Ameriprise Financial Reports Fourth Quarter and Full Year 2018 Results
Adjusted operating EPS excluding items (1) was $3.80
Full year 2018 net income per diluted share was $14.20
Adjusted operating EPS excluding items (1) was $14.94
Fourth quarter 2018 return on equity excluding AOCI was 36.0 percent
Adjusted operating ROE excluding AOCI and items (1) was 37.8 percent
Full year 2018 net income per diluted share was $14.20. Adjusted operating earnings per diluted share excluding items(1) increased 27 percent to $14.94.
“Ameriprise delivered solid results in a volatile quarter with our Advice and Wealth Management business driving our growth,” said Jim Cracchiolo, chairman and chief executive officer. “Ameriprise client flows into fee-based investment advisory remained strong and cash balances increased. As we serve more clients in advice relationships, we’re steadily growing advisor productivity.”
“Equity market declines globally were clear challenges. U.S. equity markets declined 14 percent in the quarter, which impacted our average assets and related fees, increased non-cash annuity expenses and heightened industry-wide asset management outflows. These market challenges also create opportunities for Ameriprise as they reinforce the need for personal financial planning and advice, where we are a long-standing leader, and demonstrate a key differentiation—our balance sheet strength and effective capital management.
“Our capital strength allows us to continue to invest for near- and long-term growth and capture opportunities, including delivering relevant, quality products and solutions, exceptional service to our retail and institutional clients and accelerating our share repurchase in the fourth quarter. For the year, we returned more than $2 billion to shareholders through an increased dividend and repurchase of 11 million shares while maintaining our balance sheet strength. We will continue to benefit from our capital and expense discipline as we manage a challenging market environment and further strengthen our market position.”
GAAP Results – Fourth quarter
Net revenues were $3.2 billion reflecting growth in Advice & Wealth Management offset by market dislocation in the quarter.
Expenses of $2.5 billion decreased 2 percent, or $58 million, from a year ago.
Adjusted Operating Results – Fourth quarter
Adjusted operating net revenues of $3.2 billion were flat to last year excluding the Tax Act, driven by continued strength in Advice & Wealth Management, which was offset by lower Asset Management revenue.
Adjusted operating expenses were $2.6 billion. Excluding mean reversion-related impacts, adjusted operating expenses decreased 2 percent versus last year. General and administrative expense decreased 5 percent reflecting ongoing growth investments that were more than offset by continued expense discipline and lower compensation-related expenses.
The adjusted operating effective tax rate in the quarter was 16.9 percent and was within expectations. The lower effective tax rate reflects the continued reduction in the federal income tax rate.
The full press release is available for download below. Earnings materials are also available on the Investor Relations site at ir.ameriprise.com.
1. Excludes the one-time negative impact from the enactment of the Tax Cuts and Jobs Act ("Tax Act") in the fourth quarter of 2017, as well as unlocking and mean reversion-related items in both periods, as applicable. There are two primary mean reversion-related items that are influenced by markets—increased DAC and DSIC amortization and increased reserve accrual for SOP 03-1 reserves for living benefit guarentees—both of which drove the non-cash mean reversion-related impacts in the quarter. Unlocking impacts reflect the company's annual review of insurance and annuity valuation assumptions and model changes, and the Long-Term Care (LTC) gross premium valuation.