice & Wealth Management Advice & Wealth Management reported strong Q1 2024 performance, with adjusted operating net revenue up 13% and pre-tax adjusted operating earnings up 10% Q1 2024 Advice & Wealth Management Financial Summary | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------- | :--------------------- | :--------------------- | :---------- | | Adjusted Operating Net Revenue | $2,560 | $2,265 | 13% | | Distribution Expenses | $1,369 | $1,173 | (17)% | | General & Administrative Expenses | $420 | $392 | (7)% | | Adjusted Operating Expenses | $1,798 | $1,572 | (14)% | | Adjusted Operating Earnings Before Income Taxes | $762 | $693 | 10% | | Adjusted Operating Pre-Tax Margin | 29.8% | 30.6% | (80)bps | - Total client assets grew 19% to $954 billion, with wrap assets increasing 20% to $522 billion[8][10] - Total client net flows were $8.5 billion, a 31% decrease year-over-year, with wrap net flows at $6.5 billion[8][10] - Adjusted operating net revenue per advisor (trailing 12 months) increased 11% to $942,000, and the company added 64 experienced advisors[8][10] Asset Management Asset Management's adjusted operating net revenue grew 7% to $855 million, and pre-tax adjusted operating earnings rose 25% to $206 million Q1 2024 Asset Management Financial Summary | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------- | :--------------------- | :--------------------- | :---------- | | Adjusted Operating Net Revenue | $855 | $799 | 7% | | Adjusted Operating Expenses | $649 | $634 | (2)% | | Adjusted Operating Earnings Before Income Taxes | $206 | $165 | 25% | | Net Adjusted Operating Pre-Tax Margin | 34.9% | 31.0% | | | Total Assets Under Management (AUM) | $652B | $608B | 7% | | Total Segment Net Outflows | $(5.7)B$ | $(2.5)B$ | NM | - Retail net outflows were $2.7 billion, consistent with other active managers in the industry, but sales in North America and EMEA improved both year-over-year and sequentially[14] - Global institutional net outflows were $2.2 billion, primarily due to slower new mandates and redemptions from lower-fee mandates[14] Retirement & Protection Solutions Retirement & Protection Solutions saw a 3% increase in pre-tax adjusted operating earnings to $199 million, driven by higher interest rates and equity markets Q1 2024 Retirement & Protection Solutions Financial Summary | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------- | :--------------------- | :--------------------- | :---------- | | Adjusted Operating Net Revenue | $912 | $824 | 11% | | Adjusted Operating Expenses | $713 | $630 | (13)% | | Adjusted Operating Earnings Before Income Taxes | $199 | $194 | 3% | | Retirement & Protection Solutions Sales | $1,300 | | 33% | | Protection Sales | $65 | | 8% | - Sales growth was primarily driven by strong structured variable annuity sales, with protection sales up 8%, concentrated in high-margin accumulation VUL products[16] Corporate & Other The Corporate & Other segment reported an adjusted operating pre-tax loss of $89 million in Q1 2024, an increase from $74 million Q1 2024 Corporate & Other Financial Summary | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change Rate | | :----------------------------------- | :--------------------- | :--------------------- | :---------- | | Corporate & Other (Excluding Closed Block) | $(99) | $(73) | (36)% | | Closed Block | $10 | $(1) | NM | | Adjusted Operating Earnings/(Loss) Before Income Taxes | $(89) | $(74) | (20)% | | Long-Term Care | $16 | $8 | NM | | Fixed Annuities | $(6) | $(9) | 33% | - The loss excluding the Closed Block included a $16 million unfavorable market impact from equity compensation expense, severance costs, and lease write-downs[17] - Long-Term Care business adjusted operating pre-tax earnings increased to $16 million, showing continued improvement from higher investment income[18] Capital Structure & Balance Sheet The company maintained a strong Q1 2024 capital structure, with total long-term debt slightly decreasing and an improved debt-to-capital ratio Long-term Debt & Capital Total long-term debt decreased slightly to $5.517 billion as of March 31, 2024, and the debt-to-capital ratio improved to 41.1% Long-term Debt and Capital Summary | Metric | March 31, 2024 (Millions USD) | March 31, 2023 (Millions USD) | December 31, 2023 (Millions USD) | | :----------------------------------------- | :---------------------------- | :---------------------------- | :------------------------------- | | Ameriprise Financial Total Long-Term Debt | $3,398 | $3,560 | $3,399 | | Non-Recourse Debt of Consolidated Investment Entities | $2,119 | $2,367 | $2,155 | | Total Long-Term Debt | $5,517 | $5,927 | $5,554 | | Total Equity | $4,879 | $4,144 | $4,729 | | Ameriprise Financial Total Capital | $8,277 | $7,704 | $8,128 | | Debt to Capital Ratio | 41.1% | 46.2% | 41.8% | | Available Capital for Capital Adequacy | $5,135 | $5,377 | $5,418 | Consolidated Balance Sheet Total assets grew to $179.831 billion as of March 31, 2024, driven by investments and separate account assets Consolidated Balance Sheet Key Data | Metric | March 31, 2024 (Millions USD) | December 31, 2023 (Millions USD) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Cash and Cash Equivalents | $7,071 | $7,477 | | Investments | $56,249 | $55,489 | | Market Risk Benefits | $1,964 | $1,427 | | Separate Account Assets | $79,753 | $77,457 | | Deferred Acquisition Costs | $2,701 | $2,713 | | Other Assets | $13,403 | $11,700 | | Total Assets | $179,831 | $175,191 | | Policyholder Account Balances, Future Policy Benefits and Claims | $38,667 | $37,545 | | Market Risk Benefits (Liabilities) | $1,335 | $1,762 | | Separate Account Liabilities | $79,753 | $77,457 | | Client Deposits | $36,982 | $37,321 | | Long-Term Debt | $3,398 | $3,399 | | Other Liabilities | $10,275 | $7,974 | | Total Liabilities | $174,952 | $170,462 | | Total Equity | $4,879 | $4,729 | Taxation The company's Q1 2024 operating effective tax rate was 18.6%, benefiting from equity compensation tax advantages, with a full-year forecast of 21% Effective Tax Rate The Q1 2024 operating effective tax rate was 18.6%, favorably impacted by equity compensation tax benefits, with a full-year 2024 projection of 21% - Q1 2024 operating effective tax rate was 18.6%, primarily influenced by tax benefits from equity compensation accounting[19] - The full-year 2024 operating effective tax rate is projected to be approximately 21%[19] Company Information & Disclosures This section provides essential company information, including contacts, corporate overview, non-GAAP explanations, forward-looking statements, and investor communication Contacts This section provides contact information for investor relations and media relations, facilitating stakeholder access to further company information - Investor Relations contacts: Alicia A. Charity (612) 671-2080, alicia.a.charity@ampf.com and Stephanie M. Rabe (612) 671-4085, stephanie.m.rabe@ampf.com[20] - Media Relations contact: Paul W. Johnson (612) 671-0625, paul.w.johnson@ampf.com[20] About Ameriprise Financial Ameriprise Financial is a financial services company with over 125 years of history, offering investment advisory, asset management, and insurance services - Ameriprise Financial has over 125 years of history, providing investment advisory, asset management, and insurance services[21] - The company boasts a national network of over 10,000 financial advisors serving comprehensive financial needs of individuals and institutional investors[21] - Key subsidiaries include Ameriprise Financial Services, LLC (offering financial planning, investments, insurance, and annuity products), Columbia Funds (distributed by Columbia Management Investment Distributors, Inc.), Threadneedle International Limited (SEC and FCA registered investment adviser), and RiverSource Life Insurance Company (issuing insurance and annuity products)[22] Non-GAAP Financial Measures The company uses non-GAAP financial measures, like adjusted operating metrics, to reflect core business performance and provide meaningful trend analysis - Non-GAAP financial measures are used to assess underlying core business performance and provide more meaningful trend analysis[23] - Management uses these metrics for business planning, analysis, and compensation-related matters, but they should not be considered substitutes for GAAP financial measures[23] Forward-Looking Statements This press release contains forward-looking statements reflecting management's plans, estimates, and beliefs, with actual results potentially differing due to risks - Forward-looking statements cover company plans, intentions, positioning, expectations, and objectives, including asset flows, client acquisition strategies, advisor productivity, costs, tax rates, and capital returns[24] - Readers should exercise caution with these statements and refer to the "Risk Factors" discussion in the company's 2023 Form 10-K annual report[26] - Management undertakes no obligation to publicly update or revise any forward-looking statements, and financial results in the press release represent past performance, not future results[26] Investor Information Ameriprise Financial disseminates financial and other information to investors via its investor relations website, SEC filings, press releases, and webcasts - The company releases information to investors through its investor relations website ir.ameriprise.com, SEC filings, press releases, conference calls, and webcasts[27] - Investors can register for automatic notifications to receive timely information when new materials are published[27] Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP financial measures, offering transparency into adjustments for a clearer view of core operational performance Adjusted Operating Earnings Reconciliation This reconciliation details adjustments from GAAP net income to adjusted operating earnings, including market impacts and consolidated investment entity net income Adjusted Operating Earnings Reconciliation | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | | :----------------------------------------- | :--------------------- | :--------------------- | | Net Income | $990 | $417 | | Adjustments: | | | | Market Impact on Nontraditional Long-Duration Products | $140 | $(475) | | Net Income/(Loss) from Consolidated Investment Entities | $1 | $0 | | Tax Impact | $(29) | $101 | | Adjusted Operating Earnings | $878 | $798 | | Diluted EPS | $9.46 | $3.79 | | Adjusted Operating Diluted EPS | $8.39 | $7.25 | Adjusted Operating Revenues & Expenses Reconciliation This reconciliation shows the conversion from GAAP total net revenues and expenses to adjusted operating total net revenues and expenses Adjusted Operating Revenues and Expenses Reconciliation | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | | :----------------------------------------- | :--------------------- | :--------------------- | | Total Net Revenues | $4,146 | $3,742 | | Adjustments: | | | | Market Impact on Nontraditional Long-Duration Products | $2 | $0 | | Revenues from Consolidated Investment Entities | $44 | $41 | | Adjusted Operating Total Net Revenues | $4,100 | $3,698 | | Total Expenses | $2,927 | $3,246 | | Adjustments: | | | | Expenses from Consolidated Investment Entities | $43 | $41 | | Integration/Restructuring Charges | $0 | $10 | | Market Impact on Nontraditional Long-Duration Products | $(138) | $475 | | Adjusted Operating Expenses | $3,022 | $2,720 | | Adjusted Operating Earnings Before Income Taxes | $1,078 | $978 | | Adjusted Operating Pre-Tax Margin | 26.3% | 26.4% | Available Capital for Capital Adequacy Reconciliation This reconciliation details the calculation of available capital for capital adequacy from Ameriprise Financial GAAP equity, adjusting for AOCI, goodwill, and intangibles Available Capital for Capital Adequacy Reconciliation | Metric | March 31, 2024 (Millions USD) | March 31, 2023 (Millions USD) | | :----------------------------------------- | :---------------------------- | :---------------------------- | | Ameriprise Financial GAAP Equity | $4,879 | $4,144 | | Less: AOCI | $(1,930) | $(1,985) | | Ameriprise Financial GAAP Equity (Excluding AOCI) | $6,809 | $6,129 | | Less: RiverSource Life Insurance Co. GAAP Equity (Excluding AOCI) | $2,017 | $1,667 | | Add: RiverSource Life Insurance Co. Statutory Total Adjusted Capital | $2,637 | $3,108 | | Less: Goodwill and Intangible Assets | $2,603 | $2,497 | | Add: Other Adjustments | $309 | $304 | | Available Capital for Capital Adequacy | $5,135 | $5,377 | Effective Tax Rate Reconciliation This reconciliation presents the provision for income taxes and effective tax rates for both GAAP and adjusted operating pre-tax income Effective Tax Rate Reconciliation | Metric | Q1 2024 GAAP (Millions USD) | Q1 2024 Adjusted Operating (Millions USD) | | :--------------------------- | :-------------------------- | :---------------------------------------- | | Income Before Income Taxes | $1,219 | $1,078 | | Provision for Income Taxes | $229 | $200 | | Effective Tax Rate | 18.8% | 18.6% | Asset Management G&A Expense Reconciliation This reconciliation adjusts Asset Management's general and administrative expenses by removing performance fee compensation and foreign exchange translation impacts Asset Management General & Administrative Expense Reconciliation | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | | :----------------------------------------- | :--------------------- | :--------------------- | | Total General & Administrative Expenses | $403 | $401 | | Less: Performance Fee Compensation Impact | $11 | $2 | | Less: Foreign Exchange Translation Impact | $4 | $0 | | Total General & Administrative Expenses Excluding Performance Fee Compensation and Foreign Exchange Translation Impact | $388 | $399 | Adjusted Operating Return on Equity Reconciliation This reconciliation details the conversion from GAAP net income to adjusted operating earnings and from Ameriprise Financial shareholders' equity to adjusted operating equity Adjusted Operating Return on Equity Reconciliation | Metric | As of March 31, 2024 (Millions USD) | As of March 31, 2023 (Millions USD) | | :----------------------------------------- | :---------------------------------- | :---------------------------------- | | Net Income | $3,129 | $2,741 | | Less: Adjustments | $(62) | $(266) | | Adjusted Operating Earnings | $3,191 | $3,007 | | Ameriprise Financial, Inc. Shareholders' Equity | $4,331 | $4,032 | | Less: AOCI | $(2,174) | $(2,037) | | Ameriprise Financial, Inc. Shareholders' Equity (Excluding AOCI) | $6,505 | $6,069 | | Adjusted Operating Equity | $6,509 | $6,070 | | Return on Equity (Excluding AOCI) | 48.1% | 45.2% | | Adjusted Operating Return on Equity (Excluding AOCI) | 49.0% | 49.5% |