Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q3 2022 Earnings Presentation
24 slides from Ameriprise Financial's earnings presentation, Oct 26, 2022
Slide 1: Ameriprise Financial Third Quarter 2022 Conference Call
Ameriprise Financial Third Quarter 2022 Conference Call October 26, 2022 © 2022 Ameriprise Financial, Inc. All rights reserved.
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements made in our October 25, 2022 earnings release and/or in this October 26, 2022 presentation constitute forward-looking statements. These statements reflect management's estimates, plans, beliefs and expectations, and speak only as of October 26, 2022.
Slide 3: Consolidated Third Quarter 2022 Results
Consolidated Third Quarter 2022 Results GAAP Q3 2022 Q3 2021 Over/(Under) Net Revenues ($M) $3,491 $2,903 20% Expenses ($M) $2,806 $1,633 (72)% Net Income ($M) $548 $1,031 (47)% Diluted EPS $4.86 $8.65 (44)% ROE, ex. AOCI (1) 47.1% 41.7% 540 bps Adjusted Operating Q3 2022 Q3 2021 Over/(Under) Net Re
Slide 4: Q3 2022 Business & Financial Results
Q3 2022 Business & Financial Results Walter Berman Chief Financial Officer © 2022 Ameriprise Financial, Inc. All rights reserved. 4
Slide 5: EPS up 9% demonstrating the strength of our diversified business model
EPS up 9%1 demonstrating the strength of our diversified business model despite macro pressures • Results in the quarter highlight the strength of our diversified business model, as favorable business momentum and higher interest rates more Pretax Adjusted Operating Earnings2 than offset impacts fro
Slide 6: Interest rate impacts and business momentum more than offset market pressure
Interest rate impacts and business momentum more than offset significant market pressure Assets Under Management & Administration (AUM/A) $ in billions • AUM/A declined 9% as strong business growth and client $1,206 (9%) $1,101 flows were negatively impacted by depreciating markets – Equity markets
Slide 7: Wealth Management total client flows remain strong in challenging environment
Wealth Management total client flows remain strong in challenging environment Total Client Assets Total Client Flows TTM Revenue Per Advisor1 $ in billions $ in billions $ in thousands $11.2 11% $811 (12)% $10.0 7% $819 $766 $711 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 (1)Calculated on a tra
Slide 8: Wealth Management margin expansion continues from interest rates and organic growth
Wealth Management margin expansion continues from interest rates and organic growth • Pretax earnings up 30%, as higher interest earnings and client flows Adjusted Operating Pretax Adjusted more than offset market depreciation and lower transactional activity Total Net Revenue Operating Earnings • S
Slide 9: Asset Management remains challenged by market depreciation and FX translation
Asset Management remains challenged by ongoing market depreciation and FX translation Total AUM Total Flows $ in billions $ in billions $583 $3.9 $546 ($2.4) Q3 2021 Q3 2022 Q3 2021 Q3 2022 © 2022 Ameriprise Financial, Inc. All rights reserved. 9
Slide 10: Asset Management financial results reflect the challenging macro backdrop
Asset Management financial results reflect the challenging macro backdrop consistent with industry Adjusted Operating Pretax Adjusted Operating Earnings • Pretax adjusted operating earnings declined 33% Total Net Revenue $ in millions $ in millions primarily from market depreciation and foreign curr
Slide 11: Retirement & Protection Solutions delivered stable earnings
Retirement & Protection Solutions delivered stable earnings in the face of market depreciation Pretax Adjusted • Pretax earnings excluding unlocking of $203 million reflecting continued Operating Earnings1 solid performance with a differentiated risk profile and strong free cash $ in millions flow g
Slide 12: Strong balance sheet and free cash flow support ~90% capital return commitment
Strong balance sheet and free cash flow generation support ~90% capital return commitment for 2022 Capital Returned to Shareholders • Strong balance sheet fundamentals and capital $ in millions management $133 – Strong excess capital and holding company liquidity $131 $140 $142 – AA-rated investment
Slide 13: Reconciliation Tables
Reconciliation Tables © 2022 Ameriprise Financial, Inc. All rights reserved. 13
Slide 14: Reconciliation tables: Adjusted Operating Earnings Per Diluted Share
Reconciliation tables Adjusted Operating Earnings Per Diluted Share Per Diluted Share Quarter Ended Quarter Ended September 30, September 30, % Over/ (in millions, except per share amounts, unaudited) 2022 2021 2022 2021 (Under) Net income $ 548 $ 1,031 $ 4.86 $ 8.65 (44)% Less: Net realized investm
Slide 15: Reconciliation tables: Adjusted Operating Net Revenues & Expenses
Reconciliation tables Adjusted Operating Net Revenues & Expenses Quarter Ended September 30, % Over / (in millions, unaudited) 2022 2021 (Under) Total net revenues $ 3,491 $ 2,903 20% Less: Net realized investment gains (losses) (100) 14 Less: Market impact on non-traditional long-duration 15 (1) pr
Slide 16: Reconciliation tables: Adjusted Operating and G&A Expenses
Reconciliation tables Ameriprise Financial Adjusted Operating and G&A Expenses Quarter Ended September 30, % Over/ (in millions, except per share amounts, unaudited) 2022 2021 (under) Total operating expenses $ 2,807 $ 2,665 5% BMO operating expenses 81 — Unlocking operating expenses 170 27 Total op
Slide 17: Reconciliation tables: Return on Equity Excluding AOCI
Reconciliation tables Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI” Twelve Months Ended September 30, (in millions, unaudited) 2022 2021 Net income $ 2,766 $ 2,236 Less: Adjustments (1) 92 (324) Adjusted operating earnings $ 2,674 $ 2,560 Less: Annual unlocking/loss
Slide 18: Reconciliation tables: Pretax Adjusted Operating Earnings Mix Shift
Reconciliation tables Pretax Adjusted Operating Earnings Mix Shift Quarter Ended September 30, (in millions, unaudited) 2022 2021 Advice & Wealth Management $ 595 $ 459 Asset Management 191 285 RPS 31 187 Less: Unlocking (172) (5) RPS ex Unlocking 203 192 Subtotal pretax adjusted operating earnings
Slide 19: Reconciliation tables: Asset Management Net Pretax Adjusted Operating Margin
Reconciliation tables Asset Management Net Pretax Adjusted Operating Margin Quarter Ended September 30, (in millions, except per share amounts, unaudited) 2022 2021 Adjusted operating total net revenues $ 823 $ 915 Distribution pass thru revenues (187) (231) Subadvisory and other pass thru revenues
Slide 20: Third Quarter Supplemental LTC Materials
Third Quarter Supplemental LTC Materials Annual Update Key Observations: – Claims performed within expectations – Additional annual approved premium rate increases – Increased extensive and substantial credible experience on 89% of the block – Policy count declined by 6% over the past year to ~87,00
Slide 21: Appendix - LTC Annual Update: Long term care block characteristics
Appendix - LTC Annual Update Long term care block characteristics Data as of 9-30-22 First Generation Second Generation Issue Years 1989-1999 1997-2002 # of Policies 39,924 47,036 Average Attained Age of ALR / DLR 83 / 89 78 / 85 % with Lifetime Benefits 54% 35% Statutory Reserves $1.4 billion $1.2
Slide 22: Appendix - LTC Annual Update: Extensive experience used to establish expectations
Appendix - LTC Annual Update Extensive experience used to establish expectations for the future Policy Count • 52% of issued policies have terminated without claim (in thousands) 267 (138) • Extensive credible claims experience from 38,000 closed claims and 8,000 open claims • Represents 35% of poli
Slide 23: Appendix - LTC Annual Update: Credible claims experience
Appendix - LTC Annual Update Credible claims experience Policy Count Distribution of Credible 91,000 Claims Experience 52% Extensive credible claims experience Historical claims provide extensive credible experience 37% Substantial credible claims experience 11% Developing experience Policy count as
Slide 24: Appendix - LTC Annual Update: Long term care sensitivity analysis
Appendix - LTC Annual Update Long term care sensitivity analysis compares favorably to peers GAAP Reserve Sensitivity as of 9-30-22 Current Change in Estimated Assumption Assumption Pretax Impact No improvement Morbidity Updated annually to reflect 5% change in incurred claims +/-$141M company exper