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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

~~UNITED STATES~~

~~SECURITIES AND EXCHANGE COMMISSION~~

~~WASHINGTON, D.C. 20549~~

~~FORM 10-Q~~

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For the Quarterly Period Ended September 30, 2017~~

For the Quarterly Period Ended

March 31, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from_______________________to_______________________

~~For the Transition Period from_______________________to_______________________~~

~~Commission File No. 1-32525~~

~~AMERIPRISE FINANCIAL, INC.~~

~~(Exact name of registrant as specified in its charter)~~


Commission File No.			1-32525


~~Delaware~~				~~13-3180631~~AMERIPRISE FINANCIAL, INC.
(Exact name of registrant as specified in its charter)

Delaware

13-3180631

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1099 Ameriprise Financial Center ~~Minneapolis, Minnesota~~

Minneapolis

Minnesota

55474

(Address of principal executive offices)

(Zip Code)

~~Registrant’s telephone number, including area code:~~ ~~(612) 671-3131~~

~~Former name, former address and former fiscal year, if changed since last report:~~ ~~Not Applicable~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xNo o

Registrant’s telephone number, including area code:

(612)

671-3131


			Former name, former address and former fiscal year, if changed since last report:			Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock (par value $.01 per share)

AMP

New York Stock Exchange

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filerx

☒

Accelerated Filero

☐

Non-accelerated Filer

☐

~~Non-Accelerated Filer~~o

~~(Do not check if a smaller reporting company)~~

Smaller reporting companyo

☐

Emerging growth companyo

☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o			☐

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~ ~~Yes~~ oNo x

~~Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.~~

~~Class~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at ~~October 20, 2017~~April 30, 2021

Common Stock (par value $.01 per share)

~~147,930,011~~115,904,879 shares

AMERIPRISE FINANCIAL, INC.

FORM 10-Q

INDEX


Part I. Financial Information
Item 1. Financial Statements (Unaudited)
	Consolidated Statements of Operations — Three months ended March 31, 2021 and 2020		3
	Consolidated Statements of Comprehensive Income — Three months ended March 31, 2021 and 2020		4
	Consolidated Balance Sheets — March 31, 2021 and December 31, 2020		5
	Consolidated Statements of Equity — Three months ended March 31, 2021 and 2020		6
	Consolidated Statements of Cash Flows — Three months ended March 31, 2021 and 2020		7
	Notes to Consolidated Financial Statements
	1.	Basis of Presentation	9
	2.	Recent Accounting Pronouncements	9
	3.	Revenue from Contracts with Customers	12
	4.	Variable Interest Entities	15
	5.	Investments	20
	6.	Financing Receivables	24
	7.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	28
	8.	Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities	28
	9.	Variable Annuity and Insurance Guarantees	29
	10.	Debt	31
	11.	Fair Values of Assets and Liabilities	31
	12.	Offsetting Assets and Liabilities	40
	13.	Derivatives and Hedging Activities	41
	14.	Shareholders’ Equity	45
	15.	Income Taxes	46
	16.	Contingencies	47
	17.	Earnings per Share	48
	18.	Segment Information	49
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			51
Item 3. Quantitative and Qualitative Disclosures About Market Risk			70
Item 4. Controls and Procedures			71

Part II. Other Information			71
Item 1. Legal Proceedings			71
Item 1A. Risk Factors			71
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			72
Item 6. Exhibits			73
Signatures			74



~~Part I. Financial Information~~
~~Item 1. Financial Statements (Unaudited)~~
~~Consolidated Statements of Operations — Three months and nine months ended September 30, 2017 and 2016~~				3
~~Consolidated Statements of Comprehensive Income — Three months and nine months ended September 30, 2017 and 2016~~				4
~~Consolidated Balance Sheets — September 30, 2017 and December 31, 2016~~				5
~~Consolidated Statements of Equity — Nine months ended September 30, 2017 and 2016~~				6
~~Consolidated Statements of Cash Flows — Nine months ended September 30, 2017 and 2016~~				7
~~Notes to Consolidated Financial Statements~~				9
~~1. Basis of Presentation~~				9
~~2. Recent Accounting Pronouncements~~				9
~~3. Variable Interest Entities~~				11
~~4. Investments~~				17
~~5. Financing Receivables~~				20
~~6. Deferred Acquisition Costs and Deferred Sales Inducement Costs~~				23
~~7. Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities~~				24
~~8. Variable Annuity and Insurance Guarantees~~				24
~~9. Debt~~				26
~~10. Fair Values of Assets and Liabilities~~				27
~~11. Offsetting Assets and Liabilities~~				38
~~12. Derivatives and Hedging Activities~~				40
~~13. Shareholders’ Equity~~				45
~~14. Income Taxes~~				47
~~15. Contingencies~~				48
~~16. Earnings per Share~~				49
~~17. Segment Information~~				50
~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~				52
~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~				88
~~Item 4. Controls and Procedures~~				88

~~Part II. Other Information~~				89
~~Item 1. Legal Proceedings~~				89
~~Item 1A. Risk Factors~~				89
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~				89
~~Item 6. Exhibits~~				90
~~Signatures~~				91

AMERIPRISE FINANCIAL, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions, except per share amounts)
Revenues
Management and financial advice fees $ 1,626
$ 1,464
$ 4,669
$ 4,289
Distribution fees 437
455
1,310
1,338
Net investment income 372
387
1,154
1,090
Premiums 348
374
1,035
1,114
Other revenues 210
330
733
832
Total revenues 2,993
3,010
8,901
8,663
Banking and deposit interest expense 12
12
34
29
Total net revenues 2,981
2,998
8,867
8,634
Expenses
Distribution expenses 850
798
2,505
2,371
Interest credited to fixed accounts 176
161
509
465
Benefits, claims, losses and settlement expenses 474
855
1,652
1,934
Amortization of deferred acquisition costs 48
163
189
360
Interest and debt expense 52
52
154
160
General and administrative expense 753
731
2,244
2,221
Total expenses 2,353
2,760
7,253
7,511
Pretax income 628
238
1,614
1,123
Income tax provision 125
23
315
209
Net income $ 503
$ 215
$ 1,299
$ 914

Earnings per share
Basic $ 3.29
$ 1.31
$ 8.37
$ 5.43
Diluted $ 3.24
$ 1.30
$ 8.24
$ 5.37

Cash dividends declared per common share $ 0.83
$ 0.75
$ 2.41
$ 2.17

Supplemental Disclosures:
Total other-than-temporary impairment losses on securities $ —
$ —
$ (1 ) $ (2 )
Portion of loss recognized in other comprehensive income (before taxes) —
—
—
1
Net impairment losses recognized in net investment income $ —
$ —
$ (1 ) $ (1 )
See Notes to Consolidated Financial Statements.

~~AMERIPRISE FINANCIAL, INC.~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Net income $ 503
$ 215
$ 1,299
$ 914
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 16
(16 ) 46
(55 )
Net unrealized gains (losses) on securities (4 ) (28 ) 60
382
Net unrealized gains (losses) on derivatives 1
1
2
3
Defined benefit plans —
—
5
6
Other —
—
(1 ) —
Total other comprehensive income (loss), net of tax 13
(43 ) 112
336
Total comprehensive income $ 516
$ 172
$ 1,411
$ 1,250
See Notes to Consolidated Financial Statements.

~~AMERIPRISE FINANCIAL, INC.~~

~~CONSOLIDATED BALANCE SHEETS (UNAUDITED)~~

September 30,
2017 December 31, 2016
(in millions, except share amounts)
Assets
Cash and cash equivalents $ 2,398
$ 2,318
Cash of consolidated investment entities 106
168
Investments 36,202
35,834
Investments of consolidated investment entities, at fair value 2,215
2,254
Separate account assets 85,287
80,210
Receivables 5,742
5,299
Receivables of consolidated investment entities, at fair value 9
11
Deferred acquisition costs 2,661
2,648
Restricted and segregated cash and investments 3,131
3,331
Other assets 7,735
7,748
Total assets $ 145,486
$ 139,821

Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims $ 29,963
$ 30,202
Separate account liabilities 85,287
80,210
Customer deposits 10,427
10,036
Short-term borrowings 201
200
Long-term debt 2,902
2,917
Debt of consolidated investment entities, at fair value 2,267
2,319
Accounts payable and accrued expenses 1,728
1,727
Other liabilities 6,363
5,823
Other liabilities of consolidated investment entities, at fair value 43
95
Total liabilities 139,181
133,529
Equity:
Ameriprise Financial, Inc.:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 327,007,785 and 324,006,315, respectively) 3
3
Additional paid-in capital 8,017
7,765
Retained earnings 11,271
10,351
Treasury shares, at cost (178,670,257 and 169,246,411 shares, respectively) (13,298 ) (12,027 )
Accumulated other comprehensive income, net of tax 312
200
Total equity 6,305
6,292
Total liabilities and equity $ 145,486
$ 139,821
See Notes to Consolidated Financial Statements.

~~AMERIPRISE FINANCIAL, INC.~~

~~CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)~~

Ameriprise Financial, Inc. Non-controlling Interests Total
Number of Outstanding Shares Common Shares Additional Paid-In Capital Retained Earnings Appropriated Retained
Earnings of Consolidated
Investment Entities Treasury
Shares Accumulated Other Com-
prehensive Income Total Ameriprise Financial, Inc. Shareholders’ Equity
(in millions, except share data)
Balances at January 1, 2016 ⁽¹⁾
171,033,260 $ 3 $ 7,611 $ 9,525 $ 137 $ (10,338 ) $ 253 $ 7,191 $ 1,188 $ 8,379
Cumulative effect of change in accounting policies — — — 1 (137 ) — 6 (130 ) (1,188 ) (1,318 )
Comprehensive income:
Net income — — — 914 — — — 914 — 914
Other comprehensive income, net of tax — — — — — — 336 336 — 336
Total comprehensive income 1,250 — 1,250
Dividends to shareholders — — — (368 ) — — — (368 ) — (368 )
Repurchase of common shares (14,349,061 ) — — — — (1,333 ) — (1,333 ) — (1,333 )
Share-based compensation plans 1,812,137 — 98 — — 62 — 160 — 160
Balances at
September 30, 2016 ⁽¹⁾
158,496,336 $ 3 $ 7,709 $ 10,072 $ — $ (11,609 ) $ 595 $ 6,770 $ — $ 6,770

Balances at January 1, 2017 154,759,904 $ 3 $ 7,765 $ 10,351 $ — $ (12,027 ) $ 200 $ 6,292 $ — $ 6,292
Comprehensive income:
Net income — — — 1,299 — — — 1,299 — 1,299
Other comprehensive income, net of tax — — — — — — 112 112 — 112
Total comprehensive income 1,411 — 1,411
Dividends to shareholders — — — (379 ) — — — (379 ) — (379 )
Repurchase of common shares (10,184,145 ) — — — — (1,323 ) — (1,323 ) — (1,323 )
Share-based compensation plans 3,761,769 — 252 — — 52 — 304 — 304
Balances at September 30, 2017 148,337,528 $ 3 $ 8,017 $ 11,271 $ — $ (13,298 ) $ 312 $ 6,305 $ — $ 6,305

⁽¹⁾ ~~Prior period retained earnings were restated in the fourth quarter of 2016. See Note 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~


	Three Months Ended March 31,
	2021		2020
	(in millions, except per share amounts)
Revenues
Management and financial advice fees	$	2,102	$	1,770
Distribution fees	458		464
Net investment income	377		328
Premiums, policy and contract charges	347		395
Other revenues	71		69
Total revenues	3,355		3,026
Banking and deposit interest expense	5		25
Total net revenues	3,350		3,001
Expenses
Distribution expenses	1,175		995
Interest credited to fixed accounts	159		91
Benefits, claims, losses and settlement expenses	653		(1,747)
Amortization of deferred acquisition costs	5		512
Interest and debt expense	42		46
General and administrative expense	823		753
Total expenses	2,857		650
Pretax income	493		2,351
Income tax provision	56		315
Net income	$	437	$	2,036

Earnings per share
Basic	$	3.65	$	16.11
Diluted	$	3.58	$	15.88

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
	2021		2020
	(in millions)
Net income	$	437	$	2,036
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(1)		(33)
Net unrealized gains (losses) on securities	(340)		(524)

Defined benefit plans	29		—

Total other comprehensive income (loss), net of tax	(312)		(557)
Total comprehensive income	$	125	$	1,479

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	March 31, 2021		December 31, 2020
	(in millions, except share amounts)
Assets
Cash and cash equivalents	$	5,462	$	6,751
Cash of consolidated investment entities	325		94
Investments (allowance for credit losses: 2021, $39; 2020, $52)	40,437		41,031
Investments of consolidated investment entities, at fair value	2,642		1,918
Separate account assets	93,483		92,611
Receivables (allowance for credit losses: 2021, $50; 2020, $49)	8,038		7,819
Receivables of consolidated investment entities, at fair value	17		16
Deferred acquisition costs	2,685		2,532
Restricted and segregated cash, cash equivalents and investments	2,564		2,558
Other assets	10,082		10,551
Other assets of consolidated investment entities, at fair value	2		2
Total assets	$	165,737	$	165,883

Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims	$	32,702	$	33,992
Separate account liabilities	93,483		92,611
Customer deposits	17,619		17,641
Short-term borrowings	200		200
Long-term debt	2,834		2,831
Debt of consolidated investment entities, at fair value	2,671		1,913
Accounts payable and accrued expenses	1,832		1,998
Other liabilities	8,638		8,761
Other liabilities of consolidated investment entities, at fair value	256		69
Total liabilities	160,235		160,016
Equity:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 333,819,446 and 332,390,132, respectively)	3		3
Additional paid-in capital	8,982		8,822
Retained earnings	15,600		15,292
Treasury shares, at cost (217,831,175 and 215,624,519 shares, respectively)	(19,400)		(18,879)
Accumulated other comprehensive income (loss), net of tax	317		629
Total equity	5,502		5,867
Total liabilities and equity	$	165,737	$	165,883

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)


	Number of Outstanding Shares	Common Shares		Additional Paid-In Capital		Retained Earnings		Treasury Shares		Accumulated Other Comprehensive Income (Loss)		Total
	(in millions, except per share data)






















Balances at January 1, 2020	123,939,234	$	3	$	8,461	$	14,279	$	(17,276)	$	262	$	5,729
Cumulative effect of adoption of adoption of current expected credit losses guidance	—	—		—		(9)		—		—		(9)
Comprehensive income:
Net income	—	—		—		2,036		—		—		2,036
Other comprehensive loss, net of tax	—	—		—		—		—		(557)		(557)
Total comprehensive income												1,479
Dividends to shareholders	—	—		—		(126)		—		—		(126)
Repurchase of common shares	(3,382,619)	—		—		—		(537)		—		(537)
Share-based compensation plans	1,778,272	—		117		—		40		—		157
Balances at March 31, 2020	122,334,887	$	3	$	8,578	$	16,180	$	(17,773)	$	(295)	$	6,693

Balances at January 1, 2021	116,765,613	$	3	$	8,822	$	15,292	$	(18,879)	$	629	$	5,867

Comprehensive income:
Net income	—	—		—		437		—		—		437
Other comprehensive income, net of tax	—	—		—		—		—		(312)		(312)
Total comprehensive income												125
Dividends to shareholders	—	—		—		(129)		—		—		(129)
Repurchase of common shares	(2,589,698)	—		—		—		(554)		—		(554)
Share-based compensation plans	1,812,356	—		160		—		33		—		193
Balances at March 31, 2021	115,988,271	$	3	$	8,982	$	15,600	$	(19,400)	$	317	$	5,502
See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three months ended March 31,
	2021		2020
	(in millions)
Cash Flows from Operating Activities
Net income	$	437	$	2,036
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	60		47
Deferred income tax expense (benefit)	60		1,273
Share-based compensation	35		36
Net realized investment (gains) losses	(65)		(5)
Net trading (gains) losses	1		(3)
Loss from equity method investments	12		19
Impairments and provision for loan losses	—		21
Net (gains) losses of consolidated investment entities	(19)		6
Changes in operating assets and liabilities:
Restricted and segregated investments	(315)		—
Deferred acquisition costs	(60)		452
Policyholder account balances, future policy benefits and claims, net	(1,050)		2,634
Derivatives, net of collateral	144		(681)
Receivables	(238)		(13)
Brokerage deposits	(102)		378
Accounts payable and accrued expenses	(163)		(432)
Current income tax expense (benefit)	90		(1,081)
Deferred taxes, net	(115)		—
Other operating assets and liabilities of consolidated investment entities, net	4		(1)
Other, net	284		207
Net cash provided by (used in) operating activities	(1,000)		4,893

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	92		633
Maturities, sinking fund payments and calls	2,964		2,050
Purchases	(3,245)		(2,529)
Proceeds from sales, maturities and repayments of mortgage loans	55		54
Funding of mortgage loans	(22)		(62)
Proceeds from sales, maturities and collections of other investments	54		77
Purchase of other investments	(31)		(115)
Purchase of investments by consolidated investment entities	(737)		(133)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities	240		141
Purchase of land, buildings, equipment and software	(22)		(29)
Cash paid for written options with deferred premiums	(211)		(258)
Cash received from written options with deferred premiums	21		95
Cash paid for deposit receivable	(2)		(1)
Cash received for deposit receivable	21		30
Other, net	14		7
Net cash provided by (used in) investing activities	(809)		(40)
See Notes to Consolidated Financial Statements.

September 30,
2017 2016
(in millions)
Cash Flows from Operating Activities
Net income $ 1,299
$ 914
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net 176
187
Deferred income tax expense (benefit) (58 ) (47 )
Share-based compensation 91
101
Net realized investment (gains) losses (37 ) (1 )
Net trading (gains) losses (5 ) (5 )
Loss from equity method investments 41
45
Net losses of consolidated investment entities 3
5
Changes in operating assets and liabilities:
Restricted and segregated investments 1
200
Deferred acquisition costs (31 ) 86
Other investments, net (139 ) 9
Policyholder account balances, future policy benefits and claims, net (353 ) 1,172
Derivatives, net of collateral 589
(676 )
Receivables (445 ) (177 )
Brokerage deposits (47 ) 3
Accounts payable and accrued expenses (19 ) (24 )
Other operating assets and liabilities of consolidated investment entities, net —
(9 )
Other, net 113
239
Net cash provided by (used in) operating activities 1,179
2,022

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales 335
322
Maturities, sinking fund payments and calls 3,583
3,379
Purchases (3,722 ) (4,666 )
Proceeds from sales, maturities and repayments of mortgage loans 348
705
Funding of mortgage loans (372 ) (334 )
Proceeds from sales and collections of other investments 211
131
Purchase of other investments (351 ) (144 )
Purchase of investments by consolidated investment entities (1,092 ) (566 )
Proceeds from sales, maturities and repayments of investments by consolidated investment entities 1,087
803
Purchase of land, buildings, equipment and software (125 ) (66 )
Other, net (8 ) 69
Net cash provided by (used in) investing activities $ (106 ) $ (367 )
See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
	Three months ended March 31,
	2021		2020
	(in millions)
Cash Flows from Financing Activities
Investment certificates:
Proceeds from additions	$	723	$	1,271
Maturities, withdrawals and cash surrenders	(1,224)		(1,449)
Policyholder account balances:
Deposits and other additions	384		255
Net transfers from (to) separate accounts	(60)		30
Surrenders and other benefits	(368)		(430)
Change in banking deposits, net	580		2,372
Cash paid for purchased options with deferred premiums	(42)		(36)
Cash received from purchased options with deferred premiums	306		—
Issuance of long-term debt	4		—
Repayments of long-term debt	(2)		(753)
Dividends paid to shareholders	(129)		(122)
Repurchase of common shares	(470)		(480)
Exercise of stock options	0		1
Borrowings by consolidated investment entities	797		—
Repayments of debt by consolidated investment entities	(63)		(29)
Other, net	(3)		(2)
Net cash provided by (used in) financing activities	433		628
Effect of exchange rate changes on cash	9		(17)


Net increase (decrease) in cash and cash equivalents, including amounts restricted	(1,367)		5,464
Cash and cash equivalents, including amounts restricted, at beginning of period	8,903		6,213
Cash and cash equivalents, including amounts restricted, at end of period	$	7,536	$	11,677

Supplemental Disclosures:
Interest paid excluding consolidated investment entities	$	30	$	55
Interest paid by consolidated investment entities	11		17
Income taxes paid, net	36		34

Leased assets obtained in exchange for operating lease liabilities	44		31
Non-cash investing activity:
Partnership commitments not yet remitted	0		2

Exchange of an investment that resulted in a realized gain and an increase to amortized cost	17		—

	March 31, 2021		December 31, 2020
	(in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:
Cash and cash equivalents	$	5,462	$	6,751
Cash of consolidated investment entities	325		94
Restricted and segregated cash, cash equivalents and investments	2,564		2,558
Less: Restricted and segregated investments	(815)		(500)
Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows	$	7,536	$	8,903
See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

September 30,
2017 2016
(in millions)
Cash Flows from Financing Activities
Investment certificates:
Proceeds from additions $ 3,595
$ 3,184
Maturities, withdrawals and cash surrenders (3,158 ) (2,376 )
Policyholder account balances:
Deposits and other additions 1,538
1,532
Net transfers from (to) separate accounts (120 ) 113
Surrenders and other benefits (1,413 ) (1,448 )
Cash paid for purchased options with deferred premiums (187 ) (256 )
Cash received from purchased options with deferred premiums 42
242
Issuance of long-term debt —
495
Repayments of long-term debt (8 ) (254 )
Dividends paid to shareholders (368 ) (361 )
Repurchase of common shares (1,161 ) (1,319 )
Exercise of stock options 13
6
Repayments of debt by consolidated investment entities (59 ) (134 )
Other, net —
3
Net cash provided by (used in) financing activities (1,286 ) (573 )
Effect of exchange rate changes on cash 32
(53 )
Net increase (decrease) in cash, cash equivalents and restricted cash (181 ) 1,029
Cash, cash equivalents and restricted cash at beginning of period 5,392
5,407
Net cash outflows upon the deconsolidation of VIEs —
(346 )
Cash, cash equivalents and restricted cash at end of period $ 5,211
$ 6,090

Supplemental Disclosures:
Interest paid excluding consolidated investment entities $ 130
$ 121
Interest paid by consolidated investment entities 65
74
Income taxes paid, net 387
201
Non-cash investing activity:
Partnership commitments not yet remitted 9
75
September 30,
2017 December 31, 2016
(in millions)

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 2,398
$ 2,318
Cash of consolidated investment entities 106
168
Restricted and segregated cash and investments 3,131
3,331
Less: Restricted and segregated investments (424 ) (425 )
Total cash, cash equivalents and restricted cash per consolidated statements of cash flows $ 5,211
$ 5,392
See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. The foreign operations of Ameriprise Financial, Inc. are conducted primarily through Threadneedle Asset Management Holdings Sàrl and Ameriprise Asset Management Holdings ~~GmbH~~Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”).

The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation. ~~See Note 3 for additional information on VIEs.~~

The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated results of operations and financial position for the interim periods have been made. ~~Except for the adjustment described below, all~~All adjustments made were of a normal recurring nature.

Changes to the Company’s reportable segments have been made as further discussed in Note 18.

Certain prior period amounts have been revised to conform to current period presentation. These changes have no impact on previously reported consolidated balance sheets or statements of operations, comprehensive income, stockholders equity, or cash flows.

In the first quarter of ~~2017,~~2021, the Company recorded ~~a $20~~an unfavorable out-of-period correction of $29 million ~~decrease to~~in other comprehensive income ~~tax provision~~ related to ~~an out-of-period correction for a reversal of a tax reserve.~~defined benefit plans.

In the ~~third~~first quarter of ~~2017,~~2020, the Company recorded ~~a $14 million~~an unfavorable out-of-period correction of $19 million in management and financial advice fees related to ~~a variable annuity model assumption that decreased amortization of deferred acquisition costs (“DAC”) by $10 million and decreased benefits, claims, losses and settlement expenses by $4 million.~~performance fees.

The impact of the errors were not material to the prior period financial ~~statements of these out-of-period corrections was not material.~~statements.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, filed with the Securities and Exchange Commission (“SEC”) on February ~~23, 2017~~24, 2021 (“~~2016~~2020 10-K”).

On April 12, 2021, the Company signed a definitive agreement to acquire the European-based asset management business of BMO Financial Group for £615 million, or approximately $845 million. The all-cash transaction is expected to add approximately $124 billion of assets under management in Europe and is currently expected to close in the fourth quarter of 2021, subject to regulatory approvals in the relevant jurisdictions.

The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. NoOther than the transaction noted above, no other subsequent events or transactions requiring recognition or disclosure were identified.

2. Recent Accounting Pronouncements

Adoption of New Accounting Standards

~~Statement of Cash Flows~~Income Taxes – ~~Restricted Cash~~Simplifying the Accounting for Income Taxes

In ~~November 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting standards to simplify the accounting for income taxes. The update eliminates certain exceptions to: (1) accounting principles related to intra-period tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the ~~classification~~beginning of ~~restricted cash~~the period of adoption, and (3) year-to-date losses in interim periods to be applied on ~~the statement of cash flows.~~a prospective basis. The update ~~requires entities~~also amends existing guidance related to ~~include restricted cash~~situations when an entity receives: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and ~~restricted cash equivalents in cash~~(4) franchise taxes and ~~cash equivalent balances~~other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the ~~statement~~beginning of ~~cash flows and disclose a reconciliation between~~ the ~~balances on the statement~~period of ~~cash flows and the balance sheet.~~adoption. The standard is effective for interim and annual periods beginning after December 15, ~~2017,~~2020, with early adoption permitted. The Company ~~early~~ adopted the standard ~~for the interim period ended March 31, 2017~~ on ~~a retrospective basis. As a result of the~~January 1, 2021. The adoption of ~~the~~this standard ~~restricted cash balances of $2.7 billion and $2.9 billion at September 30, 2017 and December 31, 2016, respectively, are included in the cash and cash equivalents balances~~had no impact on the Company’s consolidated ~~statements~~results of ~~cash flows. The impact~~operations and financial condition.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Financial Instruments – Credit Losses – Measurement of ~~the change in restricted cash resulted in a $213 million increase to the Company’s operating cash flows for the prior period presented.~~

~~Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments~~Credit Losses on Financial Instruments

In ~~August~~June 2016, the FASB updated the accounting standards related to ~~classification~~accounting for credit losses on certain types of ~~certain cash receipts~~financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings and ~~cash payments~~subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the ~~statement of cash flows.~~balance sheet. The ~~update includes amendments~~credit loss model for Available-for-Sale debt securities did not change; however, the credit loss calculation and subsequent recoveries are required to address diversity in practice for the classification of eight specific cash flow activities. The specific amendments the Company evaluated include the classification of debt prepayment and extinguishment costs, contingent consideration payments, proceeds from insurance settlements and corporate owned life insurance settlements, distributions from equity method investees and the application of the predominance principle to separately identifiable cash flows.be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, ~~2017. Early~~2019. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is ~~permitted~~required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and ~~all amendments must be adopted during the same period.~~financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company ~~early~~ adopted the standard ~~for the interim period ended March 31, 2017~~ on ~~a retrospective basis.~~January 1, 2020. The adoption of ~~the standard~~this update did not have a material impact on the Company’s ~~operating, investing~~consolidated results of operations or ~~financing cash flows.~~financial condition.

~~Compensation~~Intangibles – ~~Stock Compensation~~Goodwill and Other – Internal-Use Software – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In ~~March 2016,~~August 2018, the FASB updated the accounting standards related to ~~employee share-based payments.~~customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. The update requires ~~all excess tax benefits and tax deficiencies~~implementation costs for a CCA to be ~~recognized~~evaluated for capitalization using the same approach as income tax expense or benefit in the income statement. This change is required to be applied prospectively to excess tax benefits and tax deficiencies resulting from settlements after the date of adoption. No

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~adjustment is recorded for any excess tax benefits or tax deficiencies previously recorded in additional paid in capital.~~implementation costs associated with internal-use software. The update also ~~requires excess tax benefits to be classified along with other income tax cash flows as an operating activity~~addresses presentation, measurement and impairment of capitalized implementation costs in ~~the statement of cash flows. This provision can be applied on either~~ a ~~prospective or retrospective basis.~~CCA that is a service contract. The update ~~permits entities to make an accounting policy election to recognize forfeitures as they occur rather than estimating forfeitures to determine~~requires new disclosures on the ~~recognition~~nature of ~~expense for share-based payment awards.~~hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired. The ~~standard~~update is effective for interim and annual periods beginning after December 15, ~~2016 with early adoption permitted.~~2019, and can be applied either prospectively or retrospectively. The Company adopted the standard using a prospective approach on January 1, 2017 on a prospective basis, except for the cash flow statement provision, which the Company applied on a retrospective basis. During periods in which the settlement date value differs materially from the grant date fair value of~~certainshare-basedpaymentawards, the Company may experience volatility in income tax recognized initsconsolidatedresults~~of~~operations. Duringthethreemonths~~and nine months ended September 30, 2017, the Company recognized net excess tax benefits of $25 million and $57 million, respectively, as a reduction to the income tax provision in the consolidated statements of operations.2020. The ~~Company maintained its accounting policy of estimating forfeitures. As a result of the~~ adoption of ~~the standard, net excess tax benefits of $57 million and $8 million for the nine monthsended September 30, 2017 and 2016, respectively, are included in the Other, net line within operating cash flows on the Company’s consolidated statements of cash flows.~~

~~Future Adoption of New Accounting Standards~~

~~Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities~~

~~In August 2017, the FASB updated the accounting standards to amend the hedge accounting recognition and presentation requirements. The objectives of the~~this update are to better align the financial reporting of hedging relationships to the economic results of an entity’s risk management activities and simplify the application of the hedge accounting guidance. The update also adds new disclosures and amends existing disclosure requirements. The standard is effective for interim and annual periods beginning after December 15, 2018, and should be applied on a modified retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated results of operations and financial condition.

~~Receivables – Premium Amortization on Purchased Callable Debt Securities~~

In March 2017, the FASB updated the accounting standards to shorten the amortization period for certain purchased callable debt securities held at a premium. Under current guidance, premiums are generally amortized over the contractual life of the security. The amendments require the premium to be amortized to the earliest call date. The update applies to securities with explicit, non-contingent call features that are callable at fixed prices and on preset dates. The standard is effective for interim and annual periods beginning after December 15, 2018, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. The update isdid not ~~expected to~~ have a material impact on the Company’s consolidated results of operations or financial condition.

Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment

In January 2017, the FASB updated the accounting standards to simplify the accounting for goodwill impairment. The update removes the hypothetical purchase price allocation (Step 2) of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The standard is effective for interim and annual periods beginning after December 15, 2019, and should be applied prospectively with early adoption permitted for any impairment tests performed after January 1, 2017. The Company adopted the standard on January 1, 2020. The adoption of this update isdid not ~~expected to~~ have a material impact on the Company’s consolidated results of operations or financial condition.

~~Income Taxes~~Fair Value Measurement – ~~Intra-Entity Transfers of Assets Other Than Inventory~~Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

In ~~October 2016,~~August 2018, the FASB updated the accounting standards related to disclosures for fair value measurements. The update eliminates the ~~recognition~~following disclosures: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy of timing of transfers between levels of the fair value hierarchy, and (3) the valuation processes for Level 3 fair value measurements. The new disclosures include changes in unrealized gains and losses for the period included in OCI for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. The new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements. The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018. The Company adopted the provisions of the standard to include new disclosures on January 1, 2020. The update did not have an impact on the Company’s consolidated results of operations or financial condition.

Future Adoption of New Accounting Standards

Reference Rate Reform – Expedients for Contract Modifications

In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR). The following expedients are provided for modified contracts whose reference rate is changed: (1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and (3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract. The amendments in this update were effective upon issuance and must be elected prior to December 31, 2022. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions. The Company has not yet applied any of the optional

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

expedients. The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition.

Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts. The guidance revises key elements of the measurement models and disclosure requirements for long-duration insurance contracts issued by insurers and reinsurers.

The guidance establishes a significant new category of benefit features called market risk benefits that protect the contractholder from other-than-nominal capital market risk and expose the insurer to that risk. Insurers will have to measure market risk benefits at fair value. Market risk benefits include variable annuity guaranteed benefits (i.e. guaranteed minimum death, withdrawal, withdrawal for life, accumulation and income ~~tax impacts~~benefits). The portion of the change in fair value attributable to a change in the instrument-specific credit risk of market risk benefits in a liability position will be recorded in OCI.

Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature include the following:

•Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception. The review of assumptions to measure the liability for all future policy benefits will be required annually at the same time each year, or more frequently if suggested by experience. The effect of updating assumptions will be measured on ~~intra-entity transfers.~~ a retrospective catch-up basis and presented separate from the ongoing policyholder benefit expense in the statement of operations in the period the update is made. This new unlocking process will be required for the Company’s term and whole life insurance, disability income, long term care insurance and immediate annuities with a life contingent feature.

•The discount rate used to measure the liability for future policy benefits will be standardized. The current requirement to use a discount rate reflecting expected investment yields will change to an upper-medium grade (low credit risk) fixed income corporate instrument yield (generally interpreted as an “A” rating) reflecting the duration characteristics of the liability. Entities will be required to update the discount rate at each reporting date with the effect of discount rate changes reflected in OCI.

•The current premium deficiency test is being replaced with a net premium ratio cap of 100%. If the net premium ratio (i.e. the ratio of the present value of total expected benefits and related expenses to the present value of total expected premiums) exceeds 100%, insurers are required to recognize a loss in the statement of operations in the period. Contracts from different issue years will no longer be permitted to be grouped to determine contracts in a loss position.

In addition, the update requires DAC and DSIC relating to all long-duration contracts and most investment contracts to be amortized on a straight-line basis over the expected life of the contract independent of profit emergence. Under the new guidance, interest will not accrue to the deferred balance and DAC and DSIC will not be subject to an impairment test.

The update requires ~~entities to recognize the income tax consequences of intra-entity transfers, other than inventory, upon the transfer~~significant additional disclosures, including disaggregated rollforwards of the ~~asset. The update requires the selling entity to recognize a current tax expense or benefit~~liability for future policy benefits, policyholder account balances, market risk benefits, DAC and ~~the purchasing entity to recognize a deferred tax asset or liability when the transfer occurs.~~DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions. The standard is effective for interim and annual periods beginning after December 15, ~~2017.~~2022, and interim periods within those years. The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated results of operations, financial condition and ~~financial condition.~~

~~Financial Instruments – Measurement of Credit Losses~~

In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. Generally, the initial estimate of the expected credit losses and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet. The current credit loss model for Available-for-Sale debt securities does not change; however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, 2019. Early adoption will be permitted for interim and annual periods beginning after December 15, 2018. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficialdisclosures.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company is currently evaluating the impact of the standard on its consolidated results of operations and financial condition.

~~Leases – Recognition of Lease Assets and Liabilities on Balance Sheet~~

In February 2016, the FASB updated the accounting standards for leases. The update was issued to increase transparency and comparability for the accounting of lease transactions. The standard will require most lease transactions for lessees to be recorded on the balance sheet as lease assets and lease liabilities and both quantitative and qualitative disclosures about leasing arrangements. The Company currently discloses information related to operating lease arrangements within Note 23 of the 2016 10-K. The standard is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted. The update should be applied at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the standard on its consolidated results of operations and financial condition.

~~Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities~~

In January 2016, the FASB updated the accounting standards on the recognition and measurement of financial instruments. The update requires entities to carry marketable equity securities, excluding investments in securities that qualify for the equity method of accounting, at fair value with changes in fair value reflected in net income each reporting period. The update affects other aspects of accounting for equity instruments, as well as the accounting for financial liabilities utilizing the fair value option. The update eliminates the requirement to disclose the methods and assumptions used to estimate the fair value of financial assets or liabilities held at cost on the balance sheet and requires entities to use the exit price notion when measuring the fair value of financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for certain provisions. Generally, the update should be applied using a modified retrospective approach by recording a cumulative-effect adjustment to equity at the beginning of the period of adoption. The update is not expected to have a material impact on the consolidated results of operations or financial condition.

3. Revenue from Contracts with Customers

~~In May 2014,~~The following tables present revenue disaggregated by segment on an adjusted operating basis with a reconciliation of segment revenues to those reported on the ~~FASB updated~~Consolidated Statements of Operations:


	Three Months Ended March 31, 2021
	Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	531	$	—	$	—	$	531	$	—	$	531
Institutional	—		123		—		—		123		—		123
Advisory fees	1,028		—		—		—		1,028		—		1,028
Financial planning fees	88		—		—		—		88		—		88
Transaction and other fees	89		52		16		—		157		—		157
Total management and financial advice fees	1,205		706		16		—		1,927		—		1,927
Distribution fees:
Mutual funds	207		67		—		—		274		—		274
Insurance and annuity	240		47		99		—		386		—		386
Other products	112		—		—		—		112		—		112
Total distribution fees	559		114		99		—		772		—		772
Other revenues	49		1		—		—		50		—		50
Total revenue from contracts with customers	1,813		821		115		—		2,749		—		2,749
Revenue from other sources (1)	71		7		672		139		889		99		988
Total segment gross revenues	1,884		828		787		139		3,638		99		3,737
Less: Banking and deposit interest expense	5		—		—		—		5		—		5
Total segment net revenues	1,879		828		787		139		3,633		99		3,732
Less: Intersegment revenues	250		13		116		—		379		3		382
Total net revenues	$	1,629	$	815	$	671	$	139	$	3,254	$	96	$	3,350

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


	Three Months Ended March 31, 2020
	Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	447	$	—	$	—	$	447	$	—	$	447
Institutional	—		85		—		—		85		—		85
Advisory fees	854		—		—		—		854		—		854
Financial planning fees	81		—		—		—		81		—		81
Transaction and other fees	89		47		15		—		151		—		151
Total management and financial advice fees	1,024		579		15		—		1,618		—		1,618
Distribution fees:
Mutual funds	184		60		—		—		244		—		244
Insurance and annuity	208		43		86		—		337		—		337
Other products	156		—		—		—		156		—		156
Total distribution fees	548		103		86		—		737		—		737
Other revenues	47		1		—		3		51		—		51
Total revenue from contracts with customers	1,619		683		101		3		2,406		—		2,406
Revenue from other sources (1)	101		3		658		147		909		52		961
Total segment gross revenues	1,720		686		759		150		3,315		52		3,367
Less: Banking and deposit interest expense	25		—		—		1		26		—		26
Total segment net revenues	1,695		686		759		149		3,289		52		3,341
Less: Intersegment revenues	222		13		104		(1)		338		2		340
Total net revenues	$	1,473	$	673	$	655	$	150	$	2,951	$	50	$	3,001

(1) Revenues not included in the ~~accounting standards for~~scope of the revenue from contracts with ~~customers.~~customers standard. The ~~update provides a five step~~amounts primarily consist of revenue recognition model for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other standards). The standard also updates the accounting for certain costs associated with ~~obtaining~~insurance and ~~fulfilling a customer contract and requires disclosure of quantitative and qualitative information that enables users of~~annuity products or financial ~~statements to understand~~instruments.

The following discussion describes the nature, ~~amount,~~ timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with ~~customers. Subsequent related updates provide clarification~~customers on ~~certain~~a consolidated basis.

Management and Financial Advice Fees

Asset Management Fees

The Company earns revenue for performing asset management services for retail and institutional clients. The revenue is earned based on a fixed or tiered rate applied, as a percentage, to assets under management. Assets under management vary with market fluctuations and client behavior. The asset management performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Asset management fees are accrued, invoiced and collected on a monthly or quarterly basis.

The Company’s asset management contracts for Open Ended Investment Companies (“OEICs”) in the United Kingdom (“U.K.”) and Société d'Investissement à Capital Variable (“SICAVs”) in Europe include performance obligations for asset management and fund distribution services. The amounts received for these services are reported as management and financial advice fees. The revenue recognition ~~guidance~~pattern is the same for both performance obligations as the fund distribution services revenue is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment) and not recognized until assets under management are known.

The Company may also earn performance-based management fees on institutional accounts, hedge funds, collateralized loan obligations (“CLOs”), OEICs, SICAVs and property and other funds based on a percentage of account returns in excess of either a benchmark index or a contractually specified level. This revenue is variable and impacted primarily by the performance of the assets being managed compared to the benchmark index or contractually specified level. The revenue is not recognized until it is probable that a significant reversal will not occur. Performance-based management fees are invoiced on a quarterly or annual basis.

Advisory Fees

The Company earns revenue for performing investment advisory services for certain brokerage customer’s discretionary and non-discretionary managed accounts. The revenue is earned based on a contractual fixed rate applied, as a percentage, to the market value

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

of assets held in the account. The investment advisory performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Advisory fees are billed on a monthly basis on the prior month end assets.

Financial Planning Fees

The Company earns revenue for providing financial plans to its clients. The revenue earned for each financial plan is either a fixed fee (received monthly, quarterly or annually) or a variable fee (received monthly) based on a contractual fixed rate applied, as a percentage, to the prior month end assets held in a client’s investment advisory account. The financial planning fee is based on the complexity of a client’s financial and life situation and his or her advisor’s experience. The performance obligation is satisfied at the time the financial plan is delivered to the customer. The Company records a contract liability for the unearned revenue when cash is received before the plan is delivered. The financial plan contracts with clients are annual contracts. Amounts recorded as a contract liability are recognized as revenue when the financial plan is delivered, which occurs within the annual contract period.

For fixed fee arrangements, revenue is recognized when the financial plan is delivered. The Company accrues revenue for any amounts that have not been received at the time the financial plan is delivered.

For variable fee arrangements, revenue is recognized for cash that has been received when the financial plan is delivered. The amount received after the plan is delivered is variably constrained due to factors outside the Company’s control including market volatility and client behavior. The revenue is recognized when it is probable that a significant reversal will not occur that is generally each month end as the advisory account balance uncertainty is resolved.

Contract liabilities for financial planning fees, which are included in other liabilities in the Consolidated Balance Sheets, were $144 million and $146 million as of March 31, 2021 and December 31, 2020, respectively.

The Company pays sales commissions to advisors when a new ~~standard.~~financial planning contract is obtained or when an existing contract is renewed. The standard is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted for interim and annual periods beginning after December 15, 2016. The standard may be applied retrospectively for all periods presented or retrospectivelysales commissions paid to the advisors prior to financial plan delivery are considered costs to obtain a contract with a ~~cumulative-effect adjustment at~~customer and are initially capitalized. When the ~~date~~performance obligation to deliver the financial plan is satisfied, the commission is recognized as distribution expense. Capitalized costs to obtain these contracts are reported in other assets in the Consolidated Balance Sheets and were $115 million and $117 million as of ~~adoption.~~ March 31, 2021 and December 31, 2020, respectively.

Transaction and Other Fees

The Company ~~plans~~earns revenue for providing customer support, shareholder and administrative services (including transfer agent services) for affiliated mutual funds and networking, sub-accounting and administrative services for unaffiliated mutual funds. The Company also receives revenue for providing custodial services and account maintenance services on brokerage and retirement accounts that are not included in an advisory relationship. Transfer agent and administrative revenue is earned based on either a fixed rate applied, as a percentage, to ~~adopt the~~assets under management or an annual fixed fee for each fund position. Networking and sub-accounting revenue ~~recognition guidance~~is earned based on either an annual fixed fee for each account or an annual fixed fee for each fund position. Custodial and account maintenance revenue is generally earned based on a ~~retrospective basis in the first quarter of 2018. The update does not apply to revenue associated with the manufacturing of insurance and annuity products~~quarterly or financial instruments as these revenues are in the scope of other standards. Therefore, the Company does not expect the update to have an impact on these revenues. The Company’s implementation efforts include the identification of revenue within the guidance and the reviewannual fixed fee for each account. Each of the customer ~~contracts~~support and administrative services performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Transaction and other fees (other than custodial service fees) are invoiced or charged to ~~determine~~brokerage accounts on a monthly or quarterly basis. Custodial service fees are invoiced or charged to brokerage accounts on an annual basis. Contract liabilities for custodial service fees, which are included in other liabilities in the Consolidated Balance Sheets, were $42 million and NaN as of March 31, 2021 and December 31, 2020, respectively.

The Company earns revenue for providing trade execution services to franchise advisors. The trade execution performance obligation is satisfied at the time of each trade and the revenue is primarily earned based on a fixed fee per trade. These fees are invoiced and collected on a semi-monthly basis.

Distribution Fees

Mutual Funds and Insurance and Annuity Products

The Company earns revenue for selling affiliated and unaffiliated mutual funds, fixed and variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). This ongoing revenue may be recognized for many years after the initial sale. The revenue will not be recognized until it is probable that a significant reversal will not occur.

The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis.

Other Products

The Company earns revenue for selling unaffiliated alternative products. The performance obligation ~~and~~is satisfied at the ~~associated timing~~time of each ~~performance obligation.~~ individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment and is earned generally based on a fixed rate applied, as a percentage, to the market value of the investment. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment). The revenue will not be recognized until it is probable that a significant reversal will not occur.

The Company ~~has determined~~earns revenue from brokerage clients for the execution of requested trades. The performance obligation is satisfied at the time of trade execution and amounts are received on the settlement date. The revenue varies for each trade based on various factors that ~~certain payments~~include the type of investment, dollar amount of the trade and how the trade is executed (online or broker assisted).

The Company earns revenue for placing clients’ deposits in its brokerage sweep program with third-party banks. The amount received ~~primarily related~~from the third-party banks is impacted by short-term interest rates. The performance obligation with the financial institutions that participate in the sweep program is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The revenue is earned daily and settled monthly based on a rate applied, as a percentage, to the deposits placed.

Other Revenues

The Company earns revenue from fees charged to franchise ~~advisor~~advisors for providing various services the advisors need to manage and grow their practices. The primary services include: licensing of intellectual property and software, compliance supervision, insurance coverage, technology services and support, consulting and other services. The services are either provided by the Company or third- party providers. The Company controls the services provided by third parties as it has the right to direct the third parties to perform the services, is primarily responsible for performing the services and sets the prices the advisors are charged. The Company recognizes revenue for the gross amount of the fees ~~should be presented~~received from the advisors. The fees are primarily collected monthly as ~~revenue rather than~~ a reduction of ~~expense.~~commission payments.

Intellectual property and software licenses, along with compliance supervision, insurance coverage, and technology services and support are primarily earned based on a monthly fixed fee. These services are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested.

Receivables

Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company ~~expects the impact of this change to be~~has an ~~increase to both revenues and expenses of approximately $95 million to $120 million. The Company does not expect a material impact~~unconditional right to the ~~timing~~revenue. Receivables related to revenues from contracts with customers were $415 million and $403 million as of ~~revenue recognition; however, the Company’s implementation effort to assess the impact of the standard is still in process.~~March 31, 2021 and December 31, 2020, respectively.

3.4. Variable Interest Entities

The Company provides asset management services to investment entities which are considered to be VIEs, such as ~~collateralized loan obligations (“CLOs”),~~CLOs, hedge funds and other private funds, property funds and certain ~~international~~non-U.S. series funds ~~(Open Ended Investment Companies~~(such as OEICs and ~~Societes d’Investissement A Capital Variable) and private equity funds~~SICAVs) (collectively, “investment entities”), which are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates certain investment entities (collectively, “consolidated investment entities”)~~. If~~ if the Company is deemed to be the primary ~~beneficiary, it will consolidate the VIE.~~beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment ~~nor has~~and existing future funding commitments, and the Company has not provided any other support to these entities. The Company has unfunded commitments related to consolidated CLOs of $20 million and $13 million as of March 31, 2021 and December 31, 2020, respectively.

CLOs

CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary and has ~~determined~~the power to direct the activities that ~~consolidation is required for certain CLOs.~~most significantly impact the economic performance of the CLO.

The Company’s maximum exposure to loss with respect to non-consolidated CLOs is limited to its ~~investments~~ amortized cost, which was $6$1 million and $9$3 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. The Company classifies these investments as Available-for-Sale securities. See Note 45 for additional information on these investments.

Property Funds

The Company provides investment advice and related services to property funds, some of which are considered VIEs. For investment management services, the Company generally earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not have a significant economic interest and is not required to consolidate any of the property funds. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in property funds is reflected in other investments and was ~~$26~~$23 million as of both ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

Hedge Funds and other Private ~~Equity~~ Funds

The Company ~~has determined that consolidation is~~does not ~~required for~~consolidate hedge funds and other private ~~equity~~ funds which are sponsored by the Company and considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those ~~services.~~services and the Company does not have a significant economic interest in any fund. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in these entities is reflected in other investments and was ~~$7 million and $13 million~~ NaN as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016, respectively.~~2020.

~~International~~Non-U.S. Series Funds

The Company manages ~~international~~non-U.S. series funds, which are considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not consolidate these funds and its maximum exposure to loss is limited to its carrying value. The carrying value of the Company’s investment in these funds is reflected in other ~~assets~~investments and was ~~$26~~$17 million and ~~$33~~$20 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

Affordable Housing Partnerships and Other Real Estate Partnerships

The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships.

A majority of the limited partnerships are VIEs. The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in other investments and was ~~$455~~$187 million and ~~$482~~$200 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. The Company had a ~~$114~~ $9 million ~~and $135 million liability~~liability recorded as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016, respectively,~~2020 related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the ~~above mentioned~~ funding commitments.

Structured Investments

The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, commercial ~~mortgage backed securities~~ and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its ~~carrying value.~~amortized cost. See Note 45 for additional information on these structured investments.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~(Continued)

Fair Value of Assets and Liabilities

The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 1011 for the definition of the three levels of the fair value hierarchy.

The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis:


	March 31, 2021
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments:

Common stocks	$	—	$	2	$	—	$	2

Syndicated loans	—		2,485		155		2,640
Total investments	—		2,487		155		2,642
Receivables	—		17		—		17
Other assets	—		2		—		2
Total assets at fair value	$	—	$	2,506	$	155	$	2,661

Liabilities
Debt (1)	$	—	$	2,671	$	—	$	2,671
Other liabilities	—		256		—		256
Total liabilities at fair value	$	—	$	2,927	$	—	$	2,927


	September 30, 2017									December 31, 2020
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
	(in millions)									(in millions)
Assets	Assets								Assets
Investments:	Investments:								Investments:
Corporate debt securities	$	—	$	29	$	—	$	29	Corporate debt securities	$	—	$	8	$	—	$	8
Common stocks	22		11		4		37		Common stocks	—		1		—		1
Other investments	4		—		—		4

Syndicated loans	—		1,963		182		2,145		Syndicated loans	—		1,817		92		1,909
Total investments	26		2,003		186		2,215		Total investments	—		1,826		92		1,918
Receivables	—		9		—		9		Receivables	—		16		—		16
Other assets									Other assets	—		—		2		2
Total assets at fair value	$	26	$	2,012	$	186	$	2,224	Total assets at fair value	$	—	$	1,842	$	94	$	1,936

Liabilities	Liabilities								Liabilities
Debt ⁽¹⁾	$	—	$	2,267	$	—	$	2,267	Debt (1)	$	—	$	1,913	$	—	$	1,913
Other liabilities	—		43		—		43		Other liabilities	—		69		—		69
Total liabilities at fair value	$	—	$	2,310	$	—	$	2,310	Total liabilities at fair value	$	—	$	1,982	$	—	$	1,982

(1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.7 billion and $2.0 billion as of March 31, 2021 and December 31, 2020, respectively.

December 31, 2016
Level 1 Level 2 Level 3 Total
(in millions)
Assets
Investments:
Corporate debt securities $ —
$ 19
$ —
$ 19
Common stocks 22
6
5
33
Other investments 4
—
—
4
Syndicated loans —
1,944
254
2,198
Total investments 26
1,969
259
2,254
Receivables —
11
—
11
Total assets at fair value $ 26
$ 1,980
$ 259
$ 2,265

Liabilities
Debt ⁽¹⁾
$ —
$ 2,319
$ —
$ 2,319
Other liabilities —
95
—
95
Total liabilities at fair value $ —
$ 2,414
$ —
$ 2,414


⁽¹⁾	~~The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and~~ ~~$2.3 billion~~ ~~as of September 30, 2017 and December 31, 2016, respectively.~~

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

The following tables provide a summary of changes in Level 3 assets ~~and liabilities~~ held by consolidated investment entities measured at fair value on a recurring basis:


												Syndicated Loans			Other Assets
	Corporate Debt Securities		Common Stocks				Syndicated Loans					(in millions)
	(in millions)
Balance, July 1, 2017	$	—	$	7			$	185
Balance, January 1, 2021											Balance, January 1, 2021	$	92		$	2
Total gains (losses) included in:	Total gains (losses) included in:										Total gains (losses) included in:
Net income	—		1			⁽¹⁾	(1		)	⁽¹⁾	Net income	2		(1)	—

Purchases	—		—				6				Purchases	59			—
Sales	—		—				(12		)		Sales	(10)			—

Settlements	—		—				(3		)		Settlements	(20)			—
Transfers into Level 3	—		—				84				Transfers into Level 3	57			—
Transfers out of Level 3	—		(4		)		(77		)		Transfers out of Level 3	(25)			(2)
Balance, September 30, 2017	$	—	$	4			$	182
Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2017	$	—	$	1		⁽¹⁾	$	—
Balance, March 31, 2021											Balance, March 31, 2021	$	155		$	0

Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2021											Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2021	$	1	(1)	$	—


	Syndicated Loans
	(in millions)
Balance, January 1, 2020	$	143
Total gains (losses) included in:
Net income	(39)		(1)

Purchases	43
Sales	(7)

Settlements	(10)
Transfers into Level 3	248
Transfers out of Level 3	(76)
Balance, March 31, 2020	$	302

Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2020	$	(37)	(1)

Common Stocks Syndicated Loans Other Assets
(in millions)
Balance at July 1, 2016 $ 1
$ 243
$ 1

Total gains (losses) included in:
Net income —
2
⁽¹⁾
—

Purchases 1
50
—

Sales —
(10 ) —

Settlements —
(26 ) —

Transfers into Level 3 1
57
—

Transfers out of Level 3 —
(120 ) —

Balance, September 30, 2016 $ 3
$ 196
$ 1

Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2016 $ —
$ 2
⁽¹⁾
$ —

Corporate Debt Securities Common Stocks Syndicated Loans
(in millions)
Balance, January 1, 2017 $ —
$ 5
$ 254

Total gains (losses) included in:
Net income —
1
⁽¹⁾
—

Purchases —
3
133

Sales (2 ) (1 ) (27 )
Settlements —
—
(56 )
Transfers into Level 3 2
2
197

Transfers out of Level 3 —
(6 ) (319 )
Balance, September 30, 2017 $ —
$ 4
$ 182

Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2017 $ —
$ 1
⁽¹⁾
$ (2 )
⁽¹⁾

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Common Stocks Syndicated Loans Other Assets Debt
(in millions)
Balance at January 1, 2016, previously reported $ 3
$ 529
$ 2,065
$ (6,630 )
Cumulative effect of change in accounting policies ⁽³⁾
(2 ) (304 ) (2,065 ) 6,630

Balance at January 1, 2016, as adjusted 1
225
—
—

Total gains (losses) included in:
Net income —
1
⁽¹⁾
1
⁽²⁾
—

Purchases 1
100
—
—

Sales —
(11 ) —
—

Settlements —
(51 ) —
—

Transfers into Level 3 3
286
—
—

Transfers out of Level 3 (2 ) (354 ) —
—

Balance, September 30, 2016 $ 3
$ 196
$ 1
$ —

Changes in unrealized gains (losses) included in income relating to assets and liabilities held at September 30, 2016 $ —
$ 1
⁽¹⁾
$ —
$ —

⁽¹⁾ Included in net investment income in the Consolidated Statements of Operations.

⁽²⁾ ~~Included in other revenues in the Consolidated Statements of Operations.~~

⁽³⁾ ~~The cumulative effect of change in accounting policies includes the adoption impact of ASU 2015-02 and~~ ~~ASU 2014-13 – Consolidation: Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity~~ ~~(“ASU 2014-13”).~~

Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote. The Company recognizes transfers between levels of the fair value hierarchy as of the beginning of the quarter in which each transfer occurred. For assets and liabilities held at the end of the reporting periods that are measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2.

All Level 3 measurements as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.

Determination of Fair Value

Assets

Investments

The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company.

In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies loans with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of the third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise.

See Note 1011 for a description of the Company’s determination of the fair value of corporate debt securities, ~~U.S. government and agencies obligations,~~ common stocks and other investments.

Receivables

For receivables of the consolidated CLOs, the carrying value approximates fair value as the nature of these assets has historically been short term and the receivables have been collectible. The fair value of these receivables is classified as Level 2.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Liabilities

Debt

The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ ~~assets. The fair value of the CLOs’ debt~~assets and is classified as Level 2.

Other Liabilities

Other liabilities consist primarily of securities purchased but not yet settled held by consolidated CLOs. The carrying value approximates fair value as the nature of these liabilities has historically been short term. The fair value of these liabilities is classified as Level 2. Other liabilities also include accrued interest on the CLO debt.

Fair Value Option

The Company has elected the fair value option for the financial assets and liabilities of the consolidated CLOs. Management believes that the use of the fair value option better matches the changes in fair value of assets and liabilities related to the CLOs.

The followingtablepresentsthefairvalueandunpaidprincipalbalanceofloansanddebtforwhichthefairvalueoptionhasbeenelected:


	March 31, 2021		December 31, 2020
	(in millions)
Syndicated loans
Unpaid principal balance	$	2,690	$	1,990
Excess unpaid principal over fair value	(50)		(81)
Fair value	$	2,640	$	1,909

Fair value of loans more than 90 days past due	$	1	$	5
Fair value of loans in nonaccrual status	15		19
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	20		24

Debt
Unpaid principal balance	$	2,808	$	2,069
Excess unpaid principal over fair value	(137)		(156)
Carrying value (1)	$	2,671	$	1,913

September 30,
2017 December 31, 2016
(in millions)
Syndicated loans
Unpaid principal balance $ 2,215
$ 2,281
Excess unpaid principal over fair value (70 ) (83 )
Fair value $ 2,145
$ 2,198
Fair value of loans more than 90 days past due $ 12
$ 8
Fair value of loans in nonaccrual status 12
8
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 26
34

Debt
Unpaid principal balance $ 2,400
$ 2,459
Excess unpaid principal over carrying value (133 ) (140 )
Carrying value ⁽¹⁾
$ 2,267
$ 2,319

⁽¹⁾ The carrying value of the CLOs’ debtis set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was ~~$2.2~~$2.7 billion and ~~$2.3~~$2.0 billion as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

During the first quarter of 2021, the Company launched two new CLOs and issued debt of $817 million.

Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in net investment income. Gains and losses related to changes in the fair value of investments and gains and losses on sales of investments are also recorded in net investment income. Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in net investment income.

Total net gains (losses) recognized in net investment income related to the changes in ~~the~~ fair value of ~~financial assets and liabilities for which~~investments the Company owns in the consolidated CLOs where it has elected the fair value option ~~was elected~~and collateralized financing entity accounting were ~~$(1) million and nil~~immaterial for both the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively.~~

Total net gains (losses) recognized in net investment income related to changes in the fair value of financial assets and liabilities for which the fair value option was elected were $(3) million and $(5) million for the nine months ended September 30, 2017 and 2016, respectively.2020.

Debt of the consolidated investment entities and the stated interest rates were as follows:

Carrying Value Weighted Average Interest Rate
September 30,
2017 December 31,
2016 September 30,
2017 December 31,
2016
(in millions)
Debt of consolidated CLOs due 2025-2026 $ 2,267
$ 2,319
2.7 % 2.5 %


	Carrying Value				Weighted Average Interest Rate
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
	(in millions)
Debt of consolidated CLOs due 2025-2034	$	2,671	$	1,913	2.0	%	2.1	%

The debt of the consolidated CLOs has both fixed and floating interest rates, which range from 0%0.0% to ~~7.3%~~8.9%. The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

4. 5. Investments

The following is a summary of Ameriprise Financial investments:


	March 31, 2021		December 31, 2020
	(in millions)
Available-for-Sale securities, at fair value	$	35,832	$	36,283
Mortgage loans (allowance for credit losses: 2021, $29 ; 2020, $29 )	2,684		2,718
Policy loans	838		846
Other investments (allowance for credit losses: 2021, $9; 2020, $12)	1,083		1,184
Total	$	40,437	$	41,031

September 30,
2017 December 31,
2016
(in millions)
Available-for-Sale securities, at fair value $ 30,826
$ 30,719
Mortgage loans, net 3,000
2,986
Policy and certificate loans 841
831
Other investments 1,535
1,298
Total $ 36,202
$ 35,834
Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days.

~~The following is a summary~~


The following is a summary of net investment income:	Three Months Ended March 31,
	2021			2020
	(in millions)
Investment income on fixed maturities	$	266		$	322
Net realized gains (losses)	69		(1)	(19)		(1)
Affordable housing partnerships	(15)			(14)
Other	21			22
Consolidated investment entities	36			17
Total	$	377		$	328

(1) Includes the change in the allowance for credit losses of ~~net investment income:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Investment income on fixed maturities $ 340
$ 342
$ 1,012
$ 1,028
Net realized gains (losses) (3 ) 6
35
(5 )
Affordable housing partnerships (17 ) (17 ) (42 ) (35 )
Other 26
25
70
13
Consolidated investment entities 26
31
79
89
Total $ 372
$ 387
$ 1,154
$ 1,090
$1 million and $24 million for the three months ended March 31, 2021 and 2020, respectively.

Available-for-Sale securities distributed by type were as follows:


														March 31, 2021
Description of Securities		September 30, 2017
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI ⁽¹⁾		Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
		(in millions)												(in millions)
Corporate debt securities	Corporate debt securities	$	14,528	$	1,145	$	(23	)	$	15,650	$	—	Corporate debt securities	$	11,949	$	1,441	$	(87)	$	—	$	13,303
Residential mortgage backed securities	Residential mortgage backed securities	6,740		79		(29		)	6,790		—		Residential mortgage backed securities	9,903		156		(17)		—		10,042
Commercial mortgage backed securities	Commercial mortgage backed securities	3,917		62		(27		)	3,952		—		Commercial mortgage backed securities	5,876		173		(12)		—		6,037
Asset backed securities	Asset backed securities	1,611		39		(4		)	1,646		5		Asset backed securities	3,444		43		(2)		—		3,485
State and municipal obligations	State and municipal obligations	2,216		249		(10		)	2,455		—		State and municipal obligations	1,057		244		(3)		—		1,298
U.S. government and agencies obligations		5		1		—			6		—
U.S. government and agency obligations													U.S. government and agency obligations	1,325		1		—		—		1,326
Foreign government bonds and obligations	Foreign government bonds and obligations	292		21		(5		)	308		—		Foreign government bonds and obligations	231		17		(1)		—		247
Common stocks		9		11		(1		)	19		6
Other securities													Other securities	94		—		—		—		94
Total	Total	$	29,318	$	1,607	$	(99	)	$	30,826	$	11	Total	$	33,879	$	2,075	$	(122)	$	—	$	35,832

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


Description of Securities	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Corporate debt securities	$	11,762	$	1,924	$	(2)	$	(10)	$	13,674
Residential mortgage backed securities	9,845		188		(4)		—		10,029
Commercial mortgage backed securities	5,867		242		(21)		—		6,088
Asset backed securities	3,283		52		(5)		(1)		3,329
State and municipal obligations	1,088		297		(1)		—		1,384
U.S. government and agency obligations	1,456		—		—		—		1,456
Foreign government bonds and obligations	241		22		(1)		—		262
Other securities	59		2		—		—		61
Total	$	33,601	$	2,727	$	(34)	$	(11)	$	36,283

Description of Securities December 31, 2016
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Noncredit OTTI ⁽¹⁾
(in millions)
Corporate debt securities $ 15,231
$ 1,065
$ (60 ) $ 16,236
$ —
Residential mortgage backed securities 6,899
86
(67 ) 6,918
(3 )
Commercial mortgage backed securities 3,347
59
(39 ) 3,367
—
Asset backed securities 1,532
33
(16 ) 1,549
5
State and municipal obligations 2,195
198
(35 ) 2,358
—
U.S. government and agencies obligations 7
1
—
8
—
Foreign government bonds and obligations 251
17
(7 ) 261
—
Common stocks 10
13
(1 ) 22
6
Total $ 29,472
$ 1,472
$ (225 ) $ 30,719
$ 8


⁽¹⁾	Represents the amount of other-than-temporary impairment (“OTTI”) losses in accumulated other comprehensive income (“AOCI”). Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, accrued interest of $209 million and $178 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in receivables on the Consolidated Balance Sheets.

As of March 31, 2021 and December 31, 2020, investment securities with a fair value of ~~$1.7~~$3.3 billion and ~~$1.6~~$3.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which ~~$793~~$417 million and ~~$473~~$454 million, respectively, may be sold, pledged or rehypothecated by the counterparty.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, fixed maturity securities comprised approximately ~~85%~~89% and ~~86%~~88%, respectively, of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or, if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of ~~both September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, the Company’s internal analysts rated ~~$1.1 billion~~$642 million and $605 million, respectively, of securities using criteria similar to those used by NRSROs.

A summary of fixed maturity securities by rating was as follows:


Ratings	March 31, 2021						December 31, 2020
	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	19,922	$	20,255	56	%	$	19,815	$	20,253	56	%
AA	1,140		1,319		4		1,082		1,312		3
A	2,714		3,141		9		2,953		3,534		10
BBB	8,792		9,681		27		8,271		9,542		26
Below investment grade (1)	1,311		1,436		4		1,480		1,642		5
Total fixed maturities	$	33,879	$	35,832	100	%	$	33,601	$	36,283	100	%

Ratings September 30, 2017 December 31, 2016
Amortized Cost Fair Value
Percent of
Total Fair Value
Amortized Cost Fair Value
Percent of
Total Fair Value
(in millions, except percentages)
AAA $ 10,444
$ 10,528
34 % $ 9,252
$ 9,305
31 %
AA 1,914
2,132
7
1,729
1,906
6
A 4,986
5,453
18
5,157
5,567
18
BBB 10,745
11,435
37
11,739
12,340
40
Below investment grade ⁽¹⁾
1,220
1,259
4
1,585
1,579
5
Total fixed maturities $ 29,309
$ 30,807
100 % $ 29,462
$ 30,697
100 %
(1) Both the amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $1 million as of March 31, 2021, and $3 million as of December 31, 2020. These securities are not rated but are included in below investment grade due to their risk characteristics.


⁽¹⁾	The amortized cost and fair value of below investment grade securities includes interest in CLOs managed by the Company of $6 million and $11 million, respectively, at September 30, 2017, and $9 million and $14 million, respectively, at December 31, 2016. These securities are not rated but are included in below investment grade due to their risk characteristics.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, approximately ~~41%~~32% and ~~47%~~33%, respectively, of ~~the~~ securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. NoNaN holdings of any ~~other~~ issuer were greater than 10% of total equity.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~(Continued)

The following tables ~~provide information about~~summarize the fair value and gross unrealized losses on Available-for-Sale securities, ~~with gross unrealized losses~~aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss ~~position:~~position for which no allowance for credit losses has been recorded:


Description of Securities	March 31, 2021
	Less than 12 months					12 months or more					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	84	$	1,948	$	(86)	4	$	23	$	(1)	88	$	1,971	$	(87)
Residential mortgage backed securities	63	1,861		(16)		77	297		(1)		140	2,158		(17)
Commercial mortgage backed securities	43	778		(10)		18	428		(2)		61	1,206		(12)
Asset backed securities	11	265		(1)		14	203		(1)		25	468		(2)
State and municipal obligations	28	74		(2)		2	7		(1)		30	81		(3)
Foreign government bonds and obligations	4	5		0		7	7		(1)		11	12		(1)
Total	233	$	4,931	$	(115)	122	$	965	$	(7)	355	$	5,896	$	(122)


Description of Securities	December 31, 2020
	Less than 12 months					12 months or more					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	26	$	228	$	(1)	11	$	19	$	(1)	37	$	247	$	(2)
Residential mortgage backed securities	72	833		(2)		71	391		(2)		143	1,224		(4)
Commercial mortgage backed securities	35	781		(11)		19	393		(10)		54	1,174		(21)
Asset backed securities	17	344		(3)		13	231		(2)		30	575		(5)
State and municipal obligations	2	4		0		1	4		(1)		3	8		(1)
Foreign government bonds and obligations	1	3		0		7	8		(1)		8	11		(1)
Total	153	$	2,193	$	(17)	122	$	1,046	$	(17)	275	$	3,239	$	(34)

Description of Securities September 30, 2017
Less than 12 months 12 months or more Total
Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses
(in millions, except number of securities)
Corporate debt securities 106
$ 1,151
$ (7 ) 34
$ 325
$ (16 ) 140
$ 1,476
$ (23 )
Residential mortgage backed securities 113
1,901
(16 ) 109
993
(13 ) 222
2,894
(29 )
Commercial mortgage backed securities 90
1,391
(21 ) 19
210
(6 ) 109
1,601
(27 )
Asset backed securities 33
398
(2 ) 16
105
(2 ) 49
503
(4 )
State and municipal obligations 89
176
(1 ) 16
142
(9 ) 105
318
(10 )
Foreign government bonds and obligations 6
19
—
14
21
(5 ) 20
40
(5 )
Common stocks —
—
—
3
1
(1 ) 3
1
(1 )
Total 437
$ 5,036
$ (47 ) 211
$ 1,797
$ (52 ) 648
$ 6,833
$ (99 )

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Description of Securities December 31, 2016
Less than 12 months 12 months or more Total
Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses
(in millions, except number of securities)
Corporate debt securities 187
$ 2,452
$ (33 ) 38
$ 377
$ (27 ) 225
$ 2,829
$ (60 )
Residential mortgage backed securities 127
2,533
(33 ) 177
1,290
(34 ) 304
3,823
(67 )
Commercial mortgage backed securities 100
1,583
(39 ) 5
43
—
105
1,626
(39 )
Asset backed securities 48
524
(9 ) 27
298
(7 ) 75
822
(16 )
State and municipal obligations 181
374
(14 ) 3
110
(21 ) 184
484
(35 )
Foreign government bonds and obligations 7
30
(1 ) 15
23
(6 ) 22
53
(7 )
Common stocks —
—
—
3
1
(1 ) 3
1
(1 )
Total 650
$ 7,496
$ (129 ) 268
$ 2,142
$ (96 ) 918
$ 9,638
$ (225 )

As part of ~~Ameriprise Financial’s~~the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the three months ended March 31, 2021 is primarily attributable to ~~a decline in~~higher interest rates, onpartially offset by tighter credit spreads. The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the ~~long end~~Company will be required to sell these securities before the anticipated recovery of the ~~interest rate curve~~remaining amortized cost basis. As of March 31, 2021 and ~~tighter credit spreads.~~December 31, 2020, 88% and 92% respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.

The following ~~table presents~~tables present a rollforward of the ~~cumulative amounts recognized in the Consolidated Statements of Operations~~allowance for ~~other-than-temporary impairments related~~credit losses on Available-for-Sale securities:


	Corporate Debt Securities		Asset Backed Securities		Total
	(in millions)
Balance, January 1, 2021	$	10	$	1	$	11

Charge-offs	(10)		(1)		(11)
Balance, March 31, 2021	$	0	$	0	$	0

Balance at January 1, 2020 (1)	$	0	$	—	$	0
Additions for which credit losses were not previously recorded	13		—		13

Balance at March 31, 2020	$	13	$	—	$	13

(1) Prior to January 1, 2020, credit losses on Available-for-Sale securities ~~for which~~were not recorded in an allowance but were recorded as a ~~portion~~reduction of the ~~securities’ total other-than-temporary impairments~~book value of the security if the security was ~~recognized in other comprehensive income (loss) (“OCI”):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Beginning balance $ 2
$ 81
$ 69
$ 85
Credit losses for which an other-than-temporary impairment was not previously recognized —
—
—
1
Credit losses for which an other-than-temporary impairment was previously recognized —
—
1
—
Reductions for securities sold during the period (realized) —
—
(68 ) (5 )
Ending balance $ 2
$ 81
$ 2
$ 81

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

other-than-temporarily impaired.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in ~~earnings~~net investment income were as follows:


	Three Months Ended March 31,
	2021		2020
	(in millions)
Gross realized investment gains	$	51	$	8
Gross realized investment losses	(1)		(3)
Credit losses	—		(13)
Total	$	50	$	(8)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Gross realized gains $ 6
$ 10
$ 50
$ 24
Gross realized losses (2 ) (3 ) (6 ) (12 )
Other-than-temporary impairments —
—
(1 ) (1 )
Total $ 4
$ 7
$ 43
$ 11

~~Other-than-temporary impairments~~There were no credit losses for the ~~nine~~three months ended ~~September 30, 2017 and 2016~~March 31, 2021. Credit losses for the three months ended March 31, 2020 primarily related to recording an allowance for credit losses on ~~asset backed securities.~~certain corporate debt securities, primarily in the oil and gas industry.

See Note 1314 for a rollforward of net unrealized investment gains (losses) included in AOCI.

Available-for-Sale securities by contractual maturity as of ~~September 30, 2017~~March 31, 2021 were as follows:


	Amortized Cost		Fair Value			Amortized Cost		Fair Value
	(in millions)					(in millions)
Due within one year	$	2,311	$	2,340	Due within one year	$	2,241	$	2,251
Due after one year through five years	6,562		6,820		Due after one year through five years	4,757		5,058
Due after five years through 10 years	3,852		4,010		Due after five years through 10 years	3,423		3,565
Due after 10 years	4,316		5,249		Due after 10 years	4,235		5,394
	17,041		18,419			14,656		16,268
Residential mortgage backed securities	6,740		6,790		Residential mortgage backed securities	9,903		10,042
Commercial mortgage backed securities	3,917		3,952		Commercial mortgage backed securities	5,876		6,037
Asset backed securities	1,611		1,646		Asset backed securities	3,444		3,485
Common stocks	9		19
Total	$	29,318	$	30,826	Total	$	33,879	$	35,832

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities ~~as well as common stocks,~~ were not included in the maturities distribution.

5. ~~Financing Receivables~~

The Company’s financing receivables include commercial mortgage loans, syndicated loans, consumer loans, policy loans, certificate loans and margin loans. Commercial mortgage loans, syndicated loans, consumer loans, policy loans and certificate loans are reflected in investments. Margin loans are recorded in receivables.

~~Allowance for Loan Losses~~

Policy and certificate loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy and certificate loans, the Company does not record an allowance for loan losses. The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. As there is minimal risk of loss related to margin loans, the allowance for loan losses is immaterial.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

6. Financing Receivables

Financing receivables are comprised of commercial loans, consumer loans, and the deposit receivable.

Allowance for Credit Losses

The following ~~table presents~~tables present a rollforward of the allowance for ~~loan~~credit losses for the ~~nine~~three months ended ~~and the ending balance of~~March 31:


	Commercial Loans		Consumer Loans		Total
	(in millions)
Balance, January 1, 2021	$	66	$	2	$	68


Provisions	—		1		1
Charge-offs	(1)		—		(1)

Balance, March 31, 2021	$	65	$	3	$	68


	Commercial Loans		Consumer Loans		Total
	(in millions)
Balance, December 31, 2019 (1)	$	51	$	0	$	51
Cumulative effect of adoption of current expected credit losses guidance	2		3		5
Balance, January 1, 2020	53		3		56
Provisions	10		2		12
Charge-offs	—		(1)		(1)

Balance, March 31, 2020	$	63	$	4	$	67

(1) Prior to January 1, 2020, the allowance for ~~loan~~credit losses ~~by impairment method:~~was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset.

September 30,
2017 2016
(in millions)
Beginning balance $ 29
$ 32
Charge-offs —
(1 )
Provisions (1 ) (1 )
Ending balance $ 28
$ 30

Individually evaluated for impairment $ 3
$ 2
Collectively evaluated for impairment 25
28

~~The recorded investment in financing receivables by impairment method~~Accrued interest on commercial loans was $17 million and $16 million as ~~follows:~~

September 30,
2017 December 31,
2016
(in millions)
Individually evaluated for impairment $ 19
$ 12
Collectively evaluated for impairment 3,490
3,480
Total $ 3,509
$ 3,492

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively, and is recorded in receivables on the ~~Company’s recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses was~~Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans.

Purchases and Sales

During the three months ended March 31, 2021 and 2020, the Company purchased $13 million and $56 million, respectively, of syndicated loans, and sold $4 million and $7 million, ~~respectively. Unearned income, unamortized premiums and discounts, and net unamortized deferred fees and costs are not material to the Company’s total loan balance.~~respectively, of syndicated loans.

During the three months ended ~~September 30, 2017 and 2016,~~March 31, 2021, the Company purchased $18 million and $22 million, respectively, and sold $12 million and nil, respectively, primarily of syndicated loans. During the nine months ended September 30, 2017 and 2016, the Company purchased $154 million and $65$2 million of ~~syndicated~~residential mortgage loans. The allowance for credit losses for residential mortgage loans ~~respectively, and sold $16 million~~was not material as of ~~syndicated loans and $271 million of consumer loans, respectively. The loans sold during the nine months ended September 30, 2016 were sold on~~ March ~~30, 2016 to a third party. The Company received cash proceeds of $260 million and recognized a loss of $11 million.~~31, 2021.

The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.

Credit Quality Information

Nonperforming loans ~~which are generally loans 90 days or more past due,~~ were $2 $12 million and $21 million as of ~~both September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020, respectively. All other loans were considered to be performing.

Commercial Loans

Commercial Mortgage Loans

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates ~~as necessary.~~when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% ~~and nil~~ of total commercial mortgage loans as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016, respectively.~~2020. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. Total commercial mortgage loan modifications through March 31, 2021 due to the COVID-19 pandemic consisted of 93 loans with a total unpaid balance of $369 million. Modifications primarily consisted of short-term forbearance and interest only payments. As of March 31, 2021, there was 1 loan remaining that was modified due to COVID-19 with interest only payments with an unpaid balance of $10 million. All other loans returned to their normal payment schedules. Total commercial mortgage loans past due were NaN as of March 31, 2021 and December 31, 2020, respectively.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The tables below present the amortized cost basis of commercial mortgage loans by the year of origination and loan-to-value ratio:


	March 31, 2021
Loan-to-Value Ratio	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
> 100%	$	—	$	—	$	—	$	2	$	—	$	15	$	17
80% - 100%	—		15		19		12		3		22		71
60% - 80%	13		81		157		27		36		177		491
40% - 60%	7		30		50		84		139		670		980
< 40%	—		8		34		68		107		915		1,132
Total	$	20	$	134	$	260	$	193	$	285	$	1,799	$	2,691


	December 31, 2020
Loan-to-Value Ratio	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
> 100%	$	—	$	—	$	2	$	—	$	—	$	10	$	12
80% - 100%	15		16		12		3		7		15		68
60% - 80%	89		166		27		32		46		144		504
40% - 60%	23		57		74		155		113		551		973
< 40%	7		23		80		99		64		895		1,168
Total	$	134	$	262	$	195	$	289	$	230	$	1,615	$	2,725

Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type.

In addition, the Company reviews the concentrations of credit risk by region and property type.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:


	Loans				Percentage
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
	(in millions)
East North Central	$	256	$	259	10	%	10	%
East South Central	113		115		4		4
Middle Atlantic	176		178		7		7
Mountain	241		247		9		9
New England	53		54		2		2
Pacific	814		825		30		30
South Atlantic	676		681		25		25
West North Central	196		198		7		7
West South Central	166		168		6		6
	2,691		2,725		100	%	100	%
Less: allowance for credit losses	29		29
Total	$	2,662	$	2,696

Loans Percentage
September 30,
2017 December 31,
2016 September 30,
2017 December 31,
2016
(in millions)
East North Central $ 237
$ 198
9 % 7 %
East South Central 92
88
3
3
Middle Atlantic 198
203
7
8
Mountain 253
240
9
9
New England 87
91
3
3
Pacific 785
746
28
28
South Atlantic 767
783
28
29
West North Central 215
222
8
8
West South Central 136
131
5
5
2,770
2,702
100 % 100 %
Less: allowance for loan losses 21
21

Total $ 2,749
$ 2,681

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Concentrations of credit risk of commercial mortgage loans by property type were as follows:


	Loans				Percentage					Loans				Percentage
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016			March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
	(in millions)									(in millions)
Apartments	$	560	$	504	20	%	19	%	Apartments	$	711	$	713	27	%	26	%
Hotel	41		42		1		1		Hotel	49		50		2		2
Industrial	466		446		17		17		Industrial	420		427		16		16
Mixed use	48		49		2		2		Mixed use	87		87		3		3
Office	502		489		18		18		Office	361		372		13		14
Retail	937		950		34		35		Retail	871		881		32		32
Other	216		222		8		8		Other	192		195		7		7
	2,770		2,702		100	%	100	%		2,691		2,725		100	%	100	%
Less: allowance for loan losses	21		21
Less: allowance for credit losses									Less: allowance for credit losses	29		29
Total	$	2,749	$	2,681					Total	$	2,662	$	2,696

Syndicated Loans

The recorded investment in syndicated loans as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 was ~~$486~~$561 million and ~~$482~~$595 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. ~~The primary credit indicator for~~Total syndicated loans ~~is whether the loans are performing in accordance with the contractual terms of the syndication. Total nonperforming syndicated loans~~past due were NaN and $3 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016 were $2~~2020, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.

The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:


	March 31, 2021
Internal Risk Rating	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
Risk 5	$	—	$	—	$	—	$	—	$	—	$	3	$	3
Risk 4	—		—		—		2		6		7		15
Risk 3	—		2		8		14		18		36		78
Risk 2	5		27		51		56		69		45		253
Risk 1	4		19		28		47		55		59		212
Total	$	9	$	48	$	87	$	119	$	148	$	150	$	561


	December 31, 2020
Internal Risk Rating	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
Risk 5	$	—	$	—	$	—	$	—	$	—	$	3	$	3
Risk 4	—		—		4		9		—		10		23
Risk 3	—		9		8		25		13		25		80
Risk 2	30		57		62		69		14		41		273
Risk 1	17		32		47		58		22		40		216
Total	$	47	$	98	$	121	$	161	$	49	$	119	$	595

Financial Advisor Loans

The Company offers loans to financial advisors for transitional cost assistance. Repayment of the loan is highly dependent on the retention of the financial advisor. In the event a financial advisor is no longer affiliated with the Company, any unpaid balances become immediately due. Accordingly, the primary risk factor for advisor loans is termination status. The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was $8 million and $1$7 million as of March 31, 2021 and December 31, 2020, respectively.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The tables below present the amortized cost basis of advisor loans by origination year and termination status:


	March 31, 2021
Termination Status	2021		2020		2019		2018		2017		Prior		Total
	(in millions)
Active	$	37	$	165	$	132	$	97	$	125	$	154	$	710
Terminated	1		—		—		1		1		9		12
Total	$	38	$	165	$	132	$	98	$	126	$	163	$	722


	December 31, 2020
Termination Status	2020		2019		2018		2017		2016		Prior		Total
	(in millions)
Active	$	171	$	137	$	101	$	127	$	83	$	86	$	705
Terminated	—		—		—		1		1		8		10
Total	$	171	$	137	$	101	$	128	$	84	$	94	$	715

Consumer Loans

Credit Card Receivables

The ~~recorded investment in consumer loans~~credit cards are co-branded with Ameriprise Financial, Inc. and issued to the Company’s customers by a third party. FICO scores and delinquency rates are the primary credit quality indicators for the credit card portfolio. Delinquency rates are measured based on the number of days past due. Credit card receivables over 30 days past due were 1% of total credit card receivables as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016~~2020.

The table below presents the amortized cost basis of credit card receivables by FICO score:


	March 31, 2021		December 31, 2020
	(in millions)
> 800	$	25	$	28
750 - 799	21		23
700 - 749	24		25
650 - 699	15		15
< 650	5		5
Total	$	90	$	96

Policy Loans

Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is 0 allowance for credit losses.

Margin Loans

The margin loans balance was ~~$253 million~~$1.1 billion and ~~$308 million,~~$1.0 billion as of March 31, 2021 and December 31, 2020, respectively. The Company ~~considers~~monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the ~~credit worthiness~~risk of ~~borrowers (FICO score), collateral characteristics such as loan-to-value (“LTV”)~~loss. As of both March 31, 2021 and ~~geographic concentration in determining~~December 31, 2020, the allowance for ~~loan~~credit losses ~~for consumer loans. At a minimum, management updates FICO scores~~on margin loans was not material.

Pledged Asset Lines of Credit

The pledged asset lines of credit balance was $274 million and ~~LTV ratios semiannually.~~

As$224 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016, approximately 1%~~2020, respectively. The Company monitors collateral supporting pledged asset lines of credit and ~~2%, respectively,~~requests additional collateral when necessary in order to mitigate the risk of ~~consumer loans had FICO scores below 640.~~loss. As of ~~both September 30, 2017~~March 31, 2021 and December 31, ~~2016, none~~2020, there was 0 allowance for credit losses on pledged asset lines of ~~the Company’s consumer loans had LTV ratios greater than 90%.~~ credit.

Deposit Receivable

The ~~Company’s most significant geographic concentrations for consumer loans are in California representing 52% of the portfolio~~deposit receivable was $1.4 billion as of both ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016. Colorado and Washington represent 18% and 13%, respectively,~~2020. The deposit receivable is fully collateralized by the fair value of the ~~portfolio~~assets held in a trust. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was 0 allowance for credit losses for the deposit receivable as of both ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016. No other state represents more than 10% of the total consumer loan portfolio.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

During the third quarter of 2017, the Company entered into an agreement with an unaffiliated third party to sell $258 million of consumer mortgage loans and recorded a $7 million loss to reflect the loans at fair value. 2020.

Troubled Debt Restructurings

~~The recorded investment in restructured~~There were 0 loans ~~was not material~~accounted for as ~~of September 30, 2017 and December 31, 2016. The~~a troubled debt ~~restructurings did not have a material impact to~~restructuring by the ~~Company’s allowance for loan losses or income recognized for~~Company during the three months ended March 31, 2021 and ~~nine months ended September 30, 2017 and 2016.~~2020. There are no0 commitments to lend additional funds to borrowers whose loans have been restructured.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. Deferred Acquisition Costs and Deferred Sales Inducement Costs

In the third quarter of the year, management updated market-related inputs and implemented model changes related to our living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC in the third quarter of 2017 primarily reflected improved persistency and mortality on life insurance contracts and a correction related to a variable annuity model assumption partially offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking to DAC in the third quarter of 2016 primarily reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits. In addition, the Company’s review of its closed LTC business in the prior year period resulted in the write-off of DAC, which was included in the impact of unlocking.

The balances of and changes in DAC were as follows:


	2021		2020
	(in millions)
Balance at January 1	$	2,532	$	2,698
Capitalization of acquisition costs	65		60
Amortization	(5)		(512)

Impact of change in net unrealized (gains) losses on securities	93		118

Balance at March 31	$	2,685	$	2,364

2017 2016
(in millions)
Balance at January 1 $ 2,648
$ 2,730
⁽¹⁾
Capitalization of acquisition costs 220
274
⁽²⁾
Amortization, excluding the impact of valuation assumptions review (201 ) (279 )
Amortization, impact of valuation assumptions review 12
(81 )
Impact of change in net unrealized securities (gains) losses (18 ) (105 )
Balance at September 30 $ 2,661
$ 2,539
⁽¹⁾


⁽¹⁾	~~DAC balances were restated for the correction of commission expense accrual for certain insurance and annuity products in the fourth quarter of 2016. See Note 1 in the 2016 10-K.~~


⁽²⁾	~~Includes a $27 million benefit related to the write-off of the deferred reinsurance liability in connection with the loss recognition on LTC business.~~

The balances of and changes in DSIC, which is included in other assets, were as follows:


	2021		2020
	(in millions)
Balance at January 1	$	189	$	218

Amortization	(3)		(36)

Impact of change in net unrealized (gains) losses on securities	4		15
Balance at March 31	$	190	$	197

2017 2016
(in millions)
Balance at January 1 $ 302
$ 335
Capitalization of sales inducement costs 3
4
Amortization, excluding the impact of valuation assumptions review (26 ) (32 )
Amortization, impact of valuation assumptions review (1 ) 4
Impact of change in net unrealized securities (gains) losses 1
(14 )
Balance at September 30 $ 279
$ 297

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

7.8. Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities

Policyholder account balances, future policy benefits and claims consisted of the following:


	March 31, 2021		December 31, 2020
	(in millions)
Policyholder account balances
Fixed annuities (1)	$	8,401	$	8,531
Variable annuity fixed sub-accounts	5,075		5,104
Universal life (“UL”)/variable universal life (“VUL”) insurance	3,110		3,122
Indexed universal life (“IUL”) insurance	2,336		2,269
Structured variable annuities	2,027		1,371
Other life insurance	597		605
Total policyholder account balances	21,546		21,002

Future policy benefits
Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)	1,479		3,049
Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2)	(22)		1
Other annuity liabilities	173		211
Fixed annuity life contingent liabilities	1,346		1,370
Life and disability income insurance	1,179		1,187
Long term care insurance	5,558		5,722
UL/VUL and other life insurance additional liabilities	1,244		1,259
Total future policy benefits	10,957		12,799
Policy claims and other policyholders’ funds	199		191
Total policyholder account balances, future policy benefits and claims	$	32,702	$	33,992

September 30,
2017 December 31,
2016
(in millions)
Policyholder account balances
Fixed annuities ⁽¹⁾
$ 10,100
$ 10,588

Variable annuity fixed sub-accounts 5,187
5,211

Variable universal life (“VUL”)/universal life (“UL”) insurance 3,028
3,007

Indexed universal life (“IUL”) insurance 1,290
1,054

Other life insurance 731
758

Total policyholder account balances 20,336
20,618

Future policy benefits
Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 539
1,017

Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (73 )
⁽²⁾
(24 )
⁽²⁾
Other annuity liabilities 85
66

Fixed annuity life contingent liabilities 1,482
1,497

Life, disability income and long term care insurance 6,027
5,556

VUL/UL and other life insurance additional liabilities 674
588

Total future policy benefits 8,734
8,700

Policy claims and other policyholders’ funds 893
884

Total policyholder account balances, future policy benefits and claims $ 29,963
$ 30,202

⁽¹⁾ Includes fixed deferred annuities, non-life contingent fixed payout annuities and ~~equity~~fixed deferred indexed annuity ~~(“EIA”)~~ host contracts.

⁽²⁾ Includes the fair value of GMAB embedded derivatives that was a net asset as of ~~both September 30, 2017 and December~~March 31, ~~2016~~2021 reported as a contra liability.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Separate account liabilities consisted of the following:


	March 31, 2021		December 31, 2020
	(in millions)
Variable annuity	$	79,862	$	79,299
VUL insurance	8,539		8,226
Other insurance	32		31
Threadneedle investment liabilities	5,050		5,055
Total	$	93,483	$	92,611

September 30,
2017 December 31,
2016
(in millions)
Variable annuity $ 73,467
$ 69,606
VUL insurance 7,154
6,659
Other insurance 33
33
Threadneedle investment liabilities 4,633
3,912
Total $ 85,287
$ 80,210

8.9. Variable Annuity and Insurance Guarantees

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:


Variable Annuity Guarantees by Benefit Type (1)	March 31, 2021							December 31, 2020
	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	67,317	$	65,396	$	7	68	$	66,874	$	64,932	$	5	68
Five/six-year reset	8,211		5,486		7		68	8,116		5,386		6		68
One-year ratchet	6,093		5,765		13		71	6,094		5,763		8		71
Five-year ratchet	1,437		1,383		1		67	1,436		1,381		—		67
Other	1,267		1,249		45		74	1,261		1,243		45		73
Total — GMDB	$	84,325	$	79,279	$	73	68	$	83,781	$	78,705	$	64	68

GGU death benefit	$	1,196	$	1,139	$	168	72	$	1,183	$	1,126	$	162	71
GMIB	$	187	$	174	$	5	71	$	187	$	173	$	6	71
GMWB:
GMWB	$	1,949	$	1,944	$	1	74	$	1,972	$	1,967	$	1	74
GMWB for life	50,389		50,316		209		69	50,142		50,057		185		69
Total — GMWB	$	52,338	$	52,260	$	210	69	$	52,114	$	52,024	$	186	69

GMAB	$	2,187	$	2,186	$	0	61	$	2,291	$	2,291	$	—	61

(1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

Variable Annuity
Guarantees
by Benefit Type⁽¹⁾
September 30, 2017 December 31, 2016
Total Contract Value Contract Value in Separate Accounts
Net Amount
at Risk

Weighted Average
Attained Age
Total Contract Value Contract Value in Separate Accounts
Net Amount
at Risk

Weighted Average
Attained Age
(in millions, except age)
GMDB:
Return of premium $ 59,806
$ 57,840
$ 11
66 $ 56,143
$ 54,145
$ 208
65
Five/six-year reset 8,869
6,141
13
66 8,878
6,170
22
66
One-year ratchet 6,502
6,139
12
69 6,426
6,050
110
68
Five-year ratchet 1,562
1,504
1
65 1,542
1,483
7
64
Other 1,057
1,034
58
72 965
942
86
71
Total — GMDB $ 77,796
$ 72,658
$ 95
66 $ 73,954
$ 68,790
$ 433
65

GGU death benefit $ 1,103
$ 1,052
$ 126
69 $ 1,047
$ 996
$ 108
68
GMIB $ 236
$ 219
$ 8
69 $ 245
$ 227
$ 13
68

GMWB:
GMWB $ 2,525
$ 2,517
$ 2
71 $ 2,650
$ 2,642
$ 2
70
GMWB for life 42,933
42,813
160
67 39,436
39,282
289
⁽²⁾
66
Total — GMWB $ 45,458
$ 45,330
$ 162
67 $ 42,086
$ 41,924
$ 291
66

GMAB $ 3,157
$ 3,153
$ —
59 $ 3,484
$ 3,476
$ 21
59

AMERIPRISE FINANCIAL, INC.


⁽¹⁾ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)	Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.


⁽²⁾	~~Amount revised to reflect updated contractholder mortality assumptions at December 31, 2016.~~

The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.

The following table provides information related to insurance guarantees for which the Company has established additional liabilities:


	September 30, 2017			December 31, 2016				March 31, 2021			December 31, 2020
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age		Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)							(in millions, except age)
UL secondary guarantees	$	6,443	65	$	6,376	64	UL secondary guarantees	$	6,573	67	$	6,587	67

The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows:


	GMDB & GGU		GMIB		GMWB (1)		GMAB (1)		UL
	(in millions)
Balance at January 1, 2020	$	16	$	7	$	1,462	$	(39)	$	758
Incurred claims	5		2		2,437		127		32
Paid claims	(2)		—		—		—		(12)
Balance at March 31, 2020	$	19	$	9	$	3,899	$	88	$	778

Balance at January 1, 2021	$	24	$	6	$	3,049	$	1	$	916
Incurred claims	3		0		(1,570)		(23)		32
Paid claims	(1)		0		—		—		(8)
Balance at March 31, 2021	$	26	$	6	$	1,479	$	(22)	$	940

GMDB & GGU GMIB
GMWB ⁽¹⁾

GMAB ⁽¹⁾
UL
(in millions)
Balance at January 1, 2016 $ 14
$ 8
$ 1,057
$ —
$ 332
Incurred claims 10
—
1,056
9
99
Paid claims (7 ) —
—
(1 ) (18 )
Balance at September 30, 2016 $ 17
$ 8
$ 2,113
$ 8
$ 413

Balance at January 1, 2017 $ 16
$ 8
$ 1,017
$ (24 ) $ 434
Incurred claims 3
—
(478 ) (49 ) 59
Paid claims (3 ) (1 ) —
—
(22 )
Balance at September 30, 2017 $ 16
$ 7
$ 539
$ (73 ) $ 471

⁽¹⁾The incurred claims for GMWB and GMAB ~~represent~~include the change in the fair value of the liabilities (contra liabilities) less paid claims.

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:


	March 31, 2021		December 31, 2020
	(in millions)
Mutual funds:
Equity	$	46,823	$	45,947
Bond	25,614		26,073
Other	7,060		6,911
Total mutual funds	$	79,497	$	78,931

September 30,
2017 December 31,
2016
(in millions)
Mutual funds:
Equity $ 44,365
$ 40,622
Bond 23,481
23,142
Other 5,117
5,326
Total mutual funds $ 72,963
$ 69,090

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9.10. Debt

The balances and the stated interest rates of outstanding debt of Ameriprise Financial were as follows:


	Outstanding Balance				Stated Interest Rate
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
	(in millions)
Long-term debt:
Senior notes due 2022	$	500	$	500	3.0	%	3.0	%
Senior notes due 2023	750		750		4.0		4.0
Senior notes due 2024	550		550		3.7		3.7
Senior notes due 2025	500		500		3.0		3.0
Senior notes due 2026	500		500		2.9		2.9
Finance lease liabilities	46		44		N/A		N/A
Other	(12)		(13)		N/A		N/A
Total long-term debt	2,834		2,831

Short-term borrowings:
Federal Home Loan Bank (“FHLB”) advances	200		200		0.3		0.4
Total	$	3,034	$	3,031			0

Outstanding Balance Stated Interest Rate
September 30,
2017 December 31,
2016 September 30,
2017 December 31,
2016
(in millions)
Long-term debt:
Senior notes due 2019 $ 300
$ 300
7.3 % 7.3 %
Senior notes due 2020 750
750
5.3
5.3
Senior notes due 2023 750
750
4.0
4.0
Senior notes due 2024 550
550
3.7
3.7
Senior notes due 2026 500
500
2.9
2.9
Capitalized lease obligations 41
49

Other⁽¹⁾
11
18

Total long-term debt 2,902
2,917

Short-term borrowings:
Federal Home Loan Bank (“FHLB”) advances 151
150
1.3
0.8
Repurchase agreements 50
50
1.4
0.9
Total short-term borrowings 201
200

Total $ 3,103
$ 3,117

⁽¹⁾ ~~Amounts include adjustments for fair value hedges on the Company’s long-term debt and unamortized discount and debt issuance costs. See Note 12 for information on the Company’s fair value hedges.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~Long-term~~Long-Term Debt

~~On August 11, 2016, the Company issued $500 million of unsecured~~The Company’s senior notes ~~due September 15, 2026, and incurred debt issuance costs of $4 million. Interest payments are due semi-annually~~may be redeemed, in ~~arrears on March 15 and September 15, commencing on March 15, 2017.~~

~~In the first quarter of 2016, the Company extinguished $16 million of its junior subordinated notes due 2066~~whole or in ~~open market transactions and recognized a gain of less than $1 million. In the second quarter of 2016, the Company redeemed the remaining $229 million of its junior subordinated notes due 2066~~part, at any time prior to maturity at a ~~redemption~~ price equal to ~~100%~~the greater of the principal ~~balance~~amount and the present value of remaining scheduled payments, discounted to the ~~notes~~redemption date, plus accrued ~~and compounded~~ interest.

Short-term Borrowings

The Company enters into repurchase agreements in exchange for cash, which it accounts for as secured borrowings and has pledged Available-for-Sale securities to collateralize its obligations under the repurchase agreements. As of September 30, 2017 and December 31, 2016, the Company has pledged $32 million and $33 million of agency residential mortgage backed securities and $16 million and $19 million of commercial mortgage backed securities, respectively. The remaining maturity of outstanding repurchase agreements was less than one month as of September 30, 2017 and less than three months as of December 31, 2016. The stated interest rate of the repurchase agreements is a weighted average annualized interest rate on the repurchase agreements held as of the balance sheet date.

The Company’s life insurance ~~subsidiary is a member~~and bank subsidiaries are members of the FHLB of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities and residential mortgage backed securities as collateral to ~~collateralize its obligation under~~access these borrowings. The fair value of the securities pledged is recorded in investments and was ~~$764~~$1.2 billion and $1.3 billion, of commercial mortgage backed securities, and $535 million and ~~$771~~$604 million, of residential mortgage backed securities, as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. The remaining maturity of outstanding FHLB advances was less than ~~three~~2 months as of ~~September 30, 2017~~March 31, 2021 and less than ~~four~~3 months as of December 31, ~~2016.~~2020. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on ~~the~~ outstanding borrowings as of the balance sheet date.

~~On October 12, 2017, the~~The Company ~~entered into~~has an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $750 million that expires in October 2022. Under the terms of the credit agreement for the facility, the Company may increase the amount of this facility up to $1.0 billion upon satisfaction of certain approval requirements. ~~This agreement replaced t~~he ~~Company’s unsecured revolving credit facility that was to expire in May 2020. The Company had no borrowings outstanding under this facility as~~As of both ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020, the Company had 0 borrowings outstanding and ~~outstanding~~had $1 million of letters of credit issued against ~~this facility were $1 million as of both September 30, 2017 and December 31, 2016.~~the facility. The Company’s credit facility contains various administrative, reporting, legal and financial covenants. The Company was in compliance with all such covenants as of both ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

~~10.~~ 11. Fair Values of Assets and Liabilities

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.

Valuation Hierarchy

The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:


~~Level 1~~	~~Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.~~


~~Level 2~~	~~Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.~~


~~Level 3~~	~~Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.~~

Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~(Continued)

The following tables present the balances of assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis:


	March 31, 2021
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	1,875	$	2,599	$	—	$	4,474
Available-for-Sale securities:
Corporate debt securities	—		12,491		812		13,303
Residential mortgage backed securities	—		9,955		87		10,042
Commercial mortgage backed securities	—		6,037		—		6,037
Asset backed securities	—		3,455		30		3,485
State and municipal obligations	—		1,298		—		1,298
U.S. government and agency obligations	1,326		—		—		1,326
Foreign government bonds and obligations	—		247		—		247
Other securities	—		94		—		94
Total Available-for-Sale securities	1,326		33,577		929		35,832

Investments at net asset value (“NAV”)							8		(1)
Trading and other securities	61		17		—		78
Separate account assets at NAV							93,483		(1)
Investments and cash equivalents segregated for regulatory purposes	815		—		—		815
Other assets:
Interest rate derivative contracts	—		1,003		—		1,003
Equity derivative contracts	334		3,609		—		3,943
Credit derivative contracts	—		26		—		26
Foreign exchange derivative contracts	1		17		—		18
Total other assets	335		4,655		—		4,990
Total assets at fair value	$	4,412	$	40,848	$	929	$	139,680

September 30, 2017

Level 1 Level 2 Level 3 Total
(in millions)
Assets
Cash equivalents $ 136
$ 1,882
$ —
$ 2,018

Available-for-Sale securities:
Corporate debt securities —
14,383
1,267
15,650

Residential mortgage backed securities —
6,625
165
6,790

Commercial mortgage backed securities —
3,887
65
3,952

Asset backed securities —
1,611
35
1,646

State and municipal obligations —
2,455
—
2,455

U.S. government and agencies obligations 6
—
—
6

Foreign government bonds and obligations —
308
—
308

Common stocks 4
8
1
13

Common stocks measured at net asset value (“NAV”) 6
⁽¹⁾
Total Available-for-Sale securities 10
29,277
1,533
30,826

Trading securities 131
32
—
163

Separate account assets measured at NAV 85,287
⁽¹⁾
Investments segregated for regulatory purposes 424
—
—
424

Other assets:
Interest rate derivative contracts 1
1,200
—
1,201

Equity derivative contracts 51
1,891
—
1,942

Credit derivative contracts —
4
—
4

Foreign exchange derivative contracts 1
42
—
43

Total other assets 53
3,137
—
3,190

Total assets at fair value $ 754
$ 34,328
$ 1,533
$ 121,908


Liabilities
Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	$	—	$	4	$	52	$	56
IUL embedded derivatives	—		—		949		949
GMWB and GMAB embedded derivatives	—		—		715		715		(2)
Structured variable annuity embedded derivatives	—		—		124		124
Total policyholder account balances, future policy benefits and claims	—		4		1,840		1,844		(3)
Customer deposits	—		7		—		7
Other liabilities:
Interest rate derivative contracts	1		485		—		486
Equity derivative contracts	149		3,204		—		3,353

Foreign exchange derivative contracts	1		5		—		6
Other	3		7		43		53
Total other liabilities	154		3,701		43		3,898
Total liabilities at fair value	$	154	$	3,712	$	1,883	$	5,749

Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives $ —
$ 4
$ —
$ 4

IUL embedded derivatives —
—
577
577

GMWB and GMAB embedded derivatives —
—
45
45
⁽²⁾
Total policyholder account balances, future policy benefits and claims —
4
622
626
⁽³⁾
Customer deposits —
9
—
9

Other liabilities:
Interest rate derivative contracts —
416
—
416

Equity derivative contracts 5
2,664
—
2,669

Foreign exchange derivative contracts 4
27
—
31

Other 6
6
27
39

Total other liabilities 15
3,113
27
3,155

Total liabilities at fair value $ 15
$ 3,126
$ 649
$ 3,790

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


	December 31, 2020
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	2,935	$	2,506	$	—	$	5,441
Available-for-Sale securities:
Corporate debt securities	—		12,902		772		13,674
Residential mortgage backed securities	—		10,020		9		10,029
Commercial mortgage backed securities	—		6,088		—		6,088
Asset backed securities	—		3,297		32		3,329
State and municipal obligations	—		1,384		—		1,384
U.S. government and agency obligations	1,456		—		—		1,456
Foreign government bonds and obligations	—		262		—		262
Other securities	—		61		—		61
Total Available-for-Sale securities	1,456		34,014		813		36,283

Investments at NAV							$	8	(1)
Trading and other securities	61		27		—		$	88
Separate account assets at NAV							92,611		(1)
Investments and cash equivalents segregated for regulatory purposes	600		—		—		600
Other assets:
Interest rate derivative contracts	1		1,754		—		1,755
Equity derivative contracts	408		3,682		—		4,090
Credit derivative contracts	—		2		—		2
Foreign exchange derivative contracts	1		22		—		23
Total other assets	410		5,460		—		5,870
Total assets at fair value	$	5,462	$	42,007	$	813	$	140,901

December 31, 2016

Level 1 Level 2 Level 3 Total
(in millions)
Assets
Cash equivalents $ 30
$ 1,796
$ —
$ 1,826

Available-for-Sale securities:
Corporate debt securities —
14,925
1,311
16,236

Residential mortgage backed securities —
6,650
268
6,918

Commercial mortgage backed securities —
3,367
—
3,367

Asset backed securities —
1,481
68
1,549

State and municipal obligations —
2,358
—
2,358

U.S. government and agencies obligations 8
—
—
8

Foreign government bonds and obligations —
261
—
261

Common stocks 8
8
1
17

Common stocks at NAV 5
⁽¹⁾
Total Available-for-Sale securities 16
29,050
1,648
30,719

Trading securities 9
16
—
25

Separate account assets at NAV 80,210
⁽¹⁾
Investments segregated for regulatory purposes 425
—
—
425

Other assets:
Interest rate derivative contracts —
1,778
—
1,778

Equity derivative contracts 43
1,531
—
1,574

Credit derivative contracts —
1
—
1

Foreign exchange derivative contracts 13
80
—
93

Total other assets 56
3,390
—
3,446

Total assets at fair value $ 536
$ 34,252
$ 1,648
$ 116,651


Liabilities
Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	$	—	$	3	$	49	$	52
IUL embedded derivatives	—		—		935		935
GMWB and GMAB embedded derivatives	—		—		2,316		2,316		(4)
Structured variable annuity embedded derivatives	—		—		70		70
Total policyholder account balances, future policy benefits and claims	—		3		3,370		3,373		(5)
Customer deposits	—		8		—		8
Other liabilities:
Interest rate derivative contracts	—		734		—		734
Equity derivative contracts	183		3,388		—		3,571
Credit derivative contracts	—		1		—		1
Foreign exchange derivative contracts	2		4		—		6
Other	2		3		43		48
Total other liabilities	187		4,130		43		4,360
Total liabilities at fair value	$	187	$	4,141	$	3,413	$	7,741

Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives $ —
$ 5
$ —
$ 5

IUL embedded derivatives —
—
464
464

GMWB and GMAB embedded derivatives —
—
614
614
⁽⁴⁾
Total policyholder account balances, future policy benefits and claims —
5
1,078
1,083
⁽⁵⁾
Customer deposits —
8
—
8

Other liabilities:
Interest rate derivative contracts 2
987
—
989

Equity derivative contracts 3
2,132
—
2,135

Foreign exchange derivative contracts 2
45
—
47

Other 3
8
13
24

Total other liabilities 10
3,172
13
3,195

Total liabilities at fair value $ 10
$ 3,185
$ 1,091
$ 4,286

⁽¹⁾ Amounts are comprised of certain ~~investments~~financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy.

⁽²⁾ The fair value of the GMWB and GMAB embedded derivatives included ~~$494~~$980 million of individual contracts in a liability position and ~~$449~~$265 million of individual contracts in an asset position (recorded as a contra liability)as of ~~September 30, 2017.~~March 31, 2021.

⁽³⁾

(3) The Company’s adjustment for nonperformance risk resulted in a $500 million cumulative decrease to the embedded derivatives as of March 31, 2021.

(4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020.

(5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020.

~~The Company’s adjustment for nonperformance risk resulted in a $(376) million cumulative increase (decrease) to the embedded derivatives as of September 30, 2017.~~

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


⁽⁴⁾	The fair value of the GMWB and GMAB embedded derivatives included $880 million of individual contracts in a liability position and $266 million of individual contracts in an asset position as of December 31, 2016.


⁽⁵⁾	~~The Company’s adjustment for nonperformance risk resulted in a $(498) million cumulative increase (decrease) to the embedded derivatives as of December 31, 2016.~~

The following tables provide a summary of changes in Level 3 assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis:


	Available-for-Sale Securities
	Corporate Debt Securities		Residential Mortgage Backed Securities		Asset Backed Securities				Total
	(in millions)
Balance, January 1, 2021	$	772	$	9	$	32	$	813
Total gains (losses) included in:
Net income	—		—		(1)		(1)		(1)
Other comprehensive income (loss)	(5)		—		—		(5)
Purchases	46		78		—		124


Settlements	(1)		—		(1)		(2)


Balance, March 31, 2021	$	812	$	87	$	30	$	929

Changes in unrealized gains (losses) in net income relating to assets held at March 31, 2021	$	—	$	—	$	(1)	$	(1)	(1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2021	$	(5)	$	—	$	—	$	(5)

Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Common Stocks Total
(in millions)
Balance, July 1, 2017 $ 1,333
$ 172
$ —
$ 33
$ —
$ 1,538
Total gains (losses) included in:
Other comprehensive income (1 ) 1
—
(2 ) 1
(1 )
Purchases 39
—
65
10
—
114
Settlements (104 ) (9 ) —
—
—
(113 )
Transfers into Level 3 —
20
—
13
—
33
Transfers out of Level 3 —
(19 ) —
(19 ) —
(38 )
Balance, September 30, 2017 $ 1,267
$ 165
$ 65
$ 35
$ 1
$ 1,533
Changes in unrealized gains (losses) relating to assets held at September 30, 2017 $ —
$ —
$ —
$ —
$ —
$ —


	Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			GMWB and GMAB Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
	(in millions)
Balance, January 1, 2021	$	49		$	935		$	2,316		$	70		$	3,370	$	43
Total (gains) losses included in:
Net income	4		(2)	29		(2)	(1,729)		(3)	75		(3)	(1,621)		—		(4)
Issues	—			5			90			(15)			80		2
Settlements	(1)			(20)			38			(6)			11		(2)
Balance, March 31, 2021	$	52		$	949		$	715		$	124		$	1,840	$	43

Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2021	$	—		$	29	(2)	$	(1,705)	(3)	$	—		$	(1,676)	$	—


	Available-for-Sale Securities
	Corporate Debt Securities		Residential Mortgage Backed Securities		Asset Backed Securities				Total
	(in millions)
Balance, January 1, 2020	$	750	$	17	$	19	$	786
Total gains (losses) included in:
Net income	—		—		(1)		(1)		(1)
Other comprehensive income (loss)	(6)		—		(1)		(7)
Purchases	5		—		—		5


Settlements	(15)		—		—		(15)


Balance, March 31, 2020	$	734	$	17	$	17	$	768

Changes in unrealized gains (losses) in net income relating to assets held at March 31, 2020	$	—	$	—	$	(1)	$	(1)	(1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2020	$	(6)	$	—	$	(1)	$	(7)

Policyholder Account Balances,
Future Policy Benefits and Claims
Other Liabilities
IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total
(in millions)
Balance, July 1, 2017 $ 527
$ 272
$ 799
$ 14
Total (gains) losses included in:
Net income 35
⁽¹⁾
(309 )
⁽²⁾
(274 ) —
Issues 26
84
110
13
Settlements (11 ) (2 ) (13 ) —
Balance, September 30, 2017 $ 577
$ 45
$ 622
$ 27
Changes in unrealized (gains) losses relating to liabilities held at September 30, 2017 $ 35
⁽¹⁾
$ (307 )
⁽²⁾
$ (272 ) $ —

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


	Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			GMWB and GMAB Embedded Derivatives			Structured Annuity Embedded Derivatives			Total
	(in millions)
Balance, January 1, 2020	$	43		$	881		$	763		$	—		$	1,687	$	44
Total (gains) losses included in:
Net income	(12)		(2)	(145)		(2)	2,420		(3)	(3)		(3)	2,260		(2)		(4)
Issues	2			8			88			(6)			92		2
Settlements	—			(19)			5			—			(14)		(2)
Balance, March 31, 2020	$	33		$	725		$	3,276		$	(9)		$	4,025	$	42

Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2020	$	—		$	(145)	(2)	$	2,423	(3)	$	—		$	2,278	$	—

(1) Included in net investment income in the Consolidated Statements of Operations.

Available-for-Sale Securities Other Derivative Contracts
Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Total
(in millions)
Balance, July 1, 2016 $ 1,350
$ 153
$ —
$ 178
$ 1,681
$ 2

Total gains (losses) included in:
Net income —
—
—
1
1
⁽³⁾
(2 )
⁽²⁾
Other comprehensive income (2 ) 1
—
1
—
—

Purchases 20
144
33
12
209
—

Settlements (26 ) (14 ) —
—
(40 ) —

Transfers out of Level 3 —
1
—
(27 ) (26 ) —

Balance, September 30, 2016 $ 1,342
$ 285
$ 33
$ 165
$ 1,825
$ —

Changes in unrealized gains (losses) relating to assets held at September 30, 2016 $ —
$ —
$ —
$ —
$ —
$ (2 )
⁽²⁾

Policyholder Account Balances,
Future Policy Benefits and Claims

IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total Other Liabilities
(in millions)
Balance, July 1, 2016 $ 408
$ 1,965
$ 2,373
$ —
Total (gains) losses included in:
Net income 12
⁽¹⁾
(280 )
⁽²⁾
(268 ) —
Issues 25
77
102
13
Settlements (7 ) (6 ) (13 ) —
Balance, September 30, 2016 $ 438
$ 1,756
$ 2,194
$ 13
Changes in unrealized (gains) losses relating to liabilities held at September 30, 2016 $ 12
⁽¹⁾
$ (267 )
⁽²⁾
$ (255 ) $ —

Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Common Stocks Total
(in millions)
Balance, January 1, 2017 $ 1,311
$ 268
$ —
$ 68
$ 1
$ 1,648

Total gains (losses) included in:
Other comprehensive income 1
2
—
—
1
4

Purchases 109
132
65
64
—
370

Settlements (154 ) (34 ) —
(15 ) —
(203 )
Transfers into Level 3 —
20
—
27
8
55

Transfers out of Level 3 —
(223 ) —
(109 ) (9 ) (341 )
Balance, September 30, 2017 $ 1,267
$ 165
$ 65
$ 35
$ 1
$ 1,533

Changes in unrealized gains (losses) relating to assets held at September 30, 2017 $ —
$ —
$ —
$ (1 ) $ —
$ (1 )
⁽³⁾

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Policyholder Account Balances,
Future Policy Benefits and Claims
Other Liabilities
IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total
(in millions)
Balance, January 1, 2017 $ 464
$ 614
$ 1,078
$ 13

Total (gains) losses included in:
Net income 75
⁽¹⁾
(798 )
⁽²⁾
(723 ) 1
⁽⁴⁾
Issues 70
238
308
13

Settlements (32 ) (9 ) (41 ) —

Balance, September 30, 2017 $ 577
$ 45
$ 622
$ 27

Changes in unrealized (gains) losses relating to liabilities held at September 30, 2017 $ 75
⁽¹⁾
$ (771 )
⁽²⁾
$ (696 ) $ —

Available-for-Sale Securities Other Derivative Contracts
Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Total
(in millions)
Balance, January 1, 2016 $ 1,425
$ 218
$ 3
$ 162
$ 1,808
$ —

Cumulative effect of change in accounting policies —
—
—
21
21
—

Total gains (losses) included in:
Net income (2 ) —
—
—
(2 )
⁽³⁾
(2 )
⁽²⁾
Other comprehensive income 29
—
—
(5 ) 24
—

Purchases 34
144
42
28
248
2

Settlements (144 ) (53 ) (3 ) (1 ) (201 ) —

Transfers into Level 3 —
—
—
12
12
—

Transfers out of Level 3 —
(24 ) (9 ) (52 ) (85 ) —

Balance, September 30, 2016 $ 1,342
$ 285
$ 33
$ 165
$ 1,825
$ —

Changes in unrealized gains (losses) relating to assets held at September 30, 2016 $ (1 ) $ —
$ —
$ —
$ (1 )
⁽³⁾
$ (2 )
⁽²⁾

Policyholder Account Balances,
Future Policy Benefits and Claims
Other Liabilities
IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total
(in millions)
Balance, January 1, 2016 $ 364
$ 851
$ 1,215
$ —
Total (gains) losses included in:
Net income 8
⁽¹⁾
708
⁽²⁾
716
—
Issues 86
215
301
13
Settlements (20 ) (18 ) (38 ) —
Balance, September 30, 2016 $ 438
$ 1,756
$ 2,194
$ 13
Changes in unrealized (gains) losses relating to liabilities held at September 30, 2016 $ 8
⁽¹⁾
$ 830
⁽²⁾
$ 838
$ —

⁽¹⁾(2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations.

⁽²⁾(3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.

⁽³⁾~~Included in net investment income in the Consolidated Statements of Operations.~~

⁽⁴⁾Included in general and administrative expense in the Consolidated Statements of Operations.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was ~~$(37)~~$(167) million and ~~$8 million,~~$1.8 billion, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the three months ended ~~September 30, 2017~~March 31, 2021 and 2016, respectively. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $(91) million and $295 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the nine months ended September 30, 2017 and 2016,2020, respectively.

Securities transferred from Level 3 primarily represent securities with fair values that are now obtained from a third-party pricing service with observable inputs. Securities transferred to Level 3 represent securities with fair values that are now based on a single non-binding broker quote. The Company recognizes transfers between levels of the fair value hierarchy as of the beginning of the quarter in which each transfer occurred. For assets and liabilities held at the end of the reporting periods that are measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2.

The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities:


	March 31, 2021
	Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	812	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	0.9	%	–	2.9%	1.3%
Asset backed securities	$	1	Discounted cash flow	Annual short-term default rate (2)	5.5%				5.5%
				Annual long-term default rate (2)	4.0%				4.0%
				Discount rate	13.0%				13.0%
				Constant prepayment rate	10.0%				10.0%
				Loss recovery	63.6%				63.6%
IUL embedded derivatives	$	949	Discounted cash flow	Nonperformance risk (3)	65 bps				65 bps
Fixed deferred indexed annuity embedded derivatives	$	52	Discounted cash flow	Surrender rate (4)	0.0	%	–	50.0%	1.6%
				Nonperformance risk (3)	65 bps				65 bps
GMWB and GMAB embedded derivatives	$	715	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%
				Surrender rate (4)	0.1	%	–	73.5%	3.9%
				Market volatility (7) (8)	4.2	%	–	17.0%	10.8%
				Nonperformance risk (3)	65 bps				65 bps
Structured variable annuity embedded derivatives	$	124	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%
				Nonperformance risk (3)	65 bps				65 bps
Contingent consideration liabilities	$	43	Discounted cash flow	Discount rate (9)	0.0	%	–	9.0%	3.2%

September 30, 2017
Fair Value Valuation Technique Unobservable Input Range Weighted Average
(in millions)
Corporate debt securities (private placements) $ 1,266 Discounted cash flow Yield/spread to U.S. Treasuries 0.8 % – 2.3% 1.1 %
Asset backed securities $ 11 Discounted cash flow Annual short-term default rate 3.8%
Annual long-term default rate 2.5% – 3.0% 2.6 %
Discount rate 11.0%
Constant prepayment rate 5.0 % – 10.0% 9.9 %
Loss recovery 36.4 % – 63.6% 63.1 %
IUL embedded derivatives $ 577 Discounted cash flow
Nonperformance risk ⁽¹⁾
67 bps
GMWB and GMAB embedded derivatives $ 45 Discounted cash flow
Utilization of guaranteed withdrawals ⁽²⁾
0.0 % – 42.0%
Surrender rate 0.1 % – 74.7%

Market volatility ⁽³⁾
4.3 % – 15.9%

Nonperformance risk ⁽¹⁾
67 bps
Contingent consideration liabilities $ 27 Discounted cash flow Discount rate 9.0%

December 31, 2016
Fair Value Valuation Technique Unobservable Input Range Weighted Average
(in millions)
Corporate debt securities (private placements) $ 1,308 Discounted cash flow Yield/spread to U.S. Treasuries 0.9 % – 2.5% 1.3 %
Asset backed securities $ 14 Discounted cash flow Annual short-term default rate 4.8%
Annual long-term default rate 2.5%
Discount rate 13.5%
Constant prepayment rate 5.0 % – 10.0% 9.9 %
Loss recovery 36.4 % – 63.6% 62.8 %
IUL embedded derivatives $ 464 Discounted cash flow
Nonperformance risk ⁽¹⁾
82 bps
GMWB and GMAB embedded derivatives $ 614 Discounted cash flow
Utilization of guaranteed withdrawals ⁽²⁾
0.0 % – 75.6%
Surrender rate 0.1 % – 66.4%

Market volatility ⁽³⁾
5.3 % – 21.2%

Nonperformance risk ⁽¹⁾
82 bps
Contingent consideration liabilities $ 13 Discounted cash flow Discount rate 9.0%


⁽¹⁾	~~The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.~~


⁽²⁾	~~The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year.~~


⁽³⁾	~~Market volatility is implied volatility of fund of funds and managed volatility funds.~~

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


	December 31, 2020
	Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	772	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	1.0	%	–	3.3%	1.5%
Asset backed securities	$	3	Discounted cash flow	Annual short-term default rate (2)	2.9%		–	3.0%	2.9%
				Annual long-term default rate (2)	3.5%		–	4.5%	3.8%
				Discount rate	13.0%				13.0%
				Constant prepayment rate	10.0%				10.0%
				Loss recovery	63.6%				63.6%
IUL embedded derivatives	$	935	Discounted cash flow	Nonperformance risk (3)	65 bps				65 bps
Fixed deferred indexed annuity embedded derivatives	$	49	Discounted cash flow	Surrender rate (4)	0.0	%	–	50.0%	1.2%
				Nonperformance risk (3)	65 bps				65 bps
GMWB and GMAB embedded derivatives	$	2,316	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%
				Surrender rate (4)	0.1	%	–	73.5%	3.8%
				Market volatility (7) (8)	4.3	%	–	17.1%	11.0%
				Nonperformance risk (3)	65 bps				65 bps
Structured variable annuity embedded derivatives	$	70	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%
				Nonperformance risk (3)	65 bps				65 bps
Contingent consideration liabilities	$	43	Discounted cash flow	Discount rate (9)	0.0%		–	9.0%	3.1%

(1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.

(2) The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.

(3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.

(4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula.

(5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year.

(6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals.

(7) Market volatility is implied volatility of fund of funds and managed volatility funds.

(8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit.

(9) The weighted average discount rate represents the average discount rate across all contingent consideration liabilities, weighted based on the size of the contingent consideration liability.

Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.

~~Sensitivity~~Uncertainty of Fair Value Measurements ~~to Changes in Unobservable Inputs~~

Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would ~~result~~have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in the annual default rate and discount rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would ~~result~~have resulted in a significantly lower (higher) fair value measurement and a significant ~~increase (decrease)~~increases (decreases) in loss recovery in isolation would ~~result~~have resulted in a significantly ~~higher (lower)~~lower (higher) fair value measurement. ~~A significant increase (decrease)~~

Significant increases (decreases) in the constant prepayment rate in isolation would ~~result~~have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would ~~result~~have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value.

Significant increases (decreases) in utilization and volatility used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would ~~result~~have resulted in a significantly higher (lower) liability value.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would ~~result~~have resulted in a significantly lower (higher) liability value. Utilization of guaranteed withdrawals and surrender rates vary with the type of rider, the duration of the policy, the age of the contractholder, the distribution channel and whether the value of the guaranteed benefit exceeds the contract accumulation value.

Significant increases (decreases) in the discount rate used in the fair value measurement of the contingent consideration liability in isolation would ~~result~~have resulted in a significantly lower (higher) fair value measurement.

Determination of Fair Value

The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Assets

Cash Equivalents

Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Investments (Available-for-Sale Securities, Equity Securities and Trading Securities)

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from ~~third party~~third-party pricing services, non-binding broker quotes, or other model-based valuation techniques.

Level 1 securities primarily include U.S. Treasuries.

Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, state and municipal obligations and ~~U.S. agency and~~ foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from ~~third party~~third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes.

Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed ~~securities. The~~securities with fair value ~~of corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and certain asset backed securities classified as Level 3 is~~ typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of certain asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in certain asset backed securities is classified as Level 3. In addition to the general pricing controls, the Company reviews the broker prices to ensure that the broker quotes are reasonable and, when available, compares prices of privately issued securities to public issues from the same issuer to ensure that the implicit illiquidity premium applied to the privately placed investment is reasonable considering investment characteristics, maturity, and average life of the investment.

In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~third party~~ third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of ~~third party~~third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise.

Separate Account Assets

The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy.

Investments and Cash Equivalents Segregated for Regulatory Purposes

Investments and cash equivalents segregated for regulatory purposes includes U.S. Treasuries that are classified as Level 1.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Other Assets

Derivatives that are measured using quoted prices in active markets, such as ~~foreign currency forwards, or~~ derivatives that are exchange-traded are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016~~.2020. See Note 1112 and Note 1213 for further information on the credit risk of derivative instruments and related collateral.

Liabilities

Policyholder Account Balances, Future Policy Benefits and Claims

There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of certain variable annuity riders, fixed deferred indexed annuity, structured variable annuity and IUL products.

The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value ~~by discounting~~as the present value of future expected ~~cash flows from benefits plus margins for profit, risk and expenses~~benefit payments less the present value of future expected rider fees attributable to the embedded derivative ~~fees.~~feature. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions ~~implied volatility, and~~that include margins for risk, ~~profit and expenses that~~all of which the Company believes ~~an exit~~a market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims.

The Company uses ~~various~~a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2.

The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its ~~EIA~~fixed deferred indexed annuity, structured variable annuity and IUL products. ~~Significant inputs~~The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by buffer or limited to ~~the EIA calculation include observable interest rates, volatilities and equity index levels and, therefore, are classified~~a floor. The portion allocated to an indexed account is accounted for as ~~Level 2.~~an embedded derivative. The fair value of ~~the~~fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and the significant unobservable estimate of the Company’s nonperformance risk. Given the significance of the nonperformance risk assumption to the fair value, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.

The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims.

The Company’s Corporate Actuarial Department calculates the fair value of the embedded derivatives on a monthly basis. During this process, control checks are performed to validate the completeness of the data. Actuarial management approves various components of the valuation along with the final results. The change in the fair value of the embedded derivatives is reviewed monthly with senior management. The Level 3 inputs into the valuation are consistent with the pricing assumptions and updated as experience develops. Significant unobservable inputs that reflect policyholder behavior are reviewed quarterly along with other valuation assumptions.

Customer Deposits

The Company uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with the provisions of its stock market ~~certificates.~~certificates (“SMC”). The inputs to these calculations are primarily market observable and include interest rates, volatilities and equity index levels. As a result, these measurements are classified as Level 2.

Other Liabilities

Derivatives that are measured using quoted prices in active markets, such as ~~foreign currency forwards, or~~ derivatives that are exchange-traded are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The Company’s nonperformance risk associated with uncollateralized

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

derivative liabilities was immaterial as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016~~.2020. See Note 1112 and Note 1213 for further information on the credit risk of derivative instruments and related collateral.

~~Securities~~ ~~sold but not yet purchased include highly liquid investments which are short-term in nature.~~ Securities sold but not yet purchased ~~are measured using amortized cost, which is~~represent obligations of the Company to deliver specified securities that it does not yet own, creating a ~~reasonable estimate of~~liability to purchase the security in the market at prevailing prices. When available, the fair value ~~because~~ of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, or other model-based valuation techniques such as the ~~short time between the purchase~~present value of ~~the instrument and its expected realization and are classified as~~cash flows. Level 2.1 securities sold but not yet purchased primarily include U.S Treasuries traded in active markets. Level 2 securities sold but not yet purchased primarily include corporate bonds.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Contingent consideration liabilities consist of earn-outs and/or deferred payments related to the Company’s ~~acquisitions. Contingent~~acquisitions. Contingent consideration liabilities are recorded at fair value using a discounted cash flow model ~~under multiple scenarios and~~using an unobservable input (discount rate). Given the use of a significant unobservable input, the fair value of contingent consideration liabilities is classified as Level 3 within the fair value hierarchy.

~~Loans held~~Fair Value on a Nonrecurring Basis

The Company assesses its investment in affordable housing partnerships for ~~sale~~impairment. The investments that are ~~required~~determined to be ~~recorded at the lower of cost or~~impaired are written down to their fair value. ~~During~~The Company uses a discounted cash flow model to measure the ~~third quarter~~fair value of ~~2017,~~these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company ~~entered into an agreement with an unaffiliated third party to sell $258 million~~and discount rates based on market condition and the financial strength of ~~consumer loans at a $7 million loss.~~the syndicator (general partner). The ~~loans are~~balance of affordable housing partnerships measured at fair value on a nonrecurring ~~basis. The fair value of the loans, which reflects the selling price negotiated with the third party,~~basis was ~~$251~~$97 million and $101 million as of ~~September 30, 2017,~~March 31, 2021 and December 31, 2020, respectively, and is classified as Level 3 asin the ~~valuation includes unobservable inputs.~~

~~During the reporting periods, there were no other material assets or liabilities measured at~~ fair value ~~on a nonrecurring basis.~~hierarchy.

Asset and Liabilities Not Reported at Fair Value

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value:


	March 31, 2021
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	2,684	$	—	$	22	$	2,751	$	2,773
Policy loans	838		—		838		—		838
Receivables	3,748		257		1,337		2,340		3,934
Restricted and segregated cash	1,699		1,699		—		—		1,699
Other investments and assets	694		—		633		61		694

Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	10,499	$	—	$	—	$	11,630	$	11,630
Investment certificate reserves	6,251		—		—		6,248		6,248
Banking and brokerage deposits	11,370		11,370		—		—		11,370
Separate account liabilities — investment contracts	5,420		—		5,420		—		5,420
Debt and other liabilities	3,331		322		3,199		11		3,532


	September 30, 2017												December 31, 2020
	Carrying Value		Fair Value										Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total						Level 1		Level 2		Level 3		Total
	(in millions)												(in millions)
Financial Assets	Financial Assets											Financial Assets
Mortgage loans, net	$	2,749	$	—	$	—	$	2,768	$	2,768		Mortgage loans, net	$	2,718	$	—	$	22	$	2,852	$	2,874
Policy and certificate loans	841		—		1		797		798
Policy loans												Policy loans	846		—		846		—		846
Receivables	1,595		196		942		457		1,595			Receivables	3,563		147		1,258		2,398		3,803
Restricted and segregated cash	2,707		2,707		—		—		2,707			Restricted and segregated cash	1,958		1,958		—		—		1,958
Other investments and assets	511		—		439		71		510			Other investments and assets	732		—		672		62		734

Financial Liabilities	Financial Liabilities											Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	10,415	$	—	$	—	$	11,052	$	11,052		Policyholder account balances, future policy benefits and claims	$	9,990	$	—	$	—	$	11,686	$	11,686
Investment certificate reserves	6,364		—		—		6,351		6,351			Investment certificate reserves	6,752		—		—		6,752		6,752
Brokerage customer deposits	4,065		4,065		—		—		4,065
Separate account liabilities measured at NAV	4,989								4,989		⁽¹⁾
Banking and brokerage deposits												Banking and brokerage deposits	10,891		10,891		—		—		10,891
Separate account liabilities — investment contracts												Separate account liabilities — investment contracts	5,406		—		5,406		—		5,406
Debt and other liabilities	3,395		202		3,197		140		3,539			Debt and other liabilities	3,214		205		3,253		11		3,469

Receivables include the deposit receivable, brokerage margin loans, securities borrowed, pledged asset lines of credit, and loans to financial advisors. Restricted and segregated cash includes cash segregated under federal and other regulations held in special reserve bank accounts for the exclusive benefit of the Company’s brokerage customers. Other investments and assets primarily include syndicated loans, credit card receivables, certificate of deposits with original or remaining maturities at the time of purchase of more

December 31, 2016
Carrying Value Fair Value
Level 1 Level 2 Level 3 Total
(in millions)
Financial Assets
Mortgage loans, net $ 2,986
$ —
$ —
$ 2,972
$ 2,972

Policy and certificate loans 831
—
1
807
808

Receivables ⁽²⁾
1,396
127
870
403
1,400

Restricted and segregated cash 2,905
2,905
—
—
2,905

Other investments and assets 508
—
449
61
510

Financial Liabilities
Policyholder account balances, future policy benefits and claims $ 10,906
$ —
$ —
$ 11,417
$ 11,417

Investment certificate reserves 5,927
—
—
5,914
5,914

Brokerage customer deposits 4,112
4,112
—
—
4,112

Separate account liabilities measured at NAV 4,253
4,253
⁽¹⁾
Debt and other liabilities 3,371
146
3,176
169
3,491

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


⁽¹⁾	Amounts are comprised of certain investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy.


⁽²⁾	In the third quarter of 2017, the Company corrected the classification of the fair value of advisor loans, net from Level 2 to Level 3 as the valuation includes a significant unobservable input. The fair value levels at December 31, 2016 have been revised to reflect this change. The fair value of advisor loans, net was $400 million at December 31, 2016.

~~Mortgage Loans, Net~~

The fair value of commercial mortgage loans, except those with significant credit deterioration, is determined by discounting contractual cash flows using discount rates that reflect current pricing for loans with similar remaining maturities, liquidity and characteristics including LTV ratio, occupancy rate, refinance risk, debt service coverage, location, and property condition. For commercial mortgage loans with significant credit deterioration, fair value is determined using the same adjustments as above with an additional adjustment for the Company’s estimate of the amount recoverable on the loan. Given the significant unobservable inputs to the valuation of commercial mortgage loans, these measurements are classified as Level 3.

The fair value of consumer loans is determined by discounting estimated cash flows and incorporating adjustments for prepayment, administration expenses, loss severity, liquidity and credit loss estimates, with discount rates based on the Company’s estimate of current market conditions. The fair value of consumer loans is classified as Level 3 as the valuation includes significant unobservable inputs.

~~Policy and Certificate Loans~~

Policy loans represent loans made against the cash surrender value of the underlying life insurance or annuity product. These loans and the related interest are usually realized at death of the policyholder or contractholder or at surrender of the contract and are not transferable without the underlying insurance or annuity contract. The fair value of policy loans is determined by estimating expected cash flows discounted at rates based on the U.S. Treasury curve. Policy loans are classified as Level 3 as the discount rate used may be adjusted for the underlying performance of individual policies.

Certificate loans represent loans made against and collateralized by the underlying certificate balance. These loans do not transfer to third parties separate from the underlying certificate. The outstanding balance of these loans is considered a reasonable estimate of fair value and is classified as Level 2.

~~Receivables~~

Brokerage margin loans are measured at outstanding balances, which are a reasonable estimate of fair value because of the sufficiency of the collateral and short term nature of these loans. Margin loans that are sufficiently collateralized are classified as Level 2. Margin loans that are not sufficiently collateralized are classified as Level 3.

Securities borrowed require the Company to deposit cash or collateral with the lender. As the market value of the securities borrowed is monitored daily, the carrying value is a reasonable estimate of fair value. The fair value of securities borrowed is classified as Level 1 as the value of the underlying securities is based on unadjusted prices for identical assets.

The Company offers loans to financial advisors primarily for recruiting, transitional cost assistance and retention purposes. Advisor loans are recorded at principal less an allowance for doubtful accounts. The fair value of advisor loans is determined by discounting contractual cash flows, net of estimated credit losses, using a current market interest rate. Advisor loans are classified as Level 3.

~~Restricted and Segregated Cash~~

Restricted and segregated cash is generally set aside for specific business transactions and restrictions are specific to the Company and do not transfer to third party market participants; therefore, the carrying amount is a reasonable estimate of fair value.

Amounts segregated under federal and other regulations may also reflect resale agreements and are measured at the price at which the securities will be sold. This measurement is a reasonable estimate of fair value because of the short time between entering into the transaction and its expected realization and the reduced risk of credit loss due to pledging U.S. government-backed securities as collateral.

~~The fair value of restricted and segregated cash is classified as Level 1.~~

~~Other Investments and Assets~~

Other investments and assets primarily consist of syndicated loans. The fair value of syndicated loans is obtained from a third-party pricing service or non-binding broker quotes. Syndicated loans that are priced using a market approach with observable inputs are classified as Level 2 and syndicated loans priced using a single non-binding broker quote are classified as Level 3.

~~Other investments and assets also include~~than 90 days, the Company’s membership in the FHLB and investments related to the Community Reinvestment Act. ~~The fair value of these assets is approximated by~~See Note 6 for additional information on mortgage loans, policy loans, syndicated loans, credit card receivables and the ~~carrying value and classified as Level 3 due to restrictions on transfer and lack of liquidity in the primary market for these assets.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

deposit receivable.

Policyholder ~~Account Balances, Future Policy Benefits~~account balances, future policy benefits and ~~Claims~~

~~The fair value of~~claims include fixed annuities in deferral status, is determined by discounting cash flows using a risk neutral discount rate with adjustments for profit margin, expense margin, early policy surrender behavior, a margin for adverse deviation from estimated early policy surrender behavior and the Company’s nonperformance risk specific to these liabilities. The fair value of non-life contingent fixed annuities in payout status, ~~EIA~~indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment ~~contracts is determined in a similar manner. Given the use of significant unobservable inputs to~~contracts. See Note 8 for additional information on these ~~valuations, the measurements are classified as Level 3.~~

liabilities. Investment ~~Certificate Reserves~~

~~The fair value of investment~~ certificate reserves is determined by discounting cash flows using discount rates that reflect current pricing for assets with similar terms and characteristics, with adjustments for expense margin and the Company’s nonperformance risk specific to these liabilities. Given the use of significant unobservable inputs to this valuation, the measurement is classified as Level 3.

~~Brokerage Customer Deposits~~

~~Brokerage~~represent customer deposits for fixed rate certificates and stock market certificates. Banking and brokerage deposits are ~~liabilities with no defined maturities~~amounts payable to customers related to free credit balances, funds deposited by customers and ~~fair value is the amount payable on demand at the reporting date. The fair value of these deposits is classified as Level 1.~~

~~Separate Account Liabilities~~

~~Certain separate account liabilities are classified as investment contracts and are carried at an amount equal~~funds accruing to ~~the related separate account assets. The NAV of the related separate account assets is used~~customers as a ~~practical expedient for fair value and represents the exit price for the separate account liabilities.~~result of trades or contracts. Separate account liabilities are ~~excluded from classification~~primarily investment contracts in ~~the fair value hierarchy.~~

pooled pension funds offered by Threadneedle. Debt and ~~Other Liabilities~~

~~The fair value of~~other liabilities include the Company’s long-term debt, is based on quoted prices in active markets, when available. If quoted prices are not available, fair values are obtained from third party pricing services, broker quotes, or other model-based valuation techniques such as present value of cash flows. The fair value of long-term debt is classified as Level 2.

~~The fair value of~~ short-term borrowings, is obtained from a third party pricing service. A nonperformance adjustment is not included as collateral requirements for these borrowings minimize the nonperformance risk. The fair value of short-term borrowings is classified as Level 2.

~~The fair value of~~securities loaned and future funding commitments to affordable housing partnerships and other real estate ~~partnerships is determined by discounting cash flows. The fair value of these commitments includes an adjustment~~partnerships. See Note 10 for further information on the Company’s ~~nonperformance risk~~long-term debt and ~~is classified as Level 3 due to the use of the significant unobservable input.~~short-term borrowings.

Securities loaned require the borrower to deposit cash or collateral with the Company. As the market value of the securities loaned is monitored daily, the carrying value is a reasonable estimate of fair value. Securities loaned are classified as Level 1 as the fair value of the underlying securities is based on unadjusted prices for identical assets.

~~11.~~12. Offsetting Assets and Liabilities

Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments ~~repurchase agreements~~ and securities borrowing and lending agreements are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Securities borrowed and loaned result from transactions between the Company’s broker dealer subsidiary and other financial institutions and are recorded at the amount of cash collateral advanced or received. Securities borrowed and securities loaned are primarily equity securities. The Company’s securities borrowed and securities loaned transactions generally do not have a fixed maturity date and may be terminated by either party under customary terms.

The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

The following tables present the gross and net information about the Company’s assets subject to master netting arrangements:


	March 31, 2021
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)
Derivatives:
OTC	$	4,704	$	—	$	4,704	$	(3,365)	$	(1,078)	$	(252)	$	9
OTC cleared	39		—		39		(39)		—		—		—
Exchange-traded	247		—		247		(108)		(133)		—		6
Total derivatives	4,990		—		4,990		(3,512)		(1,211)		(252)		15
Securities borrowed	257		—		257		(23)		—		(228)		6
Total	$	5,247	$	—	$	5,247	$	(3,535)	$	(1,211)	$	(480)	$	21


	September 30, 2017																		December 31, 2020
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets									Net Amount			Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments ⁽¹⁾			Cash Collateral			Securities Collateral												Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)																		(in millions)
Derivatives:	Derivatives:																	Derivatives:
OTC	$	3,156	$	—	$	3,156	$	(2,379	)	$	(661	)	$	(109	)	$	7	OTC	$	5,501	$	—	$	5,501	$	(3,862)	$	(1,287)	$	(315)	$	37
OTC cleared ⁽²⁾	14		—		14		(12		)	—			—			2
OTC cleared																		OTC cleared	58		—		58		(25)		—		—		33
Exchange-traded	20		—		20		(2		)	—			—			18		Exchange-traded	311		—		311		(91)		(165)		—		55
Total derivatives	3,190		—		3,190		(2,393		)	(661		)	(109		)	27		Total derivatives	5,870		—		5,870		(3,978)		(1,452)		(315)		125
Securities borrowed	196		—		196		(48		)	—			(145		)	3		Securities borrowed	147		—		147		(43)		—		(103)		1
Total	$	3,386	$	—	$	3,386	$	(2,441	)	$	(661	)	$	(254	)	$	30	Total	$	6,017	$	—	$	6,017	$	(4,021)	$	(1,452)	$	(418)	$	126

December 31, 2016
Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the
Consolidated Balance Sheets Net Amount
Financial Instruments⁽¹⁾
Cash Collateral Securities Collateral
(in millions)
Derivatives:
OTC $ 2,920
$ —
$ 2,920
$ (2,214 ) $ (406 ) $ (235 ) $ 65
OTC cleared 512
—
512
(509 ) (3 ) —
—
Exchange-traded 14
—
14
(2 ) —
—
12
Total derivatives 3,446
—
3,446
(2,725 ) (409 ) (235 ) 77
Securities borrowed 127
—
127
(16 ) —
(108 ) 3
Total $ 3,573
$ —
$ 3,573
$ (2,741 ) $ (409 ) $ (343 ) $ 80

⁽¹⁾ Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

⁽²⁾ The decrease in OTC cleared derivatives from December 31, 2016 is a result of certain central clearing parties amending their rules resulting in variation margin payments being settlement payments, as opposed to collateral.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements:


	March 31, 2021
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)
Derivatives:
OTC	$	3,657	$	—	$	3,657	$	(3,365)	$	(15)	$	(258)	$	19
OTC cleared	76		—		76		(39)		—		—		37
Exchange-traded	112		—		112		(108)		—		—		4
Total derivatives	3,845		—		3,845		(3,512)		(15)		(258)		60
Securities loaned	322		—		322		(23)		—		(292)		7
Total	$	4,167	$	—	$	4,167	$	(3,535)	$	(15)	$	(550)	$	67


	September 30, 2017																		December 31, 2020
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets									Net Amount			Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
							Financial Instruments⁽¹⁾			Cash Collateral			Securities Collateral												Financial Instruments (1)		Cash Collateral		Securities Collateral
	(in millions)																		(in millions)
Derivatives:	Derivatives:																	Derivatives:
OTC	$	3,102	$	—	$	3,102	$	(2,379	)	$	(48	)	$	(669	)	$	6	OTC	$	4,192	$	—	$	4,192	$	(3,862)	$	(1)	$	(327)	$	2
OTC cleared ⁽²⁾	12		—		12		(12		)	—			—			—
OTC cleared																		OTC cleared	25		—		25		(25)		—		—		—
Exchange-traded	2		—		2		(2		)	—			—			—		Exchange-traded	95		—		95		(91)		—		—		4
Total derivatives	3,116		—		3,116		(2,393		)	(48		)	(669		)	6		Total derivatives	4,312		—		4,312		(3,978)		(1)		(327)		6
Securities loaned	202		—		202		(48		)	—			(150		)	4		Securities loaned	205		—		205		(43)		—		(157)		5
Repurchase agreements	50		—		50		—			—			(48		)	2
Total	$	3,368	$	—	$	3,368	$	(2,441	)	$	(48	)	$	(867	)	$	12	Total	$	4,517	$	—	$	4,517	$	(4,021)	$	(1)	$	(484)	$	11

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

December 31, 2016
Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated
Balance Sheets Amounts of Liabilities Presented in the
Consolidated Balance Sheets Gross Amounts Not Offset in the
Consolidated Balance Sheets Net Amount
Financial Instruments⁽¹⁾
Cash Collateral Securities Collateral
(in millions)
Derivatives:
OTC $ 2,626
$ —
$ 2,626
$ (2,214 ) $ (53 ) $ (352 ) $ 7
OTC cleared 539
—
539
(509 ) (25 ) —
5
Exchange-traded 6
—
6
(2 ) —
—
4
Total derivatives 3,171
—
3,171
(2,725 ) (78 ) (352 ) 16
Securities loaned 146
—
146
(16 ) —
(125 ) 5
Repurchase agreements 50
—
50
—
—
(50 ) —
Total $ 3,367
$ —
$ 3,367
$ (2,741 ) $ (78 ) $ (527 ) $ 21

⁽¹⁾ Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

In the tables above, the ~~amounts~~amount of assets or liabilities presented ~~in the Consolidated Balance Sheets~~ are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables.

When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral.

Freestanding derivative instruments are reflected in other assets and other liabilities. Cash collateral pledged by the Company is reflected in other assets and cash collateral accepted by the Company is reflected in other liabilities. ~~Repurchase agreements are reflected in short-term borrowings.~~ Securities borrowing and lending agreements are reflected in receivables and other liabilities, respectively. See Note 1213 for additional disclosures related to the Company’s derivative instruments and Note 94 for ~~additional disclosures~~information related to ~~the Company’s repurchase agreements.~~derivatives held by consolidated investment entities.

~~12.~~13. Derivatives and Hedging Activities

Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity, foreign exchange and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations.

~~The~~Certain of the Company’s freestanding derivative instruments are ~~all~~ subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 1112 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

~~The~~Generally, the Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives:


	September 30, 2017						December 31, 2016										March 31, 2021									December 31, 2020
	Notional		Gross Fair Value				Notional			Gross Fair Value							Notional			Gross Fair Value						Notional			Gross Fair Value
			Assets⁽¹⁾		Liabilities⁽²⁾⁽³⁾				Assets⁽¹⁾		Assets⁽¹⁾	Liabilities⁽²⁾⁽³⁾								Assets (1)			Liabilities (2)(3)									Liabilities (2)(3)
	(in millions)													(in millions)
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments													Derivatives designated as hedging instruments
Interest rate contracts	$	675	$	30	$	—	$	675		$	40		$	—
Foreign exchange contracts	99		—		4		164			12		—

Foreign exchange contracts – net investment hedges															Foreign exchange contracts – net investment hedges		$	105		$	—		$	1		$	32		$	—					$	2
Total qualifying hedges	774		30		4		839			52		—			Total qualifying hedges		105			—			1			32			—			$	2

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments														Derivatives not designated as hedging instruments
Interest rate contracts	66,504		1,171		416		72,449			1,738		989			Interest rate contracts		79,805			1,003			486			77,951			1,755			734
Equity contracts	60,979		1,942		2,669		63,015			1,574		2,135			Equity contracts		51,647			3,943			3,353			57,254			4,090			3,571
Credit contracts	721		4		—		1,039			1		—			Credit contracts		2,094			26			—			2,297			2			1
Foreign exchange contracts	4,494		43		27		4,733			81		47			Foreign exchange contracts		2,953			18			5			3,423			23			4
Other contracts	451		—		—		241			—		—

Total non-designated hedges	133,149		3,160		3,112		141,477			3,394		3,171			Total non-designated hedges		136,499			4,990			3,844			140,925			5,870			4,310

Embedded derivatives	Embedded derivatives														Embedded derivatives
GMWB and GMAB ⁽⁴⁾	N/A		—		45		N/A			—		614			GMWB and GMAB (4)		N/A			—			715			N/A			—			2,316
IUL	N/A		—		577		N/A			—		464			IUL		N/A			—			949			N/A			—			935
EIA	N/A		—		4		N/A			—		5
Fixed deferred indexed annuities															Fixed deferred indexed annuities		N/A			—			56			N/A			—			52
Structured variable annuities															Structured variable annuities		N/A			—			124			N/A			—			70
SMC	N/A		—		9		N/A			—		8			SMC		N/A			—			7			N/A			—			8
Total embedded derivatives	N/A		—		635		N/A			—		1,091			Total embedded derivatives		N/A			—			1,851			N/A			—			3,381
Total derivatives	$	133,923	$	3,190	$	3,751	$	142,316		$	3,446		$	4,262		Total derivatives		$	136,604		$	4,990		$	5,696		$	140,957		$	5,870		$	7,693

N/A Not applicable.

⁽¹⁾The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets.

⁽²⁾The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and ~~EIA~~structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets.

⁽³⁾The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was ~~$1.3~~$2.2 billion and ~~$1.5~~$3.7 billion as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. See Note 1112 for additional information related to master netting arrangements and cash collateral.

⁽⁴⁾The fair value of the GMWB and GMAB embedded derivatives as of ~~September 30, 2017~~March 31, 2021 included ~~$494~~$980 million of individual contracts in a liability position and ~~$449~~$265 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, ~~2016~~2020 included ~~$880 million~~$2.4 billion of individual contracts in a liability position and ~~$266~~$67 million of individual contracts in an asset position.

See Note 1011 for additional information regarding the Company’s fair value measurement of derivative instruments.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, investment securities with a fair value of ~~$122~~$292 million and ~~$235~~$325 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which ~~$122~~$292 million and ~~$118~~$325 million, respectively, may be sold, pledged or rehypothecated by the Company. As of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016,~~2020, the Company had sold, pledged or rehypothecated ~~$12 million and $19 million, respectively,~~NaN of these securities. In addition, as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016,~~2020, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

Derivatives Not Designated as Hedges

The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations:


	Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense
	(in millions)
Three Months Ended March 31, 2021
Interest rate contracts	$	—	$	—	$	(1)	$	—	$	(1,825)	$	—
Equity contracts	1		1		33		25		(310)		6
Credit contracts	—		—		—		—		69		—
Foreign exchange contracts	—		—		—		—		11		(4)

GMWB and GMAB embedded derivatives	—		—		—		—		1,600		—
IUL embedded derivatives	—		—		—		(9)		—		—
Fixed deferred indexed annuity embedded derivatives	—		—		—		(5)		—		—
Structured variable annuity embedded derivatives	—		—		—		—		(75)		—
SMC embedded derivatives	—		(1)		—		—		—		—
Total gain (loss)	$	1	$	—	$	32	$	11	$	(530)	$	2

Net Investment Income Banking and Deposit Interest Expense Distribution Expenses
Interest Credited
to Fixed Accounts
Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense
(in millions)
Three Months Ended September 30, 2017
Interest rate contracts $ (1 ) $ —
$ —
$ —
$ 14
$ —
Equity contracts (10 ) 1
13
18
(261 ) 2
Credit contracts —
—
—
—
(3 ) —
Foreign exchange contracts —
—
1
—
1
1
Other contracts —
—
—
—
(2 ) —
GMWB and GMAB embedded derivatives —
—
—
—
227
—
IUL embedded derivatives —
—
—
(24 ) —
—
SMC embedded derivatives —
(1 ) —
—
—
—
Total gain (loss) $ (11 ) $ —
$ 14
$ (6 ) $ (24 ) $ 3

Nine Months Ended September 30, 2017
Interest rate contracts $ (8 ) $ —
$ —
$ —
$ 61
$ —
Equity contracts (7 ) 3
36
50
(920 ) 7
Credit contracts —
—
—
—
(22 ) —
Foreign exchange contracts —
—
3
—
(27 ) 5
Other contracts —
—
—
—
(2 ) —
GMWB and GMAB embedded derivatives —
—
—
—
569
—
IUL embedded derivatives —
—
—
(43 ) —
—
SMC embedded derivatives —
(3 ) —
—
—
—
Total gain (loss) $ (15 ) $ —
$ 39
$ 7
$ (341 ) $ 12

Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited
to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense
(in millions)
Three Months Ended September 30, 2016
Interest rate contracts $ 6
$ —
$ —
$ —
$ (12 ) $ —
Equity contracts 2
2
11
12
(385 ) 2
Credit contracts —
—
—
—
(3 ) —
Foreign exchange contracts 2
—
—
—
(12 ) 3
Other contracts —
—
—
—
(1 ) —
GMWB and GMAB embedded derivatives —
—
—
—
209
—
IUL embedded derivatives —
—
—
(5 ) —
—
SMC embedded derivatives —
(1 ) —
—
—
—
Total gain (loss) $ 10
$ 1
$ 11
$ 7
$ (204 ) $ 5

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~


																	Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense
Nine Months Ended September 30, 2016
																	(in millions)
Three Months Ended March 31, 2020																Three Months Ended March 31, 2020
Interest rate contracts	$	(54	)	$	—		$	—	$	—	$	1,175		$	—	Interest rate contracts	$	(1)	$	—	$	2	$	—	$	2,515	$	—
Equity contracts	2			1			13		10		(536		)	3		Equity contracts	—		(7)		(116)		(112)		1,993		(16)
Credit contracts	—			—			—		—		(34		)	—		Credit contracts	—		—		—		—		(36)		—
Foreign exchange contracts	—			—			2		—		(66		)	15		Foreign exchange contracts	1		—		—		—		44		(3)
Other contracts	—			—			—		—		(2		)	—

GMWB and GMAB embedded derivatives	—			—			—		—		(905		)	—		GMWB and GMAB embedded derivatives	—		—		—		—		(2,513)		—
IUL embedded derivatives	—			—			—		12		—			—		IUL embedded derivatives	—		—		—		164		—		—
Fixed deferred indexed annuity embedded derivatives																Fixed deferred indexed annuity embedded derivatives	—		—		—		12		—		—
Structured variable annuity embedded derivatives																Structured variable annuity embedded derivatives	—		—		—		—		3		—
SMC embedded derivatives	—			(1		)	—		—		—			—		SMC embedded derivatives	—		7		—		—		—		—
Total gain (loss)	$	(52	)	$	—		$	15	$	22	$	(368	)	$	18	Total gain (loss)	$	—	$	—	$	(114)	$	64	$	2,006	$	(19)

The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company.

Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions ~~primarily~~ using ~~futures,~~ options, ~~interest rate~~ swaptions, ~~interest rate swaps, total return~~ swaps and ~~variance swaps.~~futures.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of ~~September 30, 2017~~:March 31, 2021:


	Premiums Payable		Premiums Receivable
	(in millions)
2021 (1)	$	112	$	85
2022	205		205
2023	51		42
2024	138		25
2025	125		22
2026 - 2028	262		88
Total	$	893	$	467

Premiums Payable Premiums Receivable
(in millions)
2017⁽¹⁾
$ 98
$ 26
2018 232
131
2019 295
171
2020 217
100
2021 187
109
2022 - 2027 739
183
Total $ 1,768
$ 720

⁽¹⁾~~2017~~ 2021 amounts represent the amounts payable and receivable for the period from ~~October~~April 1, ~~2017~~2021 to December 31, ~~2017.~~2021.

Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received.

The Company has a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on its statutory surplus and to cover some of the residual risks not covered by other hedging activities. As a means of economically hedging these risks, the Company ~~uses~~may use a combination of futures, options, ~~interest rate swaptions and/or swaps.~~swaps and swaptions. Certain of the macro hedge derivatives may contain settlement provisions linked to both equity returns and interest rates. The Company’s macro hedge derivatives that contain settlement provisions linked to both equity returns and interest rates, if any, are shown in ~~Other~~other contracts in the tables above.

~~EIA,~~Fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to ~~EIA,~~fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products. The equity component of ~~the EIA,~~fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

The Company enters into futures, credit default swaps and commodity swaps to manage its exposure to price risk arising from seed money investments in proprietary investment products. The Company enters into foreign currency forward contracts to economically hedge its exposure to certain foreign transactions. The Company enters into futures contracts and total return swaps to economically hedge its exposure related to compensation plans. ~~In 2015, the~~The Company ~~entered~~enters into interest rate swaps to offset interest rate changes on unrealized gains or losses for certain investments.

Cash Flow Hedges

The Company has designated ~~and accounts for the following~~derivative instruments as a cash flow ~~hedges: (i) interest rate swaps to~~ hedge of interest rate exposure on forecasted debt ~~(ii)~~ interest ~~rate lock agreements to hedge~~payments. For derivative instruments that qualify as cash flow hedges, the gain or loss on the derivative instruments is reported in AOCI and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented within the same line item as the earnings impact of the hedged item in interest ~~rate exposure on~~and debt ~~issuances and (iii) swaptions used to hedge the risk of increasing interest rates on forecasted fixed premium product sales.~~expense.

For the three months ended March 31, 2021 and ~~nine months ended September 30, 2017 and 2016,~~2020, the amounts ~~recognized in~~reclassified from AOCI to earnings related to cash flow hedges ~~due to ineffectiveness~~ were ~~not material.~~immaterial. The estimated net amount ~~of existing pretax losses~~recorded in AOCI as of ~~September 30, 2017~~March 31, 2021 that the Company expects to reclassify to earnings ~~within the next twelve months is $1 million, which consists of $2 million of pretax gains to be recorded~~ as a reduction to interest and debt expense ~~and $3 million of pretax losses to be recorded in net investment income.~~within the next twelve months is $0.5 million. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 1815 years and relates to forecasted debt interest payments. See Note 1314 for a rollforward of net unrealized derivative gains (losses) included in AOCI related to cash flow hedges.

Fair Value Hedges

The Company entered into and designated as a fair value ~~hedges two~~hedge an interest rate ~~swaps~~swap to convert senior notes due ~~2019 and~~ 2020 from fixed rate debt to floating rate debt. The ~~swaps have~~interest rate swap related to the senior notes due March 2020 was settled during the first quarter of 2020 when the debt was repaid. The swap had identical terms as the underlying debt being ~~hedged so~~hedged. The Company no ~~ineffectiveness is expected to be realized.~~longer had any fair value hedges outstanding as of March 31, 2021. The Company recognizes gains and losses on the derivatives and the related hedged items within interest and debt expense. See Note 10 for the cumulative basis adjustments for fair value hedges.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table ~~presents~~is a summary of the ~~amounts recognized in income related to fair value hedges:~~impact of derivatives designated as hedges on the Consolidated Statements of Operations:

Derivatives designated as
hedging instruments
Location of Gain Recorded into Income Amount of Gain Recognized in Income on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Interest rate contracts Interest and debt expense $ 4 $ 5
$ 12 $ 15


	Three Months Ended March 31,
	2021		2020
	(in millions)
Total interest and debt expense per Consolidated Statements of Operations	$	42	$	46
Gain (loss) on interest rate contracts designated as fair value hedges:
Hedged items	$	—	$	1
Derivatives designated as fair value hedges	—		(1)

Net Investment Hedges

The Company entered into, and designated as net investment hedges in foreign operations, forward contracts to hedge a portion of the Company’s foreign currency exchange rate risk associated with its investment in Threadneedle. As the Company determined that the forward contracts are effective, the change in fair value of the derivatives is recognized in AOCI as part of the foreign currency translation adjustment. For the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company recognized a loss of $4$0.5 million and a gain of ~~$6 million, respectively, in OCI. For the nine months ended September 30, 2017 and 2016, the Company recognized a loss of $3 million and a gain of $25~~$5.0 million, respectively, in OCI.

Credit Risk

Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 1112 for additional information on the Company’s credit exposure related to derivative assets.

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s debt rating (or based on the financial strength of the Company’s life insurance subsidiaries for contracts in which those subsidiaries are the counterparty). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company’s debt does not maintain a specific credit rating (generally an investment grade rating) or the Company’s life insurance subsidiary does not maintain a specific financial strength rating. If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was ~~$437~~$262 million and ~~$254~~$326 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 was ~~$435~~$258 million and ~~$246~~$324 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $2$4 million and $8$2 million, respectively.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~13.~~14. Shareholders’ Equity

The following tables provide the amounts related to each component of OCI:


	Three Months Ended March 31,
	2021						2020
	Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
	(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	$	(690)	$	152	$	(538)	$	(1,195)	$	264	$	(931)
Reclassification of net (gains) losses on securities included in net income (2)	(50)		11		(39)		8		(2)		6
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables	300		(63)		237		508		(107)		401
Net unrealized gains (losses) on securities	(440)		100		(340)		(679)		155		(524)





Defined benefit plans	37		(8)		29		—		—		—
Foreign currency translation	(1)		—		(1)		(34)		1		(33)
Total other comprehensive income (loss)	$	(404)	$	92	$	(312)	$	(713)	$	156	$	(557)

Three Months Ended September 30,
2017 2016
Pretax
Income Tax Benefit (Expense)
Net of Tax Pretax
Income Tax Benefit (Expense)
Net of Tax
(in millions)
Net unrealized securities gains (losses):
Net unrealized securities gains (losses) arising during the period⁽¹⁾
$ 60
$ (22 ) $ 38
$ 82
$ (31 ) $ 51
Reclassification of net securities (gains) losses included in net income ⁽²⁾
(4 ) 1
(3 ) (8 ) 4
(4 )
Impact of deferred acquisition costs, deferred sales inducement costs, unearned revenue, benefit reserves and reinsurance recoverables (61 ) 22
(39 ) (114 ) 39
(75 )
Net unrealized securities gains (losses) (5 ) 1
(4 ) (40 ) 12
(28 )

Net unrealized derivatives gains (losses):
Reclassification of net derivative (gains) losses included in net income ⁽³⁾
1
—
1
1
—
1
Net unrealized derivatives gains (losses) 1
—
1
1
—
1

Defined benefit plans:
Net gain arising during the period —
—
—
—
—
—
Defined benefit plans —
—
—
—
—
—

Foreign currency translation 25
(9 ) 16
(26 ) 10
(16 )
Other —
—
—
—
—
—
Total other comprehensive income (loss) $ 21
$ (8 ) $ 13
$ (65 ) $ 22
$ (43 )

Nine Months Ended September 30,
2017 2016
Pretax
Income Tax Benefit (Expense)
Net of Tax Pretax
Income Tax Benefit (Expense)
Net of Tax
(in millions)
Net unrealized securities gains (losses):
Net unrealized securities gains (losses) arising during the period⁽¹⁾
$ 304
$ (107 ) $ 197
$ 1,134
$ (398 ) $ 736
Reclassification of net securities (gains) losses included in net income ⁽²⁾
(43 ) 15
(28 ) (12 ) 5
(7 )
Impact of deferred acquisition costs, deferred sales inducement costs, unearned revenue, benefit reserves and reinsurance recoverables (168 ) 59
(109 ) (533 ) 186
(347 )
Net unrealized securities gains (losses)
93
(33 ) 60
589
(207 ) 382

Net unrealized derivatives gains (losses):
Reclassification of net derivative (gains) losses included in net income⁽⁴⁾
3
(1 ) 2
4
(1 ) 3
Net unrealized derivatives gains (losses)
3
(1 ) 2
4
(1 ) 3

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Nine Months Ended September 30,
2017 2016
Pretax
Income Tax Benefit (Expense)
Net of Tax Pretax
Income Tax Benefit (Expense)
Net of Tax
(in millions)
Defined benefit plans:
Net gain arising during the period 7
(2 ) 5
9
(3 ) 6
Defined benefit plans 7
(2 ) 5
9
(3 ) 6

Foreign currency translation 71
(25 ) 46
(85 ) 30
(55 )
Other (1 ) —
(1 ) —
—
—
Total other comprehensive income (loss) $ 173
$ (61 ) $ 112
$ 517
$ (181 ) $ 336

⁽¹⁾ Includes ~~other-than-temporary impairment losses~~impairments on Available-for-Sale securities related to factors other than credit that were recognized in ~~other comprehensive income (loss)~~OCI during the period.

⁽²⁾ Reclassification amounts are recorded in net investment income.

⁽³⁾ Includes nil pretax gain reclassified to interest and debt expense for both the three months ended September 30, 2017 and 2016, and a $1 million pretax loss reclassified to net investment income for both the three months ended September 30, 2017 and 2016.

AMERIPRISE FINANCIAL, INC.

⁽⁴⁾ Includes $1 million pretax gain reclassified to interest and debt expense for both the nine months ended September 30, 2017 and 2016, and a $3 million and $4 million pretax loss reclassified to net investment income for the nine months ended September 30, 2017 and 2016, respectively.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Other comprehensive income (loss) related to net unrealized ~~securities~~ gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the ~~market~~fair value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit ~~other-than-temporary impairment losses~~impairments to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

The following tables present the changes in the balances of each component of AOCI, net of tax:


	Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total
	(in millions)
Balance, January 1, 2021	$	983	$	5	$	(204)	$	(154)	$	(1)	$	629

OCI before reclassifications	(301)		0		29		(1)		0		(273)
Amounts reclassified from AOCI	(39)		0		0		0		0		(39)
Total OCI	(340)		0		29		(1)		0		(312)
Balance, March 31, 2021	$	643	$	5	$	(175)	$	(155)	$	(1)	$	317

Net Unrealized Securities Gains Net Unrealized Derivatives Gains
Defined
Benefit Plans
Foreign Currency Translation Other Total
(in millions)
Balance, July 1, 2017 $ 543
$ 6
$ (120 ) $ (129 ) $ (1 ) $ 299
OCI before reclassifications (1 ) —
—
16
—
15
Amounts reclassified from AOCI (3 ) 1
—
—
—
(2 )
Total OCI (4 ) 1
—
16
—
13
Balance, September 30, 2017 $ 539
⁽¹⁾
$ 7
$ (120 ) $ (113 ) $ (1 ) $ 312

Balance, January 1, 2017 $ 479
$ 5
$ (125 ) $ (159 ) $ —
$ 200
OCI before reclassifications 88
—
—
46
(1 ) 133
Amounts reclassified from AOCI (28 ) 2
5
—
—
(21 )
Total OCI 60
2
5
46
(1 ) 112
Balance, September 30, 2017 $ 539
⁽¹⁾
$ 7
$ (120 ) $ (113 ) $ (1 ) $ 312

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Net Unrealized Securities Gains Net Unrealized Derivatives Gains Defined Benefit Plans Foreign Currency Translation Total
(in millions)
Balance, July 1, 2016 $ 842
$ 3
$ (85 ) $ (122 ) $ 638
OCI before reclassifications (24 ) —
—
(16 ) (40 )
Amounts reclassified from AOCI (4 ) 1
—
—
(3 )
Total OCI (28 ) 1
—
(16 ) (43 )
Balance, September 30, 2016 $ 814
⁽¹⁾
$ 4
$ (85 ) $ (138 ) $ 595

Balance, January 1, 2016 $ 426
$ 1
$ (91 ) $ (83 ) $ 253
Cumulative effect of change in accounting policies 6
—
—
—
6
Balance, January 1, 2016, as adjusted 432
1
(91 ) (83 ) 259
OCI before reclassifications 389
—
—
(55 ) 334
Amounts reclassified from AOCI (7 ) 3
6
—
2
Total OCI 382
3
6
(55 ) 336
Balance, September 30, 2016 $ 814
⁽¹⁾
$ 4
$ (85 ) $ (138 ) $ 595

⁽¹⁾ Includes $8 million and $5 million of noncredit related impairments on securities and net unrealized securities gains (losses) on previously impaired securities as of September 30, 2017 and September 30, 2016, respectively.


	Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total
	(in millions)
Balance, January 1, 2020	$	576	$	6	$	(138)	$	(181)	$	(1)	$	262

OCI before reclassifications	(530)		0		0		(33)		0		(563)
Amounts reclassified from AOCI	6		0		0		0		0		6
Total OCI	(524)		0		0		(33)		0		(557)
Balance, March 31, 2020	$	52	$	6	$	(138)	$	(214)	$	(1)	$	(295)

For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company repurchased a total of ~~8.0~~1.7 million shares and ~~13.7~~2.5 million shares, respectively, of its common stock for an aggregate cost of ~~$1.0 billion~~$363 million and ~~$1.3 billion,~~$386 million, respectively. In ~~December 2015,~~August 2020, the Company’s Board of Directors authorized ~~an expenditure~~a repurchase of up to $2.5 billion for the repurchase of shares of the Company’s common stock through December 31, 2017, which was exhausted in the third quarter 2017. In April 2017, the Company’s Board of Directors authorized an additional expenditure of up to $2.5 billion for the repurchase of shares of the Company’s common stock through JuneSeptember 30, ~~2019.~~2022. As of ~~September 30, 2017,~~March 31, 2021, the Company had ~~$2.4~~$1.9 billion remaining under ~~this~~the share repurchase authorization.

The Company may also reacquire shares of its common stock under its share-based compensation plans related to restricted stock awards and certain option exercises. The holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligation. These vested restricted shares are reacquired by the Company and the Company’s payment of the holders’ income tax obligations are recorded as a treasury share purchase.

For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company reacquired 0.3 million shares and 0.3 million shares, respectively, of its common stock through the surrender of shares upon vesting and paid in the aggregate ~~$33~~$57 million and ~~$29~~$46.0 million, respectively, related to the holders’ income tax obligations on the vesting date. Option holders may elect to net settle their vested awards resulting in the surrender of the number of shares required to cover the strike price and tax obligation of the options exercised. These shares are reacquired by the Company and recorded as treasury shares. For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company reacquired ~~1.9~~0.6 million shares and ~~0.3~~0.6 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of ~~$248~~$134 million and ~~$31~~$105 million, respectively.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company reissued ~~0.8~~0.3 million and ~~0.9~~0.5 million, respectively, treasury shares ~~respectively,~~ for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans.

~~14.~~15. Income Taxes

The Company’s effective tax rate was ~~19.9%~~11.3% and ~~9.7%~~13.4% for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively.

The ~~Company’s~~ effective tax rate ~~was 19.5% and 18.6%~~ for the ~~nine~~three months ended ~~September 30, 2017 and 2016, respectively. The effective tax rates are~~March 31, 2021 is lower than the statutory tax rate as a result of tax preferred items including ~~the dividends received deduction,~~incentive compensation, low income housing tax credits, ~~stock compensation~~foreign tax credits and ~~lower~~dividends received deduction, partially offset by state income taxes, on net ~~income from foreign subsidiaries.~~ of federal benefit.

The ~~increase in the~~ effective tax rate for the three months ended ~~September 30, 2017~~March 31, 2020 was lower than the statutory rate primarily due to previous tax law changes that resulted in a $144 million tax benefit related to the forecasted utilization of a 2020 net operating loss (“NOL”) in the life

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

insurance entities that was to be applied to previous tax filings, low income housing tax credits and other tax preferred items. The Company determined the NOL benefit was attributable to current year losses; accordingly, the benefit was recorded in the annual effective tax rate.

The lower effective tax rate for the three months ended March 31, 2021 compared to March 31, 2020 is primarily the result of incentive compensation and lower pretax income in the current period compared to the prior ~~year~~ period, ~~is primarily due to higher pretax income,~~ partially offset by ~~a $25 million~~the NOL benefit ~~for stock compensation due to~~in the ~~adoption of a new accounting standard.~~prior period.

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of ~~$15~~$16 million, net of federal benefit, which will expire beginning December 31, ~~2017.~~2021.

The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $12 million, state deferred tax assets of $2 million and ~~state net operating losses and~~foreign deferred tax assets of $2 million; therefore a valuation allowance has been established. The valuation allowance was ~~$14~~$16 million and ~~$11~~$15 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the Company had ~~$127~~$122 million and ~~$115~~$110 million, respectively, of gross unrecognized tax benefits. If recognized, approximately ~~$55~~$91 million and ~~$46~~$80 million, net of federal tax benefits, of unrecognized tax benefits as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively, would affect the effective tax rate.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by ~~$15~~$40 million to ~~$25~~$50 million in the next 12 months primarily due to ~~resolution of audits~~Internal Revenue Service (“IRS”) settlements and ~~statute expirations.~~state exams.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized ~~nil~~a net decrease of $2 million in interest and penalties for the three months ended March 31, 2021. The Company recognized a net increase of $1 million in interest and penalties for the three months ~~and nine months~~ ended ~~September 30, 2017, respectively. The Company recognized nil and a net decrease of $44 million in interest and penalties for the three months and nine months ended September 30, 2016, respectively.~~March 31, 2020. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the Company had a payable of $9$8 million and $8$10 million, respectively, related to accrued interest and penalties.

The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. ~~In the third quarter, the Company received final cash settlements~~The federal statute of limitations are closed on years through 2015, except for ~~resolution of the 2006~~one issue for 2014 and 2011 audits. The IRS has completed its examination of the 2008 through 2010 tax returns and these years are effectively settled; however, the statutes of limitation, remain open for certain carryover adjustments.2015 which was claimed on amended returns. The IRS is currently auditing the Company’s U.S. income tax returns for ~~2012 through 2015.~~2016, 2017 and 2018. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from ~~2005~~2010 through ~~2015.~~

~~15. Contingencies~~

~~The Company is required by law to be a member~~2019. In the first quarter of 2021, the statute of limitations lapsed without notification of adjustments from Her Majesty’s Revenue and Customs business risk review of the guaranty fund association in every state where it is licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations.Company’s U.K. subsidiaries for 2016.

The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations (“NOLHGA”) and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated.

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of September 30, 2017 and December 31, 2016, the estimated liability was $15 million and $16 million, respectively, and the related premium tax asset was $12 million and $14 million, respectively. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known.16. Contingencies

Contingencies

The Company and its subsidiaries are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and ~~arbitration proceedings,~~litigation, including class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to ~~litigation~~legal proceedings arising out of its general business activities, such as its investments, contracts, leases and employment relationships. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally.

As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. From time to time, the Company receives requests for information from, and/or has been subject to examination or claims by, the SEC, ~~FINRA,~~the Financial Industry Regulatory Authority, the OCC, the UKU.K. Financial Conduct Authority, the Federal Reserve Board, state insurance and securities regulators, state attorneys general and various other domestic or foreign governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Company’s business activities and practices, and the practices of the Company’s financial advisors. The Company typically has numerous pending matters which include information requests, exams or inquiries ~~that the Company has received during recent periods~~ regarding certain ~~matters, including:~~subjects, including from time to time: sales and distribution of mutual funds, exchange traded funds, annuities, equity and fixed income securities, real estate investment trusts, insurance products, and financial advice offerings, including managed accounts; supervision of the Company’s financial ~~advisors;~~advisors and other associated persons; administration

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

of insurance and annuity claims; security of client information; trading activity and the Company’s monitoring and supervision of such activity; ~~performance advertising and product disclosures, including third party performance claims;~~ and transaction monitoring systems and controls. ~~The Company is also participating in regulatory audits, market~~

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~conduct examinations and other state inquiries relating to an industry-wide investigation of unclaimed property and escheatment practices and procedures.~~ The Company has cooperated and will continue to cooperate with the applicable regulators.

These legal ~~and regulatory~~ proceedings ~~and disputes~~ are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss. The Company cannot predict with certainty if, how or when any such proceedings will be initiated or resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek indeterminate damages. Numerous issues mayresolved. Matters frequently need to be ~~resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing unsettled legal questions relevant to the proceedings in question,~~more developed before a loss or range of loss can be reasonably estimated for any proceeding. An adverse outcome in one or more ~~proceeding~~proceedings could eventually result in adverse judgments, settlements, fines, penalties or other sanctions, in addition to further claims, examinations or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is at least a reasonable possibility that the outcome may be material to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter.

~~Certain legal~~Guaranty Fund Assessments

RiverSource Life and ~~regulatory proceedings~~RiverSource Life of NY are ~~described below.~~

required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In ~~November 2014, a lawsuit was filed against~~ the ~~Company’s London-based asset management affiliate in England’s High Court~~event of Justice Commercial Court, entitled Otkritie Capital International Ltd and JSC Otkritie Holding v. Threadneedle Asset Management Ltd. and Threadneedle Management Services Ltd. (“Threadneedle Defendants”). Claimants allege that the Threadneedle Defendants should be held liable for the wrongful actsinsolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of ~~its former employees, who in February 2014 was held jointly~~future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and ~~severally liable with several other parties for conspiracy~~Health Insurance Guaranty Associations and ~~dishonest assistance in connection with a fraud perpetrated against Claimants in 2011. Claimants allege they were harmed by that fraud in~~ the amount of ~~$106~~its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated.

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both March 31, 2021 and December 31, 2020, the estimated liability was $12 million. As of both March 31, 2021 and December 31, 2020, the related premium tax asset was $10 million. The Threadneedle Defendants applied to the Court for an Order dismissing the proceedings as an abuse of process of the Court. This application was declined in August 2015. The Threadneedle Defendants applied to the Court of Appeal for leave to appeal,expected period over which ~~application was granted in November 2015. In April 2017, the Court of Appeal denied the Threadneedle Defendants’ appeal. As a result, the case~~guaranty fund assessments will ~~proceed in England’s High Court of Justice, Commercial Court. A Case Management Conference was held October 6, 2017, and it was directed that trial of the matter shall not~~ be set before May 1, 2019. The Company cannot reasonably estimate the range of loss, if any, that may result from this matter due to the early procedural status of the case, the number of parties involved,made and the ~~failure to allege any specific, evidence based damages.~~related tax credits recovered is not known.

~~16.~~17. Earnings per Share

The ~~computation~~computations of basic and diluted earnings per share is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
	2017		2016		2017		2016			2021		2020
	(in millions, except per share amounts)									(in millions, except per share amounts)
Numerator:	Numerator:								Numerator:
Net income	$	503	$	215	$	1,299	$	914	Net income	$	437	$	2,036

Denominator:	Denominator:								Denominator:
Basic: Weighted-average common shares outstanding	153.0		164.0		155.2		168.3		Basic: Weighted-average common shares outstanding	119.8		126.4
Effect of potentially dilutive nonqualified stock options and other share-based awards	2.4		1.8		2.4		1.8		Effect of potentially dilutive nonqualified stock options and other share-based awards	2.4		1.8
Diluted: Weighted-average common shares outstanding	155.4		165.8		157.6		170.1		Diluted: Weighted-average common shares outstanding	122.2		128.2

Earnings per share:	Earnings per share:								Earnings per share:
Basic	$	3.29	$	1.31	$	8.37	$	5.43	Basic	$	3.65	$	16.11
Diluted	$	3.24	$	1.30	$	8.24	$	5.37	Diluted	$	3.58	$	15.88

The calculation of diluted earnings per share excludes the incremental effect of ~~2.9~~0.3 million and 4.5 million options as of ~~September 30, 2016,~~March 31, 2021 and 2020, respectively, due to their anti-dilutive effect. ~~There was no incremental effect as of September 30, 2017.~~

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)

~~17.~~18. Segment Information

During the third quarter of 2020, as the Company continued to reposition its business and implement strategies focusing on product features and sales, the composition of its reportable segments changed from 5 to 4 segments. The Chief Operating Decision Maker (“CODM”) manages the annuities and protection business as one operating segment, referred to as Retirement & Protection Solutions. The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). In addition, the Company moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block. These segment reporting changes align with the way the CODM began assessing the performance of the Company’s reportable segments and other business activities effective in the third quarter of 2020. Certain prior period amounts have been revised to conform to the current presentation. The Company’s 4 reporting segments are Advice & Wealth Management, Asset Management, ~~Annuities,~~Retirement & Protection Solutions and Corporate & Other.

Beginning in the first quarter of 2017, the long term care business, which had been reported as part of the Protection segment, is reflected in the Corporate & Other segment. The Company discontinued underwriting long term care insurance in 2002 and the transfer of this closed block to the Corporate & Other segment allows investors to better understand the performance of the Company’s on-going Protection businesses. Prior periods presented have been restated to reflect the change.

The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis.

Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, adjusted operating earnings is the Company’s measure of segment performance. ~~Operating~~Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis.

~~Operating~~Management excludes mean reversion related impacts from the Company’s adjusted operating measures. The mean reversion related impact is defined as the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves.

Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. ~~Operating~~Adjusted operating net revenues and adjusted operating expenses exclude the market impact on IUL benefits (net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual), integration and restructuring charges and the impact of consolidating investment entities. Operating net revenues also exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual); the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain ~~investments. Operating expenses also exclude the market impact on variable annuity guaranteed benefits (net of hedges~~investments; integration and restructuring charges; and the ~~related DSIC and DAC amortization) and the DSIC and DAC amortization offset to net realized investment gains or losses.~~impact of consolidating CIEs. The market impact on ~~variable annuity guaranteed benefits and IUL benefits~~non-traditional long-duration products includes changes in embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values and unhedged items including the difference between assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and certain policyholder contract elections, net of related impacts on DAC and DSIC amortization. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the Company’s life insurance subsidiary’s nonperformance spread.

The following tables summarize selected financial information by segment and ~~reconcile~~reconciles segment totals to those reported on the consolidated financial statements:


	September 30, 2017		December 31, 2016			March 31, 2021		December 31, 2020
	(in millions)					(in millions)
Advice & Wealth Management	$	13,407	$	12,654	Advice & Wealth Management	$	21,833	$	21,266
Asset Management	8,163		7,254		Asset Management	9,033		8,406
Annuities	96,656		93,481
Protection	17,543		16,780
Retirement & Protection Solutions					Retirement & Protection Solutions	113,658		114,850
Corporate & Other	9,717		9,652		Corporate & Other	21,213		21,361
Total assets	$	145,486	$	139,821	Total assets	$	165,737	$	165,883

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

(Continued)


	Three Months Ended March 31,
	2021		2020
	(in millions)
Adjusted operating net revenues:
Advice & Wealth Management	$	1,879	$	1,695
Asset Management	828		686
Retirement & Protection Solutions	787		759
Corporate & Other	139		149
Less: Eliminations (1)	379		338
Total segment adjusted operating net revenues	3,254		2,951
Net realized gains (losses)	57		(20)
Revenue attributable to consolidated investment entities	34		16
Market impact on non-traditional long-duration products, net	5		55
Mean reversion related impacts	—		(1)


Total net revenues per Consolidated Statements of Operations	$	3,350	$	3,001

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Operating net revenues:
Advice & Wealth Management $ 1,383
$ 1,272
$ 4,026
$ 3,720
Asset Management 778
740
2,252
2,203
Annuities 626
631
1,861
1,846
Protection 478
613
1,516
1,693
Corporate & Other 50
51
162
178
Eliminations ⁽¹⁾⁽²⁾
(348 ) (353 ) (1,040 ) (1,042 )
Total segment operating revenues 2,967
2,954
8,777
8,598
Net realized investment gains (losses) (3 ) 6
35
(5 )
Revenues attributable to CIEs 23
27
70
77
Market impact on IUL benefits (5 ) 6
(7 ) 18
Market impact of hedges on investments (1 ) 5
(8 ) (54 )
Total net revenues per consolidated statements of operations⁽³⁾⁽⁴⁾
$ 2,981
$ 2,998
$ 8,867
$ 8,634

⁽¹⁾Represents the elimination of intersegment revenues recognized for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 in each segment as follows: Advice & Wealth Management ($~~233~~250 million and ~~$244~~$222 million, respectively); Asset Management ($1213 million and ~~$12~~$13 million, respectively); ~~Annuities~~Retirement & Protection Solutions ($88116 million and ~~$85 million, respectively); Protection ($16 million and $12~~$104 million, respectively); and Corporate & Other ~~($(1)~~(NaN and $(1) million, ~~and nil,~~ respectively).

⁽²⁾


	Three Months Ended March 31,
	2021		2020
	(in millions)
Adjusted operating earnings:
Advice & Wealth Management	$	389	$	378
Asset Management	228		157
Retirement & Protection Solutions	183		167
Corporate & Other	(21)		(50)
Total segment adjusted operating earnings	779		652
Net realized gains (losses)	55		(20)
Net income (loss) attributable to consolidated investment entities	(1)		(2)
Market impact on non-traditional long-duration products, net	(396)		1,783
Mean reversion related impacts	56		(61)

Integration and restructuring charges	—		(1)
Pretax income per Consolidated Statements of Operations	$	493	$	2,351

~~Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2017 and 2016~~in each segment as follows: Advice & Wealth Management ($701 million and $727 million, respectively); Asset Management ($35 million and $33 million, respectively); Annuities ($259 million and $247 million, respectively); Protection ($46 million and $34 million, respectively); and Corporate & Other ($(1) million and $1 million, respectively).

⁽³⁾ ~~Includes foreign net revenues of $198 million and $162 million for the three months ended September 30, 2017 and 2016, respectively.~~


⁽⁴⁾	~~Includes foreign net revenues of $539 million and $500 million for the nine months ended September 30, 2017 and 2016, respectively.~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Operating earnings:
Advice & Wealth Management $ 298
$ 231
$ 837
$ 657
Asset Management 200
155
526
452
Annuities 281
(68 ) 562
202
Protection 55
84
169
190
Corporate & Other (136 ) (145 ) (292 ) (271 )
Total segment operating earnings 698
257
1,802
1,230
Net realized investment gains (losses) (3 ) 6
33
(5 )
Net income (loss) attributable to CIEs —
—
2
(1 )
Market impact on variable annuity guaranteed benefits (55 ) (37 ) (198 ) (78 )
Market impact on IUL benefits (10 ) 7
(16 ) 31
Market impact of hedges on investments (1 ) 5
(8 ) (54 )
Integration and restructuring charges (1 ) —
(1 ) —
Pretax income per consolidated statements of operations $ 628
$ 238
$ 1,614
$ 1,123

AMERIPRISE FINANCIAL, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow and our Consolidated Financial Statements and Notes presented in Item 1. Our Management’s Discussion and Analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, filed with the Securities and Exchange Commission (“SEC”) on February ~~23, 2017~~24, 2021 (“~~2016~~2020 10-K”), as well as our current reports on Form 8-K and other publicly available information. References below to “Ameriprise Financial,” “Ameriprise,” the “Company,” “we,” “us,” and “our” refer to Ameriprise Financial, Inc. exclusively, to our entire family of companies, or to one or more of our subsidiaries.

Overview

Ameriprise Financial is a diversified financial services company with a more than ~~120 year~~125-year history of providing financial solutions. We are a long-standing leader in financial planning and advice with $1.14 trillion in assets under management and administration as of March 31, 2021. We offer a broad range of products and services designed to achieve ~~the financial objectives of~~ individual and institutional ~~clients.~~clients’ financial objectives.

The coronavirus disease 2019 (‘‘COVID-19’’) pandemic has presented ongoing significant economic and societal disruption and market unpredictability, which has affected our business and operating environment driven by a low interest rate environment and volatility and changes in the equity markets and the potential associated implications to client behavior. In early 2020, we implemented a work-from-home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health Organization, the U.S. Centers for Disease Control and governments. We are ~~America’s leader~~thoughtfully undergoing a phased reopening of our office locations while complying with applicable health agencies’ guidelines and governmental orders. Though there are indications that the effects of the virus are lessening in ~~financial planning~~some areas, COVID-19 continues to deeply impact other areas and ~~a leading global financial institution with $869.5 billion~~has been occurring in ~~assets under management and administration as~~multiple waves, so there are still no reliable estimates of ~~September 30, 2017.~~

~~The~~how long the implications from the pandemic will last, how many people are likely to be affected by it, or its impact on the overall economy. Given the impact of the pandemic, financial results ~~from~~may not be comparable to previous years and the ~~businesses underlying~~results presented in this report may not necessarily be indicative of future operating results. For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of our ~~go-to-market approaches are reflected in our five operating segments:~~2020 10-K.

~~Advice & Wealth Management;~~

~~Asset Management;~~

~~Annuities;~~

~~Protection; and~~

~~Corporate & Other.~~

~~Our operating segments are aligned with the financial solutions we offer to address our clients’ needs.~~ The products and services we provide retail clients and, to a lesser extent, institutional clients, are the primary source of our revenues and net income. Revenues and net income are significantly affected by investment performance and the total value and composition of assets we manage and administer for our retail and institutional clients as well as the distribution fees we receive from other companies. These factors, in turn, are largely determined by overall investment market performance and the depth and breadth of our individual client relationships.

Financial markets and macroeconomic conditions have had and will continue to have a significant impact on our operating and performance results. In addition, the business, political and regulatory ~~environment~~environments in which we operate ~~remains~~are subject to elevated uncertainty and substantial, frequent change. ~~To succeed,~~Accordingly, we expect to continue focusing on our key strategic ~~objectives.~~objectives and obtaining operational and strategic leverage from our core capabilities. The success of these and other strategies may be affected by the factors discussed in ~~“Item 1A. Risk~~Item 1A, “Risk Factors” in our ~~2016~~2020 10-K and other factors as discussed herein.

Equity price, credit market and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects they have on the asset management and other asset-based fees we earn, the ~~“spread” income generated on our fixed deferred annuities, fixed insurance, deposit products and the fixed portion of variable annuities and variable insurance contracts, the~~ value of deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) assets, the values of liabilities for guaranteed benefits associated with our variable annuities and the values of derivatives held to hedge these ~~benefits.~~benefits and the “spread” income generated on our fixed deferred annuities, fixed insurance, the fixed portion of variable annuities and variable insurance contracts and deposit products.

Earnings, as well as adjusted operating earnings after tax, will ~~continue to~~ be negatively impacted by the ongoing low interest rate ~~environment.~~environment should it continue. In addition to continuing spread compression in our interest sensitive product lines, a sustained low interest rate environment may result in increases to our reserves and changes in various rate assumptions we use to amortize DAC and DSIC, which may negatively impact our adjusted operating ~~earnings.~~earnings after tax. For additional discussion on our interest rate risk, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk” and the information set forth in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk.”

InDuring the third quarter of 2020, as we continue to reposition the ~~year, we updated~~business and implement strategies focusing on product features and sales, the composition of our ~~market-related inputs~~reportable segments changed from five to four segments. The Chief Operating Decision Maker (“CODM”) now manages the Annuities and ~~implemented model changes related~~Protection business as one operating segment, referred to ~~our living benefit valuation.~~as Retirement & Protection Solutions. The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). In addition, we ~~conducted~~moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block. These segment reporting changes align with the way our ~~annual review~~CODM began assessing the performance of ~~life insurance~~our reportable segments and ~~annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking.~~

~~The favorable unlocking impact~~other business activities effective in the third quarter of ~~2017 primarily reflected a positive~~2020. Certain prior period amounts have been revised to conform to the current presentation. These changes have no impact ~~from updates to market-related inputs to our living benefit valuation. In addition, premium deficiency testing for our long term care (“LTC”) business resulted in a loss recognition reserve~~on previously reported consolidated balance sheets or statements of ~~$57 million in the third quarter of 2017 primarily due to higher morbidity, partially offset by premium increases.~~

The unfavorable unlocking impact in the third quarter of 2016 primarily reflected low interest rates and higher persistency on living benefit contracts that more than offset benefits from persistency on annuity contracts without living benefits, an update to market-related inputs related to our living benefit valuation and other model updates. Our long-term interest rate assumption remained unchanged, but we extended the period it would take for rates to reach our long term level from 3.5 years to 5.5 years. In addition, our review of our LTC business in the third quarter of 2016 resulted in a loss recognition of $31 million due to low interest rates, higher morbidity and higher reinsurance expenses, slightly offset by premium increases. The $31 million, which is included in the unlocking impact in the third quarter of 2016, was comprised of $58 million of amortization of DAC and the release of the related deferred reinsurance liability of $27 million.operations, comprehensive income, stockholders equity, or cash flows.

AMERIPRISE FINANCIAL, INC.

~~See our Consolidated~~On April 12, 2021, we signed a definitive agreement to acquire the European-based asset management business of BMO Financial Group for £615 million, or approximately $845 million. The all-cash transaction is expected to add approximately $124 billion of assets under management (“AUM”) in Europe and ~~Segment Results~~is currently expected to close in the fourth quarter of ~~Operations sections below for~~2021, subject to regulatory approvals in the ~~pretax impacts on our revenues and expenses attributable to unlocking and additional discussion of the drivers of the unlocking impact.~~relevant jurisdictions.

We consolidate certain variable interest entities for which we provide asset management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the CIEs impacts our balance sheet and income statement, our exposure to these entities is unchanged and there is no impact to the underlying business results. For further information on CIEs, see Note 34 to our Consolidated Financial Statements. The results of operations of the CIEs are reflected in the Corporate & Other segment. On a consolidated basis, the management fees we earn for the services we provide to the CIEs and the related general and administrative expenses are eliminated and the changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in net investment income. We ~~continue to~~ include the fees from these entities in the management and financial advice fees line within our Asset Management segment.

While our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity ~~guaranteed benefits,~~contracts and universal life (“UL”) insurance contracts, net of hedges and the related DSIC and DAC ~~amortization; the market impact on indexed universal life benefits, net of hedges and the related DAC~~ amortization, unearned revenue amortization and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and variable universal life (“VUL”) products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and the impact of consolidating CIEs, best reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis. Management uses ~~certain of~~ these non-GAAP measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors. Also, certain of these non-GAAP measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters. Throughout our Management’s Discussion and Analysis, these non-GAAP measures are referred to as adjusted operating measures. These non-GAAP measures should not be viewed as a substitute for U.S. GAAP measures.

It is management’s priority to increase shareholder value over a multi-year horizon by achieving our on-average, over-time financial targets.

Our financial targets are:

~~Operating total net revenue growth of 6% to 8%,~~

~~Operating~~•Adjusted operating earnings per diluted share growth of 12% to 15%, and

~~Operating~~•Adjusted operating return on equity excluding accumulated other comprehensive income (“AOCI”) of ~~19% to 23%~~over 30%.

The following tables reconcile our GAAP measures to adjusted operating measures:


					Per Diluted Share
	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2021		2020
	(in millions, except per share amounts)
Net income (loss)	$	437	$	2,036	$	3.58	$	15.88
Less: Net realized investment gains (losses) (1)	55		(20)		0.45		(0.16)
Add: Market impact on non-traditional long-duration products (1)	396		(1,783)		3.24		(13.91)
Add: Mean reversion related impacts (1)	(56)		61		(0.46)		0.47
Add: Integration/restructuring charges (1)	—		1		—		0.01
Less: Net income (loss) attributable to CIEs	(1)		(2)		(0.01)		(0.02)
Tax effect of adjustments (2)	(60)		357		(0.49)		2.78
Adjusted operating earnings	$	663	$	694	$	5.43	$	5.41

Weighted average common shares outstanding:
Basic	119.8		126.4
Diluted	122.2		128.2

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in millions)
Total net revenues $ 2,981
$ 2,998
$ 8,867
$ 8,634
Less: Revenue attributable to CIEs 23
27
70
77
Less: Net realized investment gains (losses) (3 ) 6
35
(5 )
Less: Market impact on indexed universal life benefits (5 ) 6
(7 ) 18
Less: Market impact of hedges on investments (1 ) 5
(8 ) (54 )
Operating total net revenues $ 2,967
$ 2,954
$ 8,777
$ 8,598
(1) Pretax adjusted operating adjustments.

(2) Calculated using the statutory federal tax rate of 21%.

AMERIPRISE FINANCIAL, INC.

Three Months Ended September 30, Per Diluted Share
Three Months Ended September 30,
2017 2016 2017 2016
(in millions, except per share amounts)
Net income $ 503
$ 215
$ 3.24
$ 1.30
Add: Integration/restructuring charges ⁽¹⁾
1
—
0.01
—
Add: Market impact on variable annuity guaranteed benefits ⁽¹⁾
55
37
0.35
0.22
Add: Market impact on indexed universal life benefits ⁽¹⁾
10
(7 ) 0.06
(0.04 )
Add: Market impact of hedges on investments ⁽¹⁾
1
(5 ) 0.01
(0.03 )
Less: Net realized investment gains (losses) ⁽¹⁾
(3 ) 6
(0.02 ) 0.04
Tax effect of adjustments ⁽²⁾
(25 ) (7 ) (0.16 ) (0.04 )
Operating earnings $ 548
$ 227
$ 3.53
$ 1.37

Weighted average common shares outstanding:

Basic 153.0
164.0

Diluted 155.4
165.8

⁽¹⁾~~Pretax operating adjustments.~~

⁽²⁾ ~~Calculated using the statutory tax rate of 35%.~~

Nine Months Ended September 30, Per Diluted Share
Nine Months Ended September 30,
2017 2016 2017 2016
(in millions, except per share amounts)
Net income $ 1,299
$ 914
$ 8.24
$ 5.37
Less: Net income (loss) attributable to CIEs 1
(1 ) 0.01
(0.01 )
Add: Integration/restructuring charges ⁽¹⁾
1
—
0.01
—
Add: Market impact on variable annuity guaranteed benefits ⁽¹⁾
198
78
1.26
0.46
Add: Market impact on indexed universal life benefits ⁽¹⁾
16
(31 ) 0.10
(0.18 )
Add: Market impact of hedges on investments ⁽¹⁾
8
54
0.05
0.31
Less: Net realized investment gains (losses) ⁽¹⁾
33
(5 ) 0.21
(0.03 )
Tax effect of adjustments ⁽²⁾
(67 ) (37 ) (0.42 ) (0.22 )
Operating earnings $ 1,421
$ 984
$ 9.02
$ 5.78

Weighted average common shares outstanding:

Basic 155.2
168.3

Diluted 157.6
170.1

⁽¹⁾~~Pretax operating adjustments.~~

⁽²⁾ ~~Calculated using the statutory tax rate of 35%.~~

~~AMERIPRISE FINANCIAL, INC.~~

The following table reconciles the trailing twelve months’ sum of net income ~~attributable~~ to ~~Ameriprise Financial to~~adjusted operating earnings and the five-point average of quarter-end equity to adjusted operating equity:


	Twelve Months Ended March 31,
	2021		2020
	(in millions)
Net income	$	(65)	$	3,534
Less: Adjustments (1)	(1,804)		1,175
Adjusted operating earnings	1,739		2,359

Total Ameriprise Financial, Inc. shareholders’ equity	6,126		6,058
Less: AOCI, net of tax	312		121
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI	5,814		5,937
Less: Equity impacts attributable to CIEs	1		1
Adjusted operating equity	$	5,813	$	5,936

Twelve Months Ended September 30,
2017 2016
(in millions)
Net income attributable to Ameriprise Financial $ 1,699
$ 1,271
Less: Adjustments ⁽¹⁾
(165 ) (154 )
Operating earnings $ 1,864
$ 1,425

Total Ameriprise Financial, Inc. shareholders’ equity $ 6,369
$ 7,139
Less: AOCI, net of tax 325
478
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI 6,044
6,661
Less: Equity impacts attributable to CIEs 1
62
Operating equity $ 6,043
$ 6,599

Return on equity, excluding AOCI 28.1 % 19.1 %
Operating return on equity, excluding AOCI ⁽²⁾
30.8 % 21.6 %



Return on equity, excluding AOCI	(1.1)	%	59.5	%
Adjusted operating return on equity, excluding AOCI (2)	29.9	%	39.7	%

⁽¹⁾

(1) Adjustments reflect the ~~trailing twelve months’~~ sum of after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration and restructuring charges; and net income (loss) from consolidated investment entities. After-tax is calculated using the statutory tax rate of 35%.

⁽²⁾

Operating return on equity, excluding AOCI, is calculated using the trailing twelve months of earnings excluding the after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal benefits, net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration and restructuring charges; and net income (loss) from consolidated investment entities in the numerator, and Ameriprise Financial shareholders’ equity, excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory rate of 35%.

~~The Department~~ of ~~Labor published regulations in April 2016~~after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; mean reversion related impacts; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that ~~expanded~~is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and net income (loss) from consolidated investment entities. After-tax is calculated using the ~~scope~~statutory tax rate of ~~who~~21%.

(2) Adjusted operating return on equity, excluding AOCI is considered an ERISA fiduciary and these regulations focus in large part on investment recommendations made by financial advisors, registered investment advisors, and other investment professionals to retirement investors, how financial advisors are able to discuss IRA rollovers, as well as how financial advisors and affiliates can transact with retirement investors. Tax qualified accounts, particularly IRAs, make up a significant portion of our assets under management and administration. The first phase of the regulations went into effect on June 9, 2017 and requires financial advisors to make recommendations related to assets held in IRAs and employer sponsored retirement plans in accordance with the following impartial conduct standards: recommendations must becalculated using adjusted operating earnings in the ~~best interest of the client, compensation paid for the recommendations must be reasonable~~numerator, and Ameriprise Financial shareholders’ equity, excluding AOCI and the financial advisor must not make any misleading statements. We adopted policies and procedures designed to comply with the impartial conduct standards and communicated those policies and procedures to our advisors and staff. The second phaseimpact of ~~the regulation pertaining to~~consolidating investment entities using a ~~new “best interest contract exemption” puts into place a number~~five-point average of additional requirements including entering into a best interest contract with clients, enhanced disclosure of fees and conflicts of interest, limits on differential commissions within a product category, the adoption of policies and procedures to ensure the best interest standard is met, and findings related to platforms that are limited to products that pay third-party payments and/or include proprietary products. The second phase of the regulation is currently scheduled to become effective on January 1, 2018. These regulations are currently under review by the Department of Labor and the Department has proposed to delay the second phase of the regulations until July 1, 2019, which would give the Department of Labor more time to determine if further revisions to the regulations are advisable. However, as of November 1 the Department of Labor has not issued final guidance implementing a further delay. As a result, it is unclear whether the Department of Labor will substantially rescind or revise the regulations as adopted in 2016. In light of the uncertainty regarding the fiduciary regulation, while we prudently continue to prepare to comply with the second phase of the Department of Labor’s investment fiduciary regulations and exemptionsquarter-end equity in the ~~form in which they were adopted in April 2016, we are also evaluating~~denominator. After-tax is calculated using the ~~impact to our clients, financial advisors and business should the Department~~statutory tax rate of ~~Labor decide to delay, rescind or revise the regulations per the developments since President Trump’s inauguration as generally described above.~~21%.

Critical Accounting Estimates

The accounting and reporting policies that we use affect our Consolidated Financial Statements. Certain of our accounting and reporting policies are critical to an understanding of our consolidated results of operations and financial condition and, in some cases,

~~AMERIPRISE FINANCIAL, INC.~~

the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of our Consolidated Financial Statements. These accounting policies are discussed in detail in “Management’s Discussion and Analysis — Critical Accounting Estimates” in our ~~2016~~2020 10-K.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements and their expected impact on our future consolidated results of operations and financial condition, see Note 2 to our Consolidated Financial Statements.

Economic Environment

Global equity market conditions could materially affect our financial condition and results of operations. The following table presents relevant market indices:


	March 31,
	2021	2020	Change

S&P 500
Daily average	3,861	3,069	26	%
Period end	3,973	2,585	54	%
Weighted Equity Index (“WEI”) (1)
Daily average	2,662	2,111	26	%
Period end	2,725	1,753	55	%

(1) Weighted Equity Index is an Ameriprise calculated proxy for equity market movements calculated using a weighted average of the S&P 500, Russell 2000, Russell Midcap and MSCI EAFE indices based on North America distributed equity assets.

See our segment results of operations discussion below for additional information on how changes in the economic environment have and may continue to impact our results. For further information regarding the impact of the economic environment, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of our 2020 10-K.

AMERIPRISE FINANCIAL, INC.

Assets Under Management and Administration

~~Assets under management (“AUM”)~~AUM include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, ~~assets of~~ institutional clients and ~~assets of~~ clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us. AUM also includes certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees in our Asset Management segment, such as the assets of the general account and the variable product funds held in the separate accounts of our life insurance subsidiaries and CIEs. These assets do not include assets under advisement, for which we provide model portfolios but do not have full discretionary investment authority. Corporate & Other AUM primarily includes former bank assets that are managed within our Corporate & Other segment.

Assets under administration (“AUA”) include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ brokerage accounts. We generally record revenues received from administered assets as distribution fees. We do not exercise management discretion over these assets and do not earn a management fee. These assets are not reported on our Consolidated Balance Sheets. AUA also includes certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-affiliated funds held in the separate accounts of our life insurance subsidiaries. ~~These assets~~

AUM and AUA do not include assets under advisement, for which we provide advisory services such as model portfolios but do not have full discretionary investment authority.

The following table presents detail regarding our AUM and AUA:


	September 30,						Change						March 31,				Change
	2017			2016									2021		2020
	(in billions)												(in billions)
Assets Under Management and Administration	Assets Under Management and Administration											Assets Under Management and Administration
Advice & Wealth Management AUM	$	233.9		$	196.2		$	37.7		19	%	Advice & Wealth Management AUM	$	396.5	$	273.1	$	123.4	45	%
Asset Management AUM	484.0			467.8			16.2			3		Asset Management AUM	564.1		426.2		137.9		32
Corporate & Other AUM	0.3			0.3			—			—
Corporate AUM												Corporate AUM	0.1		—		0.1		—
Eliminations	(25.9		)	(24.7		)	(1.2		)	(5	)	Eliminations	(39.6)		(27.9)		(11.7)		(42)
Total Assets Under Management	692.3			639.6			52.7			8		Total Assets Under Management	921.1		671.4		249.7		37
Total Assets Under Administration	177.2			156.0			21.2			14		Total Assets Under Administration	222.9		167.7		55.2		33
Total AUM and AUA	$	869.5		$	795.6		$	73.9		9	%	Total AUM and AUA	$	1,144.0	$	839.1	$	304.9	36	%

Total AUM increased ~~$52.7~~$249.7 billion, or 8%37%, to ~~$692.3~~$921.1 billion as of ~~September 30, 2017~~March 31, 2021 compared to ~~$639.6~~$671.4 billion as of ~~September 30, 2016 primarily~~March 31, 2020 due to a ~~$37.7~~$123.4 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a ~~$16.2~~$137.9 billion increase in Asset Management AUM driven by market appreciation and ~~a positive impact of foreign currency translation,~~continued improvement in net flows, partially offset by ~~net outflows.~~retail fund distributions. See our segment results of operations discussion below for additional information on changes in our AUM.

AMERIPRISE FINANCIAL, INC.

Consolidated Results of Operations for the Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020

The following table presents our consolidated results of operations:


	Three Months Ended September 30,				Change						Three Months Ended March 31,				Change
	2017		2016								2021		2020
	(in millions)										(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	$	1,626	$	1,464	$	162		11	%	Management and financial advice fees	$	2,102	1,770		$	332	19	%
Distribution fees	437		455		(18		)	(4	)	Distribution fees	458		464		(6)		(1)
Net investment income	372		387		(15		)	(4	)	Net investment income	377		328		49		15
Premiums	348		374		(26		)	(7	)
Premiums, policy and contract charges										Premiums, policy and contract charges	347		395		(48)		(12)
Other revenues	210		330		(120		)	(36	)	Other revenues	71		69		2		3
Total revenues	2,993		3,010		(17		)	(1	)	Total revenues	3,355		3,026		329		11
Banking and deposit interest expense	12		12		—			—		Banking and deposit interest expense	5		25		(20)		(80)
Total net revenues	2,981		2,998		(17		)	(1	)	Total net revenues	3,350		3,001		349		12
Expenses	Expenses									Expenses
Distribution expenses	850		798		52			7		Distribution expenses	1,175		995		180		18
Interest credited to fixed accounts	176		161		15			9		Interest credited to fixed accounts	159		91		68		75
Benefits, claims, losses and settlement expenses	474		855		(381		)	(45	)	Benefits, claims, losses and settlement expenses	653		(1,747)		2,400		NM
Amortization of deferred acquisition costs	48		163		(115		)	(71	)	Amortization of deferred acquisition costs	5		512		(507)		(99)
Interest and debt expense	52		52		—			—		Interest and debt expense	42		46		(4)		(9)
General and administrative expense	753		731		22			3		General and administrative expense	823		753		70		9
Total expenses	2,353		2,760		(407		)	(15	)%	Total expenses	2,857		650		2,207		NM
Pretax income	628		238		390			NM
Pretax income (loss)										Pretax income (loss)	493		2,351		(1,858)		(79)
Income tax provision	125		23		102			NM		Income tax provision	56		315		(259)		(82)
Net income	$	503	$	215	$	288		NM
Net income (loss)										Net income (loss)	$	437	$	2,036	$	(1,599)	(79)	%
NM Not Meaningful.

Overall

Pretax income ~~increased $390 million~~decreased $1.9 billion, or 79%, to ~~$628~~$493 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$238~~$2.4 billion for the prior year period. The following impacts were significant drivers of the period-over-period change in pretax income:

•The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $396 million for the three months ended March 31, 2021 compared to a benefit of $1.8 billion for the prior year period.

•A negative impact of $78 million in the Advice & Wealth Management segment from lower short-term interest rates.

•A $34 million unfavorable change in the mark-to-market impact on share-based compensation.

•A favorable impact from higher average equity markets for the three months ended March 31, 2021 compared to the prior year period.

•The mean reversion related impact was a benefit of $56 million for the three months ended March 31, 2021 compared to an expense of $61 million for the prior year period primarily due to the impact of unlocking, market appreciation, wrap account net inflows, a positive impact of higher short-term interest rates and an unfavorable $29 million LTC reserve correction in the third quarter of 2016, partially offset by asset management net outflows, loss recognition of $57 million on LTC insurance products in the third quarter of 2017 and higher performance-based compensation.

~~The following table presents the total pretax impacts on our revenues and expenses attributable to unlocking for the three months ended~~ ~~September 30~~:

Pretax Increase (Decrease) 2017 2016
(in millions)
Other revenues $ (47 ) $ 64
Total revenues (47 ) 64

Distribution expenses —
(27 )
Benefits, claims, losses and settlement expenses (139 ) 229
Amortization of DAC (12 ) 81
Total expenses (151 ) 283
Total ⁽¹⁾
$ 104
$ (219 )
⁽¹⁾ Includes a $5 million and $16 million net benefit related to the market impact on variable annuity guaranteed benefits for the three months ended September 30, 2017 and 2016, respectively.

~~AMERIPRISE FINANCIAL, INC.~~

period.

Net Revenues

Net revenues ~~decreased $17~~increased $349 million, or 1%12%, to ~~$3.0~~$3.4 billion for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $3.0 billion for the prior year period primarily due to the impact of unlocking, a $54 million decrease in revenues from the net impact of transitioning advisory accounts to share classes without 12b-1 fees, asset management net outflows, lower earned interest rates on fixed annuities and higher ceded premiums for our auto and home business, partially offset by market appreciation, wrap account net inflows and a positive impact of higher short-term interest rates.period.

Management and financial advice fees increased ~~$162~~$332 million, or ~~11%~~19%, to ~~$1.6~~$2.1 billion for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$1.5~~$1.8 billion for the prior year period primarily due to an increase in AUM, as well as a $15 million increase in performance fees. Average AUM increased $46.5 billion, or 7%, compared to the prior year period due to market appreciation andreflecting higher average equity markets, higher wrap account net inflows ~~partially offset by asset management net outflows. See our discussion on~~and an unfavorable $19 million performance fee correction in the ~~changes in AUM in our segment results of operations section.~~prior year period.

Distribution fees decreased ~~$18~~$6 million, or 4%1%, to ~~$437~~$458 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $455 million for the prior year period primarily due to a $64 million decrease related to our transition to share classes without 12b-1 fees in advisory accounts, partially offset by market appreciation and higher brokerage cash spread due to an increase in short-term interest rates.

Premiums decreased $26 million, or 7%, to $348 million for the three months ended September 30, 2017 compared to $374 million for the prior year period primarily reflecting higher ceded premiums for our auto and home business due to new reinsurance arrangements we entered into at the beginning of the year to reduce risk.

~~Other revenues decreased $120 million, or 36%, to $210 million for the three months ended September 30, 2017 compared to $330~~$464 million for the prior year period due to ~~the impact~~$55 million of ~~unlocking. Other revenues for the third quarter of 2017 included a $47 million unfavorable impact from unlocking compared~~lower fees on off-balance sheet brokerage cash primarily due to a ~~$64 million favorable impact~~decrease in the prior year period. The primary driver of the unlocking impact to other revenues for the third quarter of 2017 was a negative impact from lower projected gains on reinsurance contracts resulting from favorable mortality experience. The primary driver of the unlocking impact to other revenues for the prior year period was a positive impact fromshort-term interest rates partially offset by increased transactional activity and higher ~~projected gains on reinsurance contracts resulting from unfavorable mortality experience.~~average equity markets.

~~Expenses~~

~~Total expenses decreased $407~~Net investment income increased $49 million, or 15%, to $2.4 billion for the three months ended September 30, 2017 compared to $2.8 billion the prior year period primarily due to the impact of unlocking, partially offset by higher distribution expenses.

~~Distribution expenses increased $52 million, or 7%, to $850~~$377 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $798 million for the prior year period primarily due to market appreciation, wrap account net inflows and a $27 million benefit in the prior year period related to the write-off of the deferred reinsurance liability in connection with loss recognition testing of LTC insurance products, partially offset by a $43 million decrease from changes related to our transition to share classes without 12b-1 fees in advisory accounts and asset management net outflows.

Interest credited to fixed accounts increased $15 million, or 9%, to $176 million for the three months ended September 30, 2017 compared to $161 million for the prior year period primarily due to the market impact on indexed universal life benefits, net of hedges, which was an expense of $8 million for the three months ended September 30, 2017 compared to a benefit of $5 million for the prior year period.

~~Benefits, claims, losses and settlement expenses decreased $381 million, or 45%, to $474 million for the three months ended September 30, 2017 compared to $855~~$328 million for the prior year period primarily reflecting the following items:

~~The~~

AMERIPRISE FINANCIAL, INC.

•Net realized investment gains of $69 million, which included a $15 million gain on a strategic investment, for the three months ended ~~September 30, 2017 included a $139 million benefit from unlocking~~March 31, 2021 compared to ~~a $229~~net realized investment losses of $19 million expense in the prior year period. The unlocking impact for the third quarter of 2017 primarily reflected a benefit from updates to market-related inputs to our living benefit valuation. The unlocking impact for the prior year ~~period primarily reflected low~~period.

•Higher investment income from CIEs.

•The unfavorable impact of lower interest rates, including lower short-term interest rates on the investment portfolio supporting the certificate and ~~an unfavorable impact from persistency on living benefit reserves, partially offset by a benefit from updates~~on-balance sheet brokerage cash products.

Premiums, policy and contract charges decreased $48 million, or 12% to ~~withdrawal utilization and fee assumptions, as well as market-related inputs to our living benefit valuation.~~

~~A $29 million increase in LTC reserves from a correction related to our claim utilization assumption in the third quarter of 2016.~~

A $26 million decrease in auto and home expenses reflecting the impact of new reinsurance arrangements, a lower non-catastrophe loss ratio and an $8 million benefit from a correction of a reinsurance recoverable estimate, partially offset by higher gross catastrophe losses and a $10 million positive impact from prior year reserve development in the third quarter of 2016. Catastrophe losses, net of the impact of reinsurance, were $15$347 million for the three months ended ~~September 30, 2017, primarily related to Hurricanes Harvey and Irma,~~March 31, 2021 compared to ~~$29~~$395 million for the prior year ~~period. In~~primarily reflecting an unfavorable change in unearned revenue amortization and the ~~first quarter~~reinsurance accrual offset to the market impact on IUL benefits and lower sales of ~~2017, we entered into quota share~~immediate annuities with a life contingent feature.

Banking and excess of loss reinsurance arrangements designed to reduce net retained exposure to property losses. The expanded reinsurance program resulted in ceded losses of approximately $38 million in the third quarter.

~~A $57 million~~deposit interest expense ~~from loss recognition on LTC insurance products in the third quarter of 2017 primarily due to unfavorable morbidity experience, partially offset by premium increases.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~Amortization of DAC~~ decreased ~~$115~~$20 million, or ~~71%~~80%, to ~~$48~~$5 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$163~~$25 million due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

Total expenses increased $2.2 billion to $2.9 billion for the three months ended March 31, 2021 compared to $650 million for the prior year period.

Distribution expenses increased $180 million, or 18%, to $1.2 billion for the three months ended March 31, 2021 compared to $995 million for the prior year period reflecting higher advisor compensation due to an increase in average wrap account balances and increased transactional activity.

Interest credited to fixed accounts increased $68 million, or 75%, to $159 million for the three months ended March 31, 2021 compared to $91 million for the prior year period primarily reflecting the following items:

•A $235 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The unfavorable impact of ~~unlocking, which~~the nonperformance credit spread was ~~a benefit of $12~~$1 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to a favorable impact of $234 million for the prior year period.

•A $168 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $2 million for the three months ended March 31, 2021 compared to an expense of ~~$81~~$166 million for the prior year period. The ~~impact of unlocking~~decrease in expense was primarily due to an increase in the ~~third quarter of 2017 primarily reflected improved persistency and mortality on life insurance contracts and a $10 million benefit from a~~ ~~correction related to a variable annuity model assumption, partially offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking~~IUL embedded derivative in the prior year period, ~~primarily~~which reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits. In addition, we wrote-off $58 million of DAC in connection with the loss recognition on LTC insurance products in the prior year period.higher option costs due to lower discount rates.

~~General~~Benefits, claims, losses and ~~administrative expense increased $22 million, or 3%,~~settlement expenses increased $2.4 billion to ~~$753~~$653 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$731~~a benefit of $1.7 billion for the prior year period primarily reflecting the following items:

•A $1.8 billion increase in expense primarily reflecting the impact of year-over-year changes in the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits. The unfavorable impact of $225 million for the three months ended March 31, 2021 was driven by changes in the undiscounted embedded derivative liability compared to a favorable impact of $1.6 billion for the prior year period primarily as a result of the nonperformance credit spread widening by 145 basis points due to the market dislocation related to the COVID-19 pandemic. As the undiscounted embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense. Additionally, as the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease.

•A $727 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization. This increase was the result of an unfavorable $6.6 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by a favorable $5.8 billion change in the market impact on variable annuity guaranteed living benefits reserves. The main market drivers contributing to these changes are summarized below:

•Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in an expense for the three months ended March 31, 2021 compared to a benefit for the prior year period.

•Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in an expense for the three months ended March 31, 2021 compared to a benefit for the prior year period.

•Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the three months ended March 31, 2021 compared to the prior year period.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a net benefit for the three months ended March 31, 2021 compared to a net expense for the prior year period.

•The mean reversion related impact was a benefit of $34 million for the three months ended March 31, 2021 compared to an expense of $24 million for the prior year period.

AMERIPRISE FINANCIAL, INC.

•A $13 million decrease in reserves for immediate annuities with a life contingent feature primarily due to lower sales. This impact is offset by a decrease in premiums.

Amortization of DAC decreased $507 million, or 99% to $5 million for the three months ended March 31, 2021 compared to an expense of $512 million for the prior year period primarily reflecting the following items:

•The DAC offset to the market impact on non-traditional long-duration products was a benefit of $46 million for the three months ended March 31, 2021 compared to an expense of $416 million for the prior year period.

•The mean reversion related impact was a benefit of $22 million for the three months ended March 31, 2021 compared to an expense of $36 million for the prior year period.

Interest and debt expense decreased $4 million, or 9%, to $42 million for the three months ended March 31, 2021 compared to $46 million for the prior year period primarily due to lower levels of corporate debt and lower interest rates on our corporate debt.

General and administrative expense increased $70 million, or 9%, to $823 million for the three months ended March 31, 2021 compared to $753 million for the prior year period primarily reflecting an unfavorable change in the mark-to-market impact on share-based compensation and higher ~~performance-based compensation.~~expenses from CIEs, partially offset by disciplined expense management and reengineering.

Income Taxes

Our effective tax rate was ~~19.9%~~11.3% for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~9.7%~~13.4% for the prior year period. ~~Our effective tax rates for the three months ended September 30, 2017 and 2016 are~~The lower than the statutory rate as a result of tax preferred items including the dividends received deduction, low income housing tax credits, stock compensation, and lower taxes on net income from foreign subsidiaries. The increase in the effective tax rate for the three months ended ~~September 30, 2017~~March 31, 2021 compared to the prior year period is primarily ~~due~~the result of incentive compensation and lower pretax income in the current period compared to ~~higher pretax income,~~the prior year period, partially offset by a ~~$25~~$144 million tax benefit ~~for stock compensation due to~~in the ~~adoption~~prior year period associated with the forecasted utilization of a ~~new accounting standard.~~2020 net operating loss (“NOL”) in our life insurance entities that was not ultimately realized. See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment for the Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020

~~Operating~~Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance. ~~Operating~~Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. See Note 1718 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.

Beginning in the first quarter of 2017, the long term care business, which had been reported as part of the Protection segment, is reflected in the Corporate & Other segment. We discontinued underwriting long term care insurance in 2002 and the transfer of this closed block to the Corporate & Other segment allows investors to better understand the performance of our on-going Protection businesses. Prior periods presented have been restated to reflect the change.

The following table presents summary financial information by segment:


	Three Months Ended March 31,
	2021		2020
	(in millions)
Advice & Wealth Management
Net revenues	$	1,879	$	1,695
Expenses	1,490		1,317
Adjusted operating earnings	$	389	$	378
Asset Management
Net revenues	$	828	$	686
Expenses	600		529
Adjusted operating earnings	$	228	$	157
Retirement & Protection Solutions
Net revenues	$	787	$	759
Expenses	604		592
Adjusted operating earnings	$	183	$	167
Corporate & Other
Net revenues	$	139	$	149
Expenses	160		199
Adjusted operating loss	$	(21)	$	(50)

Three Months Ended September 30,
2017 2016
(in millions)
Advice & Wealth Management

Net revenues $ 1,383
$ 1,272
Expenses 1,085
1,041
Operating earnings $ 298
$ 231
Asset Management

Net revenues $ 778
$ 740
Expenses 578
585
Operating earnings $ 200
$ 155
Annuities

Net revenues $ 626
$ 631
Expenses 345
699
Operating earnings (loss) $ 281
$ (68 )
Protection

Net revenues $ 478
$ 613
Expenses 423
529
Operating earnings $ 55
$ 84
Corporate & Other

Net revenues $ 50
$ 51
Expenses 186
196
Operating loss $ (136 ) $ (145 )

AMERIPRISE FINANCIAL, INC.

~~The following table presents the segment pretax operating impacts on our revenues and expenses attributable to unlocking:~~

Segment Pretax Operating Increase (Decrease) Three Months Ended September 30,
2017 2016
Annuities Protection Corporate Annuities Protection Corporate
(in millions)
Other revenues $ —
$ (47 ) $ —
$ —
$ 64
$ —
Total revenues —
(47 ) —
—
64
—

Distribution expenses —
—
—
—
—
(27 )
Benefits, claims, losses and settlement expenses (119 ) (14 ) 1
197
40
6
Amortization of DAC (1 ) (13 ) —
18
7
58
Total expenses (120 ) (27 ) 1
215
47
37
Total $ 120
$ (20 ) $ (1 ) $ (215 ) $ 17
$ (37 )

Advice & Wealth Management

On July 1, 2017, we closed our acquisition of Investment Professionals, Inc. (“IPI”), an independent broker dealer based in San Antonio, Texas specializing in the on-site delivery of investment programs for financial institutions, including banks and credit unions. The acquisition added 215 financial advisors and $8 billion in client assets.

The following table presents the changes in wrap account assets and average balances for the three months ended ~~September 30:~~March 31:


	2021		2020
	(in billions)
Beginning balance	$	380.0	$	317.5
Net flows (1)	10.4		6.7
Market appreciation (depreciation) and other (1)	9.4		(48.7)
Ending balance	$	399.8	$	275.5

Advisory wrap account assets ending balance (2)	$	395.3	$	272.3
Average advisory wrap account assets (3)	$	379.3	$	311.1

2017 2016
(in billions)
Beginning balance $ 222.3
$ 189.7
Inflows from acquisition ⁽¹⁾
0.7
—
Other net flows 5.4
2.8
Net flows 6.1
2.8
Market appreciation (depreciation) and other 6.8
5.0
Ending balance $ 235.2
$ 197.5

Advisory wrap account assets ending balance ⁽²⁾
$ 233.0
$ 195.4
Average advisory wrap account assets ⁽³⁾
$ 227.0
$ 192.7
(1) Beginning in the first quarter of 2021, wrap net flows is calculated including dividends, interest and fees, which were previously recorded in Market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

⁽¹⁾

(2) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

(3) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the three months ended March 31, 2021 and 2020.

~~Inflows associated with acquisition that closed during the period.~~


⁽²⁾	Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.


⁽³⁾	~~Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.~~

Wrap account assets increased ~~$12.9~~$19.8 billion, or 6%5%, during the three months ended ~~September 30, 2017~~March 31, 2021 due to net inflows of ~~$6.1~~$10.4 billion ~~including $0.7 billion from our acquisition of IPI,~~ and market appreciation ~~and other~~ of ~~$6.8~~$9.4 billion. Average advisory wrap account assets increased ~~$34.3~~$68.2 billion, or ~~18%~~22%, compared to the prior year period reflecting market appreciation and net ~~inflows and market appreciation.~~

~~The following table presents the changes in wrap account assets for the twelve months ended September 30:~~

2017 2016
(in billions)
Beginning balance $ 197.5
$ 173.8
Inflows from acquisition⁽¹⁾
0.7
—
Other net flows 17.1
9.0
Net flows 17.8
9.0
Market appreciation (depreciation) and other 19.9
14.7
Ending balance $ 235.2
$ 197.5

⁽¹⁾ ~~Inflows associated with acquisition that closed during the period.~~

~~Wrap account assets increased $37.7 billion, or 19%, from the prior year period primarily due to net inflows and market appreciation.~~

~~AMERIPRISE FINANCIAL, INC.~~

inflows.

The following table presents the results of operations of our Advice & Wealth Management segment on an adjusted operating basis:


	Three Months Ended September 30,				Change						Three Months Ended March 31,				Change
	2017		2016								2021		2020
	(in millions)										(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	$	799	$	689	$	110		16	%	Management and financial advice fees	$	1,205	$	1,024	$	181	18	%
Distribution fees	515		531		(16		)	(3	)	Distribution fees	559		548		11		2
Net investment income	64		47		17			36		Net investment income	64		100		(36)		(36)
Other revenues	17		17		—			—		Other revenues	56		48		8		17
Total revenues	1,395		1,284		111			9		Total revenues	1,884		1,720		164		10
Banking and deposit interest expense	12		12		—			—		Banking and deposit interest expense	5		25		(20)		(80)
Total net revenues	1,383		1,272		111			9		Total net revenues	1,879		1,695		184		11
Expenses	Expenses									Expenses
Distribution expenses	813		781		32			4		Distribution expenses	1,135		970		165		17
Interest and debt expense	2		2		—			—		Interest and debt expense	3		2		1		50
General and administrative expense	270		258		12			5		General and administrative expense	352		345		7		2
Total expenses	1,085		1,041		44			4		Total expenses	1,490		1,317		173		13
Operating earnings	$	298	$	231	$	67		29	%
Adjusted operating earnings										Adjusted operating earnings	$	389	$	378	$	11	3	%

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased ~~$67~~$11 million, or ~~29%~~3%, to ~~$298~~$389 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$231~~$378 million for the prior year period reflecting higher average wrap account balances due to net inflows and market appreciation and ~~higher~~improved transactional activity, partially offset by lower earnings on brokerage cash ~~due to higher short-term~~as a result of low interest ~~rates, partially offset by expenses associated with recruiting experienced advisors and higher performance-based compensation.~~rates. Pretax adjusted operating margin was ~~21.5%~~20.7% for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~18.2%~~22.3% for the prior year period.

We launched Ameriprise Bank, FSB in the second quarter of 2019. Since then, we have continued to add deposits, with $8.0 billion of cash sweep balances as of March 31, 2021. In the fourth quarter of 2020, we acquired $224 million in an existing portfolio of brokerage client pledged asset lines of credit that are a 50% participation interest with a third party bank.

AMERIPRISE FINANCIAL, INC.

Net Revenues

Net revenues exclude net realized investment gains or losses. Net revenues increased ~~$111~~$184 million, or 9%11%, to ~~$1.4~~$1.9 billion for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$1.3~~$1.7 billion for the prior year ~~period primarily due to~~ ~~growth in wrap account assets~~, higher earnings on brokerage cash and a $12 million increase in revenues from IPI, partially offset by lower 12b-1 fee revenue. During the first quarter, we completed our transition to share classes without 12b-1 fees in advisory accounts, which reduced revenue by a net $54 million in the third quarter compared to the prior year period. ~~Operating~~Adjusted operating net revenue per advisor increased to ~~$140,000~~$187,000 for the three months ended ~~September 30, 2017,~~March 31, 2021, up 7%9%, ~~from $131,000~~compared to $172,000 for the prior year period. ~~Total advisors were 9,890 at September 30, 2017 compared to 9,747 at September 30, 2016.~~

Management and financial advice fees increased ~~$110~~$181 million, or ~~16%~~18%, to ~~$799 million~~$1.2 billion for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$689 million~~$1.0 billion for the prior year period primarily due to growth in average wrap account assets. Average advisory wrap account assets increased ~~$34.3~~$68.2 billion, or ~~18%~~22%, compared to the prior year period reflecting market appreciation and net ~~inflows and market appreciation.~~inflows.

Distribution fees ~~decreased $16~~increased $11 million, or 3%2%, to ~~$515~~$559 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$531~~$548 million for the prior year period ~~primarily~~reflecting increased transactional activity and higher average equity markets, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a ~~$64 million~~ decrease ~~related to our transition to share classes without 12b-1 fees in advisory accounts, partially offset by higher brokerage cash spread due to an increase~~ in short-term interest ~~rates and revenues from IPI.~~rates.

Net investment income, ~~increased $17~~which excludes net realized investment gains or losses, decreased $36 million, or 36%, to $64 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$47~~$100 million for the prior year period primarily due to lower certificate balances and the $23 million unfavorable impact of lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $20 million, or 80%, to $5 million for the three months ended March 31, 2021 compared to $25 million for the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

Total expenses increased $173 million, or 13%, to $1.5 billion for the three months ended March 31, 2021 compared to $1.3 billion for the prior year period.

Distribution expenses increased $165 million, or 17%, to $1.1 billion for the three months ended March 31, 2021 compared to $970 million for the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets and increased investments in recruiting experienced advisors.

General and administrative expense increased $7 million, or 2%, to $352 million for the three months ended March 31, 2021 compared to $345 million for the prior year period primarily due to higher ~~investment yields~~mark-to-market impact on share-based compensation and ~~an increase in invested balances driven by certificate net inflows.~~

~~Expenses~~

~~Total~~ ~~expenses increased $44 million, or 4%, to $1.1 billion~~planned investments for ~~the three months ended September 30, 2017 compared to $1.0 billion for the prior year period due to increases in distribution expenses and general and administrative expense.~~

~~Distribution~~ expenses increased $32 million, or 4%, to $813 million for the three months ended September 30, 2017 compared to $781 million for the prior year period reflecting higher advisor compensation due tofuture growth, ~~in wrap account assets, the IPI acquisition and investments in recruiting experienced advisors,~~ partially offset by ~~a $43 million decrease related to our transition to share classes without 12b-1 fees in advisory accounts.~~expense reengineering.

~~General~~ and administrative expense increased $12 million, or 5%, to $270 million for the three months ended September 30, 2017 compared to $258 million for the prior year period due to higher performance-based compensation, as well as higher expenses related to the IPI acquisition.

~~AMERIPRISE FINANCIAL, INC.~~

~~Asset Management~~Income Taxes

~~Voluntary fee waivers we provided to the Columbia Money Market Funds were not material~~Our effective tax rate was 11.3% for the three months ~~and nine~~ended March 31, 2021 compared to 13.4% for the prior year period. The lower effective tax rate for the three months ended ~~September 30, 2017~~March 31, 2021 compared to the prior year period is primarily the result of incentive compensation and ~~2016.~~lower pretax income in the current period compared to the prior year period, partially offset by a $144 million tax benefit in the prior year period associated with the forecasted utilization of a 2020 net operating loss (“NOL”) in our life insurance entities that was not ultimately realized. See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

~~The following tables present~~

Results of Operations by Segment for the ~~mutual fund~~Three Months Ended March 31, 2021 and 2020

Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our ~~retail Columbia~~core operations and ~~Threadneedle funds as of September 30:~~

Columbia
Mutual Fund Rankings in top 2 Lipper Quartiles 2017 2016
Domestic Equity Equal weighted 1 year 72 % 62 %
3 year 75 % 68 %
5 year 78 % 67 %
Asset weighted 1 year 68 % 74 %
3 year 82 % 78 %
5 year 82 % 84 %

International Equity Equal weighted 1 year 75 % 55 %
3 year 55 % 60 %
5 year 75 % 80 %
Asset weighted 1 year 56 % 73 %
3 year 44 % 44 %
5 year 55 % 52 %

Taxable Fixed Income Equal weighted 1 year 72 % 78 %
3 year 78 % 71 %
5 year 76 % 76 %
Asset weighted 1 year 74 % 82 %
3 year 83 % 76 %
5 year 87 % 85 %

Tax Exempt Fixed Income Equal weighted 1 year 74 % 84 %
3 year 89 % 89 %
5 year 100 % 94 %
Asset weighted 1 year 60 % 92 %
3 year 98 % 81 %
5 year 100 % 88 %

Asset Allocation Funds Equal weighted 1 year 54 % 69 %
3 year 90 % 100 %
5 year 78 % 75 %
Asset weighted 1 year 47 % 87 %
3 year 94 % 100 %
5 year 93 % 81 %

Number of funds with 4 or 5 Morningstar star ratings Overall 51
54
3 year 56
54
5 year 49
52

Percent of funds with 4 or 5 Morningstar star ratings Overall 50 % 56 %
3 year 55 % 56 %
5 year 49 % 55 %

Percent of assets with 4 or 5 Morningstar star ratings Overall 58 % 68 %
3 year 66 % 75 %
5 year 57 % 67 %

~~Mutual fund performance rankings are based~~facilitating a more meaningful trend analysis. See Note 18 to the Consolidated Financial Statements for further information on the ~~performance~~presentation of ~~Class Z fund shares for Columbia branded mutual funds. Only funds with Class Z shares are included.~~segment results and our definition of adjusted operating earnings.

The following table presents summary financial information by segment:


	Three Months Ended March 31,
	2021		2020
	(in millions)
Advice & Wealth Management
Net revenues	$	1,879	$	1,695
Expenses	1,490		1,317
Adjusted operating earnings	$	389	$	378
Asset Management
Net revenues	$	828	$	686
Expenses	600		529
Adjusted operating earnings	$	228	$	157
Retirement & Protection Solutions
Net revenues	$	787	$	759
Expenses	604		592
Adjusted operating earnings	$	183	$	167
Corporate & Other
Net revenues	$	139	$	149
Expenses	160		199
Adjusted operating loss	$	(21)	$	(50)

AMERIPRISE FINANCIAL, INC.

~~Equal Weighted Rankings in Top 2 Quartiles: Counts the number of funds with above median ranking divided by the total number of funds. Asset size is not a factor.~~

Asset Weighted Rankings in Top 2 Quartiles: Sums the total assets of the funds with above median ranking divided by total assets of all funds. Funds with more assets will receive a greater share of the total percentage above or below median.

Threadneedle
Retail Fund Rankings in Top 2 Morningstar Quartiles or Above Index Benchmark 2017 2016
Equity Equal weighted 1 year 48 % 52 %
3 year 72 % 72 %
5 year 72 % 71 %
Asset weighted 1 year 50 % 62 %
3 year 79 % 69 %
5 year 59 % 63 %

Fixed Income Equal weighted 1 year 76 % 58 %
3 year 79 % 50 %
5 year 76 % 64 %
Asset weighted 1 year 85 % 57 %
3 year 90 % 69 %
5 year 92 % 73 %

Allocation (Managed) Funds Equal weighted 1 year 78 % 88 %
3 year 89 % 88 %
5 year 86 % 83 %
Asset weighted 1 year 61 % 80 %
3 year 94 % 97 %
5 year 93 % 92 %

~~The performance of each fund is measured on a consistent basis against the most appropriate benchmark — a peer group of similar funds or an index.~~

Equal weighted: Counts the number of funds with above median ranking (if measured against peer group) or above index performance (if measured against an index) divided by the total number of funds. Asset size is not a factor.

Asset weighted: Sums the assets of the funds with above median ranking (if measured against peer group) or above index performance (if measured against an index) divided by the total sum of assets in the funds. Funds with more assets will receive a greater share of the total percentage above or below median or index.

~~Aggregated Allocation (Managed) Funds include funds that invest in other funds of the Threadneedle range including those funds that invest in both equity and fixed income.~~

~~Aggregated Threadneedle data includes funds on the Threadneedle platform sub-advised by Columbia~~Advice & Wealth Management ~~as well as advisors not affiliated with Ameriprise Financial, Inc.~~

~~The following table presents global managed assets by type:~~

September 30, Change
Average⁽¹⁾
Change
Three Months Ended September 30,
2017 2016 2017 2016
(in billions)
Equity $ 265.8
$ 245.9
$ 19.9
8 % $ 261.7
$ 244.6
$ 17.1
7 %
Fixed income 178.0
183.3
(5.3 ) (3 ) 177.3
182.4
(5.1 ) (3 )
Money market 5.9
6.6
(0.7 ) (11 ) 5.8
6.9
(1.1 ) (16 )
Alternative 6.5
7.3
(0.8 ) (11 ) 6.5
7.2
(0.7 ) (10 )
Hybrid and other 27.8
24.7
3.1
13
27.2
24.7
2.5
10
Total managed assets $ 484.0
$ 467.8
$ 16.2
3 % $ 478.5
$ 465.8
$ 12.7
3 %
⁽¹⁾ Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.

~~AMERIPRISE FINANCIAL, INC.~~

The following table presents the changes in ~~global managed assets:~~

Three Months Ended September 30,
2017 2016
(in billions)
Global Retail Funds
Beginning assets $ 272.9
—
$ 259.2
Inflows 10.9
—
12.3
Acquisition related inflows ⁽¹⁾
—
1.0
Outflows (12.3 ) —
(14.2 )
Net VP/VIT fund flows (0.8 ) —
(0.6 )
Net new flows (2.2 ) (1.5 )
Reinvested dividends 0.5
—
0.6
Net flows (1.7 ) (0.9 )
Distributions (0.7 ) —
(0.9 )
Market appreciation (depreciation) and other 9.2
—
9.5
Foreign currency translation⁽²⁾
1.1
—
(0.9 )
Total ending assets 280.8
266.0

Global Institutional
Beginning assets 199.7
—
200.4
Inflows 5.8
—
5.1
Outflows (8.8 ) —
(8.5 )
Net flows (3.0 ) (3.4 )
Market appreciation (depreciation) and other ⁽³⁾
4.1
—
7.1
Foreign currency translation⁽²⁾
2.4
—
(2.3 )
Total ending assets 203.2
201.8
Total managed assets $ 484.0
$ 467.8
Total net flows $ (4.7 ) $ (4.3 )

Former Parent Company Related ⁽⁴⁾⁽⁵⁾
Retail net new flows $ (0.6 ) —
$ —
Institutional net new flows (2.4 ) —
(1.5 )
Total net new flows $ (3.0 ) $ (1.5 )

⁽¹⁾ ~~Inflows associated with acquisitions that closed during the period.~~

⁽²⁾ ~~Amounts represent local currency to US dollar translation for reporting purposes.~~

⁽³⁾ ~~Includes $0.3 billion and $0.8 billion for the total change in Affiliated General Account Assets during the three months ended September 30, 2017 and 2016, respectively.~~

⁽⁴⁾ ~~Former parent company related~~wrap account assets and ~~net new flows are included in the rollforwards above.~~

⁽⁵⁾ Prior period former parent company related net new flows were restated to include additional Former Parent Company net new flows that were previously not considered. The change was a decrease of $65 millionaverage balances for the three months ended ~~September 30, 2016.~~March 31:

~~In a referendum~~


	2021		2020
	(in billions)
Beginning balance	$	380.0	$	317.5
Net flows (1)	10.4		6.7
Market appreciation (depreciation) and other (1)	9.4		(48.7)
Ending balance	$	399.8	$	275.5

Advisory wrap account assets ending balance (2)	$	395.3	$	272.3
Average advisory wrap account assets (3)	$	379.3	$	311.1

(1) Beginning in ~~June 2016,~~ the ~~United Kingdom (UK) voted to leave~~first quarter of 2021, wrap net flows is calculated including dividends, interest and fees, which were previously recorded in Market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

(2) Advisory wrap account assets represent those assets for which clients receive advisory services and are the ~~European Union (EU), which caused volatility~~primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in ~~capital and currency markets. Further, in March 2017 the UK invoked article 50~~their wrap accounts that do not incur an advisory fee.

(3) Average ending balances are calculated using an average of the ~~Treaty of Lisbon~~prior period’s ending balance and all months in ~~serving its relevant notice to leave~~ the ~~European Union on~~current period excluding the most recent month for the three months ended March ~~30, 2019. The full impact of the British exit from the EU (commonly known as “Brexit”) remains uncertain. This uncertainty, which is expected to last for a lengthy period of time, has had~~31, 2021 and ~~may have a negative impact on our UK and European net flows and foreign currency translation resulting from the weakening of the British Pound.~~2020.

~~Total segment AUM~~Wrap account assets increased ~~$11.4~~$19.8 billion, or 2%5%, during the three months ended ~~September 30, 2017 driven by~~March 31, 2021 due to net inflows of $10.4 billion and market appreciation of $9.4 billion. Average advisory wrap account assets increased $68.2 billion, or 22%, compared to the prior year period reflecting market appreciation and ~~a positive impact of foreign currency translation, partially offset by~~ net outflows. Total segment AUM net outflows were $4.7 billion for the three months ended September 30, 2017, which included $3.0 billion of outflows of former parent-related assets. Management expects, consistent with prior patterns of outflows, that outflows of primarily low margin assets directly or indirectly affiliated with Threadneedle and Columbia former parent companies will continue for the foreseeable future. The overall impact to segment results is difficult to quantify due to uncertain timing, volume and mix of the outflows. Former parent company related AUM was approximately $73 billion as of September 30, 2017.

~~AMERIPRISE FINANCIAL, INC.~~

Global retail net outflows of $1.7 billion included $0.8 billion of outflows of our variable product funds underlying insurance and annuity separate accounts and $0.6 billion of outflows from former parent-related assets. In U.S. retail, net outflows excluding the former parent-related assets were $1.5 billion, reflecting ongoing industry pressure on active strategies. In Europe, Middle East and Africa (“EMEA”), net inflows were $0.4 billion.

Global institutional net outflows of $3.0 billion included $2.4 billion of outflows from former parent-related assets. Institutional outflows from former parent-related assets included Zurich outflows of $0.9 billion and U.S. Trust outflows of $1.5 billion.

On September 20, 2017, we announced our acquisition of Lionstone Investments, a leading national real estate investment firm, specializing in investment strategies based upon proprietary analytics. The acquisition closed on November 1, 2017 and adds approximately $6 billion in assets under management.inflows.

The following table presents the results of operations of our ~~Asset~~Advice & Wealth Management segment on an adjusted operating basis:


	Three Months Ended September 30,				Change						Three Months Ended March 31,				Change
	2017		2016								2021		2020
	(in millions)										(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	$	657	$	612	$	45		7	%	Management and financial advice fees	$	1,205	$	1,024	$	181	18	%
Distribution fees	111		125		(14		)	(11	)	Distribution fees	559		548		11		2
Net investment income	6		1		5			NM		Net investment income	64		100		(36)		(36)
Other revenues	4		2		2			NM		Other revenues	56		48		8		17
Total revenues	778		740		38			5		Total revenues	1,884		1,720		164		10
Banking and deposit interest expense	—		—		—			—		Banking and deposit interest expense	5		25		(20)		(80)
Total net revenues	778		740		38			5		Total net revenues	1,879		1,695		184		11
Expenses	Expenses									Expenses
Distribution expenses	246		261		(15		)	(6	)	Distribution expenses	1,135		970		165		17
Amortization of deferred acquisition costs	4		4		—			—
Interest and debt expense	5		5		—			—		Interest and debt expense	3		2		1		50
General and administrative expense	323		315		8			3		General and administrative expense	352		345		7		2
Total expenses	578		585		(7		)	(1	)	Total expenses	1,490		1,317		173		13
Operating earnings	$	200	$	155	$	45		29	%
NM Not Meaningful.
Adjusted operating earnings										Adjusted operating earnings	$	389	$	378	$	11	3	%

Our ~~Asset~~Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased ~~$45~~$11 million, or ~~29%~~3%, to ~~$200~~$389 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$155~~$378 million for the prior year period reflecting higher average wrap account balances due to net inflows and market appreciation and improved transactional activity, partially offset by lower earnings on brokerage cash as a result of low interest rates. Pretax adjusted operating margin was 20.7% for the three months ended March 31, 2021 compared to 22.3% for the prior year period.

AMERIPRISE FINANCIAL, INC.

Net Revenues

Net revenues exclude net realized investment gains or losses. Net revenues increased $184 million, or 11%, to $1.9 billion for the three months ended March 31, 2021 compared to $1.7 billion for the prior year period. Adjusted operating net revenue per advisor increased to $187,000 for the three months ended March 31, 2021, up 9%, compared to $172,000 for the prior year period.

Management and financial advice fees increased $181 million, or 18%, to $1.2 billion for the three months ended March 31, 2021 compared to $1.0 billion for the prior year period primarily due to growth in average wrap account assets. Average advisory wrap account assets increased $68.2 billion, or 22%, compared to the prior year period reflecting market appreciation ~~a $7 million increase in performance~~and net inflows.

Distribution fees ~~(net of related compensation), an $8 million increase in incentive fees from CLO unwinds and continued expense management, partially offset by net outflows.~~

~~Net Revenues~~

~~Net revenues, which exclude net realized investment gains or losses,~~ increased ~~$38~~$11 million, or 5%2%, to ~~$778~~$559 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$740~~$548 million for the prior year period reflecting ~~market appreciation,~~increased transactional activity and higher ~~performance fees and an increase in incentive fees from CLO unwinds,~~average equity markets, partially offset by ~~net outflows and a $13~~$55 million ~~decrease related to the transition~~ of ~~advisory accounts to share classes without 12b-1 fees. The Asset Management segment revenue related to 12b-1~~lower fees ~~is eliminated~~ on ~~a consolidated basis.~~

Management and financial advice fees increased $45 million, or 7%, to $657 million for the three months ended September 30, 2017 compared to $612 million for the prior year period driven by market appreciation, a $15 million increase in performance fees and an $8 million increase in incentive fees from CLO unwinds, partially offset by cumulative net outflows from former parent-related assets and higher fee yielding retail funds. Our average weighted equity index, which is a proxy for equity movements on AUM, increased 14% for the three months ended September 30, 2017 compared to the prior year period.

~~Distribution fees decreased $14 million, or 11%, to $111 million for the three months ended September 30, 2017 compared to $125 million for the prior year period~~off-balance sheet brokerage cash due to ~~cumulative net outflows and a $13 million decrease related to the transition of advisory accounts to share classes without 12b-1 fees, partially offset by market appreciation.~~

~~Expenses~~

Total expenses decreased $7 million, or 1%, to $578 million for the three months ended September 30, 2017 compared to $585 million for the prior year period due to lower distribution expenses, partially offset by higher general and administrative expense.

~~AMERIPRISE FINANCIAL, INC.~~

Distribution expenses decreased $15 million, or 6%, to $246 million for the three months ended September 30, 2017 compared to $261 million for the prior year period due to lower compensation driven by cumulative net outflows and a decrease related to the transition of advisory accounts to share classes without 12b-1 fees, partially offset by market appreciation. The Asset Management segment expense related to 12b-1 fees is eliminated on a consolidated basis.

General and administrative expense increased $8 million, or 3%, to $323 million for the three months ended September 30, 2017 compared to $315 million for the prior year period due to an $8 million increase in ~~compensation related to higher performance fees.~~

~~Annuities~~

~~The following table presents the results of operations of our Annuities segment on an operating basis:~~

Three Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 196
$ 188
$ 8
4 %
Distribution fees 91
89
2
2
Net investment income 173
192
(19 ) (10 )
Premiums 24
29
(5 ) (17 )
Other revenues 142
133
9
7
Total revenues 626
631
(5 ) (1 )
Banking and deposit interest expense —
—
—
—
Total net revenues 626
631
(5 ) (1 )
Expenses
Distribution expenses 105
106
(1 ) (1 )
Interest credited to fixed accounts 121
122
(1 ) (1 )
Benefits, claims, losses and settlement expenses 19
346
(327 ) (95 )
Amortization of deferred acquisition costs 40
66
(26 ) (39 )
Interest and debt expense 9
7
2
29
General and administrative expense 51
52
(1 ) (2 )
Total expenses 345
699
(354 ) (51 )%
Operating earnings (loss) $ 281
$ (68 ) $ 349
NM
NM Not Meaningful.

Our Annuities segment pretax operating income, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization) and the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization), increased $349 million to $281 million for the three months ended September 30, 2017 compared to a loss of $68 million for the prior year period primarily due to the impact of unlocking.

RiverSource variable annuity account balances increased 4% to $78.7 billion at September 30, 2017 compared to the prior year period due to equity market appreciation, partially offset by net outflows of $3.7 billion. Lapse rates were higher in the quarter, reflecting increased client asset transfers from variable annuities to fee-based investment advisory accounts.

RiverSource fixed deferred annuity account balances declined 7% to $9.5 billion at September 30, 2017 compared to the prior year period as older policies continue to lapse and new sales are limited due to lowshort-term interest rates. ~~Given the current interest rate environment, our current fixed deferred annuity book is expected to gradually run off and earnings on our fixed deferred annuity business will trend down.~~

~~Net Revenues~~

Net revenues, which exclude net realized investment gains or losses, decreased $5 million, or 1%, to $626 million for the three months ended September 30, 2017 compared to $631 million for the prior year period due to lower investment yields and net outflows in fixed and variable annuities, partially offset by equity market appreciation and an increase in variable annuity rider fees.

Management and financial advice fees increased $8 million, or 4%, to $196 million for the three months ended September 30, 2017 compared to $188 million for the prior year period due to higher fees on variable annuities driven by higher average separate account balances. Average variable annuity account balances increased $2.1 billion, or 3%, from the prior year period due to market appreciation, partially offset by net outflows.

~~AMERIPRISE FINANCIAL, INC.~~

Net investment income, which excludes net realized investment gains or losses, decreased ~~$19~~$36 million, or ~~10%~~36%, to ~~$173~~$64 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $192 million for the prior year period reflecting a decrease of approximately $11 million from lower earned interest rates and approximately $8 million from lower invested assets due to fixed annuity net outflows.

Other revenues increased $9 million, or 7%, to $142 million for the three months ended September 30, 2017 compared to $133 million for the prior year period due to higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date and higher average fee rates.

~~Expenses~~

Total expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization) and the DAC and DSIC offset to net realized investment gains or losses, decreased $354 million, or 51%, to $345 million for the three months ended September 30, 2017 compared to $699$100 million for the prior year period primarily due to lower certificate balances and the $23 million unfavorable impact of ~~unlocking.~~lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.

~~Benefits, claims, losses~~Banking and settlement expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC amortization) and the DSIC offset to net realized investment gains or losses,deposit interest expense decreased ~~$327~~$20 million, or ~~95%~~80%, to ~~$19~~$5 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$346~~$25 million for the prior year period primarily due to ~~the impact of unlocking, which was a $119~~lower average crediting rates on certificates and lower average certificate balances.

Expenses

Total expenses increased $173 million, ~~benefit~~or 13%, to $1.5 billion for the ~~third quarter of 2017~~three months ended March 31, 2021 compared to ~~a $197 million expense~~$1.3 billion for the prior year period. ~~The unlocking impact~~

Distribution expenses increased $165 million, or 17%, to $1.1 billion for the ~~third quarter of 2017 primarily reflected a benefit from updates~~three months ended March 31, 2021 compared to ~~market-related inputs to our living benefit valuation. The unlocking impact~~$970 million for the prior year period ~~primarily reflected low interest rates~~reflecting higher asset-based advisor compensation from higher wrap account assets and ~~an unfavorable impact from persistency on living benefit reserves, partially offset by a benefit from updates to withdrawal utilization~~increased investments in recruiting experienced advisors.

General and ~~fee assumptions, as well as market-related inputs related to our living benefit valuation.~~

~~Amortization of DAC decreased $26~~administrative expense increased $7 million, or ~~39%~~2%, to ~~$40~~$352 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $66 million for the prior year period primarily reflecting the impact of unlocking, which was a benefit of $1 million for the three months ended September 30, 2017 compared to an expense of $18 million for the prior year period. The impact of unlocking in the third quarter of 2017 primarily reflected a $10 million benefit from a correction related to a variable annuity model assumption and slightly higher interest rates, largely offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking in the prior year period primarily reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits. Our long-term interest rate assumption remained unchanged, but we extended the period it would take for rates to reach our long term level from 3.5 years to 5.5 years.

~~Protection~~

~~The following table presents the results of operations of our Protection segment on an operating basis:~~

Three Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 12
$ 13
$ (1 ) (8 )%
Distribution fees 24
24
—
—
Net investment income 86
85
1
1
Premiums 305
323
(18 ) (6 )
Other revenues 51
168
(117 ) (70 )
Total revenues 478
613
(135 ) (22 )
Banking and deposit interest expense —
—
—
—
Total net revenues 478
613
(135 ) (22 )
Expenses
Distribution expenses 17
17
—
—
Interest credited to fixed accounts 47
44
3
7
Benefits, claims, losses and settlement expenses 278
363
(85 ) (23 )
Amortization of deferred acquisition costs 13
38
(25 ) (66 )
Interest and debt expense 7
6
1
17
General and administrative expense 61
61
—
—
Total expenses 423
529
(106 ) (20 )
Operating earnings $ 55
$ 84
$ (29 ) (35 )%

~~AMERIPRISE FINANCIAL, INC.~~

Our Protection segment pretax operating earnings, which excludes net realized investment gains or losses (net of the related DAC amortization, unearned revenue amortization and the reinsurance accrual) and the market impact on indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual), decreased $29 million, or 35%, to $55 million for the three months ended September 30, 2017 compared to $84$345 million for the prior year period primarily due to ~~the~~higher mark-to-market impact ~~of unlocking,~~on share-based compensation and planned investments for future growth, partially offset by ~~improved auto and home results.~~expense reengineering.

~~Net Revenues~~

Net revenues, which exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual) and the unearned revenue amortization and the reinsurance accrual offset to the market impact on indexed universal life benefits, decreased $135 million, or 22%, to $478 million for the three months ended September 30, 2017 compared to $613 million for the prior year period primarily due to the impact of unlocking and a decrease in premiums.

Premiums decreased $18 million, or 6%, to $305 million for the three months ended September 30, 2017 compared to $323 million for the prior year period primarily reflecting higher ceded premiums for our auto and home business due to new reinsurance arrangements. In the first quarter of 2017, we entered into reinsurance arrangements designed to reduce risk, particularly in several wind/hail states where losses have been elevated.

Other revenues decreased $117 million, or 70%, to $51 million for the three months ended September 30, 2017 compared to $168 million for the prior year period due to the impact of unlocking. Other revenues for the third quarter of 2017 included a $47 million unfavorable impact from unlocking compared to a $64 million favorable impact in the prior year period. The primary driver of the unlocking impact to other revenues for the third quarter of 2017 was a negative impact from lower projected gains on reinsurance contracts resulting from favorable mortality experience. The primary driver of the unlocking impact to other revenues for the prior year period was a positive impact from higher projected gains on reinsurance contracts resulting from unfavorable mortality experience.

~~Expenses~~

Total expenses, which exclude the market impact on indexed universal life benefits (net of hedges and the related DAC amortization) and the DAC offset to net realized investment gains or losses, decreased $106 million, or 20%, to $423 million for the three months ended September 30, 2017 compared to $529 million for the prior year period primarily due to the impact of unlocking and a decrease in auto and home expenses.

Benefits, claims, losses and settlement expenses decreased $85 million, or 23%, to $278 million for the three months ended September 30, 2017 compared to $363 million for the prior year period due to the impact of unlocking and a $26 million decrease in auto and home expenses reflecting the impact of new reinsurance arrangements, a lower non-catastrophe loss ratio and an $8 million benefit from a correction of a reinsurance recoverable estimate, partially offset by higher gross catastrophe losses and a $10 million positive impact from prior year reserve development in the third quarter of 2016. The unlocking impact for the third quarter of 2017 was a $14 million benefit and primarily reflected favorable mortality experience on life insurance contracts. The unlocking impact for the third quarter of 2016 was a $40 million expense and primarily reflected low interest rates and unfavorable mortality experience. Catastrophe losses, net of the impact of reinsurance, were $15 million for the three months ended September 30, 2017, primarily related to Hurricanes Harvey and Irma, compared to $29 million for the prior year period. In the first quarter of 2017, we entered into quota share and excess of loss reinsurance arrangements designed to reduce net retained exposure to property losses. The expanded reinsurance program resulted in ceded losses of approximately $38 million in the third quarter.

Amortization of DAC decreased $25 million, or 66%, to $13 million for the three months ended September 30, 2017 compared to $38 million for the prior year period primarily reflecting the impact of unlocking, which was a benefit of $13 million for the three months ended September 30, 2017 compared to an expense of $7 million for the prior year period. The impact of unlocking in the third quarter of 2017 primarily reflected improved persistency and mortality on life insurance contracts.

~~AMERIPRISE FINANCIAL, INC.~~

~~Corporate & Other~~

~~The following table presents the results of operations of our Corporate & Other segment on an operating basis:~~

Three Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Net investment income $ 22
$ 21
$ 1
5 %
Premiums 28
27
1
4
Other revenues 1
4
(3 ) (75 )
Total revenues 51
52
(1 ) (2 )
Banking and deposit interest expense 1
1
—
—
Total net revenues 50
51
(1 ) (2 )
Expenses
Distribution expenses (2 ) (31 ) 29
94
Benefits, claims, losses and settlement expenses 119
101
18
18
Amortization of deferred acquisition costs —
59
(59 ) NM
Interest and debt expense 6
7
(1 ) (14 )
General and administrative expense 63
60
3
5
Total expenses 186
196
(10 ) (5 )
Operating loss $ (136 ) $ (145 ) $ 9
6 %
NM Not Meaningful.

Our Corporate & Other segment pretax operating loss excludes net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, integration and restructuring charges, and the impact of consolidating CIEs. Our Corporate & Other segment pretax operating loss decreased $9 million, or 6%, to $136 million for the three months ended September 30, 2017 compared to $145 million for the prior year period reflecting loss recognition on LTC insurance products of $31 million in the prior year period and a $29 million increase in LTC reserves in the prior year period from a correction related to our claim utilization assumption, partially offset by LTC loss recognition of $57 million for the three months ended September 30, 2017.

Distribution expenses increased $29 million to a benefit of $2 million for the three months ended September 30, 2017 compared to a benefit of $31 million for the prior year period. Distribution expenses for the prior year period included a $27 million benefit related to the write-off of the deferred reinsurance liability in connection with loss recognition on LTC insurance products.

Benefits, claims, losses and settlement expenses increased $18 million, or 18%, to $119 million for the three months ended September 30, 2017 compared to $101 million for the prior year period primarily due to a $57 million expense from loss recognition on LTC insurance products in the third quarter of 2017, partially offset by a $29 million increase in LTC reserves in the prior year period from a correction related to our claim utilization assumption. The LTC loss recognition in the third quarter of 2017 was primarily due to unfavorable morbidity experience, partially offset by premium increases.

Amortization of DAC decreased $59 million compared to the prior year period reflecting the write-off of DAC in the third quarter of 2016 in connection with the loss recognition on LTC insurance products.

~~AMERIPRISE FINANCIAL, INC.~~

~~Consolidated Results of Operations for the Nine Months Ended September 30, 2017 and 2016~~

~~The following table presents our consolidated results of operations:~~

Nine Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 4,669
$ 4,289
$ 380
9 %
Distribution fees 1,310
1,338
(28 ) (2 )
Net investment income 1,154
1,090
64
6
Premiums 1,035
1,114
(79 ) (7 )
Other revenues 733
832
(99 ) (12 )
Total revenues 8,901
8,663
238
3
Banking and deposit interest expense 34
29
5
17
Total net revenues 8,867
8,634
233
3
Expenses
Distribution expenses 2,505
2,371
134
6
Interest credited to fixed accounts 509
465
44
9
Benefits, claims, losses and settlement expenses 1,652
1,934
(282 ) (15 )
Amortization of deferred acquisition costs 189
360
(171 ) (48 )
Interest and debt expense 154
160
(6 ) (4 )
General and administrative expense 2,244
2,221
23
1
Total expenses 7,253
7,511
(258 ) (3 )
Pretax income 1,614
1,123
491
44
Income tax provision 315
209
106
51
Net income $ 1,299
$ 914
$ 385
42 %

~~Overall~~

Pretax income increased $491 million, or 44%, to $1.6 billion for the nine months ended September 30, 2017 compared to $1.1 billion for the prior year period primarily reflecting the impact of unlocking, market appreciation, wrap account net inflows, a positive impact from higher short-term interest rates, a $23 million expense in the prior year period from the resolution of a legacy legal matter related to the hedge fund business and an unfavorable $29 million LTC reserve correction in the prior year period, partially offset by asset management net outflows, loss recognition of $57 million on LTC insurance products in the third quarter of 2017 and higher performance-based compensation.

~~The following market-related impacts were also significant drivers of the year-over-year change in pretax income:~~

The market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization) was an expense of $198 million for the nine months ended September 30, 2017 compared to an expense of $78 million for the prior year period.

The market impact on indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual) was an expense of $16 million for the nine months ended September 30, 2017 compared to a benefit of $31 million for the prior year period.

~~The market impact of hedges on investments was an expense of $8 million for the nine months ended September 30, 2017 compared to an expense of $54 million for the prior year period.~~

~~Net realized investment gains were $33 million for the nine months ended September 30, 2017 compared to net realized investment losses of $5 million for the prior year period.~~

The impact on DAC, DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance based on our view of bond and equity performance was a benefit of $63 million ($27 million for DAC, $6 million for DSIC and $30 million for insurance features in non-traditional long duration contracts) for the nine months ended September 30, 2017 reflecting favorable equity market and bond fund returns compared to a benefit of $5 million ($3 million for DAC, $1 million for DSIC and $1 million for insurance features in non-traditional long duration contracts) for the prior year period.

~~AMERIPRISE FINANCIAL, INC.~~

~~See the table of total pretax impacts on our revenues and expenses attributable to unlocking within our Consolidated Results of Operations for the three months ended September 30, 2017.~~

~~Net Revenues~~

Net revenues increased $233 million, or 3%, to $8.9 billion for the nine months ended September 30, 2017 compared to $8.6 billion for the prior year period primarily due to market appreciation, wrap account net inflows, an increase in net investment income, and ~~higher brokerage cash spread due to an increase in short-term interest rates,~~ partially offset by the impact of unlocking, a $138 million decrease in revenues from the net impact of transitioning advisory accounts to share classes without 12b-1 fees, asset management net outflows and higher ceded premiums for our auto and home business.

~~Management~~ and financial advice fees increased $380 million, or 9%, to $4.7 billion for the nine months ended September 30, 2017 compared to $4.3 billion for the prior year period primarily due to an increase in AUM. Average AUM increased $37.9 billion, or 6%, compared to the prior year period due to market appreciation and wrap account net inflows, partially offset by asset management net outflows and the negative impact of foreign currency translation. See our discussion on the changes in AUM in our segment results of operations section.

~~Distribution~~ fees decreased $28 million, or 2%, to $1.3 billion for the nine months ended September 30, 2017 compared to the prior year period primarily due to a $162 million decrease related to our transition to share classes without 12b-1 fees in advisory accounts, partially offset by market appreciation and higher brokerage cash spread due to an increase in short-term interest rates.

~~Net~~ investment income increased $64 million, or 6%, to $1.2 billion for the nine months ended September 30, 2017 compared to $1.1 billion for the prior year period primarily due to a $46 million favorable change in the market impact of hedges on investments and net realized investment gains of $35 million for the nine months ended September 30, 2017 compared to net realized investment losses of $5 million for the prior year period, partially offset by a $16 million decrease in investment income on fixed maturities driven by lower earned interest rates and fixed annuity net outflows.

~~Premiums~~ decreased $79 million, or 7%, to $1.0 billion for the nine months ended September 30, 2017 compared to $1.1 billion for the prior year period primarily reflecting higher ceded premiums for our auto and home business due to new reinsurance arrangements we entered into at the beginning of the year to reduce risk.

~~Other~~ revenues decreased $99 million, or 12%, to $733 million for the nine months ended September 30, 2017 compared to $832 million for the prior year period primarily due to the impact of unlocking, partially offset by higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date and higher average fee rates. Other revenues for the nine months ended September 30, 2017 included a $47 million unfavorable impact from unlocking compared to a $64 million favorable impact in the prior year period. The primary driver of the unlocking impact to other revenues for the nine months ended September 30, 2017 was a negative impact from lower projected gains on reinsurance contracts resulting from favorable mortality experience. The primary driver of the unlocking impact to other revenues for the prior year period was a positive impact from higher projected gains on reinsurance contracts resulting from unfavorable mortality experience.

~~Expenses~~

~~Total~~ expenses decreased $258 million, or 3%, to $7.3 billion for the nine months ended September 30, 2017 compared to $7.5 billion for the prior year period primarily due to the impact of unlocking, partially offset by higher distribution expenses.

~~Distribution~~ expenses increased $134 million, or 6%, to $2.5 billion for the nine months ended September 30, 2017 compared to $2.4 billion for the prior year period reflecting market appreciation, wrap account net inflows and a $27 million benefit in the prior year period related to the write-off of the deferred reinsurance liability in connection with loss recognition testing of LTC insurance products, partially offset by a $106 million decrease from changes related to our transition to share classes without 12b-1 fees in advisory accounts and asset management net outflows.

~~Interest~~ credited to fixed accounts increased $44 million, or 9%, to $509 million for the nine months ended September 30, 2017 compared to $465 million for the prior year period primarily due to the market impact on indexed universal life benefits, net of hedges, which was an expense of $14 million for the nine months ended September 30, 2017 compared to a benefit of $25 million for the prior year period.

Benefits, claims, losses and settlement expenses decreased $282 million, or 15%, to $1.7 billion for the nine months ended September 30, 2017 compared to $1.9 billion for the prior year period primarily reflecting the following items:

The nine months ended September 30, 2017 included a $139 million benefit from unlocking compared to a $229 million expense in the prior year period. The unlocking impact for the nine months ended September 30, 2017 primarily reflected a benefit from updates to market-related inputs to our living benefit valuation. The unlocking impact for the prior year period primarily reflected low interest rates and an unfavorable impact from persistency on living benefit reserves, partially offset by a benefit from updates to withdrawal utilization and fee assumptions, as well as market-related inputs related to our living benefit valuation.

~~A $29 million increase in LTC reserves from a correction related to our claim utilization assumption in the third quarter of 2016.~~

~~AMERIPRISE FINANCIAL, INC.~~

The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance based on our view of bond and equity performance was a benefit of $36 million for the nine months ended September 30, 2017 reflecting favorable equity market and bond fund returns compared to a benefit of $2 million for the prior year period.

An $84 million decrease in auto and home expenses reflecting the impact of new reinsurance arrangements and a lower non-catastrophe loss ratio, partially offset by higher gross catastrophe losses. Catastrophe losses, net of the impact of reinsurance, were $84 million for the nine months ended September 30, 2017 compared to $89 million for the prior year period. The expanded reinsurance program resulted in ceded losses of approximately $82 million for the nine months ended September 30, 2017.

~~A $57 million expense from loss recognition on LTC insurance products in the third quarter of 2017 primarily due to unfavorable morbidity experience, partially offset by premium increases.~~

A $24 million increase in expense related to higher reserve funding driven by the impact of higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date.

~~A $21 million negative impact from changes in assumptions in the prior year unlocking process that resulted in ongoing increases to living benefit reserves.~~

A $459 million increase in expense compared to the prior year period from the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits. As the embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense. The unfavorable impact of the nonperformance credit spread was $122 million for the nine months ended September 30, 2017 compared to a favorable impact of $337 million for the prior year period.

A $309 million decrease in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization. This decrease was the result of a favorable $1.7 billion change in the market impact on variable annuity guaranteed living benefits reserves, an unfavorable $1.4 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits and a favorable $3 million change in the DSIC offset. The main market drivers contributing to these changes are summarized below:

Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the nine months ended September 30, 2017 compared to the prior year period.

Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for the nine months ended September 30, 2017 compared to an expense in the prior year period.

Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the nine months ended September 30, 2017 compared to the prior year period.

Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a net favorable impact compared to the prior year period.

Amortization of DAC decreased $171 million, or 48%, to $189 million for the nine months ended September 30, 2017 compared to $360 million for the prior year period primarily reflecting the following items:

The impact of unlocking was a benefit of $12 million for the nine months ended September 30, 2017 compared to an expense of $81 million for the prior year period. The impact of unlocking for the nine months ended September 30, 2017 primarily reflected improved persistency and mortality on life insurance contracts and a $10 million benefit from a ~~correction related to a variable annuity model assumption~~, partially offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking in the prior year period primarily reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits. ~~In addition, we wrote-off $58 million of DAC in connection with the loss recognition on LTC insurance products in the prior year period.~~

The impact on DAC from actual versus expected market performance based on our view of bond and equity performance was a benefit of $27 million for the nine months ended September 30, 2017 reflecting favorable equity market and bond fund returns compared to a benefit of $3 million for the prior year period.

The DAC offset to the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC amortization) was a benefit of $24 million for the nine months ended September 30, 2017 compared to an expense of $6 million for the prior year period.

~~General~~ and administrative expense increased $23 million, or 1%, to $2.2 billion for the nine months ended September 30, 2017 compared to the prior year period primarily due to higher performance-based compensation, partially offset by a $23 million expense in the prior year period from the resolution of a legacy legal matter related to the hedge fund business.

~~AMERIPRISE FINANCIAL, INC.~~

~~Income Taxes~~Net Revenues

~~Our effective tax rate was 19.5%~~Net revenues increased $349 million, or 12%, to $3.4 billion for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~18.6%~~$3.0 billion for the prior year period. ~~Our effective tax rates for the nine months ended September 30, 2017~~

Management and 2016 were lower than the statutory rate as a result of tax preferred items including the dividends received deduction, low income housing tax credits, stock compensation and lower taxes on net income from foreign subsidiaries.

~~Results of Operations by Segment for the Nine Months Ended September 30, 2017 and 2016~~

~~The following table presents summary~~ financial ~~information by segment:~~

Nine Months Ended September 30,
2017 2016
(in millions)
Advice & Wealth Management
Net revenues $ 4,026
$ 3,720
Expenses 3,189
3,063
Operating earnings $ 837
$ 657
Asset Management
Net revenues $ 2,252
$ 2,203
Expenses 1,726
1,751
Operating earnings $ 526
$ 452
Annuities
Net revenues $ 1,861
$ 1,846
Expenses 1,299
1,644
Operating earnings $ 562
$ 202
Protection
Net revenues $ 1,516
$ 1,693
Expenses 1,347
1,503
Operating earnings $ 169
$ 190
Corporate & Other
Net revenues $ 162
$ 178
Expenses 454
449
Operating loss $ (292 ) $ (271 )

~~See the table of total pretax impacts on our revenues and expenses attributable~~advice fees increased $332 million, or 19%, to ~~unlocking within our Results of Operations by Segment~~$2.1 billion for the three months ended ~~September 30, 2017.~~

~~Advice & Wealth Management~~

~~The following table presents~~March 31, 2021 compared to $1.8 billion for the ~~changes in~~prior year period reflecting higher average equity markets, higher wrap account ~~assets~~net inflows and ~~average balances~~an unfavorable $19 million performance fee correction in the prior year period.

Distribution fees decreased $6 million, or 1%, to $458 million for the ~~nine~~three months ended ~~September 30:~~March 31, 2021 compared to $464 million for the prior year period due to $55 million of lower fees on off-balance sheet brokerage cash primarily due to a decrease in short-term interest rates partially offset by increased transactional activity and higher average equity markets.

Net investment income increased $49 million, or 15%, to $377 million for the three months ended March 31, 2021 compared to $328 million for the prior year period primarily reflecting the following items:

2017 2016
(in billions)
Beginning balance $ 201.1
$ 180.5
Inflows from acquisition ⁽¹⁾
0.7
—
Other net flows 13.8
6.9
Net flows 14.5
6.9
Market appreciation (depreciation) and other 19.6
10.1
Ending balance $ 235.2
$ 197.5

Advisory wrap account assets ending balance ⁽²⁾
$ 233.0
$ 195.4
Average advisory wrap account assets ⁽³⁾
$ 216.2
$ 184.7

⁽¹⁾ ~~Inflows associated with acquisition that closed during the period.~~

AMERIPRISE FINANCIAL, INC.


⁽²⁾	~~Advisory wrap account assets represent those assets~~•Net realized investment gains of $69 million, which included a $15 million gain on a strategic investment, for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.


⁽³⁾	~~Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.~~

~~Wrap account assets increased $34.1 billion, or 17%, during~~ the ~~nine~~three months ended ~~September 30, 2017 due~~March 31, 2021 compared to net ~~inflows~~realized investment losses of ~~$14.5 billion, including $0.7 billion from our acquisition of IPI, and market appreciation and other of $19.6 billion. Net flows increased $7.6 billion compared to~~$19 million for the prior year period. ~~Average advisory wrap account assets increased $31.5 billion,~~

•Higher investment income from CIEs.

•The unfavorable impact of lower interest rates, including lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products.

Premiums, policy and contract charges decreased $48 million, or ~~17%,~~12% to $347 million for the three months ended March 31, 2021 compared to $395 million for the prior year ~~period~~primarily reflecting ~~net inflows~~an unfavorable change in unearned revenue amortization and the reinsurance accrual offset to the market ~~appreciation.~~impact on IUL benefits and lower sales of immediate annuities with a life contingent feature.

~~The following table presents~~Banking and deposit interest expense decreased $20 million, or 80%, to $5 million for the ~~results of operations of our Advice & Wealth Management segment~~three months ended March 31, 2021 compared to $25 million due to lower average crediting rates on ~~an operating basis:~~certificates and lower average certificate balances.

Expenses

Nine Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 2,294
$ 1,989
$ 305
15 %
Distribution fees 1,533
1,569
(36 ) (2 )
Net investment income 174
138
36
26
Other revenues 59
53
6
11
Total revenues 4,060
3,749
311
8
Banking and deposit interest expense 34
29
5
17
Total net revenues 4,026
3,720
306
8
Expenses
Distribution expenses 2,379
2,275
104
5
Interest and debt expense 7
6
1
17
General and administrative expense 803
782
21
3
Total expenses 3,189
3,063
126
4
Operating earnings $ 837
$ 657
$ 180
27 %
Total expenses increased $2.2 billion to $2.9 billion for the three months ended March 31, 2021 compared to $650 million for the prior year period.

~~Our Advice & Wealth Management segment pretax operating earnings, which exclude net realized investment gains or losses,~~Distribution expenses increased $180 million, or ~~27%~~18%, to ~~$837 million~~$1.2 billion for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$657~~$995 million for the prior year period reflecting higher advisor compensation due to an increase in average wrap account ~~net inflows, market appreciation~~balances and ~~higher earnings on brokerage cash, partially offset by expenses associated with recruiting experienced advisors and higher performance-based compensation. Pretax operating margin was 20.8%~~increased transactional activity.

Interest credited to fixed accounts increased $68 million, or 75%, to $159 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~17.7%~~$91 million for the prior year period primarily reflecting the following items:

•A $235 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The unfavorable impact of the nonperformance credit spread was $1 million for the three months ended March 31, 2021 compared to a favorable impact of $234 million for the prior year period.

Benefits, claims, losses and settlement expenses increased $2.4 billion to $653 million for the three months ended March 31, 2021 compared to a benefit of $1.7 billion for the prior year period primarily reflecting the following items:

•The mean reversion related impact was a benefit of $34 million for the three months ended March 31, 2021 compared to an expense of $24 million for the prior year period.

AMERIPRISE FINANCIAL, INC.

•A $13 million decrease in reserves for immediate annuities with a life contingent feature primarily due to lower sales. This impact is offset by a decrease in premiums.

•The mean reversion related impact was a benefit of $22 million for the three months ended March 31, 2021 compared to an expense of $36 million for the prior year period.

General and administrative expense increased $70 million, or 9%, to $823 million for the three months ended March 31, 2021 compared to $753 million for the prior year period primarily reflecting an unfavorable change in the mark-to-market impact on share-based compensation and higher expenses from CIEs, partially offset by disciplined expense management and reengineering.

Net Revenues

Net revenues increased $349 million, or 12%, to $3.4 billion for the three months ended March 31, 2021 compared to $3.0 billion for the prior year period.

Management and financial advice fees increased $332 million, or 19%, to $2.1 billion for the three months ended March 31, 2021 compared to $1.8 billion for the prior year period reflecting higher average equity markets, higher wrap account net inflows and an unfavorable $19 million performance fee correction in the prior year period.

Distribution fees decreased $6 million, or 1%, to $458 million for the three months ended March 31, 2021 compared to $464 million for the prior year period due to $55 million of lower fees on off-balance sheet brokerage cash primarily due to a decrease in short-term interest rates partially offset by increased transactional activity and higher average equity markets.

AMERIPRISE FINANCIAL, INC.

•Net realized investment gains of $69 million, which included a $15 million gain on a strategic investment, for the three months ended March 31, 2021 compared to net realized investment losses of $19 million for the prior year period.

•Higher investment income from CIEs.

•The unfavorable impact of lower interest rates, including lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products.

Premiums, policy and contract charges decreased $48 million, or 12% to $347 million for the three months ended March 31, 2021 compared to $395 million for the prior year primarily reflecting an unfavorable change in unearned revenue amortization and the reinsurance accrual offset to the market impact on IUL benefits and lower sales of immediate annuities with a life contingent feature.

Banking and deposit interest expense decreased $20 million, or 80%, to $5 million for the three months ended March 31, 2021 compared to $25 million due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

Total expenses increased $2.2 billion to $2.9 billion for the three months ended March 31, 2021 compared to $650 million for the prior year period.

•The mean reversion related impact was a benefit of $34 million for the three months ended March 31, 2021 compared to an expense of $24 million for the prior year period.

AMERIPRISE FINANCIAL, INC.

•A $13 million decrease in reserves for immediate annuities with a life contingent feature primarily due to lower sales. This impact is offset by a decrease in premiums.

•The mean reversion related impact was a benefit of $22 million for the three months ended March 31, 2021 compared to an expense of $36 million for the prior year period.

General and administrative expense increased $70 million, or 9%, to $823 million for the three months ended March 31, 2021 compared to $753 million for the prior year period primarily reflecting an unfavorable change in the mark-to-market impact on share-based compensation and higher expenses from CIEs, partially offset by disciplined expense management and reengineering.

Income Taxes

Our effective tax rate was 11.3% for the three months ended March 31, 2021 compared to 13.4% for the prior year period. The lower effective tax rate for the three months ended March 31, 2021 compared to the prior year period is primarily the result of incentive compensation and lower pretax income in the current period compared to the prior year period, partially offset by a $144 million tax benefit in the prior year period associated with the forecasted utilization of a 2020 net operating loss (“NOL”) in our life insurance entities that was not ultimately realized. See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment for the Three Months Ended March 31, 2021 and 2020

Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. See Note 18 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.

The following table presents summary financial information by segment:


	Three Months Ended March 31,
	2021		2020
	(in millions)
Advice & Wealth Management
Net revenues	$	1,879	$	1,695
Expenses	1,490		1,317
Adjusted operating earnings	$	389	$	378
Asset Management
Net revenues	$	828	$	686
Expenses	600		529
Adjusted operating earnings	$	228	$	157
Retirement & Protection Solutions
Net revenues	$	787	$	759
Expenses	604		592
Adjusted operating earnings	$	183	$	167
Corporate & Other
Net revenues	$	139	$	149
Expenses	160		199
Adjusted operating loss	$	(21)	$	(50)

AMERIPRISE FINANCIAL, INC.

Advice & Wealth Management

The following table presents the changes in wrap account assets and average balances for the three months ended March 31:


	2021		2020
	(in billions)
Beginning balance	$	380.0	$	317.5
Net flows (1)	10.4		6.7
Market appreciation (depreciation) and other (1)	9.4		(48.7)
Ending balance	$	399.8	$	275.5

Advisory wrap account assets ending balance (2)	$	395.3	$	272.3
Average advisory wrap account assets (3)	$	379.3	$	311.1

(1) Beginning in the first quarter of 2021, wrap net flows is calculated including dividends, interest and fees, which were previously recorded in Market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

Wrap account assets increased $19.8 billion, or 5%, during the three months ended March 31, 2021 due to net inflows of $10.4 billion and market appreciation of $9.4 billion. Average advisory wrap account assets increased $68.2 billion, or 22%, compared to the prior year period reflecting market appreciation and net inflows.

The following table presents the results of operations of our Advice & Wealth Management segment on an adjusted operating basis:


	Three Months Ended March 31,				Change
	2021		2020
	(in millions)
Revenues
Management and financial advice fees	$	1,205	$	1,024	$	181	18	%
Distribution fees	559		548		11		2
Net investment income	64		100		(36)		(36)
Other revenues	56		48		8		17
Total revenues	1,884		1,720		164		10
Banking and deposit interest expense	5		25		(20)		(80)
Total net revenues	1,879		1,695		184		11
Expenses
Distribution expenses	1,135		970		165		17
Interest and debt expense	3		2		1		50
General and administrative expense	352		345		7		2
Total expenses	1,490		1,317		173		13
Adjusted operating earnings	$	389	$	378	$	11	3	%

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $11 million, or 3%, to $389 million for the three months ended March 31, 2021 compared to $378 million for the prior year period reflecting higher average wrap account balances due to net inflows and market appreciation and improved transactional activity, partially offset by lower earnings on brokerage cash as a result of low interest rates. Pretax adjusted operating margin was 20.7% for the three months ended March 31, 2021 compared to 22.3% for the prior year period.

AMERIPRISE FINANCIAL, INC.

Net Revenues

Net revenues exclude net realized investment gains or losses. Net revenues increased ~~$306~~$184 million, or 8%11%, to ~~$4.0~~$1.9 billion for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$3.7~~$1.7 billion for the prior year period. Adjusted operating net revenue per advisor increased to $187,000 for the three months ended March 31, 2021, up 9%, compared to $172,000 for the prior year period.

Management and financial advice fees increased $181 million, or 18%, to $1.2 billion for the three months ended March 31, 2021 compared to $1.0 billion for the prior year period primarily due to growth in wrap account assets, higher earnings on brokerage cash and increased transactional activity, partially offset by a $138 million decrease in revenues from the net impact of transitioning advisory accounts to share classes without 12b-1 fees. Operating net revenue per advisor increased to $414,000 for the nine months ended September 30, 2017, up 8%, from $382,000 for the prior year period.

Management and financial fees increased $305 million, or 15%, to $2.3 billion for the nine months ended September 30, 2017 compared to $2.0 billion for the prior year period primarily due to growth inaverage wrap account assets. Average advisory wrap account assets increased ~~$31.5~~$68.2 billion, or ~~17%~~22%, compared to the prior year period reflecting market appreciation and net ~~inflows and market appreciation.~~inflows.

Distribution fees increased $11 million, or 2%, to $559 million for the three months ended March 31, 2021 compared to $548 million for the prior year period reflecting increased transactional activity and higher average equity markets, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, decreased $36 million, or 2%36%, to ~~$1.5 billion~~$64 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$1.6 billion~~$100 million for the prior year period primarily due to ~~a $162~~lower certificate balances and the $23 million ~~decrease related to our transition to share classes without 12b-1 fees in advisory accounts,~~unfavorable impact of lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, partially offset by ~~market appreciation, increased transactional activity and~~ higher ~~brokerage cash spread~~average invested assets due to ~~an increase in short-term~~increased bank deposits.

Banking and deposit interest ~~rates.~~

~~Net investment income increased $36~~expense decreased $20 million, or ~~26%~~80%, to ~~$174~~$5 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$138~~$25 million for the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

Total expenses increased $173 million, or 13%, to $1.5 billion for the three months ended March 31, 2021 compared to $1.3 billion for the prior year period.

General and administrative expense increased $7 million, or 2%, to $352 million for the three months ended March 31, 2021 compared to $345 million for the prior year period primarily due to higher ~~investment yields~~mark-to-market impact on share-based compensation and ~~an increase~~planned investments for future growth, partially offset by expense reengineering.

Asset Management

The following tables present the fund performance of our retail Columbia Threadneedle Investments funds as of March 31, 2021:


Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted	1 year	3 year	5 year	10 year
Equity	60%	87%	81%	88%
Fixed Income	80%	69%	88%	89%
Asset Allocation	31%	88%	95%	89%

4- or 5-star Morningstar rated funds	Overall	3 year	5 year	10 year
Number of rated funds	103	92	92	89
Percent of rated assets	68%	61%	58%	72%

Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index. Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees. Comparisons to Index are measured Gross of Fees.

To calculate asset weighted performance, the sum of the total assets of the funds with above median ranking are divided by total assets of all funds. Funds with more assets will receive a greater share of the total percentage above or below median.

Aggregated Asset Allocation Funds may include funds that invest in ~~invested balances driven by certificate net inflows.~~

~~Expenses~~

~~Total expenses increased $126 million,~~other Columbia or ~~4%, to $3.2 billion for the nine months ended September 30, 2017 compared to $3.1 billion for the prior year period primarily due to an increase~~Threadneedle branded mutual funds included in ~~distribution expenses~~both equity and ~~general and administrative expense.~~fixed income.

AMERIPRISE FINANCIAL, INC.


The following table presents global managed assets by type:									Average (1)				Change
	March 31,				Change				Three Months Ended March 31,
	2021		2020						2021		2020
	(in billions)
Equity	$	319.4	$	210.5	$	108.9	52	%	$	308.8	$	246.8	$	62.0	25	%
Fixed income	195.0		174.0		21.0		12		195.8		181.2		14.6		8
Money market	5.8		5.0		0.8		16		5.9		4.7		1.2		26
Alternative	3.8		2.7		1.1		41		3.8		3.0		0.8		27
Hybrid and other	40.1		34.0		6.1		18		39.2		35.4		3.8		11
Total managed assets	$	564.1	$	426.2	$	137.9	32	%	$	553.5	$	471.1	$	82.4	17	%

~~Distribution expenses increased $104 million, or 5%, to $2.4 billion for the nine months ended September 30, 2017 compared to $2.3 billion for~~(1) Average ending balances are calculated using an average of the prior ~~year period reflecting higher advisor compensation due to growth~~period’s ending balance and all months in wrap account assets, increased transactional activity and investments in recruiting experienced advisors, partially offset by a $106 million decrease related to our transition to share classes without 12b-1 fees in advisory accounts.

~~General~~ ~~and administrative expense increased $21 million, or 3%, to $803 million for~~ the ~~nine months ended September 30, 2017 compared to $782 million for the prior year period primarily due to higher performance-based compensation, as well as expenses related to the IPI acquisition.~~

~~Asset Management~~

~~The following table presents global managed assets by type:~~

September 30, Change
Average⁽¹⁾
Change
Nine Months Ended September 30,
2017 2016 2017 2016
(in billions)
Equity $ 265.8
$ 245.9
$ 19.9
8 % $ 254.3
$ 244.0
$ 10.3
4 %
Fixed income 178.0
183.3
(5.3 ) (3 ) 177.3
179.6
(2.3 ) (1 )
Money market 5.9
6.6
(0.7 ) (11 ) 5.9
7.3
(1.4 ) (19 )
Alternative 6.5
7.3
(0.8 ) (11 ) 7.0
7.7
(0.7 ) (9 )
Hybrid and other 27.8
24.7
3.1
13
26.1
24.2
1.9
8
Total managed assets $ 484.0
$ 467.8
$ 16.2
3 % $ 470.6
$ 462.8
$ 7.8
2 %
⁽¹⁾ Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.
current period.

The following table presents the changes in global managed assets:


	Three Months Ended March 31,
	2021		2020
	(in billions)
Global Retail Funds
Beginning assets	$	323.5	$	287.5
Inflows	22.5		17.4
Outflows	(17.6)		(20.0)
Net VP/VIT fund flows	(1.0)		(0.8)
Net new flows	3.9		(3.4)
Reinvested dividends	0.7		0.5
Net flows	4.6		(2.9)
Distributions	(0.9)		(0.7)
Market appreciation (depreciation) and other	13.2		(43.5)
Foreign currency translation (1)	(0.2)		(1.3)
Total ending assets	340.2		239.1
Global Institutional
Beginning assets	223.1		206.7
Inflows (2)	7.8		8.5
Outflows (2)	(7.5)		(8.0)
Net flows	0.3		0.5
Market appreciation (depreciation) and other (3)	0.2		(16.7)
Foreign currency translation (1)	0.3		(3.4)
Total ending assets	223.9		187.1
Total managed assets	$	564.1	$	426.2

Total net flows	$	4.9	$	(2.4)

Legacy insurance partners net flows (4)	$	(1.3)	$	(0.6)

Nine Months Ended September 30,
2017 2016
(in billions)
Global Retail Funds
Beginning assets $ 259.9
$ 263.9
Inflows 38.0
38.3
Acquisition related inflows ⁽¹⁾
—
1.0
Outflows (45.7 ) (45.7 )
Net VP/VIT fund flows (2.5 ) (1.3 )
Net new flows (10.2 ) (7.7 )
Reinvested dividends 3.3
3.8
Net flows (6.9 ) (3.9 )
Distributions (4.1 ) (4.6 )
Market appreciation (depreciation) and other 28.5
13.8
Foreign currency translation⁽²⁾
3.4
(3.2 )
Total ending assets 280.8
266.0

Global Institutional
Beginning assets 194.5
208.0
Inflows 18.9
18.5
Outflows (31.0 ) (31.1 )
Net flows (12.1 ) (12.6 )
Market appreciation (depreciation) and other ⁽³⁾
13.9
14.9
Foreign currency translation⁽²⁾
6.9
(8.5 )
Total ending assets 203.2
201.8
Total managed assets $ 484.0
$ 467.8
Total net flows $ (19.0 ) $ (16.5 )

~~AMERIPRISE FINANCIAL, INC.~~

Nine Months Ended September 30,
2017 2016
(in billions)
Former Parent Company Related ⁽⁴⁾⁽⁵⁾
Retail net new flows $ (2.3 ) $ (0.6 )
Institutional net new flows (10.4 ) (7.6 )
Total net new flows $ (12.7 ) $ (8.2 )


⁽¹⁾	~~Inflows associated with acquisitions that closed during the period.~~

⁽²⁾(1) Amounts represent local currency to US dollar translation for reporting purposes.

⁽³⁾ ~~Includes $0.3 billion~~(2) Global Institutional inflows and ~~$2.6 billion~~outflows include net flows from our RiverSource Structured Annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.

(3) Included in Market appreciation (depreciation) and other for Global Institutional is the ~~total~~ change in ~~Affiliated General Account Assets during the nine months ended September 30, 2017~~affiliated general account balance, excluding net flows related to our structured variable annuity product beginning in Q1 2020 and ~~2016, respectively.~~Ameriprise Bank, FSB beginning in Q1 2021.

⁽⁴⁾ ~~Former parent company related~~ Legacy insurance partners assets and net ~~new~~ flows are included in the rollforwards above.

⁽⁵⁾ ~~Prior period former parent~~

AMERIPRISE FINANCIAL, INC.

The United Kingdom’s (“U.K.”) and the European Union’s (“EU”) trade and cooperation agreement did not include cross-border financial services. As a result, our U.K. asset management business is no longer able to market its services into the EU on a passporting basis and must now comply with local EU and country requirements as a non-EU firm, which includes leveraging our Luxembourg-based management company ~~related net new flows were restated~~affiliate to ~~include additional Former Parent Company net new flows that were previously not considered. The change was~~provide services and marketing to EU clients and investors. As a ~~decrease~~result the full impact of ~~$199 million for the nine months ended September 30, 2017~~Brexit remains uncertain.

Total segment AUM increased ~~$29.6~~$17.5 billion, or 7%3%,during the ~~nine monthsendedSeptember 30, 2017drivenby market appreciation and a positive impact of foreign currency translation, partially offset by net outflows. Total segment AUM net outflows were $19.0 billion for the nine~~three months ended ~~September 30, 2017, which included $12.7~~March 31, 2021. Net inflows were $4.9 billion in the first quarter of ~~outflows of former parent-related assets.~~

2021, a $7.3 billion increase compared to the prior year period. Global retail net ~~outflows of $6.9~~inflows were $4.6 billion. Global institutional net inflows were $0.3 billion and included ~~$2.5 billion of outflows of our variable product funds underlying insurance and annuity separate accounts and $2.3~~$1.3 billion of outflows from ~~former parent-related~~legacy insurance partners assets. In U.S. retail, net outflows excluding the former parent-related assets were $5.5 billion, reflecting industry pressures on active strategies partially offset by $3.3 billion of reinvested dividends. In EMEA, net inflows were $0.9 billion.

Global institutional net outflows of $12.1 billion included $10.4 billion of outflows from former parent-related assets and a $1.6 billion outflow from an institutional client that continued a pattern of redeeming assets for liquidity purposes that started in 2015. Institutional outflows from former parent-related assets included Zurich outflows of $6.6 billion and U.S. Trust outflows of $3.8 billion.

The following table presents the results of operations of our Asset Management segment on an adjusted operating basis:


	Nine Months Ended September 30,				Change						Three Months Ended March 31,				Change
	2017		2016								2021		2020
	(in millions)										(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	$	1,880	$	1,826	$	54		3	%	Management and financial advice fees	$	713	$	583	$	130	22	%
Distribution fees	344		363		(19		)	(5	)	Distribution fees	114		103		11		11
Net investment income	16		9		7			78		Net investment income	1		—		1		—
Other revenues	12		5		7			NM

Total revenues	2,252		2,203		49			2		Total revenues	828		686		142		21
Banking and deposit interest expense	—		—		—			—		Banking and deposit interest expense	—		—		—		—
Total net revenues	2,252		2,203		49			2		Total net revenues	828		686		142		21
Expenses	Expenses									Expenses
Distribution expenses	750		762		(12		)	(2	)	Distribution expenses	268		231		37		16
Amortization of deferred acquisition costs	12		13		(1		)	(8	)	Amortization of deferred acquisition costs	3		3		—		—
Interest and debt expense	16		16		—			—		Interest and debt expense	1		1		—		—
General and administrative expense	948		960		(12		)	(1	)	General and administrative expense	328		294		34		12
Total expenses	1,726		1,751		(25		)	(1	)	Total expenses	600		529		71		13
Operating earnings	$	526	$	452	$	74		16	%
NM Not Meaningful.
Adjusted operating earnings										Adjusted operating earnings	$	228	$	157	$	71	45	%

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased ~~$74~~$71 million, or ~~16%~~45%, to ~~$526~~$228 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$452~~$157 million for the prior year period primarily due to a higher level of average AUM from market appreciation ~~an increase in incentive fees from CLO unwinds, a $9 million expense in the prior year period from the resolution of a legacy legal matter related to the hedge fund business~~ and ~~continued expense management, partially offset by~~ net ~~outflows and higher performance-based compensation.~~

~~AMERIPRISE FINANCIAL, INC.~~

inflows.

Net Revenues

Net revenues, which exclude net realized investment gains or losses, increased ~~$49~~$142 million, or 2%21%, to ~~$2.3 billion~~$828 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$2.2 billion~~$686 million for the prior year period reflecting market appreciation and an increase in incentive fees from CLO unwinds, partially offset by net outflows, foreign exchange translation and a $28 million decrease related to the transition of advisory accounts to share classes without 12b-1 fees. The Asset Management segment revenue related to 12b-1 fees is eliminated on a consolidated basis.period.

Management and financial advice fees increased ~~$54~~$130 million, or 3%22%, to ~~$1.9 billion for the nine months ended September 30, 2017 compared to $1.8 billion for the prior year period driven by market appreciation and an increase in incentive fees fromCLOunwinds,partiallyoffset~~by~~cumulativenetoutflowsfromformerparent-related assetsandhigher fee yielding retail funds and a $24 million negative foreign currency translation impact. Our average weighted equity index, which is a proxyforequity movements~~on~~AUM,increased16%for the nine months ended September 30, 2017comparedto theprioryear period.~~

~~Distribution~~ ~~fees decreased $19 million, or 5%, to $344~~$713 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to $363 million for the prior year period due to cumulative net outflows and a $28 million decrease related to the transition of advisory accounts to share classes without 12b-1 fees, partially offset by market appreciation.

~~Expenses~~

~~Total~~ expenses decreased $25 million, or 1%, to $1.7 billion for the nine months ended September 30, 2017 compared to $1.8 billion for the prior year period due to lower distribution expenses and general and administrative expense.

~~Distribution~~ expenses decreased $12 million, or 2%, to $750 million for the nine months ended September 30, 2017 compared to $762 million for the prior year period due to lower compensation driven by cumulative net outflows and a decrease related to the transition of advisory accounts to share classes without 12b-1 fees, partially offset by market appreciation. The Asset Management segment expense related to 12b-1 fees is eliminated on a consolidated basis.

~~General and administrative expense decreased $12 million, or 1%, to $948 million for the nine months ended September 30, 2017 compared to $960~~$583 million for the prior year period primarily due to ~~a $20~~higher average equity markets and an unfavorable $19 million ~~benefit from the impact of foreign exchange, a $9 million expense~~performance fee correction in the prior year period.

Distribution fees increased $11 million, or 11%, to $114 million for the three months ended March 31, 2021 compared to $103 million for the prior year period ~~from~~primarily due to higher average equity markets.

Expenses

Total expenses increased $71 million, or 13%, to $600 million for the ~~resolution of a legacy legal matter~~three months ended March 31, 2021 compared to $529 million for the prior year period.

Distribution expenses increased $37 million, or 16%, to $268 million for the three months ended March 31, 2021 compared to $231 million for the prior year period reflecting higher average equity markets.

General and administrative expense increased $34 million, or 12%, to $328 million for the three months ended March 31, 2021 compared to $294 million for the prior year period primarily reflecting higher compensation expenses related to ~~the hedge fund~~stronger business performance and ~~continued expense management, partially offset by higher performance-based compensation.~~an unfavorable mark-to-market impact on share-based compensation expenses.

~~Annuities~~

AMERIPRISE FINANCIAL, INC.

Retirement & Protection Solutions

The following table presents the results of operations of our ~~Annuities~~Retirement & Protection Solutions segment on an adjusted operating basis:

Nine Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 573
$ 549
$ 24
4 %
Distribution fees 270
260
10
4
Net investment income 527
573
(46 ) (8 )
Premiums 84
89
(5 ) (6 )
Other revenues 407
375
32
9
Total revenues 1,861
1,846
15
1
Banking and deposit interest expense —
—
—
—
Total net revenues 1,861
1,846
15
1
Expenses
Distribution expenses 314
316
(2 ) (1 )
Interest credited to fixed accounts 357
360
(3 ) (1 )
Benefits, claims, losses and settlement expenses 311
628
(317 ) (50 )
Amortization of deferred acquisition costs 135
159
(24 ) (15 )
Interest and debt expense 26
24
2
8
General and administrative expense 156
157
(1 ) (1 )
Total expenses 1,299
1,644
(345 ) (21 )
Operating earnings $ 562
$ 202
$ 360
NM
NM Not Meaningful.

~~AMERIPRISE FINANCIAL, INC.~~


	Three Months Ended March 31,				Change
	2021		2020
	(in millions)
Revenues
Management and financial advice fees	$	222	$	199	$	23	12	%
Distribution fees	116		105		11		10
Net investment income	126		130		(4)		(3)
Premiums, policy and contract charges	323		325		(2)		(1)

Total revenues	787		759		28		4
Banking and deposit interest expense	—		—		—		—
Total net revenues	787		759		28		4
Expenses
Distribution expenses	129		110		19		17
Interest credited to fixed accounts	96		100		(4)		(4)
Benefits, claims, losses and settlement expenses	234		245		(11)		(4)
Amortization of deferred acquisition costs	63		54		9		17
Interest and debt expense	10		10		—		—
General and administrative expense	72		73		(1)		(1)
Total expenses	604		592		12		2
Adjusted operating earnings	$	183	$	167	$	16	10	%

Our ~~Annuities~~Retirement & Protection Solutions segment pretax adjusted operating ~~income,~~earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC ~~amortization)~~amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity ~~guaranteed benefits (net~~contracts and IUL contracts, net of hedges and the related DSIC and DAC ~~amortization)~~amortization, unearned amortization and the reinsurance accrual), and mean reversion related impacts, increased ~~$360~~$16 million, or 10%, to ~~$562~~$183 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$202~~$167 million for the prior year period primarily due to the impact of unlocking, equity market appreciation and the impact on DAC, DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance based on our view of bond and equity performance, partially offset by lower investment yields and a $21 million negative impact from changes in assumptions in the prior year unlocking process that resulted in ongoing increases to living benefit reserves.period.

~~The~~ impact on DAC, DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance based on our view of bond and equity performance was a benefit of $61 million ($25 million for DAC, $6 million for DSIC and $30 million for insurance features in non-traditional long duration contracts) for the nine months ended September 30, 2017 reflecting favorable equity market ~~and bond fund returns~~ ~~compared to a benefit of $5 million ($3 million for DAC, $1 million for DSIC and $1 million for insurance features in non-traditional long duration contracts) for the prior year period.~~

~~Net Revenues~~

Net revenues, which exclude net realized investment gains or losses, increased $15 million, or 1%, to $1.9 billion for the nine months ended September 30, 2017 compared to $1.8 billion for the prior year period due to equity market appreciation and an increase in variable annuity rider fees, partially offset by ~~lower investment yields~~ ~~and net outflows in fixed and variable annuities.~~

~~Management~~ and financial advice fees increased $24 million, or 4%, to $573 million for the nine months ended September 30, 2017 compared to $549 million for the prior year period due to higher fees on variable annuities driven by higher average separate account balances. AverageRiverSource variable annuity account balances increased ~~$2.8~~24% to $87.0 billion ~~or 4%, from~~as of March 31, 2021 compared to the prior year period due to market appreciation, partially offset by net ~~outflows.~~outflows of $1.9 billion. Variable annuity sales increased 33% compared to the prior year period reflecting an increase in sales of structured variable annuities launched in 2020, partially offset by lower sales of variable annuities with living benefit guarantees. Sales of variable annuities without living benefit guarantees comprised 64% of total variable annuity sales for the three months ended March 31, 2021 compared to 31% for the prior year period. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

Net ~~investment income, which excludes net realized investment gains or losses, decreased $46~~Revenues

Management and financial advice fees increased $23 million, or 8%12%, to ~~$527~~$222 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$573~~$199 million for the prior year period primarily ~~reflecting a decrease of approximately $34 million from lower earned interest rates and approximately $12 million from lower invested assets~~ due to ~~fixed~~market appreciation, partially offset by variable annuity net outflows.

~~Other revenues~~Distribution fees increased ~~$32~~$11 million, or 9%10%, to ~~$407~~$116 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$375~~$105 million for the prior year period due to higher ~~fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date and higher~~ average ~~fee rates.~~equity markets.

Expenses

~~Total~~Distribution expenses which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization) and the DAC and DSIC offset to net realized investment gains or losses, decreased $345increased $19 million, or ~~21%~~17%, to ~~$1.3 billion~~$129 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$1.6 billion~~$110 million for the prior year period primarily ~~due to the impact of unlocking.~~reflecting higher average equity markets and increased variable annuity sales.

Benefits,, claims, losses and settlement expenses, which exclude the market impact on variable annuity ~~guaranteed benefits~~contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, decreased ~~$317~~$11 million, or ~~50%~~4%, to ~~$311~~$234 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$628~~$245 million for the prior year period primarily reflecting ~~the following items:~~

~~The impact~~lower sales of ~~unlocking was~~immediate annuities with a $119 million benefit for the nine months ended September 30, 2017 compared to a $197 million expense for the prior year period. The unlocking impact for the nine months ended September 30, 2017 primarily reflected a benefit from updates to market-related inputs to our living benefit valuation. The unlocking impact for the prior year period primarily reflected low interest rates and an unfavorable impact from persistency on living benefit reserves,life contingent feature, partially offset by ~~a benefit from updates to withdrawal utilization and fee assumptions, as well as market-related inputs related to our living benefit valuation.~~

The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance based on our view of bond and equity performance was a benefit of $36 million for the nine ~~months ended September 30, 2017~~ ~~reflecting favorable equity market and bond fund returns compared to a benefit of $2 million for the prior year period.~~

~~A $24 million increase in expense related to~~ higher ~~reserve funding driven by the impact of higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date.~~

~~A $21 million negative impact from changes in assumptions in the prior year unlocking process that resulted in ongoing increases to living benefit reserves.~~disability income claims.

Amortization of DAC, ~~decreased $24 million, or 15%, to $135 million for the nine months ended September 30, 2017 compared to $159 million for the prior year period primarily reflecting the following items:~~

~~The impact of unlocking was a benefit of $1 million for the nine months ended September 30, 2017 compared to an expense of $18 million for the prior year period.~~ ~~The impact of unlocking~~ ~~for the nine months ended September 30, 2017~~ ~~primarily~~

~~AMERIPRISE FINANCIAL, INC.~~

reflected a $10 million benefit from a correction related to a variable annuity model assumption and slightly higher interest rates, largely offset by updates to market-related inputs to the living benefit valuation. ~~The impact of unlocking in the prior year period primarily reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits.~~

The impact on DAC from actual versus expected market performance based on our view of bond and equity performance was a benefit of $25 million for the nine months ended September 30, 2017 reflecting favorable equity market and bond fund returns compared to a benefit of $3 million for the prior year period.

~~The negative impact on DAC from higher than expected lapses on variable annuities was $14 million.~~

~~Protection~~

~~The following table presents the results of operations of our Protection segment on an operating basis:~~

Nine Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Management and financial advice fees $ 35
$ 38
$ (3 ) (8 )%
Distribution fees 74
72
2
3
Net investment income 253
247
6
2
Premiums 896
959
(63 ) (7 )
Other revenues 258
377
(119 ) (32 )
Total revenues 1,516
1,693
(177 ) (10 )
Banking and deposit interest expense —
—
—
—
Total net revenues 1,516
1,693
(177 ) (10 )
Expenses
Distribution expenses 50
50
—
—
Interest credited to fixed accounts 138
130
8
6
Benefits, claims, losses and settlement expenses 888
1,015
(127 ) (13 )
Amortization of deferred acquisition costs 70
107
(37 ) (35 )
Interest and debt expense 19
18
1
6
General and administrative expense 182
183
(1 ) (1 )
Total expenses 1,347
1,503
(156 ) (10 )
Operating earnings $ 169
$ 190
$ (21 ) (11 )%

~~Our Protection segment pretax operating earnings,~~ which excludes ~~net realized investment gains or losses (net of~~mean reversion related impacts, the ~~related~~ DAC amortization, unearned revenue amortization and the reinsurance accrual) and the market impact on indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual), decreased $21 million, or 11%, to $169 million for the nine months ended September 30, 2017 compared to $190 million for the prior year period primarily due to the impact of unlocking and the low interest rate environment, partially offset by improved auto and home results.

~~Net Revenues~~

~~Net revenues, which exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual) and the unearned revenue amortization and the reinsurance accrual~~ offset to the market impact on indexed universal life benefits, decreased $177 million, or 10%, to $1.5 billion for the nine months ended September 30, 2017 compared to $1.7 billion for the prior year period primarily due to the impact of unlockingvariable annuity contracts and ~~a decrease in premiums.~~

Premiums decreased $63 million, or 7%, to $896 million for the nine months ended September 30, 2017 compared to $959 million for the prior year period primarily reflecting higher ceded premiums for our auto and home business due to new reinsurance arrangements we entered into at the beginning of the year to reduce risk.

Other revenues decreased $119 million, or 32%, to $258 million for the nine months ended September 30, 2017 compared to $377 million for the prior year period due to the impact of unlocking. Other revenues for the nine months ended September 30, 2017 included a $47 million unfavorable impact from unlocking compared to a $64 million favorable impact in the prior year period. The primary driver of the unlocking impact to other revenues for the nine months ended September 30, 2017 was a negative impact from lower projected gains on reinsuranceIUL contracts ~~resulting from favorable mortality experience. The primary driver of the unlocking~~

~~AMERIPRISE FINANCIAL, INC.~~

~~impact to other revenues for the prior year period was a positive impact from higher projected gains on reinsurance contracts resulting from unfavorable mortality experience.~~

~~Expenses~~

~~Total expenses, which exclude the market impact on indexed universal life benefits (net of hedges and the related DAC amortization)~~ and the DAC offset to net realized investment gains or losses, ~~decreased $156~~increased $9 million, or ~~10%~~17%, to ~~$1.3 billion for the nine months ended September 30, 2017 compared to $1.5 billion for the prior year period due to the impact of unlocking and a decrease in auto and home expenses.~~

~~Benefits, claims, losses and settlement expenses decreased $127 million, or 13%, to $888~~$63 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to $1.0 billion for the prior year period due to the impact of unlocking and an $84 million decrease in auto and home expenses reflecting the impact of new reinsurance arrangements and a lower non-catastrophe loss ratio, partially offset by higher gross catastrophe losses. The unlocking impact ~~for the nine months ended September 30, 2017~~ was a $14 million benefit and primarily reflected favorable mortality experience on life insurance contracts. The unlocking impact for the prior year period was a $40 million expense and primarily reflected low interest rates and unfavorable mortality experience. Catastrophe losses, net of the impact of reinsurance, were $84 million for the nine months ended September 30, 2017 compared to $89 million for the prior year period. The expanded reinsurance program resulted in ceded losses of approximately $82 million for the nine months ended September 30, 2017.

~~Amortization of DAC decreased $37 million, or 35%, to $70 million for the nine months ended September 30, 2017 compared to $107~~$54 million for the prior year period primarily reflecting the ~~impact~~higher level of unlocking, as well as lower DAC amortization on our auto and home business. The unlocking impact for the nine months ended September 30, 2017 was a benefit of $13 million and primarily reflected improved persistency and mortality on life insurance contracts. The unlocking impact for the prior year period was an expense of $7 million.normalized amortization.

AMERIPRISE FINANCIAL, INC.

Corporate & Other

The following table presents the results of operations of our Corporate & Other segment on an adjusted operating basis:


	Three Months Ended March 31,				Change
	2021		2020
	(in millions)
Revenues


Net investment income	$	100	$	104	$	(4)	(4)
Premiums, policy and contract charges	24		25		(1)		(4)
Other revenues	15		21		(6)		(29)
Total revenues	139		150		(11)		(7)
Banking and deposit interest expense	—		1		(1)		NM
Total net revenues	139		149		(10)		(7)
Expenses
Distribution expenses	(2)		(1)		(1)		NM
Interest credited to fixed accounts	61		66		(5)		(8)
Benefits, claims, losses and settlement expenses	13		59		(46)		(78)
Amortization of deferred acquisition costs	4		2		2		NM
Interest and debt expense	15		19		(4)		(21)
General and administrative expense	69		54		15		28
Total expenses	160		199		(39)		(20)
Adjusted operating loss	$	(21)	$	(50)	$	29	58	%
NM Not Meaningful.

Nine Months Ended September 30, Change
2017 2016
(in millions)
Revenues
Net investment income $ 79
$ 94
$ (15 ) (16 )%
Premiums 81
81
—
—
Other revenues 4
4
—
—
Total revenues 164
179
(15 ) (8 )
Banking and deposit interest expense 2
1
1
NM
Total net revenues 162
178
(16 ) (9 )
Expenses
Distribution expenses (7 ) (39 ) 32
82
Benefits, claims, losses and settlement expenses 239
219
20
9
Amortization of deferred acquisition costs —
63
(63 ) NM
Interest and debt expense 20
21
(1 ) (5 )
General and administrative expense 202
185
17
9
Total expenses 454
449
5
1
Operating loss $ (292 ) $ (271 ) $ (21 ) (8 )%
NM Not Meaningful.
Our Corporate & Other segment includes our closed blocks of long term care (“LTC”) insurance and fixed annuity and fixed indexed annuity (“FA”) business.

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs. Our Corporate & Other segment pretax adjusted operating loss decreased $29 million, or 58%, to $21 million for the three months ended March 31, 2021 compared to $50 million for the prior year period primarily reflecting the COVID-19 impacts on LTC insurance and a $15 million gain on a strategic investment, partially offset by an unfavorable change in the mark-to-market impact on share-based compensation expense and lower investment income.

LTC insurance had pretax adjusted operating earnings of $46 million for the three months ended March 31, 2021 compared to pretax adjusted operating earnings of $2 million for the prior year period reflecting fewer LTC clients entering nursing homes as well as increased mortality-related client terminations due to COVID-19.

FA business had a pretax adjusted operating loss of $4 million for the three months ended March 31, 2021 compared to a pretax adjusted operating earnings of nil for the prior year period reflecting the low interest rate impact on spread income.

RiverSource fixed deferred annuity account balances declined 4% to $7.9 billion as of March 31, 2021 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities and fixed index annuities due to the low interest rate environment as well as our strategic decisions regarding our fixed annuity business.

Net Revenues

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, integration and restructuring charges, and the impact of consolidating ~~CIEs. Our Corporate & Other segment pretax operating loss increased $21~~CIEs, decreased $4 million, or 8%4%, to ~~$292~~$100 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$271~~$104 million for the prior year period primarily reflecting lower average invested assets due to fixed annuity net outflows and lower portfolio yields, partially offset by a ~~decrease in~~$15 million gain on a strategic investment.

Expenses

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment ~~income, an increase in general and administrative expense and~~ ~~LTC loss recognition of $57~~gains or losses, decreased $46 million, or 78%, to $13 million for the ~~third quarter of 2017, partially offset by~~ ~~LTC~~ ~~loss recognition of $31~~three months ended March 31, 2021 compared to $59 million infor the prior year period ~~and a $29 million increase in~~primarily reflecting the impacts from COVID-19 on LTC ~~reserves in the prior year period from a correction related to our claim utilization assumption~~.insurance.

AMERIPRISE FINANCIAL, INC.

~~Net~~ ~~investment income decreased~~General and administrative expense, which excludes integration and restructuring charges, increased $15 million, or ~~16%~~28%, to ~~$79~~$69 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$94~~$54 million for the prior year period primarily due to ~~higher amortization relating to an increase in low income housing investments and the impact of interest allocation between subsidiaries.~~

~~Distribution expenses increased $32~~a $22 million to a benefit of $7 million for the nine months ended September 30, 2017 compared to a benefit of $39 million for the prior year period. Distribution expenses for the prior year period included a $27 million benefit related to the write-off of the deferred reinsurance liability in connection with loss recognition on LTC insurance products.

~~Benefits~~, claims, losses and settlement expenses increased $20 million, or 9%, to $239 million for the nine months ended September 30, 2017 compared to $219 million for the prior year period primarily due to a ~~$57 million expense from loss recognition on LTC insurance products~~unfavorable change in the ~~third quarter of 2017~~, partially offset by a $29 million increase in LTC reserves in the prior year period from a correction related to our claim utilization assumption. The LTC loss recognition in the third quarter of 2017 was ~~primarily due to unfavorable morbidity experience, partially offset by premium increases.~~mark-to-market impact on share-based compensation expense.

~~Amortization~~ ~~of DAC decreased $63 million compared to the prior year period reflecting the write-off of DAC in the third quarter of 2016 in connection with the loss recognition on LTC insurance products.~~

General and administrative expense increased $17 million, or 9%, to $202 million for the nine months ended September 30, 2017 compared to $185 million for the prior year period primarily due to higher performance-based compensation and a $9 million expense related to the renegotiation of a vendor arrangement, partially offset by a $14 million expense in the prior year period from the resolution of a legacy legal matter related to the hedge fund business.

Market Risk

Our primary market risk exposures are interest rate, equity price, foreign currency exchange rate and credit risk. Equity price and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects they have on the asset management and other asset-based fees we earn, the spread income generated on our fixed deferred annuities, fixed insurance, brokerage client cash balances, banking deposits, face-amount certificate products and the fixed portion of our variable annuities and variable insurance contracts, the value of DAC and DSIC assets, the value of liabilities for guaranteed benefits associated with our variable annuities and the value of derivatives held to hedge these benefits.

Our earnings from fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts. We primarily invest in fixed rate securities to fund the rate credited to clients. We guarantee an interest rate to the holders of these products. Investment assets and client liabilities generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals than the yield on the underlying investments. Therefore, in an increasing interest rate environment, higher interest rates may be reflected in crediting rates to clients sooner than in rates earned on invested assets, which could result in a reduced spread between the two rates, reduced earned income and a negative impact on pretax income. However, the current low interest rate environment is resulting in interest rates below the level of some of our liability guaranteed minimum interest rates (“GMIRs”). Hence, a modest rise in interest rates would not necessarily result in changes to all the liability credited rates while projected asset purchases would capture the full increase in interest rates. This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business.

As a result of the low interest rate environment, our current reinvestment yields are generally lower than the current portfolio yield. We expect our portfolio income yields to continue to decline in future periods if interest rates remain low. The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through ~~September 30, 2019~~March 31, 2023 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were ~~$4.9~~$4.4 billion and ~~4.4%~~2.3%, respectively, as of ~~September 30, 2017.~~March 31, 2021. In addition, residential ~~mortgage-backed~~mortgage backed securities, which are subject to prepayment risk as a result of the low interest rate environment, totaled ~~$6.8~~$10.0 billion and had a weighted average yield of ~~2.7%~~1.5% as of ~~September 30, 2017.~~March 31, 2021. While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields. In addition to the interest rate environment, the mix of benefit payments versus product sales as well as the timing and volumes associated with such mix may impact our investment yield. Furthermore, reinvestment activities and the associated investment yield may also be impacted by corporate strategies implemented at management’s discretion. The average yield for investment purchases during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 was approximately ~~2.8%~~1.2%.

The reinvestment of proceeds from maturities, calls and prepayments at rates below the current portfolio yield, which may be below the level of some liability GMIRs, will have a negative impact to future operating results. To mitigate the unfavorable impact that the low interest rate environment has on our spread income, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework. In addition, we may reduce the crediting rates on our fixed products when warranted, subject to guaranteed minimums.

In addition to the fixed rate exposures noted above, RiverSource Life ~~also~~ has the following variable annuity guarantee benefits: guaranteed minimum withdrawal benefits (“GMWB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum

~~AMERIPRISE FINANCIAL, INC.~~

death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”). Each of these ~~guaranteed~~ benefits guarantees payouts to the annuity holder under certain specific conditions regardless of the performance of the underlying invested assets.

The variable annuity guarantees continue to be managed by utilizing a hedging program which attempts to match the sensitivity of the assets with the sensitivity of the liabilities. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. Our comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities: Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. We use various ~~index~~ options, ~~across the term structure, interest rate swaps and~~ swaptions, ~~total return~~ swaps and futures to manage ~~the~~ risk exposures. The exposures are measured and monitored daily, and adjustments to the hedge portfolio are made as necessary.

We have a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on our statutory surplus and to cover some of the residual risks not covered by other hedging activities. We assess the residual risk under a range of scenarios in creating and executing the macro hedge program. As a means of economically hedging these risks, we may use a combination of futures, options, ~~interest rate swaptions and/or swaps.~~swaps and swaptions. Certain of the macro hedge derivatives used contain settlement provisions linked to both equity returns and interest rates; the remaining are interest rate contracts or equity contracts. The macro hedge program could result in additional earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory capital volatility, may not be closely aligned to changes in the variable annuity guarantee embedded derivatives.

AMERIPRISE FINANCIAL, INC.

To evaluate interest rate and equity price risk we perform sensitivity testing which measures the impact on pretax income from the sources listed below for a 12-month period following a hypothetical 100 basis point increase in interest rates or a hypothetical 10% decline in equity prices. The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then staying at those levels for the next 12 months. The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months. In estimating the values of variable ~~annuity riders, equity~~annuities, fixed deferred indexed annuities, stock market certificates, ~~indexed universal life~~IUL insurance and the associated hedge assets, we assume no change in implied market volatility despite the 10% drop in equity prices.

The following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of ~~September 30, 2017:~~March 31, 2021:


Equity Price Decline 10%	Equity Price Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based management and distribution fees (1)	$	(321)	$	3	$	(318)
DAC and DSIC amortization (2)(3)	(40)		—		(40)
Variable annuities:
GMDB and GMIB (3)	(10)		—		(10)
GMWB (3)	(291)		256		(35)
GMAB	(17)		17		—
Structured variable annuities	160		(133)		27
DAC and DSIC amortization (4)	N/A		N/A		3
Total variable annuities	(158)		140		(15)
Macro hedge program (5)	—		219		219
Fixed deferred indexed annuities	6		(4)		2
Certificates	—		(1)		(1)
IUL insurance	45		(42)		3
Total	$	(468)	$	315	$	(150)	(6)
N/A Not Applicable.

Equity Price Decline 10% Equity Price Exposure to Pretax Income
Before Hedge Impact Hedge Impact Net Impact
(in millions)
Asset-based management and distribution fees ⁽¹⁾
$ (261 ) $ 6
$ (255 )
DAC and DSIC amortization ^{(2) (3)}
(129 ) —
(129 )
Variable annuity riders:

GMDB and GMIB ⁽³⁾
(29 ) —
(29 )
GMWB ^{(3) (4)}
(379 ) 233
(146 )
GMAB (25 ) 26
1
DAC and DSIC amortization ⁽⁴⁾
N/A
N/A
(3 )
Total variable annuity riders (433 ) 259
(177 )
Macro hedge program⁽⁵⁾
—
43
43
Equity indexed annuities 1
(1 ) —
Certificates 3
(3 ) —
Indexed universal life insurance 66
(49 ) 17
Total $ (753 ) $ 255
$ (501 )


Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
	Before Hedge Impact		Hedge Impact		Net Impact
	(in millions)
Asset-based management and distribution fees (1)	$	(58)	$	—	$	(58)
Variable annuities:

GMWB	1,192		(1,477)		(285)
GMAB	19		(25)		(6)
Structured variable annuities	(12)		49		37
DAC and DSIC amortization (4)	N/A		N/A		43
Total variable annuities	1,199		(1,453)		(211)
Macro hedge program (5)	—		(4)		(4)
Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	51		—		51
Banking deposits	54		—		54
Brokerage client cash balances	220		—		220
Fixed deferred indexed annuities	(1)		—		(1)
Certificates	14		—		14
IUL insurance	17		1		18
Total	$	1,496	$	(1,456)	$	83
N/A Not Applicable.

~~AMERIPRISE FINANCIAL, INC.~~

Interest Rate Increase 100 Basis Points Interest Rate Exposure to Pretax Income
Before Hedge Impact Hedge Impact Net Impact
(in millions)
Asset-based management and distribution fees⁽¹⁾
$ (50 ) $ —
$ (50 )
Variable annuity riders:

GMDB and GMIB —
—
—
GMWB 983
(1,089 ) (106 )
GMAB 21
(23 ) (2 )
DAC and DSIC amortization ⁽⁴⁾
N/A
N/A
18
Total variable annuity riders 1,004
(1,112 ) (90 )
Macro hedge program ⁽⁵⁾
—
(2 ) (2 )
Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products 99
—
99
Brokerage client cash balances 115
—
115
Certificates —
—
—
Indexed universal life insurance 93
2
95
Total $ 1,261
$ (1,112 ) $ 167
N/A Not Applicable.

⁽¹⁾ Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.

⁽²⁾Market impact on DAC and DSIC amortization resulting from lower projected profits.

⁽³⁾ In estimating the impact to pretax income on DAC and DSIC amortization ~~resulting from lower projected profits, we have not changed~~and additional insurance benefit reserves, our assumed equity asset growth ~~rates. This is a significantly more conservative estimate than if we assumed~~rates reflect what management ~~follows~~would follow in its mean reversion guideline and increased near-term rates to recover the drop in equity values over a five-year period. We make this same conservative assumption in estimating the impact from GMDB and GMIB riders and the life contingent benefits associated with GMWB.guidelines.

⁶⁵

AMERIPRISE FINANCIAL, INC.

(4)Market impact on DAC and DSIC amortization related to variable annuity riders is modeled net of hedge impact.

⁽⁵⁾The market impact of the macro hedge program is modeled net of any related impact to DAC and DSIC amortization.

(6) Represents the net impact to pretax income. The estimated net impact to pretax adjusted operating income is approximately ($318) million.

The above results compare to an estimated negative net impact to pretax income of ~~$490~~$73 million related to a 10% equity price decline and an estimated positive net impact to pretax income of ~~$297~~$2 million related to a 100 basis point increase in interest rates as of December 31, ~~2016.~~2020. The change in interest rate exposure ~~from~~as of March 31, 2021 compared to December 31, ~~2016 is~~2020 was driven by variable annuity riders, specifically GMWB, primarily ~~the result of~~due to changes in market ~~conditions.~~rates.

Net impacts shown in the above table from GMWB ~~and GMAB~~ riders result largely from differences between the liability valuation basis and the hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions and with discount rates increased to reflect a current market estimate of our risk of nonperformance specific to these liabilities. Our hedging is based on our determination of economic risk, which excludes certain items in the liability valuation including the nonperformance spread risk.

Actual results could differ materially from those illustrated above as they are based on a number of estimates and assumptions. These include assuming that implied market volatility does not change when equity prices fall by 10%~~, that management does not increase assumed equity asset growth rates to anticipate recovery of the drop in equity values when valuing DAC, DSIC and GMDB and GMIB liability values~~ and that the 100 basis point increase in interest rates is a parallel shift of the yield curve. Furthermore, we have not tried to anticipate changes in client preferences for different types of assets or other changes in client behavior, nor have we tried to anticipate all strategic actions management might take to increase revenues or reduce expenses in these scenarios.

The selection of a 100 basis point interest rate increase as well as a 10% equity price decline should not be construed as a prediction of future market events. Impacts of larger or smaller changes in interest rates or equity prices may not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices.

Fair Value Measurements

We report certain assets and liabilities at fair value; specifically, separate account assets, derivatives, embedded derivatives ~~properties held by our consolidated property funds,~~ and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions and is not the result of a forced liquidation or distressed sale. We include actual market prices, or observable inputs, in our fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. We validate prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 1011 to the Consolidated Financial Statements for additional information on our fair value measurements.

~~AMERIPRISE FINANCIAL, INC.~~

Fair Value of Liabilities and Nonperformance Risk

Companies are required to measure the fair value of liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for our obligations of our variable annuity riders, fixed deferred indexed annuities, structured variable annuities, and ~~indexed universal life~~IUL insurance, we consider the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, we adjust the valuation of variable annuity riders, fixed deferred indexed annuities, structured annuities, and ~~indexed universal life~~IUL insurance by updating certain contractholder assumptions, adding explicit margins to provide for profit, risk and ~~expenses,~~expense, and adjusting the rates used to discount expected cash flows to reflect a current market estimate of our nonperformance risk. The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of ~~September 30, 2017.~~March 31, 2021. As our estimate of this spread widens or tightens, the liability will decrease or increase. If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to future net income would be approximately ~~$213~~$334 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of ~~35%~~21%), based on ~~September 30, 2017~~March 31, 2021 credit spreads.

Liquidity and Capital Resources

Overview

We maintained substantial liquidity during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021. At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, we had ~~$2.4~~$5.5 billion and ~~$2.3~~$6.8 billion, respectively, in cash and cash equivalents excluding ~~CIEs. On October 12, 2017, we entered into~~CIEs and other restricted cash on a consolidated basis.

At March 31, 2021 and December 31, 2020, the parent company had $905 million and $1.1 billion, respectively, in cash, cash equivalents, and unencumbered liquid securities. Liquid securities predominantly include U.S. government agency mortgage back securities. Additional sources of liquidity include a line of credit with an ~~amended~~affiliate up to $1.0 billion and ~~restated credit agreement that provides for~~ an unsecured revolving committed credit facility offor up to $750 million that expires in October 2022. Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of March 31, 2021 was $2.3 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

Under the terms of the committed credit ~~agreement for the~~ facility, we ~~may~~can increase the ~~amount of this facility up~~availability to $1.0 billion upon satisfaction of certain approval requirements. ~~This agreement replaced our unsecured revolving credit~~Available borrowings under this facility ~~that was to expire in May 2020.~~are reduced by any outstanding letters of credit. At ~~September 30, 2017,~~March 31, 2021, we had no

AMERIPRISE FINANCIAL, INC.

outstanding borrowings under this credit facility and had $1 million of outstanding letters of credit. Our credit facility contains various administrative, reporting, legal and financial covenants. ~~We were~~Compliance with these covenants is not currently impaired by the COVID-19 pandemic, and we remain in compliance with all such covenants at ~~September 30, 2017.~~March 31, 2021.

~~We enter into short-term~~In addition, we have access to collateralized borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances, to reduce reinvestment risk. Short-term borrowings allow us to receive cash to reinvest in longer-duration assets, while paying back the short-term debt with cash flows generated by the fixed income portfolio. The balance of repurchase agreements as of both September 30, 2017 and December 31, 2016 was $50 million, which is collateralized with agency residential mortgage backed securities and commercial mortgage backed securities from our investment portfolio.advances. Our ~~subsidiary,~~subsidiaries, RiverSource Life Insurance Company (“RiverSource Life”), ~~is a member~~and Ameriprise Bank, FSB are members of the FHLB of Des Moines, which provides access to collateralized borrowings. We had ~~$151 million and $150~~$200 million of borrowings from the FHLB, which is collateralized with commercial mortgage backed securities ~~as of September 30, 2017~~and residential mortgage backed securities for both March 31, 2021 and December 31, ~~2016, respectively.~~2020. We believe cash flows from operating activities, available cash balances and our availability of revolver borrowings will be sufficient to fund our operating liquidity ~~needs.~~needs and stress requirements.

We continue to monitor and respond to the ongoing COVID-19 pandemic. Our risk management strategy is designed to provide proactive protection during stress events such as the current pandemic. We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the three months ended March 31, 2021.

Dividends from Subsidiaries

Ameriprise Financial is primarily a parent holding company for the operations carried out by our ~~wholly owned~~wholly-owned subsidiaries. Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), AMPF Holding Corporation, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, ~~Inc.~~LLC (“~~AFSI”~~AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc. (“AEIS”), ~~our Auto and Home insurance subsidiary, IDS Property Casualty Insurance Company (“IDS Property Casualty”), doing business as Ameriprise Auto & Home Insurance,~~ our transfer agent subsidiary, Columbia Management Investment Services Corp., our investment advisory company, Columbia Management Investment Advisers, LLC, and Ameriprise International Holdings GmbH, which is the parent company of Threadneedle Asset Management Holdings Sàrl. The payment of dividends by many of our subsidiaries is restricted and certain of our subsidiaries are subject to regulatory capital requirements.

~~AMERIPRISE FINANCIAL, INC.~~

Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows:


	Actual Capital				Regulatory Capital Requirements
	March 31, 2021		December 31, 2020		March 31, 2021	December 31, 2020
	(in millions)
RiverSource Life (1)(2)	$	4,522	$	5,021	N/A	$	993
RiverSource Life of NY (1)(2)	240		323		N/A	42
ACC (4)(5)	368		387		337	362
Threadneedle Asset Management Holdings Sàrl (6)	601		445		205	204
Ameriprise Bank, FSB (4) (7)	672		658		217	543
AFS (3)(4)	153		134		#	#
Ameriprise Captive Insurance Company (3)	41		41		13	8
Ameriprise Trust Company (3)	43		42		38	37
AEIS (3)(4)	148		122		27	25
RiverSource Distributors, Inc. (3)(4)	13		12		#	#
Columbia Management Investment Distributors, Inc. (3)(4)	10		16		#	#

Actual Capital Regulatory Capital
Requirements
September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
(in millions)
RiverSource Life⁽¹⁾⁽²⁾
$ 2,737
$ 3,052
N/A
$ 606
RiverSource Life of NY⁽¹⁾⁽²⁾
306
323
N/A
38
IDS Property Casualty⁽¹⁾⁽³⁾
805
800
$ 216
213
Ameriprise Insurance Company⁽¹⁾⁽³⁾
48
47
3
2
ACC⁽⁴⁾⁽⁵⁾
369
335
341
317
Threadneedle Asset Management Holdings Sàrl⁽⁶⁾
424
360
169
149
Ameriprise National Trust Bank⁽⁷⁾
23
22
10
10
AFSI⁽³⁾⁽⁴⁾
126
77
#
#
Ameriprise Captive Insurance Company⁽³⁾
54
51
10
9
Ameriprise Trust Company⁽³⁾
30
29
26
24
AEIS⁽³⁾⁽⁴⁾
115
107
21
19
RiverSource Distributors, Inc.⁽³⁾⁽⁴⁾
13
11
#
#
Columbia Management Investment Distributors, Inc.⁽³⁾⁽⁴⁾
17
14
#
#
N/A  Not applicable.
#  Amounts are less than $1 million.
N/A  Not applicable as only required to be calculated annually.


⁽¹⁾	~~Actual capital is determined on a statutory basis.~~


⁽²⁾	~~Regulatory capital requirement is based on the statutory risk-based capital filing.~~


⁽³⁾	~~Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of September 30, 2017 and December 31, 2016.~~


⁽⁴⁾	~~Actual capital is determined on an adjusted GAAP basis.~~

⁽⁵⁾

# Amounts are less than $1 million.

(1) Actual capital is determined on a statutory basis.

(2) Regulatory capital requirement is the company action level and is based on the statutory risk-based capital filing.

(3) Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of March 31, 2021 and December 31, 2020.

(4) Actual capital is determined on an adjusted GAAP basis.

(5) ACC is required to hold capital in compliance with ~~the Minnesota Department of Commerce and SEC capital requirements.~~


⁽⁶⁾	Actual capital and regulatory capital requirements are determined in accordance with U.K. regulatory legislation. The regulatory capital requirements at September 30, 2017 represent calculations at December 31, 2016 of the rule based requirements, as specified by FCA regulations.


⁽⁷⁾	~~Ameriprise National Trust Bank is required to maintain capital in compliance with the Office of the Comptroller of the Currency regulations and policies.~~

Our insurance companies’ statutory capital is calculated in accordance with the accounting practices prescribed or permitted by domiciliary state insurance regulators. RiverSource Life received approval from the Minnesota Department of Commerce to apply a permitted statutory accounting practice, effective July 1, 2017 through June 30, 2018, for certain derivative instruments used to economically hedge the interest rate exposure of certain variable annuity products that do not qualify for statutory hedge accounting.and SEC capital requirements.

(6) Actual capital and regulatory capital requirements are determined in accordance with U.K. regulatory legislation. The ~~permitted practice is intended to mitigate the impact to statutory~~regulatory capital ~~from the misalignment between variable annuity statutory reserves, which are not carried~~requirements at fair value, and the fair value of derivatives used to economically hedge the interest rate exposure of non-life contingent living benefit guarantees. The permitted practice allows RiverSource Life to defer a portionMarch 31, 2021 represent calculations at December 31, 2020 of the ~~change~~rule based requirements, as specified by FCA regulations.

(7) Regulatory capital requirement is based on minimum requirements for well capitalized banks in ~~fair value, net investment income and realized gains or losses generated from designated derivatives~~accordance with the Office of the Comptroller of the Currency (“OCC”). Beginning in the first quarter of 2021, Ameriprise Bank transitioned to the extent the amounts do not offset the current period interest-rate related change in the variable annuity statutory reserve liability. The deferred amount will be amortized over ten years using the straight-line method with the ability to accelerate amortization at management’s discretion. There was no immediate impact to statutory capital at the effective dateSimplified Supervisory Formula Approach (“SSFA”) for ~~the permitted statutory accounting practice. As of September 30, 2017, application of this permitted practice resulted~~risk-weighting non-agency securitized investments, resulting in a ~~decrease to RiverSource Life’s statutory~~significant reduction in risk-weighted assets and an improvement in regulatory capital ~~of approximately $21 million.~~ratios that were already in a well-capitalized position.

AMERIPRISE FINANCIAL, INC.

In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, we take into account the overall health of the business, capital levels and risk management considerations in determining a ~~dividend~~ strategy for payments to our parent holding company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries.

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of ~~$1.3 billion~~$621 million (including ~~$700~~$250 million from RiverSource Life) and contributed cash to its subsidiaries of ~~$64~~$34 million. During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2020, the parent holding company received cash dividends or a return of capital from its subsidiaries of ~~$1.3 billion~~$510 million (including ~~$800~~$250 million from RiverSource Life) and contributed cash to its subsidiaries of ~~$135~~$141 million (including ~~$75~~$100 million to ~~IDS Property Casualty)~~Ameriprise Bank, FSB).

~~AMERIPRISE FINANCIAL, INC.~~

In 2009, RiverSource established an agreement to protect its exposure to Genworth Life Insurance Company (“GLIC”) for its reinsured LTC. In 2016, substantial enhancements to this reinsurance protection agreement were finalized. The terms of these confidential provisions within the agreement have been shared, in the normal course of regular reviews, with our domiciliary regulator and rating agencies. ~~Management~~GLIC is domiciled in Delaware so in the event GLIC were subjected to rehabilitation or insolvency proceedings, such proceedings would be located in (and governed by) Delaware laws. Delaware courts have a long tradition of respecting commercial and reinsurance affairs as well as contracts among sophisticated parties. Similar credit protections to what we have with GLIC have been tested and respected in Delaware and elsewhere in the United States, and as a result we believe our credit protections would be respected even in the unlikely event that GLIC becomes subject to rehabilitation or insolvency proceedings in Delaware. Accordingly, while no credit protections are perfect, we believe the correct way to think about the risks represented by our counterparty credit exposure to GLIC is not the full amount of the gross liability that GLIC reinsures, but a much smaller net exposure to GLIC (if any that might exist after taking into account our credit protections). Thus, management believes that ~~this~~our agreement and offsetting non LTC legacy arrangements with Genworth will enable RiverSource to recover on all net exposure in all material respects in the event of ana rehabilitation or insolvency of GLIC.

Dividends Paid to Shareholders and Share Repurchases

We paid regular quarterly dividends to our shareholders totaling ~~$379~~$129 million and ~~$368~~$126 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively. On ~~October 24, 2017,~~April 26, 2021, we announced a quarterly dividend of ~~$0.83~~$1.13 per common share. The dividend will be paid on ~~November 17, 2017~~May 21, 2021 to our shareholders of record at the close of business on ~~November 6, 2017.~~May 10, 2021.

In ~~December 2015,~~August 2020, our Board of Directors authorized us to repurchase up to $2.5 billion of our common stock through ~~December 31, 2017, which was exhausted in the third quarter 2017. In April 2017, our Board of Directors authorized us to repurchase up to an additional $2.5 billion of our common stock through June~~September 30, ~~2019.~~2022. As of ~~September 30, 2017,~~March 31, 2021, we had ~~$2.4~~$1.9 billion remaining under this share repurchase ~~authorization.~~authorizations. We intend to fund share repurchases through existing working capital, future earnings and other customary financing methods. The share repurchase ~~programs do~~program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase ~~programs~~program may be made in the open market, through privately negotiated transactions or block trades or other means. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, we repurchased a total of ~~8.0~~1.7 million shares of our common stock at an average price of ~~$129.76~~$218.54 per share.

Cash Flows

Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities. Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial cash available for general use by its CIEs. Cash and cash equivalents segregated under federal and other regulations is held for the exclusive benefit of our brokerage customers and is not available for general use by Ameriprise Financial.

Operating Activities

Net cash provided by operating activities decreased ~~$843 million~~$5.9 billion to ~~$1.2~~net cash used in operating activities of $1.0 billion for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$2.0~~net cash provided by operating activities of $4.9 billion for the prior year period primarily ~~due to~~reflecting a ~~$186 million increase~~$3.7 billion decrease in policyholder account balances, future policy benefits and claims, net, a $1.6 billion decrease in net income ~~taxes paid,~~and a ~~$148~~$480 million decrease in cash from changes in ~~other investments (primarily trading securities), and net cash outflows related to derivatives for the nine months ended September 30, 2017 compared to net cash inflows for the prior year period.~~brokerage deposits.

Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net flows of our investment certificate, fixed annuity and universal life products reflected in financing activities.

Net cash used in investing activities ~~decreased $261~~increased $769 million to ~~$106~~$809 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$367~~$40 million for the prior year period primarily ~~due to~~reflecting a ~~$944~~$716 million ~~decrease~~increase in cash used for purchases of Available-for-Sale securities, a $505 million decrease in net cash flows related to investments of consolidated investment entities, partially offset by a $541 million decrease in proceeds from sales of Available-for-Sale securities and a ~~$204~~$914 million increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale ~~securities, partially offset by a $357 million decrease in proceeds from sales, maturities and repayments of mortgage loans reflecting the sale of a portion of our consumer loans in~~ ~~2016 and~~ ~~a $242 million decrease in net cash related to changes in investments of CIEs~~.securities.

AMERIPRISE FINANCIAL, INC.

Financing Activities

Net cash ~~used in~~provided by financing activities ~~increased $713~~decreased $195 million to ~~$1.3 billion~~$433 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$573~~$628 million for the prior year period primarily ~~due to the issuance~~reflecting a $1.8 billion decrease in cash from changes in banking deposits, a $750 million decrease in repayments of ~~$500 million of long-term debt in 2016~~our senior notes, and a ~~$371~~$323 million decrease in net cash ~~inflows related to~~flows from investment certificates, partially offset by a ~~$246~~$797 million ~~decrease~~increase in ~~repayments of long-term debt.~~borrowings by consolidated investment entities, a $300 million increase in net cash flows related to purchased options with deferred premiums and a $101 million increase in net cash flows related to policyholder account balances.

Contractual Commitments

There have been no material changes to our contractual obligations disclosed in our ~~2016~~2020 10-K.

Off-Balance Sheet Arrangements

We provide asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds, property funds and other private ~~equity~~ funds, which are sponsored by us. We consolidate certain CLOs. We have determined that consolidation is not required for hedge funds, property funds and other private ~~equity~~ funds, which are sponsored by us. Our maximum exposure to loss with respect to our investment in these non-consolidated entities is limited to our carrying value. We have no obligation to provide further financial or other support to these investment entities nor have we provided any support to these investment entities. See Note 34 to our Consolidated Financial Statements for additional information on our arrangements with these investment entities.

~~AMERIPRISE FINANCIAL, INC.~~

Forward-Looking Statements

This report contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

•statements of the Company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth opportunities;

•statements of the Company’s position, future performance and ability to pursue business strategy relative to the spread and impact of the COVID-19 pandemic and the related market, economic, client, governmental and healthcare system response;

•statements about the expected trend in the shift of the variable annuity sales business away from products with living benefit guarantees over time;

•statements about the Company’s announced acquisition of BMO’s European-based asset management business, including the expected timing to close the transaction and the expected AUM of the acquired business;

•other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and

•statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on ~~pace,~~track,” ~~“project”~~“project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements.

Such factors include, but are not limited to:

~~conditions~~•the impacts on our business of the COVID-19 pandemic and the related economic, client, governmental and healthcare system responses;

•market fluctuations and general economic and political factors, including volatility in the ~~interest rate, credit default, equity~~U.S. and global market conditions, client behavior and ~~foreign exchange environments, including~~ volatility in the markets for our products;

•changes in ~~valuations, liquidity~~interest rates and ~~volatility;~~periods of low interest rates;

~~changes~~•adverse capital and credit market conditions or any downgrade in and the adoption of relevant accounting standards and securities rating agency standards and processes, as well as changes in the litigation and regulatory environment, including ongoing legal proceedings and regulatory actions, the frequency and extent of legal claims threatened or initiated by clients, other persons and regulators, and developments in regulation and legislation, including the rules and regulations implemented or that may be implemented or modified in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or in light of the U.S. Department of Labor rule and exemptions pertaining to the fiduciary status of investment advice providers to 401(k) plans, plan sponsors, plan participants and the holders of individual retirement or health savings accounts;our credit ratings;

~~investment management performance and distribution partner and consumer acceptance of the Company’s products;~~

•effects of competition inand the ~~financial services industry, including pricing pressure, the introduction~~economics of ~~new products and services and~~ changes in our product ~~distribution~~revenue mix and distribution channels;

•declines in our investment management performance;

•our ability to compete in attracting and retaining talent, including financial advisors;

•impairment, negative performance or default by financial institutions or other counterparties;

•the ability to maintain our unaffiliated third-party distribution channels and the impacts of sales of unaffiliated products;

•changes to in valuation of securities and investments included in our assets;

•the ~~Company’s reputation that may arise from employee or advisor misconduct, legal or regulatory actions, perceptions~~determination of the ~~financial services industry generally, improper management~~amount of ~~conflicts~~allowances taken on loans and investments;

AMERIPRISE FINANCIAL, INC.

•the illiquidity of ~~interest or otherwise;~~our investments;

•effects of the ~~Company’s capital structure, including indebtedness, limitations~~elimination of LIBOR on, ~~subsidiaries to pay dividends,~~ and ~~the extent, manner, terms and timing~~value of, ~~any share or debt repurchases management may effect as well as the opinions of rating agencies~~securities and other ~~analysts~~assets and ~~the reactions of market participants~~liabilities tied to LIBOR;

•failures by other insurers that lead to higher assessments we owe to state insurance guaranty funds;

•failures or ~~the Company’s regulators, advisors, distribution partners or customers in response to any change or prospect of change in any such opinion;~~

changes to the availability and cost of liquidity and the Company’s credit capacity that may arise due to shifts in market conditions, the Company’s credit ratings and the overall availability of credit;

~~risks of default, capacity constraint or repricing by issuers or guarantors of investments the Company owns or~~defaults by counterparties to ~~hedge, derivative, insurance~~our reinsurance arrangements;

•inadequate reserves for future policy benefits and claims or ~~reinsurance arrangements or by manufacturers of products the Company distributes, experience~~ for future redemptions and maturities;

•deviations from the Company’s assumptions regarding such risks, the evaluations or the prospect of changes in evaluations of any such third parties published by rating agencies or other analysts, and the reactions of other market participants or the Company’s regulators, advisors, distribution partners or customers in response to any such evaluation or prospect of changes in evaluation;

~~experience deviations from the Company’s~~our assumptions regarding morbidity, mortality and persistency ~~in certain annuity and~~affecting our insurance ~~products,~~profitability;

•changes to our reputation arising from employee or ~~from assumptions regarding market returns assumed in valuing~~advisor misconduct or unlocking DAC and DSIC or market volatility underlying the Company’s valuation and hedging of guaranteed benefit annuity riders, or from assumptions regarding interest rates assumed in the Company's loss recognition testing of its long term care business, or from assumptions regarding anticipated claims and losses relating to the Company’s automobile and home insurance products;otherwise;

~~changes in capital requirements that may be indicated, required or advised by regulators or rating agencies;~~

~~the impacts of the Company’s efforts to improve distribution economics and to grow third-party distribution of its products;~~

~~the ability to pursue and complete strategic transactions and initiatives, including acquisitions, divestitures, restructurings, joint ventures and the development of new products and services;~~

the ability to realize the financial, operating and business fundamental benefits of strategic transactions and initiatives the Company has completed, is pursuing or may pursue in the future, which may be impacted by the ability to obtain regulatory

~~AMERIPRISE FINANCIAL, INC.~~

~~approvals, the ability to effectively manage related expenses and by market, business partner and consumer reactions to such strategic transactions and initiatives;~~

~~the ability and timing to realize savings and other benefits from re-engineering and tax planning;~~

•interruptions or other failures in ~~the Company’s communications, technology~~our operating systems and ~~other operating systems,~~networks, including errors or failures caused by third-party service providers, interference or ~~failures caused~~third-party attacks;

•interruptions or other errors in our telecommunications or data processing systems;

• identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk;

• ability of our subsidiaries to transfer funds to us to pay dividends;

• changes in exchange rates and other risks in connection with our international operations and earnings and income generated overseas;

• occurrence of natural or man-made disasters and catastrophes;

• legal and regulatory actions brought against us;

• changes to laws and regulations that govern operation of our business;

• supervision by ~~third party attacks on~~bank regulators and related regulatory and prudential standards as a savings and loan holding company that may limit our activities and strategies;

• changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting our products;

• protection of our intellectual property and claims we infringe the ~~Company’s systems, or the failure to safeguard the privacy or confidentiality~~intellectual property of ~~sensitive information and data on such systems; and~~others;

~~general economic and political factors, including consumer confidence~~•changes in ~~the economy~~ and the ~~financial industry,~~adoption of new accounting standards; and

•changes that could give rise to the termination of the purchase agreement with BMO Financial Group or our ability ~~and inclination of consumers generally~~ to ~~invest as well as their ability and inclination to invest in financial instruments and products other than cash and cash equivalents,~~recognize the ~~costs of products and services~~expected benefits from the ~~Company consumes in the conduct of its business, and applicable legislation and regulation and changes therein~~ ~~(such as the June 2016 UK referendum on membership in the European Union and the uncertain regulatory environment in the U.S. after the recent U.S. election)~~, including tax laws, tax treaties, fiscal and central government treasury policy, and policies regarding the financial services industry and publicly-held firms, and regulatory rulings and pronouncements.

transaction.

Management cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that management is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management undertakes no obligation to update publicly or revise any forward-looking statements. The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion included in Part I, Item 1A of our ~~2016~~2020 10-K.

Ameriprise Financial announces financial and other information to investors through the Company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this report or in any other report or document the Company furnishes or files with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk” in this report is incorporated herein by reference. These disclosures should be read in conjunction with the “Quantitative and Qualitative Disclosures About Market Risk” discussion included as Part II, Item 7A of our ~~2016~~2020 10-K filed with the SEC on February ~~23, 2017~~.24, 2021.

AMERIPRISE FINANCIAL, INC.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in and pursuant to SEC regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. It should be noted that, because of inherent limitations, our company’s disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of ~~September 30, 2017.~~March 31, 2021.

Changes in Internal Control over Financial Reporting

~~There have not been~~We implemented a new financial system during the first quarter of fiscal 2021. The new system allows us to maximize financial system functionality, enable a scalable platform and simplify processes for reporting and analytics. As part of the financial system implementation, we enhanced and modified certain existing internal controls within our general ledger, accounts payable, fixed assets, and financial reporting functions. We will continue to monitor and ensure effectiveness of any changes in internal controls. There have been no other changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

~~AMERIPRISE FINANCIAL, INC.~~

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 1516 to the Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of our ~~2016~~2020 10-K.

AMERIPRISE FINANCIAL, INC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during the ~~third~~first quarter of ~~2017:~~2021:


Period		(a)	(b)		(c)	(d)		Period	(a)	(b)		(c)	(d)
		Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾			Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1 to July 31, 2017
January 1 to January 31, 2021								January 1 to January 31, 2021
Share repurchase program ⁽¹⁾		622,117	$	136.67	622,117	$	2,635,014,130	Share repurchase program (1)	294,325	$	203.86	294,325	$	2,217,553,589
Employee transactions ⁽²⁾		432,319	$	143.36	N/A	N/A		Employee transactions (2)	163,146	$	199.06	N/A	N/A

August 1 to August 31, 2017
February 1 to February 29, 2021								February 1 to February 29, 2021
Share repurchase program ⁽¹⁾		842,580	$	142.26	842,580	$	2,515,148,831	Share repurchase program (1)	532,872	$	215.83	532,872	$	2,102,546,271
Employee transactions ⁽²⁾		276,391	$	145.67	N/A	N/A		Employee transactions (2)	690,154	$	208.30	N/A	N/A

September 1 to September 30, 2017
March 1 to March 31, 2021								March 1 to March 31, 2021
Share repurchase program ⁽¹⁾		910,991	$	140.48	910,991	$	2,387,172,782	Share repurchase program (1)	833,598	$	225.47	833,598	$	1,914,596,094
Employee transactions ⁽²⁾		74,414	$	143.50	N/A	N/A		Employee transactions (2)	65,168	$	225.63	N/A	N/A

Totals	Totals							Totals
Share repurchase program ⁽¹⁾		2,375,688	$	140.11	2,375,688			Share repurchase program (1)	1,660,795	$	218.55	1,660,795
Employee transactions ⁽²⁾		783,124	$	144.19	N/A			Employee transactions (2)	918,468	$	207.89	N/A
		3,158,812			2,375,688				2,579,263			1,660,795

N/A Not applicable.

⁽¹⁾ ~~On December 7, 2015, we announced that our Board of Directors authorized us to repurchase up to $2.5 billion of our common stock through December 31, 2017. On April 24, 2017, we announced that~~In August 2020, our Board of Directors authorized an ~~additional~~ expenditure of up to $2.5 billion for the repurchase of our common stock through ~~June~~September 30, ~~2019.~~2022. The share repurchase ~~programs do~~program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase ~~programs~~program may be made in the open market, through privately negotiated transactions or block trades or other means.

⁽²⁾Includes restricted shares withheld pursuant to the terms of awards under the Company’s share-based compensation plans to offset tax withholding obligations that occur upon vesting and release of restricted shares. The value of the restricted shares withheld is the closing price of common stock of Ameriprise Financial, Inc. on the date the relevant transaction occurs. Also includes shares withheld pursuant to the net settlement of Non-Qualified Stock Option (“NQSO”) exercises to offset tax withholding obligations that occur upon exercise and to cover the strike price of the NQSO. The value of the shares withheld pursuant to the net settlement of NQSO exercises is the closing price of common stock of Ameriprise Financial, Inc. on the day prior to the date the relevant transaction occurs.

AMERIPRISE FINANCIAL, INC.

ITEM 6. EXHIBITS

Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed certain agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.

The following exhibits are filed as part of this Quarterly Report on Form 10-Q. The exhibit numbers followed by an asterisk (*) indicate exhibits electronically filed herewith. All other exhibit numbers indicate exhibits previously filed and are hereby incorporated herein by reference.



Exhibit			Description

3.1			Amended and Restated Certificate of Incorporation of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, File No. 1-32525, filed on May 1, 2014).
3.2			Amended and Restated Bylaws of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.2 to the ~~Current~~Annual Report on Form ~~8-K,~~10-K, File No. 1-32525, filed on ~~May 1, 2014)~~February 24, 2021).
4.1			Form of Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Form 10 Registration Statement, File No. 1-32525, filed on August 19, 2005). Other instruments defining the rights of holders of long-term debt securities of the registrant are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The registrant agrees to furnish copies of these instruments to the SEC upon request.
10.1*†			~~Third Amended and Restated Credit Agreement dated as of October 12, 2017 among~~ Ameriprise Financial Inc., as Borrower, the lenders party thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A. and Citibank, N.A. as Co-Syndication Agents, Credit Suisse AG, Cayman Islands Branch, Goldman Sachs Bank USA, HSBC Bank USA, National Association, JPMorgan Chase Bank, N.A. and U.S. Bank National Association as Co-Documentation Agents, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on October 16, 2017).2007 Long-Term Incentive Award Program Guide
31.131.1			Certification of James M. Cracchiolo pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.231.2			Certification of Walter S. Berman pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
3232			Certification of James M. Cracchiolo and Walter S. Berman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*101			The following materials from Ameriprise Financial, Inc.’s Quarterly Report on Form 10-Q for the period ended ~~September 30, 2017,~~March 31, 2021 are formatted in ~~XBRL:~~iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2021 and ~~nine months ended September 30, 2017 and 2016;~~2020; (ii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and ~~nine months ended September 30, 2017 and 2016;~~2020; (iii) Consolidated Balance Sheets at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016;~~2020; (iv) Consolidated Statements of Equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016;~~2020; (v) Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016;~~2020; and (vi) Notes to the Consolidated Financial Statements.
104			The cover page from Ameriprise Financial, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2021 is formatted in iXBRL and contained in Exhibit 101.
* Filed electronically herewithin.
† Management contract or compensation plan or arrangement

AMERIPRISE FINANCIAL, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERIPRISE FINANCIAL, INC.

(Registrant)


		~~(Registrant)~~


Date:	~~November 1, 2017~~May 10, 2021		ByBy:	/s/ Walter S. Berman
				Walter S. Berman
		Executive Vice President and
Chief Financial Officer
					(Principal Financial Officer)

Date:

~~November 1, 2017~~May 10, 2021

ByBy:

/s/ ~~David K. Stewart~~John R. Hutt

~~David K. Stewart~~John R. Hutt

Senior Vice President – Corporate Finance and Controller

(Principal Accounting Officer)



	Ameriprise Financial, Inc.																				Non-controlling Interests			Total
	Number of Outstanding Shares		Common Shares		Additional Paid-In Capital		Retained Earnings			Appropriated Retained Earnings of Consolidated Investment Entities			Treasury Shares			Accumulated Other Com- prehensive Income		Total Ameriprise Financial, Inc. Shareholders’ Equity
	(in millions, except share data)
Balances at January 1, 2016 ⁽¹⁾	171,033,260		$	3	$	7,611	$	9,525		$	137		$	(10,338	)	$	253	$	7,191		$	1,188		$	8,379
Cumulative effect of change in accounting policies	—		—		—		1			(137		)	—			6		(130		)	(1,188		)	(1,318		)
Comprehensive income:
Net income	—		—		—		914			—			—			—		914			—			914
Other comprehensive income, net of tax	—		—		—		—			—			—			336		336			—			336
Total comprehensive income																		1,250			—			1,250
Dividends to shareholders	—		—		—		(368		)	—			—			—		(368		)	—			(368		)
Repurchase of common shares	(14,349,061	)	—		—		—			—			(1,333		)	—		(1,333		)	—			(1,333		)
Share-based compensation plans	1,812,137		—		98		—			—			62			—		160			—			160
Balances at September 30, 2016 ⁽¹⁾	158,496,336		$	3	$	7,709	$	10,072		$	—		$	(11,609	)	$	595	$	6,770		$	—		$	6,770

Balances at January 1, 2017	154,759,904		$	3	$	7,765	$	10,351		$	—		$	(12,027	)	$	200	$	6,292		$	—		$	6,292
Comprehensive income:
Net income	—		—		—		1,299			—			—			—		1,299			—			1,299
Other comprehensive income, net of tax	—		—		—		—			—			—			112		112			—			112
Total comprehensive income																		1,411			—			1,411
Dividends to shareholders	—		—		—		(379		)	—			—			—		(379		)	—			(379		)
Repurchase of common shares	(10,184,145	)	—		—		—			—			(1,323		)	—		(1,323		)	—			(1,323		)
Share-based compensation plans	3,761,769		—		252		—			—			52			—		304			—			304
Balances at September 30, 2017	148,337,528		$	3	$	8,017	$	11,271		$	—		$	(13,298	)	$	312	$	6,305		$	—		$	6,305



	Carrying Value				Weighted Average Interest Rate
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
	(in millions)
Debt of consolidated CLOs due 2025-2026	$	2,267	$	2,319	2.7	%	2.5	%



	GMDB & GGU			GMIB			GMWB ⁽¹⁾			GMAB ⁽¹⁾			UL
	(in millions)
Balance at January 1, 2016	$	14		$	8		$	1,057		$	—		$	332
Incurred claims	10			—			1,056			9			99
Paid claims	(7		)	—			—			(1		)	(18		)
Balance at September 30, 2016	$	17		$	8		$	2,113		$	8		$	413

Balance at January 1, 2017	$	16		$	8		$	1,017		$	(24	)	$	434
Incurred claims	3			—			(478		)	(49		)	59
Paid claims	(3		)	(1		)	—			—			(22		)
Balance at September 30, 2017	$	16		$	7		$	539		$	(73	)	$	471



Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives	$	—	$	4	$	—	$	4
IUL embedded derivatives	—		—		577		577
GMWB and GMAB embedded derivatives	—		—		45		45		⁽²⁾
Total policyholder account balances, future policy benefits and claims	—		4		622		626		⁽³⁾
Customer deposits	—		9		—		9
Other liabilities:
Interest rate derivative contracts	—		416		—		416
Equity derivative contracts	5		2,664		—		2,669
Foreign exchange derivative contracts	4		27		—		31
Other	6		6		27		39
Total other liabilities	15		3,113		27		3,155
Total liabilities at fair value	$	15	$	3,126	$	649	$	3,790



	Available-for-Sale Securities															Other Derivative Contracts
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities		Asset Backed Securities			Total				Other Derivative Contracts
	(in millions)
Balance, July 1, 2016	$	1,350		$	153		$	—	$	178		$	1,681			$	2
Total gains (losses) included in:
Net income	—			—			—		1			1			⁽³⁾	(2		)	⁽²⁾
Other comprehensive income	(2		)	1			—		1			—				—
Purchases	20			144			33		12			209				—
Settlements	(26		)	(14		)	—		—			(40		)		—
Transfers out of Level 3	—			1			—		(27		)	(26		)		—
Balance, September 30, 2016	$	1,342		$	285		$	33	$	165		$	1,825			$	—
Changes in unrealized gains (losses) relating to assets held at September 30, 2016	$	—		$	—		$	—	$	—		$	—			$	(2	)	⁽²⁾



Nine Months Ended September 30, 2017
Interest rate contracts	$	(8	)	$	—		$	—	$	—		$	61		$	—
Equity contracts	(7		)	3			36		50			(920		)	7
Credit contracts	—			—			—		—			(22		)	—
Foreign exchange contracts	—			—			3		—			(27		)	5
Other contracts	—			—			—		—			(2		)	—
GMWB and GMAB embedded derivatives	—			—			—		—			569			—
IUL embedded derivatives	—			—			—		(43		)	—			—
SMC embedded derivatives	—			(3		)	—		—			—			—
Total gain (loss)	$	(15	)	$	—		$	39	$	7		$	(341	)	$	12



Derivatives designated as hedging instruments	Location of Gain Recorded into Income	Amount of Gain Recognized in Income on Derivatives
		Three Months Ended September 30,				Nine Months Ended September 30,
		2017		2016		2017		2016
		(in millions)
Interest rate contracts	Interest and debt expense	$	4	$	5	$	12	$	15



	Net Unrealized Securities Gains				Net Unrealized Derivatives Gains		Defined Benefit Plans			Foreign Currency Translation			Other			Total
	(in millions)
Balance, July 1, 2017	$	543			$	6	$	(120	)	$	(129	)	$	(1	)	$	299
OCI before reclassifications	(1		)		—		—			16			—			15
Amounts reclassified from AOCI	(3		)		1		—			—			—			(2		)
Total OCI	(4		)		1		—			16			—			13
Balance, September 30, 2017	$	539		⁽¹⁾	$	7	$	(120	)	$	(113	)	$	(1	)	$	312



Balance, January 1, 2017	$	479			$	5	$	(125	)	$	(159	)	$	—		$	200
OCI before reclassifications	88				—		—			46			(1		)	133
Amounts reclassified from AOCI	(28		)		2		5			—			—			(21		)
Total OCI	60				2		5			46			(1		)	112
Balance, September 30, 2017	$	539		⁽¹⁾	$	7	$	(120	)	$	(113	)	$	(1	)	$	312



Balance, January 1, 2016	$	426			$	1	$	(91	)	$	(83	)	$	253
Cumulative effect of change in accounting policies	6				—		—			—			6
Balance, January 1, 2016, as adjusted	432				1		(91		)	(83		)	259
OCI before reclassifications	389				—		—			(55		)	334
Amounts reclassified from AOCI	(7		)		3		6			—			2
Total OCI	382				3		6			(55		)	336
Balance, September 30, 2016	$	814		⁽¹⁾	$	4	$	(85	)	$	(138	)	$	595



	Twelve Months Ended September 30,
	2017			2016
	(in millions)
Net income attributable to Ameriprise Financial	$	1,699		$	1,271
Less: Adjustments ⁽¹⁾	(165		)	(154		)
Operating earnings	$	1,864		$	1,425

Total Ameriprise Financial, Inc. shareholders’ equity	$	6,369		$	7,139
Less: AOCI, net of tax	325			478
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI	6,044			6,661
Less: Equity impacts attributable to CIEs	1			62
Operating equity	$	6,043		$	6,599

Return on equity, excluding AOCI	28.1		%	19.1		%
Operating return on equity, excluding AOCI ⁽²⁾	30.8		%	21.6		%



Pretax Increase (Decrease)	2017			2016
	(in millions)
Other revenues	$	(47	)	$	64
Total revenues	(47		)	64

Distribution expenses	—			(27		)
Benefits, claims, losses and settlement expenses	(139		)	229
Amortization of DAC	(12		)	81
Total expenses	(151		)	283
Total ⁽¹⁾	$	104		$	(219	)
⁽¹⁾ Includes a $5 million and $16 million net benefit related to the market impact on variable annuity guaranteed benefits for the three months ended September 30, 2017 and 2016, respectively.



International Equity	Equal weighted	1 year	75	%	55	%
		3 year	55	%	60	%
		5 year	75	%	80	%
	Asset weighted	1 year	56	%	73	%
		3 year	44	%	44	%
		5 year	55	%	52	%



Taxable Fixed Income	Equal weighted	1 year	72	%	78	%
		3 year	78	%	71	%
		5 year	76	%	76	%
	Asset weighted	1 year	74	%	82	%
		3 year	83	%	76	%
		5 year	87	%	85	%



Tax Exempt Fixed Income	Equal weighted	1 year	74	%	84	%
		3 year	89	%	89	%
		5 year	100	%	94	%
	Asset weighted	1 year	60	%	92	%
		3 year	98	%	81	%
		5 year	100	%	88	%



Asset Allocation Funds	Equal weighted	1 year	54	%	69	%
		3 year	90	%	100	%
		5 year	78	%	75	%
	Asset weighted	1 year	47	%	87	%
		3 year	94	%	100	%
		5 year	93	%	81	%



Allocation (Managed) Funds	Equal weighted	1 year	78	%	88	%
		3 year	89	%	88	%
		5 year	86	%	83	%
	Asset weighted	1 year	61	%	80	%
		3 year	94	%	97	%
		5 year	93	%	92	%



	September 30,				Change					Average⁽¹⁾				Change
	September 30,									Three Months Ended September 30,
	2017		2016							2017		2016
	(in billions)
Equity	$	265.8	$	245.9	$	19.9		8	%	$	261.7	$	244.6	$	17.1		7	%
Fixed income	178.0		183.3		(5.3		)	(3	)	177.3		182.4		(5.1		)	(3	)
Money market	5.9		6.6		(0.7		)	(11	)	5.8		6.9		(1.1		)	(16	)
Alternative	6.5		7.3		(0.8		)	(11	)	6.5		7.2		(0.7		)	(10	)
Hybrid and other	27.8		24.7		3.1			13		27.2		24.7		2.5			10
Total managed assets	$	484.0	$	467.8	$	16.2		3	%	$	478.5	$	465.8	$	12.7		3	%
⁽¹⁾ Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.



	Actual Capital				Regulatory Capital Requirements
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
	(in millions)
RiverSource Life⁽¹⁾⁽²⁾	$	2,737	$	3,052	N/A		$	606
RiverSource Life of NY⁽¹⁾⁽²⁾	306		323		N/A		38
IDS Property Casualty⁽¹⁾⁽³⁾	805		800		$	216	213
Ameriprise Insurance Company⁽¹⁾⁽³⁾	48		47		3		2
ACC⁽⁴⁾⁽⁵⁾	369		335		341		317
Threadneedle Asset Management Holdings Sàrl⁽⁶⁾	424		360		169		149
Ameriprise National Trust Bank⁽⁷⁾	23		22		10		10
AFSI⁽³⁾⁽⁴⁾	126		77		#		#
Ameriprise Captive Insurance Company⁽³⁾	54		51		10		9
Ameriprise Trust Company⁽³⁾	30		29		26		24
AEIS⁽³⁾⁽⁴⁾	115		107		21		19
RiverSource Distributors, Inc.⁽³⁾⁽⁴⁾	13		11		#		#
Columbia Management Investment Distributors, Inc.⁽³⁾⁽⁴⁾	17		14		#		#
N/A Not applicable. # Amounts are less than $1 million.