Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q4 2020 Earnings Presentation
20 slides from Ameriprise Financial's earnings presentation, Jan 28, 2021
Slide 1: Ameriprise Financial Fourth Quarter 2020 Conference Call
Ameriprise Financial Fourth Quarter 2020 Conference Call January 28, 2021 © 2021 Ameriprise Financial, Inc. All rights reserved.
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements made in our January 27, 2021 earnings release and/or in this January 28, 2021 presentation constitute forward-looking statements. These statements reflect management's estimates, plans, beliefs and expectations, and speak only as of January 28, 2021.
Slide 3: Consolidated fourth quarter results
Consolidated fourth quarter results GAAP Q4 2020 Q4 2019 Over/(Under) Net Revenues ($M) $3,183 $3,287 (3%) Expenses ($M) $2,993 $2,753 (9%) Net Income ($M) $177 $463 (62%) Diluted EPS $1.43 $3.53 (59%) ROE, ex. AOCI (1) 26.1% 33.1% (700 bps) Adjusted Operating Q4 2020 Q4 2019 Over/(Under) Net Revenu
Slide 4: Q4 2020 Business & Financial Results
Q4 2020 Business & Financial Results Walter Berman Chief Financial Officer © 2021 Ameriprise Financial, Inc. All rights reserved. 4
Slide 5: Ameriprise delivered strong results and is positioned well for growth in 2021
Ameriprise delivered strong results and is positioned well for growth in 2021 • Strong financial performance fueled by robust organic growth with operating earnings per diluted share of $4.53, up 8% from last year • Reached $1.1 trillion of assets under management and administration with $15 billion
Slide 6: Strong underlying business performance continue to offset interest rate headwinds
Strong underlying business performance continue to offset interest rate headwinds Adjusted Operating Adjusted Operating • Revenue was up 6%, excluding the $92 million benefit Total Net Revenue EPS from higher short-term interest rates in the prior year, $ in millions reflecting strong underlying per
Slide 7: Robust Advice & Wealth delivered excellent organic growth across all measures
Robust Advice & Wealth delivered excellent organic growth across all measures Total Client Assets Wrap Net Flows Advisor Productivity $ in billions $ in billions $ in thousands 14% $732 $7.9 Interest $667 82% Rate 8% Impact $643 $619 $4.4 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 © 2021 Amerip
Slide 8: AWM very strong organic growth and flows continue to drive margin expansion
AWM very strong organic growth and flows continue to drive margin expansion • Demonstrated strong underlying revenue growth in the face Adjusted Operating Pretax Adjusted of $92 million of interest rate headwinds Total Net Revenues Operating Earnings – Underlying revenue increased 10% driven by stro
Slide 9: Asset Management demonstrates continued improvement in profitable growth
Asset Management demonstrates continued improvement in profitable growth Adjusted Operating Pretax Adjusted Total Net Revenues Operating Earnings • Sustained improvement in flow trends with net inflows(1) of $ in millions $ in millions $8.3 billion, a $4.1 billion improvement from the prior year • R
Slide 10: Retirement & Protection Solutions delivering consistent financial results and prudent risk management
Retirement & Protection Solutions delivering consistent financial results and prudent risk management Pretax Adjusted Operating Earnings • 58% of retirement product sales without living benefits $ in millions • Insurance sales mix shifting to highly accretive VUL sales $179 $180 1% • Earnings perfor
Slide 11: Corporate & Other benefitted from improved LTC results and lower corporate expenses
Corporate & Other benefitted from improved LTC results and lower corporate expenses Closed Blocks Corporate & Other Fixed Annuities Pretax Adjusted Operating Earnings Pretax Adjusted Operating Earnings $ in millions $ in millions Q4 2019 Q4 2020 $6 ($2) ($60) Q4 2019 Q4 2020 ($99) Long Term Care Cor
Slide 12: Strong balance sheet and free cash flow generation support continued capital return
Strong balance sheet and free cash flow generation support continued capital return Capital Returned to Shareholders • Strong balance sheet fundamentals $ in millions – $2.3 billion of parent company available liquidity $128 – Free cash flow generation of ~90% in 2020 – $1.9 billion of excess capita
Slide 13: Reconciliation tables
Reconciliation tables Adjusted operating net revenues ($ in millions) Q4 Q4 % Over/ 2019 2020 (Under) Total net revenues $ 3,287 $ 3,183 (3)% Less: Net realized investment gains (losses (2) 8 Less: Market impact on non-traditional long-duration products 8 20 Less: Mean Reversion related impacts - -
Slide 14: Reconciliation tables
Reconciliation tables Adjusted operating expenses ($ in millions) Q4 Q4 % Over/ 2019 2020 (Under) Total expenses $ 2,753 $ 2,993 (9)% Less: CIEs expenses 20 13 Less: Integration/restructuring charges 6 - Less: Market impact on non-traditional long-duration products 366 634 Less: Mean reversion relat
Slide 15: Reconciliation tables
Reconciliation tables Adjusted operating earnings per diluted share ($ in millions, except per share amounts) Per Diluted Share Q4 Q4 % Over/ Q4 Q4 % Over/ 2019 2020 (Under) 2019 2020 (Under) Net income $ 463 $ 177 (62)% $ 3.53 $ 1.43 (59)% (1) Less: Net realized investment (losses) gains (2) 8 (0.0
Slide 16: Reconciliation tables
Reconciliation tables Adjusted operating return on equity ($ in millions) Twelve Months Ended Twelve Months Ended December 31, December 31, 2019 2020 Net income $ 1,893 $ 1,534 (1) Less: Adjustments (297) (236) Adjusted operating earnings $ 2,190 $ 1,770 (2) Less: Annual unlocking/loss recognition,
Slide 17: Reconciliation tables
Reconciliation tables Advice & Wealth Management adjusted operating total net revenues ($ in millions) Q4 Q4 % Over/ 2019 2020 (Under) AWM Net revenues $ 1,710 $ 1,776 4% Less: short-term interest rate impacts 92 - AWM Net revenues excluding short-term interest rate impact $ 1,618 $ 1,776 10% Advice
Slide 18: Reconciliation tables
Reconciliation tables Advice & Wealth Management adjusted revenue per advisor 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Total Net Revenue $ 1,554 $ 1,653 $ 1,682 $ 1,710 $ 1,695 $ 1,537 $ 1,667 $ 1,776 Interest Revenue $ (122) $ (122) $ (116) $ (92) $ (68) $ - $ - $ - Advisor C
Slide 19: Reconciliation tables
Reconciliation tables Pretax operating margin ($ in millions) Q4 Q4 2019 2020 Total net revenues $ 3,287 $ 3,183 Less: Net realized investment gains (losses) (2) 8 Less: Market impact on non-traditional long-duration products 8 20 Less: Mean reversion related impacts - - Less market impact of hedges
Slide 20: Reconciliation tables
Reconciliation tables Asset Management net pretax adjusted operating margin ($ in millions) Q4 Q4 2019 2020 Adjusted operating total net revenues $ 770 $ 798 Less: Distribution pass through revenues 193 205 Less: Subadvisory and other pass through revenues 85 94 Net adjusted operating revenues $ 492