This excerpt taken from the AMP 8-K filed Jul 25, 2006.
Adjusted earnings per diluted share for the quarter were $0.79, reflecting strong underlying business performance
MINNEAPOLIS July 25, 2006 Ameriprise Financial, Inc. (NYSE: AMP) today reported net income of $141 million for the quarter ended June 30, 2006 versus income before discontinued operations of $149 million for the year-ago quarter. Adjusted earnings increased 22 percent to $195 million in the second quarter of 2006 compared to the second quarter of 2005. Adjusted earnings exclude income from discontinued operations, after-tax non-recurring separation costs and after-tax earnings of AMEX Assurance in the 2005 period, a business that remained with American Express.(1)
Net income per diluted share for the second quarter of 2006 was $0.57. Adjusted earnings per diluted share for the second quarter of 2006 were $0.79, up 22 percent from the year-ago period. Both per share amounts are based on an average diluted share count of 248 million.
Revenues grew 8 percent to $2.1 billion in the second quarter of 2006. Adjusted revenues, which exclude the impact of AMEX Assurance, grew 13 percent, reflecting solid growth in retail client activity, which resulted in higher management fees, distribution fees and premiums. Other revenues were positively impacted by the proceeds from the sale of the defined contribution recordkeeping business, contributing 4 percentage points of the adjusted revenue growth.
Return on equity for the 12 months ended June 30, 2006 was 7.1 percent. Adjusted return on equity increased to 10.7 percent from 10.4 percent for the 12 months ended March 31, 2006. During the quarter, the Company repurchased 1 million shares for approximately $42 million.
We had a solid operating quarter and continue to gain significant traction against our strategic objectives, reflecting the benefits of the diversification within our integrated business model, said Jim Cracchiolo, chairman and chief executive officer. We are exceeding our revenue and earnings targets and continue to drive improvement in return on equity.
A key factor in our success in the quarter is the continued stability and increased productivity of our advisor force. Branded advisor retention remains stable at high levels and advisor productivity increased significantly, reflected in strong growth in gross dealer concession and advisor cash sales, in spite of the turbulent market environment. In addition, we continue to attract mass affluent clients into our base.
(1) See definitions and reconciliations throughout the release.
Owned and managed net flows approached $2 billion in the quarter as we saw continued strong sales in wrap and variable annuity products and net outflows in RiverSource Funds were essentially cut in half due to both increased sales and lower redemptions. I am pleased with the progress were making.
With regard to our operating segments, our Asset Accumulation and Income segment results were led by continued improvements in our brokerage business driven by strong wrap net flows and other brokerage activity. The variable annuity business continues to experience strong net flows both within Ameriprise and through third parties. Our exposure to spread products, primarily certificates and fixed annuities, declined as we continue to manage our exposure to the yield curve.
Within the Protection segment, we feel good about our results as we continue to gain market share in variable universal life, universal life and auto and home insurance. Profitability in our disability income insurance business has returned to historical levels after higher claims in the first quarter of the year. In addition, long term care insurance experienced lower-than-usual claims in the quarter; however, we see this as an anomaly rather than a trend.