

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

~~For the Quarterly Period Ended~~ ~~March 31, 2019~~For the Quarterly Period Ended

March 31, 2020


oOR
	☐	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~~



Commission File No.	1-32525

~~AMERIPRISE FINANCIAL INC~~

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

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	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 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 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



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	☒	No	☐



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	☒	No	☐



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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~~Non-accelerated Filero	☐	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.~~



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes	☐	No	☒



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 ~~April 19, 2019~~May 1, 2020
	Common Stock (par value $.01 per share)		~~133,904,298~~122,337,248 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, 2019 and 2018~~				3
~~Consolidated Statements of Comprehensive Income — Three months ended March 31, 2019 and 2018~~				4
~~Consolidated Balance Sheets — March 31, 2019 and December 31, 2018~~				5
~~Consolidated Statements of Equity — Three months ended March 31, 2019 and 2018~~				6
~~Consolidated Statements of Cash Flows — Three months ended March 31, 2019 and 2018~~				7
~~Notes to Consolidated Financial Statements~~				9
~~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~~				26
~~8. Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities~~				27
~~9. Variable Annuity and Insurance Guarantees~~				28
~~10. Debt~~				29
~~11. Fair Values of Assets and Liabilities~~				29
~~12. Offsetting Assets and Liabilities~~				37
~~13. Derivatives and Hedging Activities~~				39
~~14. Leases~~				42
~~15. Held for Sale Classification~~				44
~~16. Shareholders’ Equity~~				45
~~17. Regulatory Requirements~~				46
~~18. Income Taxes~~				47
~~19. Contingencies~~				47
~~20. Earnings per Share~~				48
~~21. 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~~				72
~~Item 4. Controls and Procedures~~				72

~~Part II. Other Information~~				73
~~Item 1. Legal Proceedings~~				73
~~Item 1A. Risk Factors~~				73
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~				73
~~Item 6. Exhibits~~				74
~~Signatures~~				75



Part I. Financial Information
Item 1. Financial Statements (Unaudited)
	Consolidated Statements of Operations — Three months ended March 31, 2020 and 2019		3
	Consolidated Statements of Comprehensive Income — Three months ended March 31, 2020 and 2019		4
	Consolidated Balance Sheets — March 31, 2020 and December 31, 2019		5
	Consolidated Statements of Equity — Three months ended March 31, 2020 and 2019		6
	Consolidated Statements of Cash Flows — Three months ended March 31, 2020 and 2019		7
	Notes to Consolidated Financial Statements		9
	1.	Basis of Presentation	9
	2.	Summary of Significant Accounting Policies	9
	3.	Recent Accounting Pronouncements	12
	4.	Revenue from Contracts with Customers	15
	5.	Variable Interest Entities	18
	6.	Investments	23
	7.	Financing Receivables	26
	8.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	30
	9.	Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities	30
	10.	Variable Annuity and Insurance Guarantees	31
	11.	Debt	33
	12.	Fair Values of Assets and Liabilities	33
	13.	Offsetting Assets and Liabilities	42
	14.	Derivatives and Hedging Activities	43
	15.	Shareholders’ Equity	48
	16.	Income Taxes	49
	17.	Contingencies	50
	18.	Earnings per Share	51
	19.	Segment Information	51
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			54
Item 3. Quantitative and Qualitative Disclosures About Market Risk			75
Item 4. Controls and Procedures			75

Part II. Other Information			76
Item 1. Legal Proceedings			76
Item 1A. Risk Factors			76
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			77
Item 6. Exhibits			78
Signatures			79

AMERIPRISE FINANCIAL, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended March 31,					Three Months Ended March 31,
	2019			2018		2020			2019
	(in millions, except per share amounts)
Revenues
Management and financial advice fees	$	1,627		$	1,669	$	1,770		$	1,627
Distribution fees	480			468		464			480
Net investment income	397			396		328			397
Premiums	371			343		91			371
Other revenues	278			308		373			278
Total revenues	3,153			3,184		3,026			3,153
Banking and deposit interest expense	35			16		25			35
Total net revenues	3,118			3,168		3,001			3,118
Expenses
Distribution expenses	900			905		995			900
Interest credited to fixed accounts	204			141		91			204
Benefits, claims, losses and settlement expenses	670			494		(1,747		)	670
Amortization of deferred acquisition costs	16			92		512			16
Interest and debt expense	53			51		46			53
General and administrative expense	805			789		753			805
Total expenses	2,648			2,472		650			2,648
Pretax income	470			696		2,351			470
Income tax provision	75			102		315			75
Net income	$	395		$	594	$	2,036		$	395

Earnings per share
Basic	$	2.85		$	3.97	$	16.11		$	2.85
Diluted	$	2.82		$	3.91	$	15.88		$	2.82

Supplemental Disclosures:
Total other-than-temporary impairment losses on securities	$	(12	)	$	—
Portion of loss recognized in other comprehensive income (before taxes)	7			—
Net impairment losses recognized in net investment income	$	(5	)	$	—

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)



	Three Months Ended March 31,
	2020			2019
	(in millions)
Net income	$	2,036		$	395
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(33		)	5
Net unrealized gains (losses) on securities	(524		)	322
Net unrealized gains (losses) on derivatives	—			(1		)
Total other comprehensive income (loss), net of tax	(557		)	326
Total comprehensive income	$	1,479		$	721

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)



	March 31, 2020			December 31, 2019
	(in millions, except share amounts)
Assets
Cash and cash equivalents	$	8,730		$	3,709
Cash of consolidated investment entities	99			118
Investments (net of allowance for credit losses: 2020, $52; 2019, $24 ⁽¹⁾)	36,626			37,915
Investments of consolidated investment entities, at fair value	1,398			1,606
Separate account assets	75,305			87,488
Receivables (net of allowance for credit losses: 2020, $47; 2019, $39)	7,185			7,202
Receivables of consolidated investment entities, at fair value	3			8
Deferred acquisition costs	2,364			2,698
Restricted and segregated cash, cash equivalents and investments	2,848			2,386
Other assets	11,124			8,698
Total assets	$	145,682		$	151,828

Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims	$	32,685		$	30,512
Separate account liabilities	75,305			87,488
Customer deposits	17,010			14,430
Short-term borrowings	200			201
Long-term debt	2,344			3,097
Debt of consolidated investment entities, at fair value	1,376			1,628
Accounts payable and accrued expenses	1,427			1,884
Other liabilities	8,536			6,775
Other liabilities of consolidated investment entities, at fair value	106			84
Total liabilities	138,989			146,099
Equity:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 331,142,264 and 329,842,827, respectively)	3			3
Additional paid-in capital	8,578			8,461
Retained earnings	16,180			14,279
Treasury shares, at cost (208,807,377 and 205,903,593 shares, respectively)	(17,773		)	(17,276		)
Accumulated other comprehensive income (loss), net of tax	(295		)	262
Total equity	6,693			5,729
Total liabilities and equity	$	145,682		$	151,828

⁽¹⁾Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities. See Notes 2, 3, 6 and 7 for more information.

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

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

Three Months Ended March 31,
2019 2018
(in millions)
Net income $ 395
$ 594
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 5
29
Net unrealized gains (losses) on securities 322
(262 )
Net unrealized gains (losses) on derivatives (1 ) —
Total other comprehensive income (loss), net of tax 326
(233 )
Total comprehensive income $ 721
$ 361

~~See Notes to Consolidated Financial Statements.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~CONSOLIDATED BALANCE SHEETS (UNAUDITED)~~

March 31,
2019 December 31,
2018
(in millions, except share amounts)
Assets
Cash and cash equivalents $ 3,259
$ 2,931
Cash of consolidated investment entities (“CIEs”) 88
166
Investments 33,463
35,825
Investments of consolidated investment entities, at fair value 1,740
1,706
Separate account assets 83,571
77,925
Receivables 7,434
6,173
Receivables of consolidated investment entities, at fair value 28
12
Deferred acquisition costs 2,757
2,776
Restricted and segregated cash, cash equivalents and investments 2,564
2,910
Other assets 7,472
6,792
Assets held for sale 2,027
—
Total assets $ 144,403
$ 137,216

Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims $ 29,463
$ 30,124
Separate account liabilities 83,571
77,925
Customer deposits 11,520
11,545
Short-term borrowings 201
201
Long-term debt 3,394
2,867
Debt of consolidated investment entities, at fair value 1,731
1,743
Accounts payable and accrued expenses 1,596
1,862
Other liabilities 5,808
5,239
Other liabilities of consolidated investment entities, at fair value 105
122
Liabilities held for sale 1,171
—
Total liabilities 138,560
131,628
Equity:
Ameriprise Financial, Inc.:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 328,900,292 and 328,537,214 respectively) 3
3
Additional paid-in capital 8,270
8,260
Retained earnings 13,172
12,909
Treasury shares, at cost (194,716,785 and 192,206,467 shares, respectively) (15,637 ) (15,293 )
Accumulated other comprehensive income (loss), net of tax 35
(291 )
Total equity 5,843
5,588
Total liabilities and equity $ 144,403
$ 137,216

~~See Notes to Consolidated Financial Statements.~~



	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, 2019	136,330,747		$	3	$	8,260	$	12,909		$	(15,293	)	$	(291	)	$	5,588
Cumulative effect of adoption of premium amortization on purchased callable debt securities guidance	—		—		—		(5		)	—			—			(5		)
Comprehensive income:
Net income	—		—		—		395			—			—			395
Other comprehensive loss, net of tax	—		—		—		—			—			326			326
Total comprehensive income																721
Dividends to shareholders	—		—		—		(127		)	—			—			(127		)
Repurchase of common shares	(3,199,907	)	—		—		—			(399		)	—			(399		)
Share-based compensation plans	1,052,667		—		10		—			55			—			65
Balances at March 31, 2019	134,183,507		$	3	$	8,270	$	13,172		$	(15,637	)	$	35		$	5,843

Balances at January 1, 2020	123,939,234		$	3	$	8,461	$	14,279		$	(17,276	)	$	262		$	5,729
Cumulative effect of adoption of current expected credit losses guidance	—		—		—		(9		)	—			—			(9		)
Comprehensive income:
Net income	—		—		—		2,036			—			—			2,036
Other comprehensive income, 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
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, 2018 146,634,664 $ 3 $ 8,085 $ 11,326 $ (13,648 ) $ 229 $ 5,995
Cumulative effect of adoption of equity securities guidance — — — 1 — (1 ) —
Comprehensive income:
Net income — — — 594 — — 594
Other comprehensive loss, net of tax — — — — — (233 ) (233 )
Total comprehensive income 361
Dividends to shareholders — — — (125 ) — — (125 )
Repurchase of common shares (3,003,729 ) — — — (482 ) — (482 )
Share-based compensation plans 1,387,422 — 31 — 60 — 91
Balances at March 31, 2018 145,018,357 $ 3 $ 8,116 $ 11,796 $ (14,070 ) $ (5 ) $ 5,840

Balances at January 1, 2019 136,330,747 $ 3 $ 8,260 $ 12,909 $ (15,293 ) $ (291 ) $ 5,588
Cumulative effect of change in accounting policy — — — (5 ) — — (5 )
Comprehensive income:
Net income — — — 395 — — 395
Other comprehensive income, net of tax — — — — — 326 326
Total comprehensive income 721
Dividends to shareholders — — — (127 ) — — (127 )
Repurchase of common shares (3,199,907 ) — — — (399 ) — (399 )
Share-based compensation plans 1,052,667 — 10 — 55 — 65
Balances at March 31, 2019 134,183,507 $ 3 $ 8,270 $ 13,172 $ (15,637 ) $ 35 $ 5,843

~~See Notes to Consolidated Financial Statements.~~

~~AMERIPRISE FINANCIAL, INC.~~

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,
2019
2018⁽¹⁾
(in millions)
Cash Flows from Operating Activities
Net income $ 395
$ 594
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net 46
56
Deferred income tax expense (benefit) (2 ) 104
Share-based compensation 30
32
Net realized investment (gains) losses (10 ) (6 )
Net trading (gains) losses (4 ) (3 )
Loss from equity method investments 12
12
Other-than-temporary impairments and provision for loan losses 5
—
Net (gains) losses of consolidated investment entities 4
1
Changes in operating assets and liabilities:
Restricted and segregated investments (25 ) 75
Deferred acquisition costs (55 ) 13
Policyholder account balances, future policy benefits and claims, net (201 ) (325 )
Derivatives, net of collateral 316
29
Receivables 125
(78 )
Brokerage deposits (264 ) (207 )
Accounts payable and accrued expenses (177 ) (373 )
Other operating assets and liabilities of consolidated investment entities, net 1
3
Other, net (24 ) (115 )
Net cash provided by (used in) operating activities 172
(188 )

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales 92
361
Maturities, sinking fund payments and calls 1,986
1,195
Purchases (2,085 ) (1,456 )
Proceeds from sales, maturities and repayments of mortgage loans 64
75
Funding of mortgage loans (43 ) (40 )
Proceeds from sales, maturities and collections of other investments 51
224
Purchase of other investments (93 ) (272 )
Purchase of investments by consolidated investment entities (203 ) (116 )
Proceeds from sales, maturities and repayments of investments by consolidated investment entities 132
130
Purchase of land, buildings, equipment and software (31 ) (33 )
Cash paid for written options with deferred premiums (42 ) (57 )
Cash received from written options with deferred premiums 35
53
Change in reinsurance deposit, net (345 ) —
Other, net 1
3
Net cash provided by (used in) investing activities $ (481 ) $ 67
See Notes to Consolidated Financial Statements.



	Three Months Ended March 31,
	2020			2019
	(in millions)
Cash Flows from Operating Activities
Net income	$	2,036		$	395
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	47			46
Deferred income tax expense (benefit)	1,273			(2		)
Share-based compensation	36			30
Net realized investment (gains) losses	(5		)	(10		)
Net trading (gains) losses	(3		)	(4		)
Loss from equity method investments	19			12
Impairments and provision for loan losses	21			5
Net (gains) losses of consolidated investment entities	6			4
Changes in operating assets and liabilities:
Restricted and segregated investments	—			(25		)
Deferred acquisition costs	452			(55		)
Policyholder account balances, future policy benefits and claims, net	2,634			(201		)
Derivatives, net of collateral	(681		)	316
Receivables	(13		)	125
Brokerage deposits	378			(264		)
Accounts payable and accrued expenses	(432		)	(177		)
Current income tax expense (benefit)	(1,081		)	33
Other operating assets and liabilities of consolidated investment entities, net	(1		)	1
Other, net	207			(57		)
Net cash provided by (used in) operating activities	4,893			172

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	633			92
Maturities, sinking fund payments and calls	2,050			1,986
Purchases	(2,529		)	(2,085		)
Proceeds from sales, maturities and repayments of mortgage loans	54			64
Funding of mortgage loans	(62		)	(43		)
Proceeds from sales, maturities and collections of other investments	77			51
Purchase of other investments	(115		)	(93		)
Purchase of investments by consolidated investment entities	(133		)	(203		)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities	141			132
Purchase of land, buildings, equipment and software	(29		)	(31		)
Cash paid for written options with deferred premiums	(258		)	(42		)
Cash received from written options with deferred premiums	95			35
Cash paid for deposit receivable	(1		)	(345		)
Cash received for deposit receivable	30			—
Other, net	7			1
Net cash provided by (used in) investing activities	$	(40	)	$	(481	)
See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

Three Months Ended March 31,
2019
2018⁽¹⁾
(in millions)
Cash Flows from Financing Activities
Investment certificates:
Proceeds from additions $ 1,618
$ 1,336
Maturities, withdrawals and cash surrenders (1,377 ) (1,192 )
Policyholder account balances:
Deposits and other additions 585
444
Net transfers from (to) separate accounts (1 ) (28 )
Surrenders and other benefits (476 ) (501 )
Cash paid for purchased options with deferred premiums (44 ) (45 )
Cash received from purchased options with deferred premiums 12
24
Issuance of long-term debt 497
—
Repayments of long-term debt (3 ) (3 )
Dividends paid to shareholders (124 ) (122 )
Repurchase of common shares (385 ) (425 )
Exercise of stock options 1
2
Repayments of debt by consolidated investment entities (12 ) (52 )
Other, net —
(2 )
Net cash provided by (used in) financing activities 291
(564 )
Effect of exchange rate changes on cash 7
12
Net increase (decrease) in cash and cash equivalents, including amounts restricted and cash balances classified as assets held-for-sale (11 ) (673 )
Less: Net change in cash balances classified as assets held for sale 111
—
Net increase (decrease) in cash and cash equivalents, including amounts restricted (122 ) (673 )
Cash and cash equivalents, including amounts restricted at beginning of period 5,883
5,144
Cash and cash equivalents, including amounts restricted at end of period $ 5,761
$ 4,471

Supplemental Disclosures:
Interest paid excluding consolidated investment entities $ 68
$ 44
Interest paid by consolidated investment entities 14
21
Income taxes paid, net 18
118
Leased assets obtained in exchange for operating lease liabilities 4
—
Non-cash investing activity:
Investments transferred in connection with reinsurance transaction 1,265
—

March 31,
2019 December 31,
2018
(in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:
Cash and cash equivalents $ 3,259
$ 2,931
Cash of consolidated investment entities 88
166
Restricted and segregated cash, cash equivalents and investments 2,564
2,910
Less: Restricted and segregated investments (150 ) (124 )
Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows $ 5,761
$ 5,883

⁽¹⁾Certain prior period amounts have been restated. See Note 1 for more information.
See Notes to Consolidated Financial Statements.



CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

	Three Months Ended March 31,
	2020			2019
	(in millions)
Cash Flows from Financing Activities
Investment certificates:
Proceeds from additions	$	1,271		$	1,618
Maturities, withdrawals and cash surrenders	(1,449		)	(1,377		)
Policyholder account balances:
Deposits and other additions	255			585
Net transfers from (to) separate accounts	30			(1		)
Surrenders and other benefits	(430		)	(476		)
Change in banking deposits, net	2,372			—
Cash paid for purchased options with deferred premiums	(36		)	(44		)
Cash received from purchased options with deferred premiums	—			12
Issuance of long-term debt	—			497
Repayments of long-term debt	(753		)	(3		)
Dividends paid to shareholders	(122		)	(124		)
Repurchase of common shares	(480		)	(385		)
Exercise of stock options	1			1
Repayments of debt by consolidated investment entities	(29		)	(12		)
Other, net	(2		)	—
Net cash provided by (used in) financing activities	628			291
Effect of exchange rate changes on cash	(17		)	7
Net increase (decrease) in cash and cash equivalents, including amounts restricted and cash balances classified as assets held-for-sale	5,464			(11		)
Less: Net change in cash balances classified as assets held for sale	—			111
Net increase (decrease) in cash and cash equivalents, including amounts restricted	5,464			(122		)
Cash and cash equivalents, including amounts restricted, at beginning of period	6,213			5,883
Cash and cash equivalents, including amounts restricted, at end of period	$	11,677		$	5,761

Supplemental Disclosures:
Interest paid excluding consolidated investment entities	$	55		$	68
Interest paid by consolidated investment entities	17			14
Income taxes paid, net	34			18
Leased assets obtained in exchange for operating lease liabilities	31			4
Non-cash investing activity:
Partnership commitments not yet remitted	2			—
Investments transferred in connection with reinsurance transaction	—			1,265

	March 31, 2020			December 31, 2019
	(in millions)
	(in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:
Cash and cash equivalents	$	8,730		$	3,709
Cash of consolidated investment entities	99			118
Restricted and segregated cash, cash equivalents and investments	2,848			2,386
Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows	$	11,677		$	6,213
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 (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.

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. All adjustments made were of a normal recurring nature.

In the first quarter of 2020, the Company recorded an out-of-period correction of $19 million to management and financial advice fees related to performance fees. The impact of the correction was not material to the prior period financial statements.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). ~~Certain reclassifications of prior period amounts have been made to conform to the current presentation.~~ 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, ~~2018,~~2019, filed with the Securities and Exchange Commission (“SEC”) on February ~~27,~~ 26, 2020 (“2019 ~~(“2018~~ 10-K”).

The Company corrected prior period errors related to the classification of certain changes in other investments in the Consolidated Statements of Cash Flows. For the three months ended March 31, 2018, cash used in operating activities was overstated by $20 million and cash provided by investing activities was overstated by $20 million. ~~The~~ ~~impact of these corrections was not material to the prior period Consolidated Statement of Cash Flows.~~

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. On April 2, 2020, the Company issued $500 million of unsecured senior notes due 2025. See Note 11 for more information on the debt issuance. No other subsequent events or transactions were identified. ~~See Note 15 for information on the sale of Ameriprise Auto & Home (“AAH”).~~

2. Summary of Significant Accounting Policies

The Company adopted accounting standard, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments, on January 1, 2020. The significant accounting policies for Available-for-Sale Securities, Financing Receivables, and Reinsurance were updated as a result of adopting the new accounting standard. Refer to Note 3 for further details of the adoption.

Available-for-Sale Securities

Available-for-Sale securities are carried at fair value with unrealized gains (losses) recorded in accumulated other comprehensive income (“AOCI”), net of impacts to deferred acquisition costs (“DAC”), deferred sales inducement costs (“DSIC”), unearned revenue, benefit reserves, reinsurance recoverables and income taxes. Gains and losses are recognized on a trade date basis in the Consolidated Statements of Operations upon disposition of the securities.

Available-for-Sale securities are impaired when the fair value of an investment is less than its amortized cost. When an Available-for-Sale security is impaired, the Company first assesses whether or not: (i) it has the intent to sell the security (made a decision to sell) or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions exist, the Company recognizes an impairment by reducing the book value of the security for the difference between the investment’s amortized cost and its fair value with a corresponding charge to earnings. Subsequent increases in the fair value of Available-for-Sale securities that occur in periods after a write-down has occurred are recorded as unrealized gains in other comprehensive income (“OCI”), while subsequent decreases in fair value would continue to be recorded as reductions of book value with a charge to earnings.

For securities that do not meet the above criteria, the Company determines whether the decrease in fair value is due to a credit loss or due to other factors. The amount of impairment due to credit-related factors, if any, is recognized as an allowance for credit losses with a related charge to net investment income. The allowance for credit losses is limited to the amount by which the security’s amortized cost basis exceeds its fair value. The amount of the impairment related to other factors is recognized in OCI. Factors the Company considers in determining whether declines in the fair value of fixed maturity securities are due to credit-related factors include: (i) the extent to which the market value is below amortized cost; (ii) fundamental analysis of the liquidity, business prospects and overall financial condition of the issuer; and (iii) market events that could impact credit ratings, economic and business climate, litigation and government actions, and similar external business factors.

If through subsequent evaluation there is a sustained increase in cash flows expected, both the allowance and related charge to earnings may be reversed to reflect the increase in expected principal and interest payments. However, for Available-for-Sale securities that recognized an impairment prior to January 1, 2020 by reducing the book value of the security, the difference between the new amortized cost basis and the improved cash flows expected to be collected is accreted as interest income.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

In order to determine the amount of the credit loss component for corporate debt securities, a best estimate of the present value of cash flows expected to be collected discounted at the security’s effective interest rate is compared to the amortized cost basis of the security. The significant inputs to cash flow projections consider potential debt restructuring terms, projected cash flows available to pay creditors and the Company’s position in the debtor’s overall capital structure. When assessing potential credit-related impairments for structured investments (e.g., residential mortgage backed securities, commercial mortgage backed securities, asset backed securities and other structured investments), the Company also considers credit-related factors such as overall deal structure and its position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections.

Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for Available-for-Sale securities. Accrued interest on Available-for-sale securities is recorded as earned in receivables on the Consolidated Balance Sheets. Available-for-Sale securities are placed on nonaccrual status when the accrued balance becomes 90 days past due or earlier based on management’s evaluation of the facts and circumstances of each security under review. At this time all previously accrued interest is reversed through net investment income.

Financing Receivables

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

Commercial Loans

Commercial loans include commercial mortgage loans, syndicated loans, and advisor loans and are recorded at amortized cost less the allowance for loan losses. Commercial mortgage loans and syndicated loans are recorded within investments on the Consolidated Balance Sheets. Advisor loans are recorded within receivables on the Consolidated Balance Sheets. Commercial mortgage loans are loans on commercial properties that are originated by the Company. Syndicated loans represent the Company’s investment in loan syndications originated by unrelated third parties. The Company offers loans to financial advisors primarily for recruiting, transitional cost assistance and retention purposes. These advisor loans are generally repaid over a five- to ten-year period. If the financial advisor is no longer affiliated with the Company, any unpaid balance of such loan becomes immediately due.

Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on commercial mortgage loans and syndicated loans is recorded in net investment income on the Consolidated Statements of Operations. Interest income recognized on advisor loans is recorded in other revenues on the Consolidated Statements of Operations.

Consumer Loans

Consumer loans consist of credit card receivables, policy loans, and brokerage margin loans and are recorded at amortized cost less the allowance for loan losses. Credit card receivables and policy loans are recorded within investments on the Consolidated Balance Sheets. Brokerage margin loans are recorded within receivables on the Consolidated Balance Sheets. Credit card receivables are related to Ameriprise-branded credit cards issued to the Company’s customers by a third party. When originated, policy loan balances do not exceed the cash surrender value of the underlying products. As there is minimal risk of loss related to policy loans, the Company does not record an allowance for loan losses. The Company’s broker dealer subsidiaries enter into lending arrangements with clients through the normal course of business, which are primarily based on customer margin levels.

Interest income is accrued as earned on the unpaid principal balances of the loans. Interest income recognized on consumer loans is recorded in net investment income on the Consolidated Statements of Operations.

Deposit Receivable

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability related to insurance risk in accordance with applicable accounting standards. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Reinsurance deposits made are included in receivables. As amounts are received, consistent with the underlying contracts, the deposit receivable is adjusted. The deposit receivable is accreted using the interest method and the accretion is reported in other revenues.

See Note 7 for additional information on financing receivables.

Allowance for Credit Losses

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected over the asset’s expected life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. Estimates of expected credit losses consider both historical charge-off and recovery experience as well as management’s expectation of future charge-off and recovery levels. Expected losses related to risks other than credit risk are excluded from the allowance for credit losses. The allowance for credit losses is measured and recorded upon initial recognition of the loan, regardless of whether it is originated or purchased. The methods and information used to develop the allowance for credit losses for each class of financing receivable are discussed below.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Commercial Loans

The allowance for credit losses for commercial mortgage loans and syndicated loans utilizes a probability of default and loss severity approach to estimate lifetime expected credit losses. Actual historical default and loss severity data for each type of commercial loan is adjusted for current conditions and reasonable and supportable forecasts of future economic conditions to develop the probability of default and loss severity assumptions that are applied to the amortized cost basis of the loans over the expected life of each portfolio. The allowance for credit losses on commercial mortgage loans and syndicated loans is recorded through provisions charged to net investment income and is reduced/increased by net charge-offs/recoveries.

Management determines the adequacy of the allowance for credit losses based on the overall loan portfolio composition, recent and historical loss experience, and other pertinent factors, including when applicable, internal risk ratings, loan-to-value (“LTV”) ratios and occupancy rates, along with reasonable and supportable forecasts of economic and market conditions. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change. While the Company may attribute portions of the allowance to specific loan pools as part of the allowance estimation process, the entire allowance is available to absorb losses expected over the life of the loan portfolio.

When determining the allowance for credit losses for advisor loans, the Company considers its actual historical collection experience and advisor termination experience as well as other factors including amounts due at termination, the reasons for the terminated relationship, length of time since termination, and the former financial advisor’s overall financial position. Management uses its best estimate of future termination and collection rates to estimate expected credit losses over the expected life of the loans. The allowance for credit losses on advisor loans is recorded in distribution expenses.

Consumer Loans

The allowance for loan losses for credit card receivables is based on a model that projects the Company’s receivable exposure over the expected life of the loans using cohorts based on the age of the receivable, geographic location, and credit scores. The model utilizes industry data to derive probability of default and loss given default assumptions, adjusted for current and future economic conditions. Management evaluates actual historical charge-off experience and monitors risk factors including FICO scores and past-due status within the credit card portfolio to ensure the allowance for loan losses based on industry data appropriately reserves for risks specific to the Company’s portfolio. The allowance for credit losses for credit card receivables is recorded in net investment income.

The Company monitors the market value of collateral supporting the margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. Due to these ongoing monitoring procedures, the allowance for credit losses is only measured for the margin loan balances that are uncollateralized at the balance sheet date.

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

Deposit receivable

The allowance for credit losses is calculated on an individual reinsurer basis. The deposit receivable is collateralized by an underlying trust arrangement. Management evaluates the terms of the reinsurance and trust agreements, the nature of the underlying assets, and the potential for changes in the collateral value when considering the need for an allowance for credit losses.

Nonaccrual Loans

Commercial mortgage loans and syndicated loans are placed on nonaccrual status when either the collection of interest or principal has become 90 days past due or is otherwise considered doubtful of collection. Advisor loans are placed on nonaccrual status upon the advisor’s termination. When a loan is placed on nonaccrual status, unpaid accrued interest is reversed. Interest payments received on loans on nonaccrual status are generally applied to principal unless the remaining principal balance has been determined to be fully collectible. Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for commercial mortgage loans, syndicated loans, and consumer loans.

Restructured Loans

A loan is classified as a restructured loan when the Company makes certain concessionary modifications to contractual terms for borrowers experiencing financial difficulties. When the interest rate, minimum payments, and/or due dates have been modified in an attempt to make the loan more affordable to a borrower experiencing financial difficulties, the modification is considered a troubled debt restructuring. Generally, performance prior to the restructuring or significant events that coincide with the restructuring are considered in assessing whether the borrower can meet the new terms which may result in the loan being returned to accrual status at the time of the restructuring or after a performance period. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan remains on nonaccrual status.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Charge-off and Foreclosure

Commercial Loans

Charge-offs are recorded when the Company concludes that all or a portion of the commercial mortgage loan or syndicated loan is uncollectible. Factors used by the Company to determine whether all amounts due on commercial mortgage loans will be collected, include but are not limited to, the financial condition of the borrower, performance of the underlying properties, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on property type and geographic location. Factors used by the Company to determine whether all amounts due on syndicated loans will be collected, include but are not limited to the borrower’s financial condition, industry outlook, and internal risk ratings based on rating agency data and internal analyst expectations.

If it is determined that foreclosure on a commercial mortgage loan is probable and the fair value is less than the current loan balance, expected credit losses are measured as the difference between the amortized cost basis of the asset and fair value less estimated selling costs. Upon foreclosure, the commercial mortgage loan and related allowance are reversed, and the foreclosed property is recorded as real estate owned in other assets.

Concerns regarding the recoverability of loans to advisors primarily arise in the event that the financial advisor is no longer affiliated with the Company. When the review of these factors indicates that further collection activity is highly unlikely, the outstanding balance of the loan is written-off and the related allowance is reduced.

Consumer Loans

Credit card receivables are not placed on nonaccrual status at 90 days past due, however, are fully charged off upon reaching 180 days past due.

Reinsurance

Policyholder account balances, future policy benefits and claims recoverable under reinsurance contracts are recorded within receivables, net of the allowance for credit losses. The Company evaluates the financial condition of its reinsurers prior to entering into new reinsurance contracts and on a periodic basis during the contract term. The allowance for credit losses related to reinsurance recoverable is based on applying observable industry data including insurer ratings, default and loss severity data to the Company’s reinsurance recoverable balances. Management evaluates the results of the calculation and considers differences between the industry data and the Company’s data. Such differences include the fact the Company has no actual history of losses and the fact that industry data may contain non-life insurers. This evaluation is inherently subjective as it requires estimates, which may be susceptible to significant change given the long-term nature of these receivables. In addition, the Company has a reinsurance protection agreement that provides credit protections for its reinsured long term care business. The allowance for credit losses on reinsurance recoverable is recorded through provisions charged to benefits, claims, losses and settlement expenses on the Consolidated Statements of Operations.

3. Recent Accounting Pronouncements

Adoption of New Accounting Standards

Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to disclosures for fair value measurements. The update eliminates the 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 does not have an impact on the Company’s consolidated results of operations or financial condition. See Note 12 for additional disclosures on fair value measurements.

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

In August 2018, the FASB updated the accounting standards related to customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. The update requires implementation costs for a CCA to be evaluated for capitalization using the same approach as implementation costs associated with internal-use software. The update also addresses presentation, measurement and impairment of capitalized implementation costs in a CCA that is a service contract. The update requires new disclosures on the nature of hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired. The update is effective for interim

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

and annual periods beginning after December 15, 2019, and can be applied either prospectively or retrospectively. The Company adopted the standard using a prospective approach on January 1, 2020. The adoption of this update did not 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 did not have a material impact on the Company’s consolidated results of operations or financial condition.

Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments

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. At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings 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 credit loss model for Available-for-Sale debt securities did 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. 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 beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company adopted the standard on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition.

Leases – Recognition of Lease Assets and Liabilities on Balance Sheet

In February 2016, the ~~Financial Accounting Standards Board (“FASB”)~~FASB updated the accounting standards for leases. The update was issued to increase transparency and comparability for the accounting of lease transactions. The standard requires 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 standard was effective for interim and annual periods beginning after December 15, 2018. Entities had the option to adopt the standard using a modified retrospective approach at either the beginning of the earliest period presented or as of the date of adoption. The Company adopted the standard using a modified retrospective approach as of January 1, 2019. The Company also elected the package of practical expedients permitted under the transition guidance within the accounting standard that allows entities to carryforward their historical lease classification and to not reassess contracts for embedded leases among other things. The Company recorded a right-of-use asset of $274 million and a corresponding lease liability of $295 million substantially related to real estate leases. The amount the lease liability exceeds the right-of-use asset primarily reflects lease incentives recorded as a reduction of the right-of-use asset that were previously recorded as a liability. The adoption of the standard did not have other material impacts on the Company’s consolidated results of operations ~~and~~or financial condition. ~~See Note 14 for new disclosures on leases.~~

Income Statement – Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB updated the accounting standards related to the presentation of tax effects stranded in ~~accumulated other comprehensive income (“AOCI”).~~AOCI. The update allows a reclassification from AOCI to retained earnings for tax effects stranded in AOCI resulting from the legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The election of the update was optional. The update was effective for fiscal years beginning after December 15, 2018. Entities could record the impacts either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company adopted the standard on January 1, 2019 and elected not to reclassify the stranded tax effects in AOCI.

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 update are to better align the financial reporting of hedging relationships to the economic results of

~~AMERIPRISE FINANCIAL, INC.~~

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

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 was effective for interim and annual periods beginning after December 15, 2018, and was required to be applied on a modified retrospective basis. The Company adopted the standard on January 1, 2019. The adoption did not have a material impact on the Company’s consolidated results of operations ~~and~~or financial condition.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Receivables – Nonrefundable Fees and Other Costs – 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 previous guidance, premiums were 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 was effective for interim and annual periods beginning after December 15, 2018, and was required to 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. The Company adopted the standard on January 1, 2019. The adoption did not have a material impact on the Company’s consolidated results of operations or financial condition.

~~Fair Value Measurement~~Future Adoption of New Accounting Standards

Reference Rate Reform – ~~Disclosure Framework – Changes to the Disclosure Requirements~~Expedients for ~~Fair Value Measurement~~Contract Modifications

In ~~August 2018,~~ 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 ~~disclosures~~the economic characteristics and risks of the host contract. When elected, the optional expedients for ~~fair value measurements.~~contract modifications must be applied consistently for all eligible contracts or eligible transactions. The Company is currently evaluating the impact of electing to adopt the standard on its consolidated results of operations and financial condition.

Income Taxes – Simplifying the Accounting for Income Taxes

In December 2019, the FASB updated the accounting standards to simplify the accounting for income taxes. The update eliminates ~~the following disclosures: 1) the amount of and reasons for transfers between Level 1 and Level 2~~certain exceptions to accounting principles related to intraperiod tax allocation (prospective basis), deferred tax liabilities related to outside basis differences (modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the ~~fair value hierarchy, 2) the policy of timing of transfers between levels~~beginning of the ~~fair value hierarchy,~~period of adoption) and 3)year-to-date losses in interim periods (prospective basis). The update also amends existing guidance related to situations when an entity receives a step-up in the ~~valuation processes~~tax basis of goodwill (prospective basis), allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements (retrospective basis for ~~Level 3 fair value measurements. The new disclosures include~~all periods presented), interim recognition of enactment of tax laws or rate changes ~~in unrealized gains~~(prospective basis) and ~~losses~~franchise taxes and other taxes partially based on income (retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period ~~included in other comprehensive income (“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.~~adoption). The ~~new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update~~standard is effective for interim and annual periods beginning after December 15, ~~2019. Early~~2020, with early adoption permitted. The method of adoption is ~~permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements.~~noted parenthetically after each amendment above. The Company ~~early adopted~~is currently evaluating the ~~provisions~~impact of the standard ~~to eliminate or modify disclosure requirements in the fourth quarter of 2018. The update does not have an impact~~ on ~~the Company’s~~its consolidated results of operations orand 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 these financial instruments. The standard was effective for interim and annual periods beginning after December 15, 2017. The Company adopted the standard on January 1, 2018 using a modified retrospective approach. The adoption of the standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

~~Future Adoption of New Accounting Standards~~

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 ~~contract holder~~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 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 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.

~~AMERIPRISE FINANCIAL, INC.~~

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

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.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

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 ~~deferred acquisition costs (“DAC”)~~DAC and ~~deferred sales inducement costs (“DSIC”)~~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 significant additional disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits, DAC and DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions. The update is currently effective for interim and annual periods beginning after December 15, ~~2020.~~2021. 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 disclosures.

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

~~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 update is not expected to have a material impact on the Company’s consolidated results of operations or financial condition.

~~Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments~~

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 beneficial 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.

~~AMERIPRISE FINANCIAL, INC.~~

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

3. 4. Revenue from Contracts with Customers

The following tables present revenue disaggregated by segment on an adjusted operating basis with a reconciliation of segment revenues to those reported on the Consolidated Statements of Operations:


	Three Months Ended March 31, 2019																	Three Months Ended March 31, 2020
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total		Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:																		Management and financial advice fees:
Asset management fees:
Retail	$	—	$	429	$	—	$	—	$	—		$	429	$	—	$	429	$	—	$	447	$	—	$	—	$	—		$	447	$	—	$	447
Institutional	—		104		—		—		—			104		—		104		—		85		—		—		—			85		—		85
Advisory fees	725		—		—		—		—			725		—		725		854		—		—		—		—			854		—		854
Financial planning fees	69		—		—		—		—			69		—		69		81		—		—		—		—			81		—		81
Transaction and other fees	84		46		13		2		—			145		—		145		89		47		13		2		—			151		—		151
Total management and financial advice fees	878		579		13		2		—			1,472		—		1,472		1,024		579		13		2		—			1,618		—		1,618

Distribution fees:
Mutual funds	171		57		—		—		—			228		—		228		184		60		—		—		—			244		—		244
Insurance and annuity	205		41		79		7		2			334		—		334		208		43		79		7		—			337		—		337
Other products	185		—		—		—		—			185		—		185		156		—		—		—		—			156		—		156
Total distribution fees	561		98		79		7		2			747		—		747		548		103		79		7		—			737		—		737

Other revenues	45		1		2		—		—			48		—		48		47		1		—		—		3			51		—		51
Total revenue from contracts with customers	1,484		678		94		9		2			2,267		—		2,267		1,619		683		92		9		3			2,406		—		2,406

Revenue from other sources ⁽¹⁾	105		11		510		253		342			1,221		3		1,224		101		3		497		248		60			909		52		961
Total segment gross revenues	1,589		689		604		262		344			3,488		3		3,491		1,720		686		589		257		63			3,315		52		3,367
Less: Banking and deposit interest expense	35		—		—		—		2			37		—		37		25		—		—		—		1			26		—		26
Total segment net revenues	1,554		689		604		262		342			3,451		3		3,454		1,695		686		589		257		62			3,289		52		3,341
Less: Intersegment revenues	219		13		88		15		(2		)	333		3		336		222		13		90		14		(1		)	338		2		340
Total net revenues	$	1,335	$	676	$	516	$	247	$	344		$	3,118	$	—	$	3,118	$	1,473	$	673	$	499	$	243	$	63		$	2,951	$	50	$	3,001


x

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM			10-Q


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(in millions)
Syndicated loans
Unpaid principal balance	$	1,780		$	1,743		$	1,696		$	1,678
Excess unpaid principal over fair value	(54		)	(52		)	(306		)	(81		)
Fair value	$	1,726		$	1,691		$	1,390		$	1,597
Fair value of loans more than 90 days past due	$	8		$	—		$	3		$	4
Fair value of loans in nonaccrual status	8			—			73			42
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	—			—			64			18

Debt
Unpaid principal balance	$	1,885		$	1,951		$	1,732		$	1,761
Excess unpaid principal over fair value	(154		)	(208		)	(356		)	(133		)
Carrying value ⁽¹⁾	$	1,731		$	1,743		$	1,376		$	1,628



	March 31, 2019		December 31, 2018
	(in millions)
Available-for-Sale securities, at fair value	$	28,764	$	31,058
Mortgage loans, net	2,644		2,696
Policy and certificate loans	854		861
Other investments	1,201		1,210
Total	$	33,463	$	35,825



	March 31, 2020		December 31, 2019
	(in millions)
Available-for-Sale securities, at fair value (net of allowance for credit losses: 2020, $13)	$	31,846	$	33,129
Mortgage loans, net (net of allowance for credit losses: 2020, $26; 2019, $19)	2,779		2,778
Policy loans	869		868
Other investments (net of allowance for credit losses: 2020, $13; 2019, $5)	1,132		1,140
Total	$	36,626	$	37,915


Description of Securities	Description of Securities	March 31, 2019												Description of Securities	March 31, 2020
Description of Securities	Description of Securities	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	$	12,185	$	813	$	(60	)	$	12,938	$	(6	)	Corporate debt securities	$	11,185	$	857	$	(335	)	$	(13	)	$	11,694
Residential mortgage backed securities	Residential mortgage backed securities	6,291		53		(43		)	6,301		—			Residential mortgage backed securities	9,734		117		(136		)	—			9,715
Commercial mortgage backed securities	Commercial mortgage backed securities	4,810		32		(41		)	4,801		—			Commercial mortgage backed securities	5,478		61		(144		)	—			5,395
Asset backed securities	Asset backed securities	1,268		39		(4		)	1,303		1			Asset backed securities	2,129		28		(73		)	—			2,084
State and municipal obligations	State and municipal obligations	1,228		201		(5		)	1,424		—			State and municipal obligations	1,100		235		(5		)	—			1,330
U.S. government and agencies obligations		1,709		1		—			1,710		—
U.S. government and agency obligations														U.S. government and agency obligations	1,372		4		—			—			1,376
Foreign government bonds and obligations	Foreign government bonds and obligations	280		13		(6		)	287		—			Foreign government bonds and obligations	251		9		(8		)	—			252
Total	Total	$	27,771	$	1,152	$	(159	)	$	28,764	$	(5	)	Total	$	31,249	$	1,311	$	(701	)	$	(13	)	$	31,846



	Three Months Ended March 31,
	2019			2018⁽¹⁾
	(in millions)
Cash Flows from Operating Activities
Net income	$	395		$	594
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	46			56
Deferred income tax expense (benefit)	(2		)	104
Share-based compensation	30			32
Net realized investment (gains) losses	(10		)	(6		)
Net trading (gains) losses	(4		)	(3		)
Loss from equity method investments	12			12
Other-than-temporary impairments and provision for loan losses	5			—
Net (gains) losses of consolidated investment entities	4			1
Changes in operating assets and liabilities:
Restricted and segregated investments	(25		)	75
Deferred acquisition costs	(55		)	13
Policyholder account balances, future policy benefits and claims, net	(201		)	(325		)
Derivatives, net of collateral	316			29
Receivables	125			(78		)
Brokerage deposits	(264		)	(207		)
Accounts payable and accrued expenses	(177		)	(373		)
Other operating assets and liabilities of consolidated investment entities, net	1			3
Other, net	(24		)	(115		)
Net cash provided by (used in) operating activities	172			(188		)

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	92			361
Maturities, sinking fund payments and calls	1,986			1,195
Purchases	(2,085		)	(1,456		)
Proceeds from sales, maturities and repayments of mortgage loans	64			75
Funding of mortgage loans	(43		)	(40		)
Proceeds from sales, maturities and collections of other investments	51			224
Purchase of other investments	(93		)	(272		)
Purchase of investments by consolidated investment entities	(203		)	(116		)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities	132			130
Purchase of land, buildings, equipment and software	(31		)	(33		)
Cash paid for written options with deferred premiums	(42		)	(57		)
Cash received from written options with deferred premiums	35			53
Change in reinsurance deposit, net	(345		)	—
Other, net	1			3
Net cash provided by (used in) investing activities	$	(481	)	$	67
See Notes to Consolidated Financial Statements.
See Notes to Consolidated Financial Statements.


	Three Months Ended March 31, 2018																	Three Months Ended March 31, 2019
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total		Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:	Management and financial advice fees:																	Management and financial advice fees:
Asset management fees:
Retail	$	—	$	480	$	—	$	—	$	—		$	480	$	—	$	480	$	—	$	429	$	—	$	—	$	—		$	429	$	—	$	429
Institutional	—		111		—		—		—			111		—		111		—		104		—		—		—			104		—		104
Advisory fees	691		—		—		—		—			691		—		691		725		—		—		—		—			725		—		725
Financial planning fees	68		—		—		—		—			68		—		68		69		—		—		—		—			69		—		69
Transaction and other fees	89		48		14		1		1			153		—		153		84		46		13		2		—			145		—		145
Total management and financial advice fees	848		639		14		1		1			1,503		—		1,503		878		579		13		2		—			1,472		—		1,472

Distribution fees:
Mutual funds	190		69		—		—		—			259		—		259		171		57		—		—		—			228		—		228
Insurance and annuity	222		45		84		7		1			359		—		359		205		41		79		7		2			334		—		334
Other products	145		—		—		—		—			145		—		145		185		—		—		—		—			185		—		185
Total distribution fees	557		114		84		7		1			763		—		763		561		98		79		7		2			747		—		747

Other revenues	41		1		—		—		—			42		—		42		45		1		2		—		—			48		—		48
Total revenue from contracts with customers	1,446		754		98		8		2			2,308		—		2,308		1,484		678		94		9		2			2,267		—		2,267

Revenue from other sources ⁽¹⁾	71		24		515		245		322			1,177		61		1,238		105		11		510		253		342			1,221		3		1,224
Total segment gross revenues	1,517		778		613		253		324			3,485		61		3,546		1,589		689		604		262		344			3,488		3		3,491
Less: Banking and deposit interest expense	16		—		—		—		1			17		—		17		35		—		—		—		2			37		—		37
Total segment net revenues	1,501		778		613		253		323			3,468		61		3,529		1,554		689		604		262		342			3,451		3		3,454
Less: Intersegment revenues	240		12		90		16		(1		)	357		4		361		219		13		88		15		(2		)	333		3		336
Total net revenues	$	1,261	$	766	$	523	$	237	$	324		$	3,111	$	57	$	3,168	$	1,335	$	676	$	516	$	247	$	344		$	3,118	$	—	$	3,118


	March 31, 2019								March 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments:
Corporate debt securities	$	—	$	9	$	—	$	9	$	—	$	7	$	—	$	7
Common stocks	1		—		—		1		1		—		—		1
Other investments	4		—		—		4
Syndicated loans	—		1,609		117		1,726		—		1,088		302		1,390
Total investments	5		1,618		117		1,740		1		1,095		302		1,398
Receivables	—		28		—		28		—		3		—		3
Total assets at fair value	$	5	$	1,646	$	117	$	1,768	$	1	$	1,098	$	302	$	1,401

Liabilities
Debt ⁽¹⁾	$	—	$	1,731	$	—	$	1,731	$	—	$	1,376	$	—	$	1,376
Other liabilities	—		105		—		105		—		106		—		106
Total liabilities at fair value	$	—	$	1,836	$	—	$	1,836	$	—	$	1,482	$	—	$	1,482


	December 31, 2018								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments:
Corporate debt securities	$	—	$	9	$	—	$	9	$	—	$	8	$	—	$	8
Common stocks	1		1		—		2		1		—		—		1
Other investments	4		—		—		4
Syndicated loans	—		1,465		226		1,691		—		1,454		143		1,597
Total investments	5		1,475		226		1,706		1		1,462		143		1,606
Receivables	—		12		—		12		—		8		—		8
Total assets at fair value	$	5	$	1,487	$	226	$	1,718	$	1	$	1,470	$	143	$	1,614

Liabilities
Debt ⁽¹⁾	$	—	$	1,743	$	—	$	1,743	$	—	$	1,628	$	—	$	1,628
Other liabilities	—		122		—		122		—		84		—		84
Total liabilities at fair value	$	—	$	1,865	$	—	$	1,865	$	—	$	1,712	$	—	$	1,712


⁽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 $1.4 billion and $1.7 billion as of ~~both~~ March 31, ~~2019~~2020 and December 31, ~~2018.~~2019, respectively.



					Syndicated Loans
					(in millions)
Balance, January 1, 2019					$	226
Purchases					22
Sales					(1		)
Settlements					(7		)
Transfers into Level 3					25
Transfers out of Level 3					(148		)
Balance, March 31, 2019					$	117
Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2019					$	—


	Common Stocks				Syndicated Loans
	(in millions)
Balance, January 1, 2018	$	4			$	180
Total gains (losses) included in:
Net income	4			⁽¹⁾	2			⁽¹⁾
Purchases	—				18
Sales	—				(1		)
Settlements	—				(11		)
Transfers into Level 3	4				61
Transfers out of Level 3	(1		)		(49		)
Balance, March 31, 2018	$	11			$	200
Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2018	$	4		⁽¹⁾	$	2		⁽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⁾


	Carrying Value				Weighted Average Interest Rate				Carrying Value				Weighted Average Interest Rate
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018		March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019
	(in millions)								(in millions)
Debt of consolidated CLOs due 2025-2030	$	1,731	$	1,743	4.0	%	3.7	%	$	1,376	$	1,628	3.3	%	3.5	%


⁽¹⁾ ⁽¹⁾Includes the change in the allowance for credit losses of $24 million for the three months ended March 31, 2020.	Net realized gains for the three months ended March 31, 2019 included other-than-temporary impairments (“OTTI”) on investments held by AAH, which were classified as held for sale on the Consolidated Balance Sheet as of March 31, 2019. See Note 15 for additional information.


⁽¹⁾	Represents the amount of OTTI losses in 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.


Ratings	Ratings	March 31, 2019						December 31, 2018						Ratings	March 31, 2020						December 31, 2019
Ratings	Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value		Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
		(in millions, except percentages)													(in millions, except percentages)
AAA	AAA	$	13,124	$	13,138	46	%	$	13,399	$	13,252	43	%	AAA	$	18,039	$	17,903	56	%	$	18,256	$	18,437	56	%
AA	AA	1,174		1,334		5		1,571		1,723		5		AA	1,030		1,204		4		1,113		1,304		4
A	A	2,962		3,294		11		3,667		3,899		13		A	3,157		3,596		11		3,008		3,474		10
BBB	BBB	9,549		10,041		35		11,102		11,290		36		BBB	7,878		8,144		26		8,178		9,102		28
Below investment grade ⁽¹⁾	Below investment grade ⁽¹⁾	962		957		3		932		894		3		Below investment grade ⁽¹⁾	1,145		999		3		777		812		2
Total fixed maturities	Total fixed maturities	$	27,771	$	28,764	100	%	$	30,671	$	31,058	100	%	Total fixed maturities	$	31,249	$	31,846	100	%	$	31,332	$	33,129	100	%



	Corporate Debt Securities
	(in millions)
Balance, January 1, 2020 ⁽¹⁾	$	—
Additions for which credit losses were not previously recorded	13
Balance, March 31, 2020	$	13



	March 31,
	2019			2018
	(in millions)
Beginning balance	$	24		$	26
Charge-offs	(1		)	—
Provisions	—			—
Ending balance	$	23		$	26

Individually evaluated for impairment	$	—		$	—
Collectively evaluated for impairment	23			26



	Loans				Percentage
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
	(in millions)
East North Central	$	218	$	216	8	%	8	%
East South Central	108		107		4		4
Middle Atlantic	186		187		7		7
Mountain	235		237		9		9
New England	57		62		2		2
Pacific	798		814		30		30
South Atlantic	712		731		27		27
West North Central	205		213		8		8
West South Central	144		148		5		5
	2,663		2,715		100	%	100	%
Less: allowance for loan losses	19		19
Total	$	2,644	$	2,696



Loan-to-Value Ratio	2020		2019		2018		2017		2016		Prior		Total
Loan-to-Value Ratio	(in millions)
> 100%	$	—	$	—	$	—	$	—	$	1	$	11	$	12
80% - 100%	13		15		10		4		14		12		68
60% - 80%	33		182		85		44		61		129		534
40% - 60%	8		46		54		156		86		692		1,042
< 40%	5		24		51		96		75		898		1,149
Total	$	59	$	267	$	200	$	300	$	237	$	1,742	$	2,805



Internal Risk Rating	2020		2019		2018		2017		2016		Prior		Total
Internal Risk Rating	(in millions)
Risk 5	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk 4	—		13		5		6		2		7		33
Risk 3	—		5		14		31		10		19		79
Risk 2	11		40		59		60		23		56		249
Risk 1	9		27		49		58		18		38		199
Total	$	20	$	85	$	127	$	155	$	53	$	120	$	560



Termination Status	2020		2019		2018		2017		2016		Prior		Total
Termination Status	(in millions)
Active	$	46	$	153	$	109	$	134	$	91	$	111	$	644
Terminated	—		—		—		1		3		12		16
Total	$	46	$	153	$	109	$	135	$	94	$	123	$	660



	Total
	(in millions)
> 800	$	24
750 - 799	19
700 - 749	25
650 - 699	16
< 650	7
Total	$	91


Variable Annuity Guarantees by Benefit Type ⁽¹⁾	Variable Annuity Guarantees by Benefit Type ⁽¹⁾	March 31, 2019							December 31, 2018							Variable Annuity Guarantees by Benefit Type ⁽¹⁾	March 31, 2020							December 31, 2019
Variable Annuity Guarantees by Benefit Type ⁽¹⁾	Variable Annuity Guarantees by Benefit Type ⁽¹⁾	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	Variable Annuity Guarantees by Benefit Type ⁽¹⁾	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)															(in millions, except age)
GMDB:	GMDB:															GMDB:
Return of premium	Return of premium	$	59,779	$	57,840	$	36	67	$	55,810	$	53,872	$	417	67	Return of premium	$	55,082	$	53,129	$	611	68	$	62,909	$	60,967	$	5	67
Five/six-year reset	Five/six-year reset	8,026		5,296		16		67	7,670		4,941		112		67	Five/six-year reset	6,920		4,189		205		68	7,983		5,263		7		67
One-year ratchet	One-year ratchet	5,891		5,545		48		70	5,560		5,210		417		70	One-year ratchet	5,080		4,740		518		70	5,935		5,600		7		70
Five-year ratchet	Five-year ratchet	1,388		1,331		2		66	1,307		1,251		23		66	Five-year ratchet	1,195		1,139		46		67	1,396		1,340		—		66
Other	Other	1,113		1,093		84		72	1,033		1,014		148		72	Other	1,040		1,022		185		73	1,192		1,174		65		73
Total — GMDB	Total — GMDB	$	76,197	$	71,105	$	186	67	$	71,380	$	66,288	$	1,117	67	Total — GMDB	$	69,317	$	64,219	$	1,565	68	$	79,415	$	74,344	$	84	67

GGU death benefit	GGU death benefit	$	1,058	$	1,006	$	119	70	$	992	$	940	$	112	70	GGU death benefit	$	955	$	899	$	107	71	$	1,115	$	1,063	$	133	71

GMIB	GMIB	$	190	$	175	$	8	70	$	180	$	164	$	12	69	GMIB	$	150	$	136	$	18	70	$	186	$	172	$	6	70

GMWB:	GMWB:															GMWB:
GMWB	GMWB	$	2,084	$	2,078	$	2	72	$	1,990	$	1,984	$	3	72	GMWB	$	1,691	$	1,685	$	6	73	$	1,999	$	1,993	$	1	73
GMWB for life	GMWB for life	44,025		43,936		360		68	40,966		40,876		742		68	GMWB for life	41,357		41,254		1,230		68	46,799		46,691		272		68
Total — GMWB	Total — GMWB	$	46,109	$	46,014	$	362	68	$	42,956	$	42,860	$	745	68	Total — GMWB	$	43,048	$	42,939	$	1,236	68	$	48,798	$	48,684	$	273	68

GMAB	GMAB	$	2,571	$	2,565	$	2	59	$	2,456	$	2,450	$	24	59	GMAB	$	2,184	$	2,181	$	35	60	$	2,528	$	2,524	$	—	60


⁽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.


	GMDB & GGU			GMIB			GMWB ⁽¹⁾			GMAB ⁽¹⁾			UL			GMDB & GGU			GMIB			GMWB ⁽¹⁾			GMAB ⁽¹⁾			UL
	(in millions)
Balance at January 1, 2018	$	17		$	6		$	463		$	(80	)	$	489
Incurred claims	1			—			(261		)	4			26
Paid claims	(1		)	—			—			—			(7		)
Balance at March 31, 2018	$	17		$	6		$	202		$	(76	)	$	508
																(in millions)
Balance at January 1, 2019	$	19		$	8		$	875		$	(19	)	$	659		$	19		$	8		$	875		$	(19	)	$	659
Incurred claims	—			(1		)	(104		)	(26		)	34			—			(1		)	(104		)	(26		)	34
Paid claims	(2		)	—			—			—			(17		)	(2		)	—			—			—			(17		)
Balance at March 31, 2019	$	17		$	7		$	771		$	(45	)	$	676		$	17		$	7		$	771		$	(45	)	$	676

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


	Outstanding Balance						Stated Interest Rate				Outstanding Balance						Stated Interest Rate
	March 31, 2019			December 31, 2018			March 31, 2019		December 31, 2018		March 31, 2020			December 31, 2019			March 31, 2020		December 31, 2019
	(in millions)										(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		$	—		$	750		—	%	5.3	%
Senior notes due 2022	500			—			3.0		—		500			500			3.0		3.0
Senior notes due 2023	750			750			4.0		4.0		750			750			4.0		4.0
Senior notes due 2024	550			550			3.7		3.7		550			550			3.7		3.7
Senior notes due 2026	500			500			2.9		2.9		500			500			2.9		2.9
Finance lease liabilities	55			25							54			57			N/A		N/A
Other ⁽¹⁾	(11		)	(8		)					(10		)	(10		)	N/A		N/A
Total long-term debt	3,394			2,867							2,344			3,097

Short-term borrowings:
Federal Home Loan Bank (“FHLB”) advances	151			151			2.7		2.6		200			201			1.4		1.8
Repurchase agreements	50			50			2.7		2.6
Total short-term borrowings	201			201
Total	$	3,595		$	3,068						$	2,544		$	3,298


Liabilities
Policyholder account balances, future policy benefits and claims:
Indexed annuity embedded derivatives	$	—	$	3	$	23	$	26
Fixed deferred indexed annuity embedded derivatives										$	—	$	2	$	33		$	35
IUL embedded derivatives	—		—		745		745			—		—		725			725
GMWB and GMAB embedded derivatives	—		—		180		180		⁽²⁾	—		—		3,276			3,276			⁽²⁾
Structured annuity embedded derivatives										—		—		(9		)	(9		)
Total policyholder account balances, future policy benefits and claims	—		3		948		951		⁽³⁾	—		2		4,025			4,027			⁽³⁾
Customer deposits	—		13		—		13			—		5		—			5
Other liabilities:
Interest rate derivative contracts	—		366		—		366			—		1,238		—			1,238
Equity derivative contracts	34		2,591		—		2,625			296		1,944		—			2,240
Credit derivative contracts	—		21		—		21
Foreign exchange derivative contracts	1		32		—		33			3		16		—			19
Other	10		7		31		48			3		10		42			55
Total other liabilities	45		3,017		31		3,093			302		3,208		42			3,552
Total liabilities at fair value	$	45	$	3,033	$	979	$	4,057		$	302	$	3,215	$	4,067		$	7,584


⁽¹⁾	Amounts are comprised of certain 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 $3.3 billion of individual contracts in a liability position and $12 million of individual contracts in an asset position as of March 31, 2020.


⁽³⁾	The Company’s adjustment for nonperformance risk resulted in a ~~$(536) million~~$(2.7) billion cumulative increase (decrease) to the embedded derivatives as of March 31, ~~2019.~~2020.


⁽⁴⁾	The fair value of the GMWB and GMAB embedded derivatives included ~~$646~~$981 million of individual contracts in a liability position and ~~$318~~$218 million of individual contracts in an asset position as of December 31, ~~2018.~~2019.


⁽⁵⁾	The Company’s adjustment for nonperformance risk resulted in a ~~$(726)~~$(502) million cumulative increase (decrease) to the embedded derivatives as of December 31, ~~2018.~~2019.



	Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives				GMWB and GMAB Embedded Derivatives				Total			Other Liabilities
	(in millions)
Balance, January 1, 2019	$	14		$	628			$	328			$	970		$	30
Total (gains) losses included in:
Net income	2		⁽²⁾	98			⁽²⁾	(230		)	⁽³⁾	(130		)	1		⁽⁴⁾
Issues	7			36				84				127			—
Settlements	—			(17		)		(2		)		(19		)	—
Balance, March 31, 2019	$	23		$	745			$	180			$	948		$	31

Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2019	$	—		$	98		⁽²⁾	$	(230	)	⁽³⁾	$	(132	)	$	—


	March 31, 2019										March 31, 2020
	Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average		Fair Value			Valuation Technique	Unobservable Input	Range				Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	846	Discounted cash flow	Yield/spread to U.S. Treasuries	0.8	%	–	2.8%	1.3	%	$	733		Discounted cash flow	Yield/spread to U.S. Treasuries ⁽¹⁾	1.8	%	–	6.0%	2.8	%
Asset backed securities	$	6	Discounted cash flow	Annual short-term default rate	2.8%						$	3		Discounted cash flow	Annual short-term default rate	8.0%				8.0	%
				Annual long-term default rate	2.5%										Annual long-term default rate ⁽²⁾	3.0	%	–	3.5%	3.1	%
				Discount rate	11.5%										Discount rate	20.0%				20.0	%
				Constant prepayment rate	5.0	%	–	10.0%	10.0	%					Constant prepayment rate	10.0%				10.0	%
				Loss recovery	36.4	%	–	63.6%	63.6	%					Loss recovery	63.6%				63.6	%
IUL embedded derivatives	$	745	Discounted cash flow	Nonperformance risk ⁽¹⁾	85 bps						$	725		Discounted cash flow	Nonperformance risk ⁽³⁾	210 bps				210 bps
Indexed annuity embedded derivatives	$	23	Discounted cash flow	Surrender rate	0.0	%	–	50.0%
Fixed deferred indexed annuity embedded derivatives											$	33		Discounted cash flow	Surrender rate ⁽⁴⁾	0.0	%	–	50.0%	1.4	%
				Nonperformance risk ⁽¹⁾	85 bps										Nonperformance risk ⁽³⁾	210 bps				210 bps
GMWB and GMAB embedded derivatives	$	180	Discounted cash flow	Utilization of guaranteed withdrawals ⁽²⁾	0.0	%	–	36.0%			$	3,276		Discounted cash flow	Utilization of guaranteed withdrawals ⁽⁵⁾ ⁽⁶⁾	0.0	%	–	36.0%	10.8	%
				Surrender rate	0.1	%	–	73.4%							Surrender rate ⁽⁴⁾	0.1	%	–	73.5%	3.4	%
				Market volatility ⁽³⁾	3.9	%	–	15.4%							Market volatility ^{(7) (8)}	4.8	%	–	19.2%	12.6	%
				Nonperformance risk ⁽¹⁾	85 bps										Nonperformance risk ⁽³⁾	210 bps				210 bps
Structured annuity embedded derivatives											$	(9	)	Discounted cash flow	Surrender rate ⁽⁴⁾	0.8	%	–	40.0%	0.9	%
															Nonperformance risk ⁽³⁾	210 bps				210 bps
Contingent consideration liabilities	$	31	Discounted cash flow	Discount rate	9.0%						$	42		Discounted cash flow	Discount rate	9.0%				9.0	%

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)

New York Stock Exchange