Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q3 2023 Earnings Presentation
25 slides from Ameriprise Financial's earnings presentation, Oct 26, 2023
Slide 1: Ameriprise Financial Third Quarter 2023 Conference Call
Ameriprise Financial Third Quarter 2023 Conference Call October 26, 2023 © 2023 Ameriprise Financial, Inc. All rights reserved.
Slide 2: Forward-looking statements
Forward-looking statements Some of the statements made in our October 25, 2023 earnings release and/or in this October 26, 2023 presentation constitute forward-looking statements. These statements reflect management's estimates, plans, beliefs and expectations, and speak only as of October 26, 2023.
Slide 3: Consolidated Third Quarter 2023 Results
Consolidated Third Quarter 2023 Results GAAP Q3 2023 Q3 2022 Better/(Worse) Net Revenues ($M) $3,925 $3,484 13% Expenses ($M) $2,808 $2,149 (31)% Net Income ($M) $872 $1,061 (18)% Diluted EPS $8.14 $9.41 (13)% Return on Equity, ex. AOCI (1) 44.4% 55.7% (1,130) bps Adjusted Operating Q3 2023 Q3 2022
Slide 4: Q3 2023 Business & Financial Results
Q3 2023 Business & Financial Results Walter Berman Chief Financial Officer © 2023 Ameriprise Financial, Inc. All rights reserved. 4
Slide 5: Excellent 24% EPS growth demonstrates the strength of our diversified business model
(1) Excellent 24% EPS growth demonstrates the strength of our diversified business model • Our diversified revenue sources continue to generate strong and sustainable results across the market cycle with operating earnings(1) up 18% • Assets under management and administration grew 12% to $1.2 trill
Slide 6: Strong business momentum and benefit from rates
Strong business momentum and benefit from rates Operating Net Revenues1 $ in millions • Benefits of diversified business mix is reflected in results across market cycles and generates consistent free cash flow 10% $3,914 $3,543 • Operating net revenues1 increased 10% ◦ Significant benefits from inte
Slide 7: Wealth Management: Multiple drivers from fee and spread businesses deliver strong results across cycles
Wealth Management: Multiple drivers from fee and spread businesses deliver strong results across cycles Total Client Assets TTM Total Client Flows1 TTM Revenue Per Advisor1 $ in billions $ in billions $ in thousands 1% 10% $901 $42.7 $43.0 15% $816 $819 $711 Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q
Slide 8: AWM clients continue to allocate heavily to cash
AWM clients continue to allocate heavily to cash • Total cash balances, including money market funds and Total Cash Balances brokered CDs, reached $72.5 billion $ in billions ◦ Up 35% from a year ago and 4% sequentially ◦ A sizeable opportunity for future deployment $72.5 $32.0 • Cash sweep (includi
Slide 9: Wealth Management earnings increased 26%
Wealth Management earnings increased 26%(1) Adjusted Operating Pretax Adjusted • Strong revenue and pretax earnings growth driven by Total Net Revenue Operating Earnings1 higher spread revenue and continued client net inflows $ in millions $ in millions – $8.9 billion of total client flows with $43
Slide 10: Asset Management AUM growth driven by market appreciation; flows remain challenged
Option - Trailing Twelve Months $ Asset Management AUM growth driven by market appreciation; flows remain challenged like the industry Total AUM TTM Total Flow Rate1 $ in billions $587 $546 3.4% 0.3% (2.3)% Q3 2022 Q3 2023 Q3 2022 Q3 2023 BMO-Related Flows (1) Calculated on a trailing twelve month b
Slide 11: Asset Management: strong financial results in a challenging environment
Asset Management: strong financial results in a challenging environment Adjusted Operating Pretax Adjusted • Revenue and earnings growth driven by market Total Net Revenue Operating Earnings appreciation, higher performance fees and $7 million $ in millions $ in millions of favorable timing-related
Slide 12: Retirement & Protection Solutions delivered good earnings and strong free cash flow
Retirement & Protection Solutions delivered good earnings and strong free cash flow Pretax Adjusted Operating Earnings1 • Pretax earnings excluding unlocking were $204 million, reflecting continued $ in millions solid performance with a differentiated risk profile and strong free cash flow • Overall
Slide 13: Strong balance sheet and ~90% free cash flow generation support capital return
Strong balance sheet and ~90% free cash flow generation support capital return Capital Returned to Shareholders • Strong balance sheet fundamentals and capital $ in millions management $140 $138 $146 $143 – Strong excess capital position of $1.4 billion $138 – Holding company available liquidity of
Slide 14: APPENDIX: Third Quarter Supplemental LTC Materials
APPENDIX: 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 88% of the block – Policy count declined over the past year to ~8
Slide 15: LTC Annual Update: Long term care block characteristics
Appendix - LTC Annual Update Long term care block characteristics Data as of 9-30-23 First Generation Second Generation Issue Years 1989-1999 1997-2002 # of Policies 36,848 44,990 Average Attained Age of ALR / DLR 84 / 89 79 / 86 % with Lifetime Benefits 54% 34% Statutory Reserves $1.4 billion $1.2
Slide 16: LTC Annual Update: Extensive experience used to establish expectations
Appendix - LTC Annual Update Extensive experience used to establish expectations for the future • 53% of issued policies have terminated without claim (141) • Since 2019, 20%+ of policyholders who received rate increases have chosen to take at least one benefit reduction • Extensive credible claims
Slide 17: LTC Annual Update: Credible claims experience
Appendix - LTC Annual Update Credible claims experience Policy Count Distribution of Credible 86,000 Claims Experience 52% Extensive credible claims experience Historical claims provide extensive credible experience 38% Substantial credible claims experience 10% Developing experience Policy count as
Slide 18: LTC Annual Update: GAAP Reserve Sensitivity
Appendix - LTC Annual Update GAAP Reserve Sensitivity as of 9-30-23 Current Change in Estimated Assumption Assumption Financial Impact Updated annually to reflect Morbidity 5% change in incurred claims –$70M to +$45M company experience Updated annually to reflect Mortality 5% change in mortality –$3
Slide 19: Reconciliation Tables
Reconciliation Tables © 2023 Ameriprise Financial, Inc. All rights reserved. 19
Slide 20: Reconciliation tables: Adjusted Operating Earnings Per Diluted Share
Reconciliation tables Adjusted Operating Earnings Per Diluted Share Per Diluted Share Quarter Ended September Quarter Ended 30, September 30, % Better/ % Better/ (in millions, except per share amounts, unaudited) 2023 2022 (Worse) 2023 2022 (Worse) Net income $ 872 $ 1,061 (18)% $ 8.14 $ 9.41 (13)%
Slide 21: Pretax Adjusted Operating Earnings
Reconciliation tables Pretax Adjusted Operating Earnings Quarter Ended September 30, % Better/ (in millions, unaudited) 2023 2022 (Worse) Total net revenues $ 3,925 $ 3,484 13% Adjustments: Net realized investment gains (losses) (38) (88) Market impact on non-traditional long-duration products 3 (1)
Slide 22: 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) 2023 2022 Net income $ 2,828 $ 3,200 Less: Adjustments (1) (254) 332 Adjusted operating earnings 3,082 2,868 Less: Annual unlocking (2) (78)
Slide 23: Reconciliation tables: General and Administrative Expense
Reconciliation tables Ameriprise General and Administrative Expense Quarter Ended September 30, % Better/ (in millions, unaudited) 2023 2022 (Worse) Total G&A Expense $ 938 $ 904 (4)% Less: Regulatory accrual 20 — Total G&A Expense excluding accrual for regulatory matter $ 918 $ 904 (2)% © 2023 Amer
Slide 24: Reconciliation tables: Advice & Wealth Management Operating Margin
Reconciliation tables Advice & Wealth Management Operating Margin Quarter Ended September 30, % Better/ (in millions, unaudited) 2023 2022 (Worse) Adjusted operating net revenues $ 2,407 $ 2,137 13% Adjusted operating expenses 1,678 1,542 (9)% Less: Regulatory accrual 20 — Adjusted operating expense
Slide 25: Reconciliation tables: Asset Management Net Pretax Adjusted Operating Margin
Reconciliation tables Asset Management Net Pretax Adjusted Operating Margin (in millions, unaudited) 3 Qtr 2023 Adjusted operating total net revenues $ 826 Distribution pass through revenues (186) Subadvisory and other pass through revenues (96) Net adjusted operating revenues $ 544 Pretax adjusted