Ameriprise Financial, Inc. (NYSE:AMP) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 09:00 am ET

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Ameriprise Financial, Inc. (NYSE:AMP) Q4 2014 Earnings Conference Call - Final Transcript

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Operator
operator

Welcome to the Fourth Quarter and Full Year 2014 Earnings Conference Call. My name is Lorane and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Ms. Alicia Charity. Ms. Charity, you may begin.

Executive
Alicia Charity

Thank you and good morning. Welcome to Ameriprise Financial's Fourth quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO; and Walter Berman, Chief Financial Officer. Following their remarks, we'll be happy to take your questions.

During the call, you will hear references to various non-GAAP financial measures, which we believe provide insights into the company's operations. Reconciliation of the non-GAAP numbers to the respective GAAP numbers can be found in today's materials available on our website.

(Forward-Looking Cautionary Statements)

And with that, I'll turn it over to Jim.

Executive
James M. Cracchiolo

Good morning and thank you for joining us for today's earnings call. I'll spend my time discussing what I'm seeing in the business. Walter will talk to the numbers, and then we'll be happy to take your questions.

In terms of the quarter and 2014 overall, I feel good about Ameriprise and our position. The fourth quarter we delivered was a continuation of a strong year. We're executing our strategy well and generating good results.

For the fourth quarter, operating net revenues continued to grow, up 5%; with good growth in operating earnings, up 16%; and operating earnings per diluted share, up a very strong 23%. For the full year 2014, operating net revenues grew 7%, with good movement in operating earnings up 14%; and operating EPS up a very strong 21%.

We also had solid growth in assets under management and administration, which increased 5% to $806 billion. This was driven by continued good advisor client flows and market appreciation. Our strong growth in earnings allows us to generate significant free cash, so we're able to consistently deliver differentiated shareholder return while maintaining our financial strength, all while investing in the business. In the fourth quarter we returned $444 million to shareholders. And for the full year, we returned 1.8 billion to shareholders, which is 109% of our operating earnings.

In fact, 2014 marked four consecutive years that we have returned more than 100% of our operating earnings to shareholders. We expect to continue to return strongly to shareholders and have targeted a 90% to 100% range annually, and we will evaluate based on circumstances. With strong business results and significant capital return, operating return on equity reached another high. Excluding AOCI, we ended the year at 23%, up from 19.7% at the end of 2013.

Very few financial services companies are generating this level and growth of ROE and capital return. We've consistently grown these measures at a meaningful way.

Let's move to the business, starting with Advice and Wealth Management where we had another terrific quarter in terms