Ameriprise Hit with $320 Million Tax Impact in the Fourth Quarter of 2017
Ameriprise Financial Inc. (NYSE: AMP), one of the nation’s largest independent broker-dealers, reported that the recently enacted Tax Cuts and Jobs Act will result in an unfavorable impact of $320 million in its fourth quarter earnings.
Ameriprise Financial Inc. (NYSE: AMP), one of the nation’s largest independent broker-dealers, reported that the recently enacted Tax Cuts and Jobs Act will result in an unfavorable impact of $320 million in its fourth quarter earnings, but will be an ongoing benefit to the company’s earnings and cash flow generation.
The $320 million impact is primarily related to the remeasurement of net deferred tax assets using the lowered corporate tax rate, repatriation tax, and lower future tax benefits from low income housing assets. Ameriprise said that this is a one-time, primarily non-cash, accounting adjustment.
Ameriprise also estimates that its ongoing effective tax rate will be in the 17 to 19 percent range over the near term, and that the lower corporate tax rate will have an ongoing benefit to earnings. The company expects to earn back the initial charge within two years.
In addition, due to the recent California wildfires, the company expects that its fourth quarter 2017 results will include approximately $25 million after-tax net catastrophe losses from its auto and home insurance business.
Ameriprise Financial oversees a nationwide network of approximately 10,000 financial advisors and has $869 billion in assets under management.
