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Ameriprise Financial Inc. Reports Operating Results (10-Q)

May 10, 2012 | About:
10qk

10qk

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Ameriprise Financial Inc. (AMP) filed Quarterly Report for the period ended 2012-03-31.

Ameriprise Finl has a market cap of $12.03 billion; its shares were traded at around $50.81 with a P/E ratio of 10.6 and P/S ratio of 1.2. The dividend yield of Ameriprise Finl stocks is 2.1%.

Highlight of Business Operations:

(1) Represents the elimination of intersegment revenues recognized for the three months ended March 31, 2012 and 2011 in each segment as follows: Advice & Wealth Management ($229 and $232, respectively); Asset Management ($10 and $10, respectively); Annuities ($63 and $58, respectively); Protection ($9 and $9, respectively); and Corporate & Other ($1 and nil, respectively).

Net revenues increased 1% for the first quarter of 2012 compared to the prior year period as growth in asset-based fees from retail client net inflows, primarily wrap account net inflows, and market appreciation was largely offset by a decline in net investment income from low interest rates. Net income from continuing operations attributable to Ameriprise Financial per diluted share decreased 12% compared to the prior year period. Net income from continuing operations attributable to Ameriprise Financial decreased $67 million, or 21%, compared to the prior year period reflecting the market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization) and the negative impact of low interest rates, partially offset by the market impact on DAC and DSIC amortization and the impact of variable annuity model updates and enhancements. The market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization), after tax, was a decrease to earnings of $74 million, or $0.32 per diluted share, for the first quarter of 2012 compared to a decrease of $14 million, or $0.05 per diluted share, for the prior year period. Return on equity from continuing operations excluding accumulated other comprehensive income was 13.3% for the twelve months ended March 31, 2012 compared to 13.0% for the prior year period.

Income from continuing operations decreased $45 million, or 15%, compared to the prior year period reflecting the market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization) and the negative impact of the low interest rate environment, partially offset by the market impact on DAC and DSIC amortization, the impact of variable annuity model updates and enhancements and the change in net income (loss) attributable to non-controlling interests. The market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization), after-tax, was a negative impact of $74 million for the first quarter of 2012 compared to a negative impact of $14 million for the prior year period. Earnings in the first quarter of 2012 included a $17 million after-tax benefit from the market impact on DAC and DSIC amortization compared to a $7 million after-tax benefit for the prior year period. Earnings in the first quarter of 2012 included a $13 million after-tax benefit from variable annuity model updates and enhancements compared to a $3 million after-tax benefit for the prior year period. Net income attributable to non-controlling interests of $4 million in the first quarter of 2012 compared to a loss of $18 million for the prior year period reflected an increase in net investment income of $34 million partially offset by a decrease in other revenues of $19 million. Loss from discontinued operations, net of tax, was $1 million for the three months ended March 31, 2012 compared to $71 million for the prior year period. Loss from discontinued operations, net of tax, for the prior year period included a $77 million after-tax charge related to previously disclosed legal expenses.

Net revenues increased $29 million, or 1%, compared to the prior year period due to an increase in net investment income, which reflected higher net investment income of the CIEs partially offset by lower investment income on fixed maturity securities, and higher premiums, as well as, growth in asset-based fees from wrap account net inflows and market appreciation offset by lower asset-based fees from Asset Management AUM net outflows. Net investment income increased $16 million, or 3%, compared to the prior year period reflecting higher net investment income of the CIEs, partially offset by a decrease in investment income on fixed maturity securities driven by lower interest rates. Net investment income for the first quarter of 2012 included a $61 million gain for changes in the assets and liabilities of CIEs, primarily debt and underlying syndicated loans, compared to a $27 million gain in the prior year period. Premiums increased $9 million, or 3%, compared to the prior year period due to growth in Auto and Home premiums primarily driven by higher volumes. Auto and Home policy counts increased 7% period-over-period.

Net cash used in financing activities increased $70 million to $417 million for the three months ended March 31, 2012 compared to $347 million for the three months ended March 31, 2011 due to net cash inflows related to policyholder and contractholder account values of $48 million for the first quarter of 2012 compared to net cash outflows of $126 million for the prior year period driven by lower fixed annuity net outflows, higher sales of universal life products and lower surrenders of universal life products compared to the prior year period. This increase was partially offset by a $95 million decrease in cash provided by other banking deposits compared to the prior year period. A decrease in cash of $100 million from the change in repurchase agreements compared to the period year period was offset by a $101 million increase in cash due to lower repurchases of common stock compared to the prior year period.

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