Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q3 2021 Earnings Presentation
29 slides from Ameriprise Financial's earnings presentation, Oct 27, 2021
Slide 1: Ameriprise Financial Third Quarter 2021 Conference Call
Ameriprise Financial Third Quarter 2021 Conference Call October 27, 2021 © 2021 Ameriprise Financial, Inc. All rights reserved.
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements made in our October 26, 2021 earnings release and/or in this October 27, 2021 presentation constitute forward-looking statements. These statements reflect management's estimates, plans, beliefs and expectations, and speak only as of October 27, 2021.
Slide 3: Consolidated Third Quarter 2021 Results
Consolidated Third Quarter 2021 Results GAAP Q3 2021 Q3 2020 Over/(Under) Net Revenues ($M) $2,903 $3,003 (3)% Expenses ($M) $1,633 $3,187 49% Net Income ($M) $1,031 $(140) NM Diluted EPS $8.65 $(1.14) NM ROE, ex. AOCI (1) 41.7% 30.6% 1,110 bps Adjusted Operating Q3 2021 Q3 2020 Over/(Under) Net Rev
Slide 4: Q3 2021 Business & Financial Results
Q3 2021 Business & Financial Results Walter Berman Chief Financial Officer © 2021 Ameriprise Financial, Inc. All rights reserved. 4
Slide 5: EPS up 38% driven by profitable organic growth in Wealth and Asset Management
EPS up 38% driven by profitable organic growth in Wealth and Asset Management • Ameriprise EPS was $5.91(1), up 38% • Wealth and Asset Management delivered strong organic growth and generated 80%(2) of AMP pretax adjusted operating earnings in the quarter – Revenue in Wealth and Asset Management inc
Slide 6: Wealth and Asset Management continue to drive AMP's excellent financial performance
Wealth and Asset Management continue to drive AMP’s excellent financial performance Total AUM/A Wealth and Asset Wealth and Asset $ in billions Management Flows Management Flows $ in billions $ in billions 21% $1,206 $13.9 $44.3 $999 137% 208% $18.7 $4.5 Q3 2020 Q3 2021 Q3 2020 Q3 2021 YTD Q3 2020 Y
Slide 7: Wealth and Asset Management are the growth drivers for Ameriprise
Wealth and Asset Management are the growth drivers for Ameriprise Wealth and Asset Wealth and Asset Management Wealth and Asset Management Management Net Revenue Pretax Adjusted Pretax Adjusted $ in billions Operating Earnings Operating Margin(1) $ in billions 370 $2,963 $744 28.3% bps 23% 44% 24.6%
Slide 8: Wealth and Asset Management drove ~80% of Ameriprise's profitability
(1) Wealth and Asset Management drove ~80% of Ameriprise’s profitability 2021 Pretax Adjusted Operating Earnings(2) $0.7 ($0.2) $3.1 up 22% $1.0 $2.6 $1.0 $1.0 vs. LY up 28% vs. LY $1.6 $1.6 $1.6 $1.6 Advice & Wealth Asset Management Wealth and Asset RPS Corporate & Other Ameriprise Management Manag
Slide 9: Wealth Management has a strong track record of profitable organic growth
Wealth Management has a strong track record of profitable organic growth Total Client Assets Total Client Flows TTM Revenue Per Advisor(1) $ in billions $ in billions $ in thousands 26% 24% 91% $38.6 $766 $811 $732 $667 $29.7 $619 $643 6% $20.2 5% 4% 2019 2020 2021 2019 2020 2021 2019 2020 2021 Orga
Slide 10: Wealth Management had excellent financial results
Wealth Management had excellent financial results Adjusted Operating Pretax Adjusted • Revenue grew 23% year-over-year and 3% sequentially Total Net Revenue Operating Earnings – Robust client flows into wrap accounts $ in millions $ in millions – Higher transactional activity – Equity market appreci
Slide 11: Asset Management has a strong track record of profitable growth
Asset Management has a strong track record of profitable growth Total AUM/A Total Flows Adjusted Operating Margin $ in billions 18% 830 bps $27.8 44.6% 583.4 $32B 546.6 39.1% 494.2 36.3% 5% $10.4 2% 2019 2020 2021 (1)% 2019 2020 2021 $(4.2) 2019 2020 2021 Flows excluding legacy insurance partners. O
Slide 12: Sustained positive flows in Asset Management drove 44% growth in operating earnings
Sustained positive flows in Asset Management drove 44% growth in operating earnings Adjusted Operating Pretax Adjusted • Consistently strong investment performance is the Total Net Revenue Operating Earnings engine behind $5.3 billion(1) improvement in net inflows $ in millions $ in millions year-ov
Slide 13: Retirement & Protection Solutions delivers stable earnings and substantial free cash flow
Retirement & Protection Solutions delivers stable earnings and generates substantial free cash flow Pretax Adjusted • Earnings were $192 million excluding unlocking reflecting Operating Earnings, continued excellent performance with a stable profile given Excluding Unlocking well managed sales $ in
Slide 14: RPS business is a highly valuable asset with sustainable financial results
RPS business is a highly valuable asset with sustainable financial results, free cash flow and a low risk profile • Unique distribution model • Diversified inforce business with client behavior that has been consistent focused on delivering client with expectations solutions through financial planni
Slide 15: Strong balance sheet and free cash flow generation support 90% capital return target
Strong balance sheet and free cash flow generation support continued 90% capital return target Capital Returned to Shareholders • Strong balance sheet fundamentals and superior capital $ in millions strength – Ongoing free cash flow generation of ~90% $133 – $3.7 billion of holding company available
Slide 16: 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, up from 84% a year ago – Policy count declined by 6% over
Slide 17: Appendix - LTC Annual Update Long term care block characteristics
Appendix - LTC Annual Update Long term care block characteristics Data as of 9-30-21 First Generation Second Generation Issue Years 1989-1999 1997-2002 # of Policies 43,381 49,168 Average Attained Age of ALR / DLR 83 / 88 78 / 85 % with Lifetime Benefits 54% 35% Statutory Reserves $1.4 billion $1.2
Slide 18: Appendix - LTC Extensive experience used to establish expectations
Appendix - LTC Annual Update Extensive experience used to establish expectations for the future Policy Count • 50% of issued policies have terminated without claim (in thousands) 267 (134) • Extensive credible claims experience from 35,000 closed claims and 8,000 open claims • Represents 33% of poli
Slide 19: Appendix - LTC Credible claims experience
Appendix - LTC Annual Update Credible claims experience Policy Count Distribution of Credible 97,000 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 20: Appendix - LTC sensitivity analysis compares favorably to peers
Appendix - LTC Annual Update Long term care sensitivity analysis compares favorably to peers GAAP Reserve Sensitivity as of 9-30-21 Current Change in Estimated Assumption Assumption Pretax Impact No improvement Morbidity Updated annually to reflect 5% change in incurred claims +/-$145M company exper
Slide 21: Reconciliation Tables
Reconciliation Tables © 2021 Ameriprise Financial, Inc. All rights reserved. 21
Slide 22: Reconciliation tables
Reconciliation tables Adjusted Operating Net Revenues & Expenses Quarter Ended September 30, % Over / (in millions, unaudited) 2021 2020 (Under) Total net revenues $ 2,903 $ 3,003 (3)% Less: Net realized investment gains (losses) 14 4 Less: Market impact on non-traditional long-duration products (1)
Slide 23: Reconciliation tables
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) 2021 2020 2021 2020 (Under) Net income $ 1,031 $ (140) $ 8.65 $ (1.14) (3) NM Add: Basic to diluted
Slide 24: Reconciliation tables
Reconciliation tables Return on Equity (ROE) Excluding Accumulated Other Comprehensive Income “AOCI” Twelve Months Ended September 30, (in millions, unaudited) 2021 2020 Net income $ 2,236 $ 1,820 Less: Adjustments (1) (324) 58 Adjusted operating earnings $ 2,560 $ 1,762 Total Ameriprise Financial,
Slide 25: Reconciliation tables
Reconciliation tables Advice & Wealth Management Adjusted Revenue Per Advisor 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q % Over/ (unaudited) 2019 2020 2020 2020 2020 2021 2021 2021 (Under) Total Net Revenue ($ in M) $ 1,710 $ 1,695 $ 1,537 $ 1,667 $ 1,776 $ 1,879 1,980 2,048 Interest Revenue ($ in M) $ (92) $ (78) $ —
Slide 26: Reconciliation tables
Reconciliation tables Asset Management Net Pretax Adjusted Operating Margin Quarter Ended September 30, (in millions, except per share amounts, unaudited) 2021 2020 Adjusted operating total net revenues $ 915 $ 739 Distribution pass thru revenues (231) (193) Subadvisory and other pass thru revenues
Slide 27: Reconciliation tables
Reconciliation tables Wealth and Asset Management Net Pretax Adjusted Operating Margin Quarter Ended September 30, (in millions, except per share amounts, unaudited) 2021 2020 Advice & Wealth adjusted operating total net revenues 2,048 1,667 Asset Management net adjusted operating revenues 587 472 W
Slide 28: Reconciliation tables
Reconciliation tables Pretax Adjusted Operating Earnings Mix Shift Quarter Ended September 30, (in millions, unaudited) 2021 2020 Advice & Wealth Management $ 459 $ 320 Asset Management 285 198 RPS 187 (89) Pretax adjusted operating earnings 931 429 Advice & Wealth Management 49 % 75 % Asset Managem
Slide 29: Reconciliation tables
Reconciliation tables Pretax Adjusted Operating Earnings Growth and Mix Shift ex Unlocking TTM September 30, % Over/ (in millions, unaudited) 2021 2020 (Under) Advice & Wealth Management $ 1,623 $ 1,356 Asset Management 967 674 Total Advice & Wealth Mangement and Asset Management 2,590 2,030 28 % Re