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TheStreet Open House

Ameriprise Financial Reports Fourth Quarter 2012 Results

Stocks in this article: AMP

Ameriprise Financial, Inc. (NYSE: AMP) today reported fourth quarter 2012 net income from continuing operations attributable to Ameriprise Financial of $388 million, or $1.80 per diluted share, compared to $223 million, or $0.95 per diluted share, a year ago. Fourth quarter 2012 operating earnings were $367 million, or $1.71 per diluted share, compared to $308 million, or $1.31 per diluted share, a year ago.

Fourth quarter 2012 operating net revenues increased 6 percent from a year ago to $2.6 billion driven by strong Ameriprise advisor client net inflows, increased client activity and market appreciation. Growth in revenue was partially offset by the decline in investment income from low interest rates as well as outflows in asset management.

Fourth quarter 2012 operating expenses increased 5 percent to $2.2 billion, reflecting higher distribution-related expenses and previously disclosed catastrophe losses related to Superstorm Sandy. General and administrative expenses were flat compared to a year ago as ongoing expense controls offset investments in the business.

The company continues to maintain a strong capital position, generate strong free cash flow and return capital to shareholders. The company’s excess capital position remains above $2 billion after returning $446 million to shareholders through share repurchases and dividends during the quarter.

Return on shareholders’ equity excluding accumulated other comprehensive income (AOCI) was 12.8 percent for the 12 months ended December 31, 2012. Operating return on equity excluding AOCI was 16.2 percent for the same time period.

“We had a solid quarter led by strong results in our advice and wealth management business,” said Jim Cracchiolo, chairman and chief executive officer. “We reported a record high for assets under management and administration driven by strong client net inflows into fee-based accounts and equity market appreciation. We’re executing our strategy well and maintaining tight expenses to offset headwinds from low interest rates.”

“We continue to generate significant free cash flow and benefit from our strong balance sheet and capital position. Our operating return on equity ended the year above 16 percent and we returned more than 130 percent of our full-year operating earnings to shareholders through ongoing share repurchases and dividends.“

 
Ameriprise Financial, Inc.
Fourth Quarter Summary
 

(in millions, except per share amounts, unaudited)

 

Quarter Ended December 31,

 

Per Diluted Share Quarter Ended December 31,

2012   2011  

% Better/ (Worse)

2012   2011  

% Better/ (Worse)

Net income from continuing operations attributable to Ameriprise Financial

$ 388 $ 223 74 % $ 1.80 $ 0.95 89 %

Adjustments, net of tax (1)

(see reconciliation on p. 11)   (21 )   85 NM   (0.09 )   0.36 NM
Operating earnings $ 367 $ 308 19 % $ 1.71 $ 1.31 31 %
 
Weighted average common shares outstanding:
Basic 210.8 230.6
Diluted 215.1 234.5
 

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

NM Not Meaningful – variance of greater than 100%
 

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 gains or losses; integration and restructuring charges; the market impact on variable annuity guaranteed living benefits net of hedges and related deferred acquisition costs (DAC) and deferred sales inducement costs (DSIC) amortization; and income or loss from discontinued operations.

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