0000820027us-gaap:FairValueInputsLevel3Memberamp:MeasurementInputUtilizationofGuaranteedWithdrawalsMembersrt:MinimumMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:ConsolidatedEntityExcludingVariableInterestEntitiesVIEMemberamp:GMWBAndGMABEmbeddedDerivativesMember2021-06-300000820027amp:EmbeddedDerivativeFinancialInstrumentsPolicyholderAccountBalancesFuturePolicyBenefitsAndClaimsMembersrt:ConsolidatedEntityExcludingVariableInterestEntitiesVIEMember2021-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒

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

For the Quarterly Period Ended

~~June 30, 2021~~March 31, 2022

☐

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

For the Transition Period from_______________________to_______________________


Commission File No.			1-32525


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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock (par value $.01 per share)

AMP

New York Stock Exchange

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

☒

☐

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

Yes

☒

☐

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

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller reporting company

☐

Emerging growth company

☐


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.			☐

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

Yes

☐

☒

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

Class

Outstanding at ~~July 30, 2021~~April 22, 2022

Common Stock (par value $.01 per share)

~~113,745,937~~109,904,488 shares

AMERIPRISE FINANCIAL, INC.

FORM 10-Q

INDEX


Part I. Financial Information	Part I. Financial Information				Part I. Financial Information
Item 1. Financial Statements (Unaudited)	Item 1. Financial Statements (Unaudited)				Item 1. Financial Statements (Unaudited)
		Consolidated Statements of Operations — Three months and six months ended June 30, 2021 and 2020		3		Consolidated Statements of Operations — Three months ended March 31, 2022 and 2021		3
		Consolidated Statements of Comprehensive Income — Three months and six months ended June 30, 2021 and 2020		4		Consolidated Statements of Comprehensive Income — Three months ended March 31, 2022 and 2021		4
		Consolidated Balance Sheets — June 30, 2021 and December 31, 2020		5		Consolidated Balance Sheets — March 31, 2022 and December 31, 2021		5
		Consolidated Statements of Equity — Three months and six months ended June 30, 2021 and 2020		6		Consolidated Statements of Equity — Three months ended March 31, 2022 and 2021		6
		Consolidated Statements of Cash Flows — Six months ended June 30, 2021 and 2020		7		Consolidated Statements of Cash Flows — Three months ended March 31, 2022 and 2021		7
		Notes to Consolidated Financial Statements				Notes to Consolidated Financial Statements
		1.	Basis of Presentation	9		1.	Basis of Presentation	9
		2.	Recent Accounting Pronouncements	9		2.	Recent Accounting Pronouncements	9
		3.	Revenue from Contracts with Customers	12		3.	Revenue from Contracts with Customers	11
		4.	Variable Interest Entities	16		4.	Variable Interest Entities	14
		5.	Investments	21		5.	Investments	18
		6.	Financing Receivables	25		6.	Financing Receivables	22
		7.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	29		7.	Deferred Acquisition Costs and Deferred Sales Inducement Costs	26
		8.	Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities	30		8.	Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities	26
		9.	Variable Annuity and Insurance Guarantees	31		9.	Variable Annuity and Insurance Guarantees	27
		10.	Debt	32		10.	Debt	29
		11.	Fair Values of Assets and Liabilities	33		11.	Fair Values of Assets and Liabilities	29
		12.	Offsetting Assets and Liabilities	44		12.	Offsetting Assets and Liabilities	40
		13.	Derivatives and Hedging Activities	46		13.	Derivatives and Hedging Activities	42
		14.	Shareholders’ Equity	50		14.	Shareholders’ Equity	45
		15.	Income Taxes	52		15.	Income Taxes	46
		16.	Contingencies	53		16.	Contingencies	47
		17.	Earnings per Share	54		17.	Earnings per Share	48
		18.	Segment Information	55		18.	Segment Information	49
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			57	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			51
Item 3. Quantitative and Qualitative Disclosures About Market Risk	Item 3. Quantitative and Qualitative Disclosures About Market Risk			86	Item 3. Quantitative and Qualitative Disclosures About Market Risk			70
Item 4. Controls and Procedures	Item 4. Controls and Procedures			86	Item 4. Controls and Procedures			70

Part II. Other Information	Part II. Other Information			87	Part II. Other Information			71
Item 1. Legal Proceedings	Item 1. Legal Proceedings			87	Item 1. Legal Proceedings			71
Item 1A. Risk Factors	Item 1A. Risk Factors			87	Item 1A. Risk Factors			71
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			87	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			71
Item 6. Exhibits	Item 6. Exhibits			88	Item 6. Exhibits			72
Signatures	Signatures			89	Signatures			73

AMERIPRISE FINANCIAL, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022			2021
		(in millions, except per share amounts)											(in millions, except per share amounts)
Revenues	Revenues									Revenues
Management and financial advice fees	Management and financial advice fees	$	2,251	$	1,702	$	4,353	$	3,472	Management and financial advice fees			$	2,459		$	2,102
Distribution fees	Distribution fees	452		375		910		839		Distribution fees			446			458
Net investment income	Net investment income	278		305		655		633		Net investment income			261			377
Premiums, policy and contract charges	Premiums, policy and contract charges	364		272		711		667		Premiums, policy and contract charges			368			347
Other revenues	Other revenues	75		76		146		145		Other revenues			123			71
Total revenues	Total revenues	3,420		2,730		6,775		5,756		Total revenues			3,657			3,355
Banking and deposit interest expense	Banking and deposit interest expense	2		18		7		43		Banking and deposit interest expense			2			5
Total net revenues	Total net revenues	3,418		2,712		6,768		5,713		Total net revenues			3,655			3,350
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	1,233		940		2,408		1,935		Distribution expenses			1,297			1,175
Interest credited to fixed accounts	Interest credited to fixed accounts	124		262		283		353		Interest credited to fixed accounts			141			159
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	404		1,467		1,057		(280)		Benefits, claims, losses and settlement expenses			211			653
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	63		(248)		68		264		Amortization of deferred acquisition costs			96			5
Interest and debt expense	Interest and debt expense	43		41		85		87		Interest and debt expense			40			42
General and administrative expense	General and administrative expense	830		776		1,653		1,529		General and administrative expense			947			823
Total expenses	Total expenses	2,697		3,238		5,554		3,888		Total expenses			2,732			2,857
Pretax income (loss)		721		(526)		1,214		1,825
Pretax income										Pretax income			923			493
Income tax provision	Income tax provision	130		13		186		328		Income tax provision			162			56
Net income (loss)		$	591	$	(539)	$	1,028	$	1,497
Net income										Net income			$	761		$	437

Earnings per share	Earnings per share									Earnings per share
Basic	Basic	$	4.99	$	(4.31)	$	8.63	$	11.91	Basic			$	6.69		$	3.65
Diluted	Diluted	$	4.88	$	(4.31)	$	8.45	$	11.77	Diluted			$	6.55		$	3.58

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022			2021
		(in millions)											(in millions)
Net income (loss)		$	591	$	(539)	$	1,028	$	1,497
Net income										Net income			$	761		$	437
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	Foreign currency translation adjustment	2		(8)		1		(41)		Foreign currency translation adjustment			(46)			(1)
Net unrealized gains (losses) on securities	Net unrealized gains (losses) on securities	141		697		(199)		173		Net unrealized gains (losses) on securities			(853)			(340)

Net unrealized gains (losses) on derivatives										Net unrealized gains (losses) on derivatives			1			—
Defined benefit plans	Defined benefit plans	—		—		29		—		Defined benefit plans			—			29

Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	143		689		(169)		132		Total other comprehensive income (loss), net of tax			(898)			(312)
Total comprehensive income	Total comprehensive income	$	734	$	150	$	859	$	1,629	Total comprehensive income			$	(137)		$	125

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions, except share amounts)					(in millions, except share amounts)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	7,121	$	6,751	Cash and cash equivalents	$	6,623	$	7,127
Cash of consolidated investment entities	Cash of consolidated investment entities	95		94		Cash of consolidated investment entities	119		121
Investments (allowance for credit losses: 2021, $18; 2020, $52)		40,745		41,031
Investments (allowance for credit losses: 2022, $18; 2021, $18)						Investments (allowance for credit losses: 2022, $18; 2021, $18)	36,040		35,810
Investments of consolidated investment entities, at fair value	Investments of consolidated investment entities, at fair value	2,611		1,918		Investments of consolidated investment entities, at fair value	2,177		2,184
Separate account assets	Separate account assets	96,854		92,611		Separate account assets	89,669		97,491
Receivables (allowance for credit losses: 2021, $56; 2020, $49)		8,030		7,819
Receivables (allowance for credit losses: 2022, $51; 2021, $55)						Receivables (allowance for credit losses: 2022, $51; 2021, $55)	16,193		16,205
Receivables of consolidated investment entities, at fair value	Receivables of consolidated investment entities, at fair value	48		16		Receivables of consolidated investment entities, at fair value	22		17
Deferred acquisition costs	Deferred acquisition costs	2,650		2,532		Deferred acquisition costs	2,928		2,782
Restricted and segregated cash, cash equivalents and investments	Restricted and segregated cash, cash equivalents and investments	2,382		2,558		Restricted and segregated cash, cash equivalents and investments	2,668		2,795
Other assets	Other assets	11,165		10,551		Other assets	11,084		11,444
Other assets of consolidated investment entities, at fair value	Other assets of consolidated investment entities, at fair value	2		2		Other assets of consolidated investment entities, at fair value	2		3
Total assets	Total assets	$	171,703	$	165,883	Total assets	$	167,525	$	175,979

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities:	Liabilities:					Liabilities:
Policyholder account balances, future policy benefits and claims	Policyholder account balances, future policy benefits and claims	$	34,222	$	33,992	Policyholder account balances, future policy benefits and claims	$	35,225	$	35,750
Separate account liabilities	Separate account liabilities	96,854		92,611		Separate account liabilities	89,669		97,491
Customer deposits	Customer deposits	17,796		17,641		Customer deposits	22,048		20,227
Short-term borrowings	Short-term borrowings	200		200		Short-term borrowings	200		200
Long-term debt	Long-term debt	2,833		2,831		Long-term debt	2,330		2,832
Debt of consolidated investment entities, at fair value	Debt of consolidated investment entities, at fair value	2,558		1,913		Debt of consolidated investment entities, at fair value	2,156		2,164
Accounts payable and accrued expenses	Accounts payable and accrued expenses	2,034		1,998		Accounts payable and accrued expenses	2,050		2,527
Other liabilities	Other liabilities	9,381		8,761		Other liabilities	8,691		8,966
Other liabilities of consolidated investment entities, at fair value	Other liabilities of consolidated investment entities, at fair value	139		69		Other liabilities of consolidated investment entities, at fair value	146		137
Total liabilities	Total liabilities	166,017		160,016		Total liabilities	162,515		170,294
Equity:	Equity:					Equity:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 334,017,351 and 332,390,132, respectively)		3		3
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 335,320,837 and 334,828,117, respectively)						Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 335,320,837 and 334,828,117, respectively)	3		3
Additional paid-in capital	Additional paid-in capital	9,049		8,822		Additional paid-in capital	9,348		9,220
Retained earnings	Retained earnings	16,057		15,292		Retained earnings	18,153		17,525
Treasury shares, at cost (219,719,917 and 215,624,519 shares, respectively)		(19,883)		(18,879)
Treasury shares, at cost (225,174,867 and 223,967,107 shares, respectively)						Treasury shares, at cost (225,174,867 and 223,967,107 shares, respectively)	(21,599)		(21,066)
Accumulated other comprehensive income (loss), net of tax	Accumulated other comprehensive income (loss), net of tax	460		629		Accumulated other comprehensive income (loss), net of tax	(895)		3
Total equity	Total equity	5,686		5,867		Total equity	5,010		5,685
Total liabilities and equity	Total liabilities and equity	$	171,703	$	165,883	Total liabilities and equity	$	167,525	$	175,979

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 April 1, 2020 122,334,887 $ 3 $ 8,578 $ 16,180 $ (17,773) $ (295) $ 6,693
Comprehensive income:
Net income (loss) — — — (539) — — (539)
Other comprehensive loss, net of tax — — — — — 689 689
Total comprehensive income 150
Dividends to shareholders — — — (131) — — (131)
Repurchase of common shares (1,794,058) — — — (257) — (257)
Share-based compensation plans 66,672 — 44 — 1 — 45
Balances at June 30, 2020 120,607,501 $ 3 $ 8,622 $ 15,510 $ (18,029) $ 394 $ 6,500
Balances at April 1, 2021 115,988,271 $ 3 $ 8,982 $ 15,600 $ (19,400) $ 317 $ 5,502
Comprehensive income:
Net income — — — 591 — — 591
Other comprehensive income, net of tax — — — — — 143 143
Total comprehensive income (loss) 734
Dividends to shareholders — — — (134) — — (134)
Repurchase of common shares (1,898,474) — — — (484) — (484)
Share-based compensation plans 207,637 — 67 — 1 — 68
Balances at June 30, 2021 114,297,434 $ 3 $ 9,049 $ 16,057 $ (19,883) $ 460 $ 5,686
Balances at January 1, 2020 123,939,234 $ 3 $ 8,461 $ 14,279 $ (17,276) $ 262 $ 5,729
Cumulative effect of adoption of adoption of current expected credit losses guidance — — — (9) — — (9)
Comprehensive income:
Net income — — — 1,497 — — 1,497
Other comprehensive loss, net of tax — — — — — 132 132
Total comprehensive income 1,629
Dividends to shareholders — — — (257) — — (257)
Repurchase of common shares (5,176,677) — — — (794) (794)
Share-based compensation plans 1,844,944 — 161 — 41 — 202
Balances at June 30, 2020 120,607,501 $ 3 $ 8,622 $ 15,510 $ (18,029) $ 394 $ 6,500
Balances at January 1, 2021 116,765,613 $ 3 $ 8,822 $ 15,292 $ (18,879) $ 629 $ 5,867
Comprehensive income:
Net income — — — 1,028 — — 1,028
Other comprehensive income, net of tax — — — — — (169) (169)
Total comprehensive income 859
Dividends to shareholders — — — (263) — — (263)
Repurchase of common shares (4,488,172) — — — (1,038) — (1,038)
Share-based compensation plans 2,019,993 — 227 — 34 — 261
Balances at June 30, 2021 114,297,434 $ 3 $ 9,049 $ 16,057 $ (19,883) $ 460 $ 5,686
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, 2021	116,765,613	$	3	$	8,822	$	15,292	$	(18,879)	$	629	$	5,867
Net income	—	—		—		437		—		—		437
Other comprehensive loss, net of tax	—	—		—		—		—		(312)		(312)
Dividends to shareholders	—	—		—		(129)		—		—		(129)
Repurchase of common shares	(2,589,698)	—		—		—		(554)		—		(554)
Share-based compensation plans	1,812,356	—		160		—		33		—		193
Balances at March 31, 2021	115,988,271	$	3	$	8,982	$	15,600	$	(19,400)	$	317	$	5,502

Balances at January 1, 2022	110,861,010	$	3	$	9,220	$	17,525	$	(21,066)	$	3	$	5,685
Net income	—	—		—		761		—		—		761
Other comprehensive loss, net of tax	—	—		—		—		—		(898)		(898)
Dividends to shareholders	—	—		—		(133)		—		—		(133)
Repurchase of common shares	(1,930,235)	—		—		—		(579)		—		(579)
Share-based compensation plans	1,215,195	—		128		—		46		—		174
Balances at March 31, 2022	110,145,970	$	3	$	9,348	$	18,153	$	(21,599)	$	(895)	$	5,010

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income	Net income	$	1,028	$	1,497	Net income	$	761	$	437
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	Adjustments to reconcile net income to net cash provided by (used in) operating activities:					Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net	Depreciation, amortization and accretion, net	120		96		Depreciation, amortization and accretion, net	(12)		60
Deferred income tax expense (benefit)	Deferred income tax expense (benefit)	161		521		Deferred income tax expense (benefit)	154		60
Share-based compensation	Share-based compensation	74		72		Share-based compensation	44		35
Net realized investment (gains) losses		(79)		(10)
Net realized investment gains						Net realized investment gains	(18)		(65)
Net trading (gains) losses	Net trading (gains) losses	3		(6)		Net trading (gains) losses	—		1
Loss from equity method investments	Loss from equity method investments	33		39		Loss from equity method investments	12		12
Impairments and provision for loan losses		7		20

Net (gains) losses of consolidated investment entities	Net (gains) losses of consolidated investment entities	(20)		13		Net (gains) losses of consolidated investment entities	3		(19)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Restricted and segregated investments	Restricted and segregated investments	(265)		—		Restricted and segregated investments	(124)		(315)
Deferred acquisition costs	Deferred acquisition costs	(70)		156		Deferred acquisition costs	43		(60)
Policyholder account balances, future policy benefits and claims, net	Policyholder account balances, future policy benefits and claims, net	377		2,721		Policyholder account balances, future policy benefits and claims, net	(168)		(1,050)
Derivatives, net of collateral	Derivatives, net of collateral	(122)		(267)		Derivatives, net of collateral	(4)		144
Receivables	Receivables	(236)		(131)		Receivables	(83)		(238)
Brokerage deposits	Brokerage deposits	(104)		192		Brokerage deposits	120		(102)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	153		(205)		Accounts payable and accrued expenses	(461)		(163)
Current income tax expense (benefit)		(286)		(382)
Current income tax, net						Current income tax, net	(27)		90
Deferred taxes, net	Deferred taxes, net	(312)		(3)		Deferred taxes, net	2		(115)
Other operating assets and liabilities of consolidated investment entities, net	Other operating assets and liabilities of consolidated investment entities, net	8		(6)		Other operating assets and liabilities of consolidated investment entities, net	8		4
Other, net	Other, net	461		386		Other, net	159		284
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	931		4,703		Net cash provided by (used in) operating activities	409		(1,000)

Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Available-for-Sale securities:	Available-for-Sale securities:					Available-for-Sale securities:
Proceeds from sales	Proceeds from sales	405		1,318		Proceeds from sales	—		92
Maturities, sinking fund payments and calls	Maturities, sinking fund payments and calls	5,714		4,162		Maturities, sinking fund payments and calls	2,209		2,964
Purchases	Purchases	(6,210)		(6,138)		Purchases	(3,972)		(3,245)
Proceeds from sales, maturities and repayments of mortgage loans	Proceeds from sales, maturities and repayments of mortgage loans	173		92		Proceeds from sales, maturities and repayments of mortgage loans	32		55
Funding of mortgage loans	Funding of mortgage loans	(120)		(132)		Funding of mortgage loans	(51)		(22)
Proceeds from sales, maturities and collections of other investments	Proceeds from sales, maturities and collections of other investments	112		109		Proceeds from sales, maturities and collections of other investments	15		54
Purchase of other investments	Purchase of other investments	(54)		(134)		Purchase of other investments	(5)		(31)
Purchase of investments by consolidated investment entities	Purchase of investments by consolidated investment entities	(1,178)		(376)		Purchase of investments by consolidated investment entities	(190)		(737)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities	Proceeds from sales, maturities and repayments of investments by consolidated investment entities	556		343		Proceeds from sales, maturities and repayments of investments by consolidated investment entities	183		240
Purchase of land, buildings, equipment and software	Purchase of land, buildings, equipment and software	(55)		(62)		Purchase of land, buildings, equipment and software	(44)		(22)
Cash paid for written options with deferred premiums	Cash paid for written options with deferred premiums	(210)		(258)		Cash paid for written options with deferred premiums	—		(211)
Cash received from written options with deferred premiums	Cash received from written options with deferred premiums	24		108		Cash received from written options with deferred premiums	12		21
Cash paid for deposit receivable		(4)		(1)
Cash received for deposit receivable		44		53
Cash paid for deposit receivables						Cash paid for deposit receivables	(12)		(2)
Cash received for deposit receivables						Cash received for deposit receivables	134		21
Other, net	Other, net	(106)		20		Other, net	24		14
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(909)		(896)		Net cash provided by (used in) investing activities	$	(1,665)	$	(809)
See Notes to Consolidated Financial Statements.	See Notes to Consolidated Financial Statements.					See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)					CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities
Investment certificates:	Investment certificates:					Investment certificates:
Proceeds from additions	Proceeds from additions	$	1,397	$	2,534	Proceeds from additions	$	733	$	723
Maturities, withdrawals and cash surrenders	Maturities, withdrawals and cash surrenders	(2,407)		(2,599)		Maturities, withdrawals and cash surrenders	(835)		(1,224)
Policyholder account balances:	Policyholder account balances:					Policyholder account balances:
Deposits and other additions	Deposits and other additions	751		774		Deposits and other additions	285		384
Net transfers from (to) separate accounts	Net transfers from (to) separate accounts	(132)		(15)		Net transfers from (to) separate accounts	(57)		(60)
Surrenders and other benefits	Surrenders and other benefits	(693)		(726)		Surrenders and other benefits	(328)		(368)
Change in banking deposits, net	Change in banking deposits, net	1,268		1,510		Change in banking deposits, net	1,802		580
Cash paid for purchased options with deferred premiums	Cash paid for purchased options with deferred premiums	(76)		(131)		Cash paid for purchased options with deferred premiums	(71)		(42)
Cash received from purchased options with deferred premiums	Cash received from purchased options with deferred premiums	342		39		Cash received from purchased options with deferred premiums	168		306
Issuance of long-term debt	Issuance of long-term debt	4		496		Issuance of long-term debt	—		4
Repayments of long-term debt	Repayments of long-term debt	(4)		(756)		Repayments of long-term debt	(502)		(2)
Dividends paid to shareholders	Dividends paid to shareholders	(255)		(250)		Dividends paid to shareholders	(129)		(129)
Repurchase of common shares	Repurchase of common shares	(911)		(716)		Repurchase of common shares	(541)		(470)
Exercise of stock options		—		2
Borrowings by consolidated investment entities		1,375		—

Borrowings of consolidated investment entities						Borrowings of consolidated investment entities	—		797
Repayments of debt by consolidated investment entities	Repayments of debt by consolidated investment entities	(754)		(37)		Repayments of debt by consolidated investment entities	(1)		(63)
Other, net	Other, net	(6)		(8)		Other, net	(6)		(3)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(101)		117		Net cash provided by (used in) financing activities	518		433
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	9		(18)		Effect of exchange rate changes on cash	(20)		9

Net increase (decrease) in cash and cash equivalents, including amounts restricted	Net increase (decrease) in cash and cash equivalents, including amounts restricted	(70)		3,906		Net increase (decrease) in cash and cash equivalents, including amounts restricted	(758)		(1,367)
Cash and cash equivalents, including amounts restricted, at beginning of period	Cash and cash equivalents, including amounts restricted, at beginning of period	8,903		6,213		Cash and cash equivalents, including amounts restricted, at beginning of period	9,569		8,903
Cash and cash equivalents, including amounts restricted, at end of period	Cash and cash equivalents, including amounts restricted, at end of period	$	8,833	$	10,119	Cash and cash equivalents, including amounts restricted, at end of period	$	8,811	$	7,536

Supplemental Disclosures:	Supplemental Disclosures:					Supplemental Disclosures:
Interest paid excluding consolidated investment entities	Interest paid excluding consolidated investment entities	$	58	$	100	Interest paid excluding consolidated investment entities	$	27	$	30
Interest paid by consolidated investment entities	Interest paid by consolidated investment entities	30		33		Interest paid by consolidated investment entities	13		11
Income taxes paid, net	Income taxes paid, net	638		51		Income taxes paid, net	34		36

Leased assets obtained in exchange for operating lease liabilities	Leased assets obtained in exchange for operating lease liabilities	52		51		Leased assets obtained in exchange for operating lease liabilities	13		44
Non-cash investing activity:	Non-cash investing activity:					Non-cash investing activity:
Partnership commitments not yet remitted		—		2

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

		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:	Reconciliation of cash and cash equivalents, including amounts restricted:					Reconciliation of cash and cash equivalents, including amounts restricted:
Cash and cash equivalents	Cash and cash equivalents	$	7,121	$	6,751	Cash and cash equivalents	$	6,623	$	7,127
Cash of consolidated investment entities	Cash of consolidated investment entities	95		94		Cash of consolidated investment entities	119		121
Restricted and segregated cash, cash equivalents and investments	Restricted and segregated cash, cash equivalents and investments	2,382		2,558		Restricted and segregated cash, cash equivalents and investments	2,668		2,795
Less: Restricted and segregated investments	Less: Restricted and segregated investments	(765)		(500)		Less: Restricted and segregated investments	(599)		(474)
Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows	Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows	$	8,833	$	8,903	Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows	$	8,811	$	9,569
See Notes to Consolidated Financial Statements.	See Notes to Consolidated Financial Statements.					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 Columbia Threadneedle ~~Asset Management~~Investments UK International Limited,TAM UK International Holdings ~~Sàrl~~Ltd and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”).

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

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.

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

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

In the first quarter of 2021, the Company recorded ~~an unfavorable~~a favorable out-of-period correction of $29 million in other comprehensive income related to defined benefit plans.

~~In the first quarter of 2020, the Company recorded an unfavorable out-of-period correction of $19 million in management and financial advice fees related to performance fees.~~

The impact of the ~~errors were~~error was not material to the current and prior period financial statements.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the Securities and Exchange Commission (“SEC”) on February ~~24,~~ 25, 2022 (“2021 ~~(“2020~~ 10-K”).

On April 12, 2021, the Company signed a definitive agreement to acquire the European-based asset management business of BMO Financial Group for £615 million, or approximately $845 million (subject to customary and other closing adjustments as well as foreign currency spot rates in effect on the closing date that drive the approximate amount in U.S. dollars). The all-cash transaction is expected to add approximately $124 billion of assets under management in Europe and is currently expected to close in the fourth quarter of 2021, subject to regulatory approvals in the relevant jurisdictions.

On June 2, 2021, the Company filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation. The Company also filed an application to transition the FSB’s personal trust services business to a new limited purpose national trust bank regulated by the Office of the Comptroller of the Currency.

On June 29, 2021, the Company’s life insurance companies, RiverSource Life Insurance Company (“RiverSource Life”) and RiverSource Life Insurance Co. of New York (“RiverSource Life of New York”) signed an agreement to reinsure approximately $8.0 billion of fixed deferred and immediate annuity policies. The transaction, effective on July 1, 2021, with RiverSource Life closed on July 8, 2021. The transaction with RiverSource Life of New York is subject to regulatory approval.

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. ~~Other than the items noted above, no other~~No subsequent events or transactions requiring recognition or disclosure were identified.

2. Recent Accounting Pronouncements

~~Adoption of New Accounting Standards~~

~~Income Taxes – Simplifying the Accounting for Income Taxes~~

In December 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting standards to simplify the accounting for income taxes. The update eliminates certain exceptions to: (1) accounting principles related to intra-period tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, and (3) year-to-date losses in interim periods to be applied on a prospective basis. The update also amends existing guidance related to situations when an entity receives: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense

~~AMERIPRISE FINANCIAL, INC.~~

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

when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and (4) franchise taxes and other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the standard on January 1, 2021. The adoption of this standard had no impact on the Company’s consolidated results of operations and 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.

~~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 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.

~~Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement~~

In August 2018, the 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 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. The new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements. The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018. The Company adopted the provisions of the standard to include new disclosures on January 1, 2020. The update did not have an impact on the Company’s consolidated results of operations or financial condition.

Future Adoption of New Accounting Standards

~~Reference Rate Reform~~Financial Instruments – ~~Expedients~~Credit Losses – Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards Board (“FASB”) proposed amendments to Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The update removes the recognition and measurement guidance for Troubled Debt Restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, and modifies the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. Rather than applying the recognition and measurement for TDRs, an entity must apply the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan. The update also requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The amendments are to be applied prospectively, but entities may apply a modified retrospective transition for changes to the recognition and measurement of TDRs. For entities that have adopted Topic 326, the amendments are effective for interim and annual periods beginning after December 15, 2022. Early adoption is permitted for entities that have adopted Topic 326, including adoption in an interim period. The adoption of the standard is not expected to have a material impact on the Company’s consolidated results of operations and financial condition.

Business Combinations – Accounting for Contract ~~Modifications~~Assets and Contract Liabilities from Contracts with Customers

In ~~March 2020,~~October 2021, the FASB updated the accounting standards to ~~provide optional expedients~~require an entity (acquirer) to recognize and ~~exceptions~~measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue for ~~applying GAAP~~Contracts with Customers (“Topic 606”). At the acquisition date, an acquirer is required to account for the related revenue contracts ~~hedging or other transactions that are affected by reference rate reform (i.e.,~~in accordance with Topic 606 as if it had originated the ~~elimination of LIBOR)~~contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with GAAP). The ~~following expedients are provided~~amendments apply to all contract assets and contract liabilities acquired in a business combination that result from contracts accounted for ~~modified contracts whose reference rate~~under the principals of Topic 606. The standard is ~~changed:~~effective for interim and annual periods beginning after December 15, 2022. Early adoption is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) ~~receivables~~retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of the early application and ~~debt contracts are accounted for~~(2) prospectively to all business combinations that occur on or after the date of initial application. The adoption of the standard is not expected to have a material impact on the Company’s consolidated results of operations and financial condition.

109

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and (3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract. The amendments in this update were effective upon issuance and must be elected prior to December 31, 2022. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions. In January 2021, FASB updated the standard to allow an entity to elect to apply the treatment under the original guidance to derivative instruments that use an interest rate for margining, discounting or contract price alignment that will be modified due to reference rate reform but did not qualify under the original guidance. The Company has not yet applied any of the optional expedients. The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition.

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

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

The guidance establishes a significant new category of benefit features called market risk benefits that protect the contractholder from other-than-nominal capital market risk and expose the insurer to that risk. Insurers will have to measure market risk benefits at fair value. Market risk benefits include variable annuity guaranteed benefits (i.e. guaranteed minimum death, withdrawal, withdrawal for life, accumulation and income 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 including 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.

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

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

In addition, the update requires deferred acquisition costs (“DAC”) and deferred sales inducement costs (“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 standard is effective for interim and annual periods beginning after December 15, ~~2022, and interim periods within those years.~~2022. 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~~in the process of implementing the standard, including the implementation of controlled measurement and reporting processes. The Company expects the impact of adopting the standard onto be material to its consolidated results of operations and financial ~~condition and disclosures.~~condition.

1110

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3. 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 June 30, 2021
Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating
Revenue Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail $ — $ 567 $ — $ — $ 567 $ — $ 567
Institutional — 131 — — 131 — 131
Advisory fees 1,113 — — — 1,113 — 1,113
Financial planning fees 93 — — — 93 — 93
Transaction and other fees 93 56 18 — 167 — 167
Total management and financial advice fees 1,299 754 18 — 2,071 — 2,071
Distribution fees:
Mutual funds 212 69 — — 281 — 281
Insurance and annuity 252 49 101 — 402 — 402
Other products 98 — — — 98 — 98
Total distribution fees 562 118 101 — 781 — 781
Other revenues 51 7 — 1 59 — 59
Total revenue from contracts with customers 1,912 879 119 1 2,911 — 2,911
Revenue from other sources (1)
70 — 689 119 878 34 912
Total segment gross revenues 1,982 879 808 120 3,789 34 3,823
Banking and deposit interest expense (2) — — (1) (3) — (3)
Total segment net revenues 1,980 879 808 119 3,786 34 3,820
Intersegment revenues (266) (14) (118) (1) (399) (3) (402)
Total net revenues $ 1,714 $ 865 $ 690 $ 118 $ 3,387 $ 31 $ 3,418


		Six Months Ended June 30, 2021															Three Months Ended March 31, 2022
		Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total			Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total
		(in millions)															(in millions)
Management and financial advice fees:	Management and financial advice fees:															Management and financial advice fees:
Asset management fees:	Asset management fees:															Asset management fees:
Retail	Retail	$	—	$	1,098	$	—	$	—	$	1,098	$	—	$	1,098	Retail	$	—	$	644	$	—	$	—	$	644	$	—	$	644
Institutional	Institutional	—		254		—		—		254		—		254		Institutional	—		195		—		—		195		—		195
Advisory fees	Advisory fees	2,141		—		—		—		2,141		—		2,141		Advisory fees	1,191		—		—		—		1,191		—		1,191
Financial planning fees	Financial planning fees	181		—		—		—		181		—		181		Financial planning fees	97		—		—		—		97		—		97
Transaction and other fees	Transaction and other fees	182		108		34		—		324		—		324		Transaction and other fees	92		55		16		—		163		—		163
Total management and financial advice fees	Total management and financial advice fees	2,504		1,460		34		—		3,998		—		3,998		Total management and financial advice fees	1,380		894		16		—		2,290		—		2,290
Distribution fees:	Distribution fees:															Distribution fees:
Mutual funds	Mutual funds	419		136		—		—		555		—		555		Mutual funds	204		65		—		—		269		—		269
Insurance and annuity	Insurance and annuity	492		96		200		—		788		—		788		Insurance and annuity	221		46		95		—		362		—		362

Other products	Other products	210		—		—		—		210		—		210		Other products	104		—		—		—		104		—		104
Total distribution fees	Total distribution fees	1,121		232		200		—		1,553		—		1,553		Total distribution fees	529		111		95		—		735		—		735
Other revenues	Other revenues	100		8		—		1		109		—		109		Other revenues	53		5		—		—		58		—		58
Total revenue from contracts with customers	Total revenue from contracts with customers	3,725		1,700		234		1		5,660		—		5,660		Total revenue from contracts with customers	1,962		1,010		111		—		3,083		—		3,083
Revenue from other sources (1)	Revenue from other sources (1)	141		7		1,361		258		1,767		133		1,900		Revenue from other sources (1)	82		7		661		116		866		63		929
Total segment gross revenues	Total segment gross revenues	3,866		1,707		1,595		259		7,427		133		7,560		Total segment gross revenues	2,044		1,017		772		116		3,949		63		4,012
Banking and deposit interest expense	Banking and deposit interest expense	(7)		—		—		(1)		(8)		—		(8)		Banking and deposit interest expense	(2)		—		—		—		(2)		—		(2)
Total segment net revenues	Total segment net revenues	3,859		1,707		1,595		258		7,419		133		7,552		Total segment net revenues	2,042		1,017		772		116		3,947		63		4,010
Intersegment revenues		(516)		(27)		(234)		(1)		(778)		(6)		(784)
Elimination of intersegment revenues																Elimination of intersegment revenues	(228)		(12)		(112)		—		(352)		(3)		(355)
Total net revenues	Total net revenues	$	3,343	$	1,680	$	1,361	$	257	$	6,641	$	127	$	6,768	Total net revenues	$	1,814	$	1,005	$	660	$	116	$	3,595	$	60	$	3,655

1211

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Three Months Ended June 30, 2020
Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating
Revenue Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail $ — $ 417 $ — $ — $ 417 $ — $ 417
Institutional — 101 — — 101 — 101
Advisory fees 797 — — — 797 — 797
Financial planning fees 86 — — — 86 — 86
Transaction and other fees 86 45 16 — 147 — 147
Total management and financial advice fees 969 563 16 — 1,548 — 1,548
Distribution fees:
Mutual funds 170 55 — — 225 — 225
Insurance and annuity 196 41 105 — 342 — 342
Other products 87 — — — 87 — 87
Total distribution fees 453 96 105 — 654 — 654
Other revenues 47 1 — — 48 — 48
Total revenue from contracts with customers 1,469 660 121 — 2,250 — 2,250
Revenue from other sources (1)
86 8 634 132 860 (51) 809
Total segment gross revenues 1,555 668 755 132 3,110 (51) 3,059
Banking and deposit interest expense (18) — — (1) (19) — (19)
Total segment net revenues 1,537 668 755 131 3,091 (51) 3,040
Intersegment revenues (208) (13) (105) — (326) (2) (328)
Total net revenues $ 1,329 $ 655 $ 650 $ 131 $ 2,765 $ (53) $ 2,712


		Six Months Ended June 30, 2020															Three Months Ended March 31, 2021
		Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total			Advice & Wealth Management		Asset Management		Retirement & Protection Solutions		Corporate & Other		Total Segments		Non-operating Revenue		Total
		(in millions)															(in millions)
Management and financial advice fees:	Management and financial advice fees:															Management and financial advice fees:
Asset management fees:	Asset management fees:															Asset management fees:
Retail	Retail	$	—	$	864	$	—	$	—	$	864	$	—	$	864	Retail	$	—	$	531	$	—	$	—	$	531	$	—	$	531
Institutional	Institutional	—		186		—		—		186		—		186		Institutional	—		123		—		—		123		—		123
Advisory fees	Advisory fees	1,651		—		—		—		1,651		—		1,651		Advisory fees	1,028		—		—		—		1,028		—		1,028
Financial planning fees	Financial planning fees	167		—		—		—		167		—		167		Financial planning fees	88		—		—		—		88		—		88
Transaction and other fees	Transaction and other fees	175		92		31		—		298		—		298		Transaction and other fees	89		52		16		—		157		—		157
Total management and financial advice fees	Total management and financial advice fees	1,993		1,142		31		—		3,166		—		3,166		Total management and financial advice fees	1,205		706		16		—		1,927		—		1,927
Distribution fees:	Distribution fees:															Distribution fees:
Mutual funds	Mutual funds	354		115		—		—		469		—		469		Mutual funds	207		67		—		—		274		—		274
Insurance and annuity	Insurance and annuity	404		84		191		—		679		—		679		Insurance and annuity	240		47		99		—		386		—		386

Other products	Other products	243		—		—		—		243		—		243		Other products	112		—		—		—		112		—		112
Total distribution fees	Total distribution fees	1,001		199		191		—		1,391		—		1,391		Total distribution fees	559		114		99		—		772		—		772
Other revenues	Other revenues	94		2		—		3		99		—		99		Other revenues	49		1		—		—		50		—		50
Total revenue from contracts with customers	Total revenue from contracts with customers	3,088		1,343		222		3		4,656		—		4,656		Total revenue from contracts with customers	1,813		821		115		—		2,749		—		2,749
Revenue from other sources (1)	Revenue from other sources (1)	187		11		1,292		279		1,769		1		1,770		Revenue from other sources (1)	71		7		672		139		889		99		988
Total segment gross revenues	Total segment gross revenues	3,275		1,354		1,514		282		6,425		1		6,426		Total segment gross revenues	1,884		828		787		139		3,638		99		3,737
Banking and deposit interest expense	Banking and deposit interest expense	(43)		—		—		(2)		(45)		—		(45)		Banking and deposit interest expense	(5)		—		—		—		(5)		—		(5)
Total segment net revenues	Total segment net revenues	3,232		1,354		1,514		280		6,380		1		6,381		Total segment net revenues	1,879		828		787		139		3,633		99		3,732
Intersegment revenues		(430)		(26)		(209)		1		(664)		(4)		(668)
Elimination of intersegment revenues																Elimination of intersegment revenues	(250)		(13)		(116)		—		(379)		(3)		(382)
Total net revenues	Total net revenues	$	2,802	$	1,328	$	1,305	$	281	$	5,716	$	(3)	$	5,713	Total net revenues	$	1,629	$	815	$	671	$	139	$	3,254	$	96	$	3,350

(1) Revenues not included in the scope of the revenue from contracts with customers standard. The amounts primarily consist of revenue associated with insurance and annuity products or financial instruments.

~~AMERIPRISE FINANCIAL, INC.~~

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

The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers on a consolidated basis.

Management and Financial Advice Fees

Asset Management Fees

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

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

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

Advisory Fees

The Company earns revenue for performing investment advisory services for certain brokerage ~~customers’~~customer’s discretionary and non-discretionary managed accounts. The revenue is earned based on a contractual fixed rate applied, as a percentage, to the market value of assets held in the account. The investment advisory performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Advisory fees are billed on a monthly basis on the prior month end assets.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Financial Planning Fees

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

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

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

Contract liabilities for financial planning fees, which are included in ~~other~~Other liabilities, ~~in the Consolidated Balance Sheets,~~ were ~~$142~~$155 million and ~~$146~~$157 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

The Company pays sales commissions to advisors when a new financial planning contract is obtained or when an existing contract is renewed. The sales commissions paid to the advisors prior to financial plan delivery are considered costs to obtain a contract with a customer and are initially capitalized. When the performance obligation to deliver the financial plan is satisfied, the commission is recognized as distribution expense. Capitalized costs to obtain these contracts are reported in ~~other~~Other assets ~~in the Consolidated Balance Sheets~~ and were ~~$114~~$123 million and ~~$117~~$126 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Transaction and Other Fees

The Company earns revenue for providing customer support, shareholder and administrative services (including transfer agent services) for affiliated mutual funds and networking, sub-accounting and administrative services for unaffiliated mutual funds. The Company also receives revenue for providing custodial services and account maintenance services on brokerage and retirement accounts that are not included in an advisory relationship. Transfer agent and administrative revenue is earned based on either a fixed

~~AMERIPRISE FINANCIAL, INC.~~

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

rate applied, as a percentage, to assets under management or an annual fixed fee for each fund position. Networking and sub-accounting revenue is earned based on either an annual fixed fee for each account or an annual fixed fee for each fund position. Custodial and account maintenance revenue is generally earned based on a quarterly or annual fixed fee for each account. Each of the customer support and administrative services performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Transaction and other fees (other than custodial service fees) are invoiced or charged to brokerage accounts on a monthly or quarterly basis. Custodial service fees are invoiced or charged to brokerage accounts on an annual basis. Contract liabilities for custodial service fees, which are included in ~~other~~Other liabilities, ~~in the Consolidated Balance Sheets,~~ were ~~$28~~$39 million and ~~NaN~~nil as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

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

Distribution Fees

Mutual Funds and Insurance and Annuity Products

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

The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis.

Other Products

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

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

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

Other Revenues

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

Intellectual property and software licenses, along with compliance supervision, insurance coverage, and technology services and support are primarily earned based on a monthly fixed fee. These services are considered a series of distinct services that are

~~AMERIPRISE FINANCIAL, INC.~~

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

substantially the same and are satisfied each day over the contract term. The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested.

Contract Costs Asset

The Company has an asset of $39 million as of both March 31, 2022 and December 31, 2021 related to the transition of investment advisory services under an arrangement with BMO Financial Group for clients that elected to transfer U.S. retail and institutional assets to the Company.

Receivables

Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were ~~$442~~$609 million and ~~$403~~$668 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

4. Variable Interest Entities

The Company provides asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds and other private funds, property funds and certain non-U.S. series funds (such as OEICs and SICAVs) (collectively, “investment entities”), which are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates certain investment entities (collectively, “consolidated investment entities”) if the Company is deemed to be the primary beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment and existing future funding commitments, and the Company has not provided any other support to these entities. The Company has unfunded commitments related to consolidated CLOs of ~~$36~~$28 million and ~~$13~~$27 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

CLOs

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary and has the power to direct the activities that most significantly impact the economic performance of the CLO.

The Company’s maximum exposure to loss with respect to non-consolidated CLOs is limited to its amortized cost, which was $1 million ~~and $3 million~~ as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company classifies these investments as Available-for-Sale securities. See Note 5 for additional information on these investments.

Property Funds

The Company provides investment advice and related services to property funds, some of which are considered VIEs. For investment management services, the Company generally earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not have a significant economic interest and is not required to consolidate any of the property funds. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in property funds is reflected in other investments and was $~~26 million and $23~~44 million as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Hedge Funds and other Private Funds

The Company does not consolidate hedge funds and other private funds which are sponsored by the Company and considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services and the Company does not have a significant economic interest in any fund. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in these entities is reflected in other investments and was NaN as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Non-U.S. Series Funds

The Company manages non-U.S. series funds, which are considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not consolidate these funds and its maximum exposure to loss is limited to its carrying value. The carrying value of the Company’s investment in these funds is reflected in other investments and was $2742 million and ~~$20~~$43 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

~~AMERIPRISE FINANCIAL, INC.~~

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

Affordable Housing Partnerships and Other Real Estate Partnerships

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

A majority of the limited partnerships are VIEs. The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in other investments and was ~~$166~~$124 million and ~~$200~~$138 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company had a $9$8 million liability recorded as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021, respectively, related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments.

Structured Investments

The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its amortized cost. See Note 5 for additional information on these structured investments.

Fair Value of Assets and Liabilities

The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 11 for the definition of the three levels of the fair value hierarchy.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		June 30, 2021									March 31, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
		(in millions)									(in millions)
Assets	Assets									Assets
Investments:	Investments:									Investments:

Common stocks	Common stocks	$	—	$	2	$	—	$	2	Common stocks	$	—	$	3	$	—	$	3

Syndicated loans	Syndicated loans	—		2,497		112		2,609		Syndicated loans	—		2,077		97		2,174
Total investments	Total investments	—		2,499		112		2,611		Total investments	—		2,080		97		2,177
Receivables	Receivables	—		48		—		48		Receivables	—		22		—		22
Other assets	Other assets	—		2		—		2		Other assets	—		2		—		2
Total assets at fair value	Total assets at fair value	$	—	$	2,549	$	112	$	2,661	Total assets at fair value	$	—	$	2,104	$	97	$	2,201

Liabilities	Liabilities									Liabilities
Debt (1)	Debt (1)	$	—	$	2,558	$	—	$	2,558	Debt (1)	$	—	$	2,156	$	—	$	2,156
Other liabilities	Other liabilities	—		139		—		139		Other liabilities	—		146		—		146
Total liabilities at fair value	Total liabilities at fair value	$	—	$	2,697	$	—	$	2,697	Total liabilities at fair value	$	—	$	2,302	$	—	$	2,302

~~AMERIPRISE FINANCIAL, INC.~~

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


		December 31, 2020									December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
		(in millions)									(in millions)
Assets	Assets									Assets
Investments:	Investments:									Investments:
Corporate debt securities		$	—	$	8	$	—	$	8

Common stocks	Common stocks	—		1		—		1		Common stocks	$	—	$	3	$	—	$	3

Syndicated loans	Syndicated loans	—		1,817		92		1,909		Syndicated loans	—		2,117		64		2,181
Total investments	Total investments	—		1,826		92		1,918		Total investments	—		2,120		64		2,184
Receivables	Receivables	—		16		—		16		Receivables	—		17		—		17
Other assets	Other assets	—		—		2		2		Other assets	—		—		3		3
Total assets at fair value	Total assets at fair value	$	—	$	1,842	$	94	$	1,936	Total assets at fair value	$	—	$	2,137	$	67	$	2,204

Liabilities	Liabilities									Liabilities
Debt (1)	Debt (1)	$	—	$	1,913	$	—	$	1,913	Debt (1)	$	—	$	2,164	$	—	$	2,164
Other liabilities	Other liabilities	—		69		—		69		Other liabilities	—		137		—		137
Total liabilities at fair value	Total liabilities at fair value	$	—	$	1,982	$	—	$	1,982	Total liabilities at fair value	$	—	$	2,301	$	—	$	2,301

(1) The carrying value of the ~~CLOs��~~CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was ~~$2.6~~$2.1 billion and ~~$2.0~~$2.2 billion as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

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

Syndicated Loans
(in millions)
Balance, April 1, 2021 $ 155
Purchases 22
Sales (24)
Settlements (19)
Transfers into Level 3 28
Transfers out of Level 3 (50)
Balance, June 30, 2021 $ 112
Changes in unrealized gains (losses) included in income relating to assets held at June 30, 2021 $ (1) (1)

Syndicated Loans
(in millions)
Balance, April 1, 2020 $ 302
Total gains (losses) included in:
Net income 18 (1)
Purchases 2
Sales (8)
Settlements (16)
Transfers into Level 3 102
Transfers out of Level 3 (189)
Balance, June 30, 2020 $ 211
Changes in unrealized gains (losses) included in income relating to assets held at June 30, 2020 $ 17 (1)


	Syndicated Loans			Other Assets
	(in millions)
Balance, January 1, 2022	$	64		$	3
Total gains (losses) included in:
Net income	(1)		(1)	—
Purchases	15			—
Sales	(1)			—

Transfers into Level 3	62			—
Transfers out of Level 3	(42)			(3)

Balance, March 31, 2022	$	97		$	—

Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2022	$	(1)	(1)	$	—

1816

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Syndicated Loans Other Assets
(in millions)
Balance, January 1, 2021 $ 92 $ 2
Total gains (losses) included in:
Net income 2 (1) —
Purchases 81 —
Sales (34) —
Settlements (39) —
Transfers into Level 3 85 —
Transfers out of Level 3 (75) (2)
Balance, June 30, 2021 $ 112 $ 0
Changes in unrealized gains (losses) included in income relating to assets held at June 30, 2021 $ (1) (1) $ —


		Syndicated Loans				Syndicated Loans			Other Assets
		(in millions)				(in millions)
Balance, January 1, 2020		$	143
Balance, January 1, 2021					Balance, January 1, 2021	$	92		$	2
Total gains (losses) included in:	Total gains (losses) included in:				Total gains (losses) included in:
Net income	Net income	(21)		(1)	Net income	2		(1)	—
Purchases	Purchases	45			Purchases	59			—
Sales	Sales	(15)			Sales	(10)			—
Settlements	Settlements	(26)			Settlements	(20)			—
Transfers into Level 3	Transfers into Level 3	350			Transfers into Level 3	57			—
Transfers out of Level 3	Transfers out of Level 3	(265)			Transfers out of Level 3	(25)			(2)
Balance, June 30, 2020		$	211
Balance, March 31, 2021					Balance, March 31, 2021	$	155		$	—

Changes in unrealized gains (losses) included in income relating to assets held at June 30, 2020		$	3	(1)
Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2021					Changes in unrealized gains (losses) included in income relating to assets held at March 31, 2021	$	1	(1)	$	—

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

Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote.

All Level 3 measurements as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.

Determination of Fair Value

Assets

Investments

The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 11 for a description of the Company’s determination of the fair value of corporate debt securities, common stocks and other investments.

Receivables

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

Liabilities

Debt

The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets and is classified as Level 2.

~~AMERIPRISE FINANCIAL, INC.~~

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

Other Liabilities

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

Fair Value Option

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected:


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Syndicated loans	Syndicated loans					Syndicated loans
Unpaid principal balance	Unpaid principal balance	$	2,666	$	1,990	Unpaid principal balance	$	2,242	$	2,233
Excess unpaid principal over fair value	Excess unpaid principal over fair value	(57)		(81)		Excess unpaid principal over fair value	(68)		(52)
Fair value	Fair value	$	2,609	$	1,909	Fair value	$	2,174	$	2,181

Fair value of loans more than 90 days past due	Fair value of loans more than 90 days past due	$	2	$	5	Fair value of loans more than 90 days past due	$	—	$	—
Fair value of loans in nonaccrual status	Fair value of loans in nonaccrual status	29		19		Fair value of loans in nonaccrual status	11		13
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	18		24		Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both	5		10

Debt	Debt					Debt
Unpaid principal balance	Unpaid principal balance	$	2,696	$	2,069	Unpaid principal balance	$	2,295	$	2,296
Excess unpaid principal over fair value	Excess unpaid principal over fair value	(138)		(156)		Excess unpaid principal over fair value	(139)		(132)
Carrying value (1)	Carrying value (1)	$	2,558	$	1,913	Carrying value (1)	$	2,156	$	2,164

(1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was ~~$2.6~~$2.1 billion and ~~$2.0~~$2.2 billion as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

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

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

Total net gains (losses) recognized in ~~net~~Net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for both the three months ended March 31, 2022 and ~~six months ended June 30, 2021 and 2020.~~2021.

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

Carrying Value Weighted Average Interest Rate
June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020
(in millions)
Debt of consolidated CLOs due 2025-2034 $ 2,558 $ 1,913 1.8 % 2.1 %


	Carrying Value				Weighted Average Interest Rate
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
	(in millions)
Debt of consolidated CLOs due 2028-2034	$	2,156	$	2,164	1.9	%	1.7	%

The debt of the consolidated CLOs has both fixed and floating interest rates, which range from ~~0.0%~~nil to ~~8.8%~~9.5%. The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates.

~~AMERIPRISE FINANCIAL, INC.~~

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

5. Investments

The following is a summary of Ameriprise Financial investments:


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Available-for-Sale securities, at fair value	Available-for-Sale securities, at fair value	$	36,146	$	36,283	Available-for-Sale securities, at fair value	$	32,330	$	32,050
Mortgage loans (allowance for credit losses: 2021, $14; 2020, $29)		1,655		2,718
Mortgage loans (allowance for credit losses: 2022, $12; 2021, $12)						Mortgage loans (allowance for credit losses: 2022, $12; 2021, $12)	1,971		1,953
Policy loans	Policy loans	840		846		Policy loans	833		835
Loans held for sale		1,388		—
Other investments (allowance for credit losses: 2021, $4; 2020, $12)		716		1,184

Other investments (allowance for credit losses: 2022, $5; 2021, $5)						Other investments (allowance for credit losses: 2022, $5; 2021, $5)	906		972
Total	Total	$	40,745	$	41,031	Total	$	36,040	$	35,810

Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, equity securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days.

~~The following is a summary of net investment income:~~

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(in millions)
Investment income on fixed maturities $ 265 $ 290 $ 531 $ 612
Net realized gains (losses) 11 (3) 81 (22)
Affordable housing partnerships (23) (22) (38) (36)
Other 7 23 27 45
Consolidated investment entities 18 17 54 34
Total $ 278 $ 305 $ 655 $ 633

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

June 30, 2021
Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value
(in millions)
Corporate debt securities $ 12,038 $ 1,665 $ (27) $ — $ 13,676
Residential mortgage backed securities 9,556 135 (9) — 9,682
Commercial mortgage backed securities 5,995 187 (4) — 6,178
Asset backed securities 3,603 46 (1) — 3,648
State and municipal obligations 1,039 281 (1) — 1,319
U.S. government and agency obligations 1,326 — — — 1,326
Foreign government bonds and obligations 207 17 (1) — 223
Other securities 94 — — — 94
Total $ 33,858 $ 2,331 $ (43) $ — $ 36,146

2118

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


	Three Months Ended March 31,
		2022		2021
		(in millions)
Investment income on fixed maturities		$	214	$	266
Net realized gains (losses)		20		69
Affordable housing partnerships		(15)		(15)
Other		23		21
Consolidated investment entities		19		36
Total		$	261	$	377

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


	March 31, 2022
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Corporate debt securities	$	9,012	$	667	$	(297)	$	—	$	9,382
Residential mortgage backed securities	12,117		17		(439)		—		11,695
Commercial mortgage backed securities	5,461		3		(168)		—		5,296
Asset backed securities	3,676		16		(54)		—		3,638
State and municipal obligations	847		163		(8)		(1)		1,001
U.S. government and agency obligations	1,160		—		—		—		1,160
Foreign government bonds and obligations	83		2		(3)		—		82

Other securities	77		—		(1)		—		76
Total	$	32,433	$	868	$	(970)	$	(1)	$	32,330


Description of Securities	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Corporate debt securities	$	8,737	$	1,243	$	(48)	$	—	$	9,932
Residential mortgage backed securities	10,927		67		(50)		—		10,944
Commercial mortgage backed securities	4,950		59		(23)		—		4,986
Asset backed securities	3,639		26		(11)		—		3,654
State and municipal obligations	850		244		(1)		(1)		1,092
U.S. government and agency obligations	1,301		—		—		—		1,301
Foreign government bonds and obligations	88		5		(1)		—		92
Other securities	49		—		—		—		49
Total	$	30,541	$	1,644	$	(134)	$	(1)	$	32,050

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, accrued interest of ~~$176~~$156 million and ~~$178~~$140 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in ~~receivables on the Consolidated Balance Sheets.~~Receivables.

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, investment securities with a fair value of ~~$2.9~~$3.3 billion and ~~$3.6~~$3.1 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which ~~$501~~$428 million and ~~$454~~$314 million, respectively, may be sold, pledged or rehypothecated by the counterparty.

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, fixed maturity securities comprised approximately ~~92%~~90% and ~~88%~~89%, respectively, of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company’s internal analysts rated ~~$682~~$471 million and ~~$605~~$400 million, respectively, of securities using criteria similar to those used by NRSROs.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


Ratings	Ratings	June 30, 2021						December 31, 2020						Ratings	March 31, 2022						December 31, 2021
		Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value			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	$	19,979	$	20,320	56	%	$	19,815	$	20,253	56	%	AAA	$	22,172	$	21,546	67	%	$	20,563	$	20,625	64	%
AA	AA	1,127		1,331		4		1,082		1,312		3		AA	748		858		3		727		898		3
A	A	2,488		2,965		8		2,953		3,534		10		A	1,786		1,991		6		1,775		2,129		7
BBB	BBB	8,987		10,093		28		8,271		9,542		26		BBB	6,941		7,135		22		6,495		7,268		23
Below investment grade (1)	Below investment grade (1)	1,277		1,437		4		1,480		1,642		5		Below investment grade (1)	786		800		2		981		1,130		3
Total fixed maturities	Total fixed maturities	$	33,858	$	36,146	100	%	$	33,601	$	36,283	100	%	Total fixed maturities	$	32,433	$	32,330	100	%	$	30,541	$	32,050	100	%

(1) ~~Both the~~The amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $1 million and $2 million, respectively, as of ~~June 30, 2021,~~both March 31, 2022 and ~~$3 million as of~~ December 31, ~~2020.~~2021. These securities are not rated but are included in below investment grade due to their risk characteristics.

As of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020,~~2021, approximately ~~31% and 33%, respectively,~~30% of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. ~~NaN~~No holdings of any issuer were greater than 10% of the Company’s total ~~equity.~~

~~AMERIPRISE FINANCIAL, INC.~~

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

shareholder’s equity as of both March 31, 2022 and December 31, 2021.

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


Description of Securities	Description of Securities	June 30, 2021															Description of Securities	March 31, 2022
		Less than 12 months					12 months or more					Total						Less than 12 Months					12 Months or More					Total
		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
		(in millions, except number of securities)																(in millions, except number of securities)
Corporate debt securities	Corporate debt securities	67	$	1,272	$	(27)	1	$	5	$	—	68	$	1,277	$	(27)	Corporate debt securities	253	$	3,182	$	(234)	40	$	441	$	(63)	293	$	3,623	$	(297)
Residential mortgage backed securities	Residential mortgage backed securities	55	1,531		(8)		65	229		(1)		120	1,760		(9)		Residential mortgage backed securities	444	9,348		(410)		70	544		(29)		514	9,892		(439)
Commercial mortgage backed securities	Commercial mortgage backed securities	34	519		(3)		12	211		(1)		46	730		(4)		Commercial mortgage backed securities	248	4,322		(153)		20	277		(15)		268	4,599		(168)
Asset backed securities	Asset backed securities	13	419		(1)		10	153		—		23	572		(1)		Asset backed securities	88	3,003		(52)		6	113		(2)		94	3,116		(54)
State and municipal obligations	State and municipal obligations	10	32		—		2	8		(1)		12	40		(1)		State and municipal obligations	55	126		(8)		1	4		—		56	130		(8)

Foreign government bonds and obligations	Foreign government bonds and obligations	3	3		—		6	5		(1)		9	8		(1)		Foreign government bonds and obligations	7	28		(1)		9	8		(2)		16	36		(3)

Other securities																	Other securities	4	76		(1)		—	—		—		4	76		(1)
Total	Total	182	$	3,776	$	(39)	96	$	611	$	(4)	278	$	4,387	$	(43)	Total	1,099	$	20,085	$	(859)	146	$	1,387	$	(111)	1,245	$	21,472	$	(970)

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


Description of Securities	December 31, 2021
	Less than 12 Months					12 Months or More					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	110	$	2,056	$	(43)	14	$	81	$	(5)	124	$	2,137	$	(48)
Residential mortgage backed securities	206	5,808		(48)		56	191		(2)		262	5,999		(50)
Commercial mortgage backed securities	102	2,184		(22)		9	139		(1)		111	2,323		(23)
Asset backed securities	41	1,883		(11)		6	118		—		47	2,001		(11)
State and municipal obligations	26	64		(1)		—	—		—		26	64		(1)

Foreign government bonds and obligations	5	6		—		6	4		(1)		11	10		(1)


Total	490	$	12,001	$	(125)	91	$	533	$	(9)	581	$	12,534	$	(134)

As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 is primarily attributable to the impact of higher interest rates ~~partially offset by tighter~~and wider credit spreads. The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of ~~both June 30, 2021~~March 31, 2022 and December 31, ~~2020, 92%~~2021, approximately 94% and 96%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.

~~AMERIPRISE FINANCIAL, INC.~~

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

The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities:

Corporate Debt Securities Asset Backed Securities Total
(in millions)
Balance, April 1, 2021 $ 0 $ 0 $ 0
Additional increases (decreases) on securities that had an allowance recorded in a previous period — — —
Charge-offs 0 0 0
Balance, June 30, 2021 $ 0 $ 0 $ 0
Balance, April 1, 2020 $ 13 $ 0 $ 13
Additional increases (decreases) on securities that had an allowance recorded in a previous period 0 1 1
Balance, June 30, 2020 $ 13 $ 1 $ 14
Balance at January 1, 2021 (1)
$ 10 $ 1 $ 11
Charge-offs (10) (1) (11)
Balance, June 30, 2021 $ 0 $ 0 $ 0
Balance at January 1, 2020 (1)
$ 0 $ 0 $ 0
Additions for which credit losses were not previously recorded 13 — 13
Additional increases (decreases) on securities that had an allowance recorded in a previous period — 1 1
Balance at June 30, 2020 $ 13 $ 1 $ 14

~~(1)~~ Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired.


	Corporate Debt Securities		Asset Backed Securities		State and Municipal Obligations		Total
	(in millions)











Balance at January 1, 2022	$	—	$	—	$	1	$	1


Charge-offs	—		—		—		—
Balance at March 31, 2022	$	—	$	—	$	1	$	1

Balance at January 1, 2021	$	10	$	1	$	—	$	11


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

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

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(in millions)
Gross realized investment gains $ 14 $ 5 $ 65 $ 13
Gross realized investment losses — — (1) (3)
Credit losses — (1) — (14)
Other impairments (13) — (13) —
Total $ 1 $ 4 $ 51 $ (4)


	Three Months Ended March 31,
		2022			2021
			(in millions)
Gross realized investment gains			$	20		$	51
Gross realized investment losses			—			(1)


Total			$	20		$	50

There were no credit losses for the three months ended March 31, 2022 and ~~six months ended June 30,~~ 2021. Other impairments for the three months and six months ended June 30, 2021 relate to Available-for-Sale securities for which the Company has the intent to sell related to the reinsurance transaction. See Note 1 for more information on the reinsurance transaction. Credit losses for the three months and six months ended June 30, 2020 primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry.

See Note 14 for a rollforward of net unrealized investment gains (losses) included in ~~AOCI.~~accumulated other comprehensive income (“AOCI”).

2421

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Available-for-Sale securities by contractual maturity as of ~~June 30, 2021~~March 31, 2022 were as follows:


		Amortized Cost		Fair Value			Amortized Cost		Fair Value
		(in millions)					(in millions)
Due within one year	Due within one year	$	2,534	$	2,551	Due within one year	$	1,847	$	1,849
Due after one year through five years	Due after one year through five years	4,131		4,412		Due after one year through five years	2,120		2,133
Due after five years through 10 years	Due after five years through 10 years	3,907		4,115		Due after five years through 10 years	3,563		3,382
Due after 10 years	Due after 10 years	4,132		5,560		Due after 10 years	3,649		4,337
		14,704		16,638			11,179		11,701
Residential mortgage backed securities	Residential mortgage backed securities	9,556		9,682		Residential mortgage backed securities	12,117		11,695
Commercial mortgage backed securities	Commercial mortgage backed securities	5,995		6,178		Commercial mortgage backed securities	5,461		5,296
Asset backed securities	Asset backed securities	3,603		3,648		Asset backed securities	3,676		3,638
Total	Total	$	33,858	$	36,146	Total	$	32,433	$	32,330

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

6. Financing Receivables

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

Allowance for Credit Losses

The following tables present a rollforward of the allowance for credit ~~losses for the six months ended June 30:~~losses:

Commercial Loans Consumer Loans Total
(in millions)
Balance, January 1, 2021 $ 66 $ 2 $ 68
Provisions (15) 1 (14)
Charge-offs (3) — (3)
Other 2 — 2
Balance, June 30, 2021 $ 50 $ 3 $ 53


	Commercial Loans		Consumer Loans		Total
	(in millions)


Balance, January 1, 2022	$	47	$	3	$	50
Provisions	(2)		—		(2)



Balance, March 31, 2022	$	45	$	3	$	48

Commercial Loans Consumer Loans Total
(in millions)
Balance, December 31, 2019 (1)
$ 51 $ 0 $ 51
Cumulative effect of adoption of current expected credit losses guidance 2 3 5
Balance, January 1, 2020 53 3 56
Provisions 13 3 16
Charge-offs (1) (2) (3)
Balance, June 30, 2020 $ 65 $ 4 $ 69


	Commercial Loans		Consumer Loans		Total
	(in millions)


Balance, January 1, 2021	$	66	$	2	$	68
Provisions	—		1		1
Charge-offs	(1)		—		(1)

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

~~(1)~~
~~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.~~

The allowance for credit losses provision for commercial loans reflects the reclassification of certain commercial mortgage loans and syndicated loans to held for sale (recorded at the lower of amortized cost or fair value) as of June 30, 2021. Loans held for sale do not require measurement of lifetime expected credit losses because the recovery of the loan is expected to result from its sale, not from holding the loan and collecting contractual cash flows. The provision reflects a release of $14 million as a result of the reclassification to held for sale. A separate valuation allowance of $7 million was established to record the loans held for sale at the lower of amortized cost or fair value as of June 30, 2021. The release of the allowance for credit losses and the creation of the held for sale valuation allowance are both recorded in realized gains and losses within net investment income on the Consolidated Statements of Operations. See Note 1 for more information on the reinsurance transaction.

Accrued interest on commercial loans was ~~$19~~$12 million and ~~$16~~$13 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and is recorded in ~~receivables on the Consolidated Balance Sheets~~Receivables and excluded from the amortized cost basis of commercial loans.

~~AMERIPRISE FINANCIAL, INC.~~

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

Purchases and Sales

During the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company purchased ~~$24 million~~NaN and ~~$13 million,~~ ~~respectively, of syndicated loans, and sold $4 million and NaN, respectively, of syndicated loans. During the six months ended June 30, 2021 and 2020, the Company purchased $37 million and $69~~$13 million, respectively, of syndicated loans, and sold ~~$8 million~~NaN and $7$4 million, respectively, of syndicated loans.

During the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company purchased $4$1 million and ~~$22 million, respectively, of residential mortgage loans. During the six months ended June 30, 2021 and 2020, the Company purchased $6 million and $22~~$2 million, respectively, of residential mortgage loans. The allowance for credit losses for residential mortgage loans was not material as of both ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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

Credit Quality Information

Nonperforming loans were ~~$13~~$8 million and ~~$21~~$9 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. All other loans were considered to be performing.

Commercial Loans

Commercial Mortgage Loans

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. Total commercial mortgage ~~loan modifications through June 30, 2021 due to the COVID-19 pandemic consisted of 93 loans~~ ~~with a total unpaid balance of $369 million~~. ~~Modifications primarily consisted of short-term forbearance and interest only payments. As of June 30, 2021, there were 0~~ ~~loans remaining that were modified due to COVID-19. All loans returned to their normal payment schedules. Total commercial mortgage~~ loans past due were ~~NaN~~nil as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

The tables below present the amortized cost basis of commercial mortgage loans by the year of origination and loan-to-value ratio ~~(excludes commercial mortgage loans held for sale of $1.0 billion and NaN as of June 30, 2021 and December 31, 2020, respectively)~~:


		June 30, 2021															March 31, 2022
Loan-to-Value Ratio	Loan-to-Value Ratio	2021		2020		2019		2018		2017		Prior		Total		Loan-to-Value Ratio	2022		2021		2020		2019		2018		Prior		Total
		(in millions)															(in millions)
> 100%	> 100%	$	—	$	—	$	10	$	11	$	—	$	12	$	33	> 100%	$	—	$	—	$	—	$	11	$	10	$	15	$	36
80% - 100%	80% - 100%	6		—		4		3		—		21		34		80% - 100%	—		9		—		26		2		39		76
60% - 80%	60% - 80%	80		67		64		28		62		131		432		60% - 80%	21		99		66		48		22		164		420
40% - 60%	40% - 60%	11		33		76		64		51		345		580		40% - 60%	17		81		30		87		63		478		756
< 40%	< 40%	5		1		42		3		52		461		564		< 40%	4		14		26		2		71		529		646
Total	Total	$	102	$	101	$	196	$	109	$	165	$	970	$	1,643	Total	$	42	$	203	$	122	$	174	$	168	$	1,225	$	1,934


		December 31, 2020															December 31, 2021
Loan-to-Value Ratio	Loan-to-Value Ratio	2020		2019		2018		2017		2016		Prior		Total		Loan-to-Value Ratio	2021		2020		2019		2018		2017		Prior		Total
		(in millions)															(in millions)
> 100%	> 100%	$	—	$	—	$	2	$	—	$	—	$	10	$	12	> 100%	$	—	$	—	$	20	$	10	$	—	$	29	$	59
80% - 100%	80% - 100%	15		16		12		3		7		15		68		80% - 100%	9		2		9		2		—		29		51
60% - 80%	60% - 80%	89		166		27		32		46		144		504		60% - 80%	142		80		60		23		61		138		504
40% - 60%	40% - 60%	23		57		74		155		113		551		973		40% - 60%	42		33		86		74		57		401		693
< 40%	< 40%	7		23		80		99		64		895		1,168		< 40%	11		8		48		6		58		478		609
Total	Total	$	134	$	262	$	195	$	289	$	230	$	1,615	$	2,725	Total	$	204	$	123	$	223	$	115	$	176	$	1,075	$	1,916

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

~~AMERIPRISE FINANCIAL, INC.~~

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

In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:


		Loans				Percentage					Loans				Percentage
		June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
		(in millions)									(in millions)
East North Central	East North Central	$	178	$	259	11	%	10	%	East North Central	$	205	$	194	11	%	10	%
East South Central	East South Central	66		115		4		4		East South Central	56		57		3		3
Middle Atlantic	Middle Atlantic	93		178		6		7		Middle Atlantic	121		122		6		6
Mountain	Mountain	123		247		7		9		Mountain	118		119		6		6
New England	New England	24		54		1		2		New England	27		28		1		2
Pacific	Pacific	571		825		35		30		Pacific	637		627		33		33
South Atlantic	South Atlantic	379		681		23		25		South Atlantic	503		497		26		26
West North Central	West North Central	124		198		8		7		West North Central	139		141		7		7
West South Central	West South Central	85		168		5		6		West South Central	128		131		7		7
		1,643		2,725		100	%	100	%		1,934		1,916		100	%	100	%
Less: allowance for credit losses	Less: allowance for credit losses	14		29						Less: allowance for credit losses	12		12
Total commercial mortgage loans held for investment		1,629		2,696
Commercial mortgage loans held for sale (1)		1,023		—
Total commercial mortgage loans		$	2,652	$	2,696
Total										Total	$	1,922	$	1,904

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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

Loans Percentage
June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020
(in millions)
Apartments $ 476 $ 713 29 % 26 %
Hotel 15 50 1 2
Industrial 268 427 17 16
Mixed use 54 87 3 3
Office 217 372 13 14
Retail 509 881 31 32
Other 104 195 6 7
1,643 2,725 100 % 100 %
Less: allowance for credit losses 14 29
Total commercial mortgage loans held for investment 1,629 2,696
Commercial mortgage loans held for sale (1)
1,023 —
Total commercial mortgage loans $ 2,652 $ 2,696

~~(1)~~ ~~See Note 1 for more information on the reinsurance transaction.~~


	Loans				Percentage
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
	(in millions)
Apartments	$	512	$	496	26	%	26	%
Hotel	15		14		1		1
Industrial	321		319		17		17
Mixed use	67		68		3		3
Office	266		271		14		14
Retail	617		617		32		32
Other	136		131		7		7
	1,934		1,916		100	%	100	%
Less: allowance for credit losses	12		12
Total	$	1,922	$	1,904

Syndicated Loans

The recorded investment in syndicated loans as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020 were $539~~2021 was $146 million and ~~$595~~$149 million, ~~respectively, and included $174 million and $595 million of loans that are classified as held for investment as of June 30, 2021 and December 31, 2020,~~ respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were ~~NaN and $3 million~~nil as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively.~~2021. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.

~~AMERIPRISE FINANCIAL, INC.~~

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

The tables below present the amortized cost basis of syndicated loans by origination year and internal risk ~~rating (excludes loans held for sale of $365 million and NaN as of June 30, 2021 and December 31, 2020, respectively):~~rating:


		June 30, 2021															March 31, 2022
Internal Risk Rating	Internal Risk Rating	2021		2020		2019		2018		2017		Prior		Total		Internal Risk Rating	2022		2021		2020		2019		2018		Prior		Total
		(in millions)															(in millions)
Risk 5	Risk 5	$	—	$	—	$	—	$	—	$	—	$	0	$	0	Risk 5	$	1	$	—	$	—	$	—	$	—	$	—	$	1
Risk 4	Risk 4	—		—		1		0		1		2		4		Risk 4	—		—		—		—		—		3		3
Risk 3	Risk 3	—		0		3		6		5		8		22		Risk 3	—		4		—		9		5		12		30
Risk 2	Risk 2	15		9		11		12		15		11		73		Risk 2	—		15		6		7		7		32		67
Risk 1	Risk 1	10		4		10		13		19		19		75		Risk 1	—		5		1		3		12		24		45
Total	Total	$	25	$	13	$	25	$	31	$	40	$	40	$	174	Total	$	1	$	24	$	7	$	19	$	24	$	71	$	146


		December 31, 2020															December 31, 2021
Internal Risk Rating	Internal Risk Rating	2020		2019		2018		2017		2016		Prior		Total		Internal Risk Rating	2021		2020		2019		2018		2017		Prior		Total
		(in millions)															(in millions)
Risk 5	Risk 5	$	—	$	—	$	—	$	—	$	—	$	3	$	3	Risk 5	$	—	$	—	$	1	$	—	$	—	$	—	$	1
Risk 4	Risk 4	—		—		4		9		—		10		23		Risk 4	—		—		—		—		1		2		3
Risk 3	Risk 3	—		9		8		25		13		25		80		Risk 3	—		—		4		5		5		6		20
Risk 2	Risk 2	30		57		62		69		14		41		273		Risk 2	15		4		12		10		18		12		71
Risk 1	Risk 1	17		32		47		58		22		40		216		Risk 1	8		3		3		11		16		13		54
Total	Total	$	47	$	98	$	121	$	161	$	49	$	119	$	595	Total	$	23	$	7	$	20	$	26	$	40	$	33	$	149

Financial Advisor Loans

The Company offers loans to financial advisors for transitional cost assistance. Repayment of the loan is highly dependent on the retention of the financial advisor. In the event a financial advisor is no longer affiliated with the Company, any unpaid balances become immediately due. Accordingly, the primary risk factor for advisor loans is termination status. The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was ~~$8 million and $7~~$5 million as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively.~~2021.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		June 30, 2021															March 31, 2022
Termination Status	Termination Status	2021		2020		2019		2018		2017		Prior		Total		Termination Status	2022		2021		2020		2019		2018		Prior		Total
		(in millions)															(in millions)
Active	Active	$	67	$	160	$	128	$	95	$	122	$	141	$	713	Active	$	40	$	131	$	142	$	114	$	86	$	212	$	725
Terminated	Terminated	1		—		—		0		1		8		10		Terminated	—		—		1		1		—		6		8
Total	Total	$	68	$	160	$	128	$	95	$	123	$	149	$	723	Total	$	40	$	131	$	143	$	115	$	86	$	218	$	733


		December 31, 2020															December 31, 2021
Termination Status	Termination Status	2020		2019		2018		2017		2016		Prior		Total		Termination Status	2021		2020		2019		2018		2017		Prior		Total
		(in millions)															(in millions)
Active	Active	$	171	$	137	$	101	$	127	$	83	$	86	$	705	Active	$	136	$	147	$	119	$	89	$	116	$	113	$	720
Terminated	Terminated	—		—		—		1		1		8		10		Terminated	1		1		—		—		—		6		8
Total	Total	$	171	$	137	$	101	$	128	$	84	$	94	$	715	Total	$	137	$	148	$	119	$	89	$	116	$	119	$	728

Consumer Loans

Credit Card Receivables

The credit cards are co-branded with Ameriprise Financial, Inc. and issued to the Company’s customers by a third party. FICO scores and delinquency rates are the primary credit quality indicators for the credit card portfolio. Delinquency rates are measured based on the number of days past due. Credit card receivables over 30 days past due were 1% of total credit card receivables as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~

~~AMERIPRISE FINANCIAL, INC.~~

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

2021.

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
> 800	> 800	$	28	$	28	> 800	$	28	$	30
750 - 799	750 - 799	24		23		750 - 799	23		24
700 - 749	700 - 749	24		25		700 - 749	23		25
650 - 699	650 - 699	14		15		650 - 699	14		14
< 650	< 650	4		5		< 650	5		5
Total	Total	$	94	$	96	Total	$	93	$	98

Policy Loans

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

Margin Loans

The margin loans balance was ~~$1.1 billion and $1.0~~$1.2 billion as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively.~~2021. The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. As of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the allowance for credit losses on margin loans was not material.

Pledged Asset Lines of Credit

The pledged asset lines of credit balance was ~~$350~~$520 million and ~~$224~~$467 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company monitors collateral supporting pledged asset lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there was 0no allowance for credit losses on pledged asset lines of credit.

Deposit ~~Receivable~~Receivables

~~The deposit receivable was $1.4~~Deposit receivables were $7.8 billion and $7.9 billion as of ~~both June 30, 2021~~March 31, 2022 and December 31, ~~2020. The deposit receivable is~~2021, respectively. Deposit receivables are fully collateralized by the fair value of the assets held in ~~a trust.~~trusts. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was 0no allowance for credit losses for the deposit ~~receivable~~receivables as of ~~both June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Troubled Debt Restructurings

There were 0no loans accounted for as a troubled debt restructuring by the Company during the ~~both~~ three months ended March 31, 2022 and ~~six months ended June 30, 2021 and 2020.~~2021. There are 0no commitments to lend additional funds to borrowers whose loans have been restructured.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. Deferred Acquisition Costs and Deferred Sales Inducement Costs

The balances of and changes in DAC were as follows:


		2021		2020			2022		2021
		(in millions)					(in millions)
Balance at January 1	Balance at January 1	$	2,532	$	2,698	Balance at January 1	$	2,782	$	2,532
Capitalization of acquisition costs	Capitalization of acquisition costs	138		108		Capitalization of acquisition costs	53		65
Amortization	Amortization	(68)		(264)		Amortization	(96)		(5)

Impact of change in net unrealized (gains) losses on securities	Impact of change in net unrealized (gains) losses on securities	48		(43)		Impact of change in net unrealized (gains) losses on securities	189		93

Balance at June 30		$	2,650	$	2,499
Balance at March 31						Balance at March 31	$	2,928	$	2,685

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


		2021		2020			2022		2021
		(in millions)					(in millions)
Balance at January 1	Balance at January 1	$	189	$	218	Balance at January 1	$	189	$	189
Capitalization of sales inducement costs		1		1

Amortization	Amortization	(7)		(18)		Amortization	(8)		(3)

Impact of change in net unrealized (gains) losses on securities	Impact of change in net unrealized (gains) losses on securities	5		(5)		Impact of change in net unrealized (gains) losses on securities	6		4
Balance at June 30		$	188	$	196
Balance at March 31						Balance at March 31	$	187	$	190

~~AMERIPRISE FINANCIAL, INC.~~

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

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

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Policyholder account balances	Policyholder account balances					Policyholder account balances
Fixed annuities (1)	Fixed annuities (1)	$	8,307	$	8,531	Fixed annuities (1)	$	8,002	$	8,117
Variable annuity fixed sub-accounts	Variable annuity fixed sub-accounts	5,052		5,104		Variable annuity fixed sub-accounts	4,951		4,990
Universal life (“UL”)/variable universal life (“VUL”) insurance	Universal life (“UL”)/variable universal life (“VUL”) insurance	3,111		3,122		Universal life (“UL”)/variable universal life (“VUL”) insurance	3,092		3,103
Indexed universal life (“IUL”) insurance	Indexed universal life (“IUL”) insurance	2,395		2,269		Indexed universal life (“IUL”) insurance	2,587		2,534
Structured variable annuities	Structured variable annuities	2,858		1,371		Structured variable annuities	4,885		4,440
Other life insurance	Other life insurance	588		605		Other life insurance	553		563
Total policyholder account balances	Total policyholder account balances	22,311		21,002		Total policyholder account balances	24,070		23,747

Future policy benefits	Future policy benefits					Future policy benefits
Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)	Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)	2,149		3,049		Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)	1,750		2,336
Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2)	Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2)	(20)		1		Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2)	(17)		(23)
Other annuity liabilities	Other annuity liabilities	196		211		Other annuity liabilities	96		67
Fixed annuity life contingent liabilities	Fixed annuity life contingent liabilities	1,323		1,370		Fixed annuity life contingent liabilities	1,254		1,278
Life and disability income insurance	Life and disability income insurance	1,165		1,187		Life and disability income insurance	1,125		1,139
Long term care insurance	Long term care insurance	5,658		5,722		Long term care insurance	5,485		5,664
UL/VUL and other life insurance additional liabilities	UL/VUL and other life insurance additional liabilities	1,263		1,259		UL/VUL and other life insurance additional liabilities	1,203		1,291
Total future policy benefits	Total future policy benefits	11,734		12,799		Total future policy benefits	10,896		11,752
Policy claims and other policyholders’ funds	Policy claims and other policyholders’ funds	177		191		Policy claims and other policyholders’ funds	259		251
Total policyholder account balances, future policy benefits and claims	Total policyholder account balances, future policy benefits and claims	$	34,222	$	33,992	Total policyholder account balances, future policy benefits and claims	$	35,225	$	35,750

(1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts.

(2) Includes the fair value of GMAB embedded derivatives that was a net asset as of ~~June 30,~~both March 31, 2022 and December 31, 2021 reported as a contra liability.

~~Separate account liabilities consisted of the following:~~

June 30, 2021 December 31, 2020
(in millions)
Variable annuity $ 82,584 $ 79,299
VUL insurance 8,998 8,226
Other insurance 33 31
Threadneedle investment liabilities 5,239 5,055
Total $ 96,854 $ 92,611

3026

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Separate account liabilities consisted of the following:


	March 31, 2022		December 31, 2021
	(in millions)
Variable annuity	$	75,921	$	82,862
VUL insurance	8,719		9,343
Other insurance	31		33
Threadneedle investment liabilities	4,998		5,253
Total	$	89,669	$	97,491

9. Variable Annuity and Insurance Guarantees

~~The majority~~Most of the variable annuity contracts ~~offered~~issued by the Company contain one or more guaranteed minimum death benefit (“GMDB”) ~~provisions. The Company also offers variable annuities with~~provisions or death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. ~~In addition, the~~The Company ~~offers contracts with~~discontinued new sales of substantially all GMWB and GMAB ~~provisions.~~at the end of 2021. The Company also previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

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

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


Variable Annuity Guarantees by Benefit Type (1)	Variable Annuity Guarantees by Benefit Type (1)	June 30, 2021							December 31, 2020							Variable Annuity Guarantees by Benefit Type (1)	March 31, 2022							December 31, 2021
		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		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	$	69,623	$	67,714	$	4	68	$	66,874	$	64,932	$	5	68	Return of premium	$	64,309	$	62,458	$	122	69	$	70,020	$	68,145	$	6	69
Five/six-year reset	Five/six-year reset	8,364		5,646		6		68	8,116		5,386		6		68	Five/six-year reset	7,814		5,125		40		69	8,309		5,612		6		68
One-year ratchet	One-year ratchet	6,256		5,933		8		71	6,094		5,763		8		71	One-year ratchet	5,689		5,375		222		72	6,177		5,858		13		71
Five-year ratchet	Five-year ratchet	1,463		1,409		1		67	1,436		1,381		—		67	Five-year ratchet	1,318		1,266		13		68	1,438		1,386		1		68
Other	Other	1,305		1,288		36		74	1,261		1,243		45		73	Other	1,190		1,175		99		74	1,302		1,286		38		74
Total — GMDB	Total — GMDB	$	87,011	$	81,990	$	55	68	$	83,781	$	78,705	$	64	68	Total — GMDB	$	80,320	$	75,399	$	496	69	$	87,246	$	82,287	$	64	69

GGU death benefit	GGU death benefit	$	1,242	$	1,187	$	182	72	$	1,183	$	1,126	$	162	71	GGU death benefit	$	1,173	$	1,112	$	164	72	$	1,260	$	1,198	$	184	72

GMIB	GMIB	$	192	$	178	$	5	71	$	187	$	173	$	6	71	GMIB	$	166	$	153	$	5	72	$	184	$	170	$	4	71
GMWB:	GMWB:															GMWB:
GMWB	GMWB	$	1,972	$	1,967	$	1	74	$	1,972	$	1,967	$	1	74	GMWB	$	1,724	$	1,719	$	2	75	$	1,900	$	1,895	$	1	75
GMWB for life	GMWB for life	52,130		52,064		163		69	50,142		50,057		185		69	GMWB for life	47,847		47,815		575		69	52,387		52,334		187		69
Total — GMWB	Total — GMWB	$	54,102	$	54,031	$	164	69	$	52,114	$	52,024	$	186	69	Total — GMWB	$	49,571	$	49,534	$	577	69	$	54,287	$	54,229	$	188	69

GMAB	GMAB	$	2,143	$	2,143	$	—	61	$	2,291	$	2,291	$	—	61	GMAB	$	1,771	$	1,771	$	3	62	$	2,005	$	2,005	$	—	62

(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.

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		June 30, 2021			December 31, 2020				March 31, 2022			December 31, 2021
		Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age		Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
		(in millions, except age)							(in millions, except age)
UL secondary guarantees	UL secondary guarantees	$	6,565	68	$	6,587	67	UL secondary guarantees	$	6,563	68	$	6,564	68

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

~~AMERIPRISE FINANCIAL, INC.~~

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

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


		GMDB & GGU		GMIB		GMWB (1)		GMAB (1)		UL			GMDB & GGU		GMIB		GMWB (1)		GMAB (1)		UL
		(in millions)
Balance at January 1, 2020		$	16	$	7	$	1,462	$	(39)	$	758
Balance at January 1, 2022												Balance at January 1, 2022	$	36	$	5	$	2,336	$	(23)	$	1,020
Incurred claims	Incurred claims	5		1		2,387		69		65		Incurred claims	—		—		(586)		6		31
Paid claims	Paid claims	(4)		(1)		—		—		(24)		Paid claims	(3)		—		—		—		(9)
Balance at June 30, 2020		$	17	$	7	$	3,849	$	30	$	799
Balance at March 31, 2022												Balance at March 31, 2022	$	33	$	5	$	1,750	$	(17)	$	1,042

Balance at January 1, 2021	Balance at January 1, 2021	$	24	$	6	$	3,049	$	1	$	916	Balance at January 1, 2021	$	24	$	6	$	3,049	$	1	$	916
Incurred claims	Incurred claims	9		0		(900)		(21)		69		Incurred claims	3		—		(1,570)		(23)		32
Paid claims	Paid claims	(2)		—		—		—		(16)		Paid claims	(1)		—		—		—		(8)
Balance at June 30, 2021		$	31	$	6	$	2,149	$	(20)	$	969
Balance at March 31, 2021												Balance at March 31, 2021	$	26	$	6	$	1,479	$	(22)	$	940

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

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

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Mutual funds:	Mutual funds:					Mutual funds:
Equity	Equity	$	48,376	$	45,947	Equity	$	46,511	$	49,183
Bond	Bond	25,684		26,073		Bond	21,640		24,998
Other	Other	8,151		6,911		Other	7,438		8,316
Total mutual funds	Total mutual funds	$	82,211	$	78,931	Total mutual funds	$	75,589	$	82,497

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10. Debt

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


		Outstanding Balance				Stated Interest Rate					Outstanding Balance				Stated Interest Rate
		June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
		(in millions)									(in millions)
Long-term debt:	Long-term debt:									Long-term debt:
Senior notes due 2022	Senior notes due 2022	$	500	$	500	3.0	%	3.0	%	Senior notes due 2022	$	—	$	500	—	%	3.0	%
Senior notes due 2023	Senior notes due 2023	750		750		4.0		4.0		Senior notes due 2023	750		750		4.0		4.0
Senior notes due 2024	Senior notes due 2024	550		550		3.7		3.7		Senior notes due 2024	550		550		3.7		3.7
Senior notes due 2025	Senior notes due 2025	500		500		3.0		3.0		Senior notes due 2025	500		500		3.0		3.0
Senior notes due 2026	Senior notes due 2026	500		500		2.9		2.9		Senior notes due 2026	500		500		2.9		2.9

Finance lease liabilities	Finance lease liabilities	44		44		N/A		N/A		Finance lease liabilities	37		40		N/A		N/A
Other		(11)		(13)		N/A		N/A
Other (1)										Other (1)	(7)		(8)		N/A		N/A
Total long-term debt	Total long-term debt	2,833		2,831						Total long-term debt	2,330		2,832

Short-term borrowings:	Short-term borrowings:									Short-term borrowings:
Federal Home Loan Bank (“FHLB”) advances	Federal Home Loan Bank (“FHLB”) advances	200		200		0.3		0.4		Federal Home Loan Bank (“FHLB”) advances	200		200		0.6	%	0.3	%
Total	Total	$	3,033	$	3,031					Total	$	2,530	$	3,032

~~AMERIPRISE FINANCIAL, INC.~~(1) Includes adjustments for net unamortized discounts, debt issuance costs and other lease obligations.

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

N/A Not Applicable

Long-Term Debt

The Company’s senior notes may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest.

~~Short-term~~The Company repaid $500 million principal amount of its 3.0% senior notes at maturity on March 22, 2022.

Short-Term Borrowings

The Company’s life insurance and bank subsidiaries are members of the FHLB of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities and residential mortgage backed securities as collateral to access these borrowings. The fair value of the securities pledged is recorded in ~~investments~~Investments and was ~~$0.9 billion and $1.3~~$1.2 billion of commercial mortgage backed securities as of both March 31, 2022 and ~~$580~~December 31, 2021, and $587 million and ~~$604~~$581 million, of residential mortgage backed securities, as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The remaining maturity of outstanding FHLB advances was less than three months as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on the outstanding borrowings as of the balance sheet date.

OnIn June ~~11,~~ 2021, the Company entered into an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $1.0 billion that expires in June 2026. Under the terms of the credit agreement for the facility, the Company may increase the amount of this facility up to $1.25 billion upon satisfaction of certain approval requirements. As of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had 0no borrowings outstanding and ~~had~~ $1 million of letters of credit issued against the facility. The Company’s credit facility contains various administrative, reporting, legal and financial covenants. The Company was in compliance with all such covenants as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

11. Fair Values of Assets and Liabilities

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

Valuation Hierarchy

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The three levels of the fair value hierarchy are defined as follows:

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

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

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

3330

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the balances of assets and liabilities of Ameriprise Financial measured at fair value on a recurring ~~basis:~~basis (See Note 4 for the balances of assets and liabilities for consolidated investment entities):


		June 30, 2021										March 31, 2022
		Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
		(in millions)										(in millions)
Assets	Assets										Assets
Cash equivalents	Cash equivalents	$	2,359	$	3,642	$	—	$	6,001		Cash equivalents	$	1,824	$	2,525	$	—	$	4,349
Available-for-Sale securities:	Available-for-Sale securities:										Available-for-Sale securities:
Corporate debt securities	Corporate debt securities	—		13,285		391		13,676			Corporate debt securities	—		8,885		497		9,382
Residential mortgage backed securities	Residential mortgage backed securities	—		9,682		—		9,682			Residential mortgage backed securities	—		11,695		—		11,695
Commercial mortgage backed securities	Commercial mortgage backed securities	—		6,178		—		6,178			Commercial mortgage backed securities	—		5,184		112		5,296
Asset backed securities	Asset backed securities	—		3,642		6		3,648			Asset backed securities	—		3,631		7		3,638
State and municipal obligations	State and municipal obligations	—		1,319		—		1,319			State and municipal obligations	—		1,001		—		1,001
U.S. government and agency obligations	U.S. government and agency obligations	1,326		—		—		1,326			U.S. government and agency obligations	1,160		—		—		1,160
Foreign government bonds and obligations	Foreign government bonds and obligations	—		223		—		223			Foreign government bonds and obligations	—		82		—		82
Other securities	Other securities	—		94		—		94			Other securities	—		76		—		76
Total Available-for-Sale securities	Total Available-for-Sale securities	1,326		34,423		397		36,146			Total Available-for-Sale securities	1,160		30,554		616		32,330

Investments at net asset value (“NAV”)	Investments at net asset value (“NAV”)							8		(1)	Investments at net asset value (“NAV”)							11		(1)
Trading and other securities	Trading and other securities	20		31		—		51			Trading and other securities	209		18		—		227
Separate account assets at NAV	Separate account assets at NAV							96,854		(1)	Separate account assets at NAV							89,669		(1)
Investments and cash equivalents segregated for regulatory purposes	Investments and cash equivalents segregated for regulatory purposes	765		—		—		765			Investments and cash equivalents segregated for regulatory purposes	599		—		—		599
Receivables:											Receivables:
Fixed deferred indexed annuity ceded embedded derivatives											Fixed deferred indexed annuity ceded embedded derivatives	—		—		55		55
Other assets:	Other assets:										Other assets:
Interest rate derivative contracts	Interest rate derivative contracts	2		1,415		—		1,417			Interest rate derivative contracts	3		736		—		739
Equity derivative contracts	Equity derivative contracts	448		4,230		—		4,678			Equity derivative contracts	149		3,707		—		3,856
Credit derivative contracts	Credit derivative contracts	—		1		—		1			Credit derivative contracts	—		45		—		45
Foreign exchange derivative contracts	Foreign exchange derivative contracts	2		22		—		24			Foreign exchange derivative contracts	2		28		—		30
Total other assets	Total other assets	452		5,668		—		6,120			Total other assets	154		4,516		—		4,670
Total assets at fair value	Total assets at fair value	$	4,922	$	43,764	$	397	$	145,945		Total assets at fair value	$	3,946	$	37,613	$	671	$	131,910


Liabilities	Liabilities										Liabilities
Policyholder account balances, future policy benefits and claims:	Policyholder account balances, future policy benefits and claims:										Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	$	—	$	4	$	54	$	58		Fixed deferred indexed annuity embedded derivatives	$	—	$	5	$	52	$	57
IUL embedded derivatives	IUL embedded derivatives	—		—		928		928			IUL embedded derivatives	—		—		848		848
GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	—		—		1,373		1,373		(2)	GMWB and GMAB embedded derivatives	—		—		828		828		(2)
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	—		—		214		214			Structured variable annuity embedded derivatives	—		—		280		280
Total policyholder account balances, future policy benefits and claims	Total policyholder account balances, future policy benefits and claims	—		4		2,569		2,573		(3)	Total policyholder account balances, future policy benefits and claims	—		5		2,008		2,013		(3)
Customer deposits	Customer deposits	—		6		—		6			Customer deposits	—		2		—		2
Other liabilities:	Other liabilities:										Other liabilities:
Interest rate derivative contracts	Interest rate derivative contracts	—		558		—		558			Interest rate derivative contracts	7		308		—		315
Equity derivative contracts	Equity derivative contracts	160		3,790		—		3,950			Equity derivative contracts	259		3,525		—		3,784
Credit derivative contracts		—		7		—		7

Foreign exchange derivative contracts	Foreign exchange derivative contracts	1		5		—		6			Foreign exchange derivative contracts	—		3		—		3
Other	Other	8		3		44		55			Other	204		5		62		271
Total other liabilities	Total other liabilities	169		4,363		44		4,576			Total other liabilities	470		3,841		62		4,373
Total liabilities at fair value	Total liabilities at fair value	$	169	$	4,373	$	2,613	$	7,155		Total liabilities at fair value	$	470	$	3,848	$	2,070	$	6,388

3431

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


		December 31, 2020										December 31, 2021
		Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
		(in millions)										(in millions)
Assets	Assets										Assets
Cash equivalents	Cash equivalents	$	2,935	$	2,506	$	—	$	5,441		Cash equivalents	$	2,341	$	3,478	$	—	$	5,819
Available-for-Sale securities:	Available-for-Sale securities:										Available-for-Sale securities:
Corporate debt securities	Corporate debt securities	—		12,902		772		13,674			Corporate debt securities	—		9,430		502		9,932
Residential mortgage backed securities	Residential mortgage backed securities	—		10,020		9		10,029			Residential mortgage backed securities	—		10,944		—		10,944
Commercial mortgage backed securities	Commercial mortgage backed securities	—		6,088		—		6,088			Commercial mortgage backed securities	—		4,951		35		4,986
Asset backed securities	Asset backed securities	—		3,297		32		3,329			Asset backed securities	—		3,647		7		3,654
State and municipal obligations	State and municipal obligations	—		1,384		—		1,384			State and municipal obligations	—		1,092		—		1,092
U.S. government and agency obligations	U.S. government and agency obligations	1,456		—		—		1,456			U.S. government and agency obligations	1,301		—		—		1,301
Foreign government bonds and obligations	Foreign government bonds and obligations	—		262		—		262			Foreign government bonds and obligations	—		92		—		92
Other securities	Other securities	—		61		—		61			Other securities	—		49		—		49
Total Available-for-Sale securities	Total Available-for-Sale securities	1,456		34,014		813		36,283			Total Available-for-Sale securities	1,301		30,205		544		32,050

Investments at NAV	Investments at NAV							8		(1)	Investments at NAV							11		(1)
Trading and other securities	Trading and other securities	61		27		—		88			Trading and other securities	217		25		—		242
Separate account assets at NAV	Separate account assets at NAV							92,611		(1)	Separate account assets at NAV							97,491		(1)
Investments and cash equivalents segregated for regulatory purposes	Investments and cash equivalents segregated for regulatory purposes	600		—		—		600			Investments and cash equivalents segregated for regulatory purposes	600		—		—		600
Receivables:											Receivables:
Fixed deferred indexed annuity ceded embedded derivatives											Fixed deferred indexed annuity ceded embedded derivatives	—		—		59		59
Other assets:	Other assets:										Other assets:
Interest rate derivative contracts	Interest rate derivative contracts	1		1,754		—		1,755			Interest rate derivative contracts	1		1,251		—		1,252
Equity derivative contracts	Equity derivative contracts	408		3,682		—		4,090			Equity derivative contracts	158		4,135		—		4,293
Credit derivative contracts	Credit derivative contracts	—		2		—		2			Credit derivative contracts	—		9		—		9
Foreign exchange derivative contracts	Foreign exchange derivative contracts	1		22		—		23			Foreign exchange derivative contracts	1		19		—		20
Total other assets	Total other assets	410		5,460		—		5,870			Total other assets	160		5,414		—		5,574
Total assets at fair value	Total assets at fair value	$	5,462	$	42,007	$	813	$	140,901		Total assets at fair value	$	4,619	$	39,122	$	603	$	141,846


Liabilities	Liabilities										Liabilities
Policyholder account balances, future policy benefits and claims:	Policyholder account balances, future policy benefits and claims:										Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	$	—	$	3	$	49	$	52		Fixed deferred indexed annuity embedded derivatives	$	—	$	5	$	56	$	61
IUL embedded derivatives	IUL embedded derivatives	—		—		935		935			IUL embedded derivatives	—		—		905		905
GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	—		—		2,316		2,316		(4)	GMWB and GMAB embedded derivatives	—		—		1,486		1,486		(4)
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	—		—		70		70			Structured variable annuity embedded derivatives	—		—		406		406
Total policyholder account balances, future policy benefits and claims	Total policyholder account balances, future policy benefits and claims	—		3		3,370		3,373		(5)	Total policyholder account balances, future policy benefits and claims	—		5		2,853		2,858		(5)
Customer deposits	Customer deposits	—		8		—		8			Customer deposits	—		4		—		4
Other liabilities:	Other liabilities:										Other liabilities:
Interest rate derivative contracts	Interest rate derivative contracts	—		734		—		734			Interest rate derivative contracts	1		467		—		468
Equity derivative contracts	Equity derivative contracts	183		3,388		—		3,571			Equity derivative contracts	101		3,653		—		3,754
Credit derivative contracts		—		1		—		1

Foreign exchange derivative contracts	Foreign exchange derivative contracts	2		4		—		6			Foreign exchange derivative contracts	1		—		—		1
Other	Other	2		3		43		48			Other	212		4		61		277
Total other liabilities	Total other liabilities	187		4,130		43		4,360			Total other liabilities	315		4,124		61		4,500
Total liabilities at fair value	Total liabilities at fair value	$	187	$	4,141	$	3,413	$	7,741		Total liabilities at fair value	$	315	$	4,133	$	2,914	$	7,362

(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 ~~$1.5~~$1.0 billion of individual contracts in a liability position and ~~$154~~$204 million of individual contracts in an asset position (recorded as a contra liability) as of ~~June 30, 2021.~~March 31, 2022.

(3) The Company’s adjustment for nonperformance risk resulted in a ~~$547~~$607 million cumulative decrease to the embedded derivatives as of ~~June 30, 2021.~~March 31, 2022.

(4) The fair value of the GMWB and GMAB embedded derivatives included ~~$2.4~~$1.6 billion of individual contracts in a liability position and ~~$67~~$133 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, ~~2020.~~2021.

(5) The Company’s adjustment for nonperformance risk resulted in a ~~$727~~$598 million cumulative decrease to the embedded derivatives as of December 31, ~~2020.~~2021.

3532

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		Available-for-Sale Securities									Available-for-Sale Securities									Receivables
		Corporate Debt Securities		Residential Mortgage Backed Securities		Asset Backed Securities		Total			Corporate Debt Securities				Commercial Mortgage Backed Securities	Asset Backed Securities				Total	Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
		(in millions)								(in millions)
Balance, April 1, 2021		$	812	$	87	$	30	$	929
Balance at January 1, 2022												Balance at January 1, 2022	$	502		$	35	$	7		$	544		$	59
Total gains (losses) included in:	Total gains (losses) included in:											Total gains (losses) included in:

Net income												Net income	—			—		—			—		(1)	(3)
Other comprehensive income (loss)	Other comprehensive income (loss)	2		—		—		2				Other comprehensive income (loss)	(22)			—		—			(22)			—
Purchases	Purchases	21		—		—		21				Purchases	23			112		—			135			—

Settlements	Settlements	(28)		—		—		(28)				Settlements	(6)			—		—			(6)			(1)

Transfers out of Level 3	Transfers out of Level 3	(416)		(87)		(24)		(527)				Transfers out of Level 3	—			(35)		—			(35)			—
Balance, June 30, 2021		$	391	$	0	$	6	$	397
Balance at March 31, 2022												Balance at March 31, 2022	$	497		$	112	$	7		$	616		$	55

Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2021		$	2	$	—	$	—	$	2
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2022												Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2022	$	(21)		$	—	$	—		$	(21)		$	—

Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
Balance, April 1, 2021 $ 52 $ 949 $ 715 $ 124 $ 1,840 $ 43
Total (gains) losses included in:
Net income 2 (2) 8 (2) 525 (3) 101 (3) 636 1 (4)
Issues — (1) 89 (1) 87 4
Settlements — (28) 44 (10) 6 (4)
Balance, June 30, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 $ 44
Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2021 $ — $ 8 (2) $ 529 (3) $ — $ 537 $ —

Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total
(in millions)
Balance, April 1, 2020 $ 734 $ 17 $ 17 $ 768
Total gains (losses) included in:
Net income (1) — — (1) (1)
Other comprehensive income (loss) 14 1 (1) 14
Purchases — 187 — 187
Settlements (3) — (1) (4)
Balance, June 30, 2020 $ 744 $ 205 $ 15 $ 964
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2020 $ (1) $ — $ — $ (1) (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2020 $ 14 $ 1 $ (1) $ 14


	Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities
	Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			GMWB and GMAB Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
	(in millions)
Balance at January 1, 2022	$	56		$	905		$	1,486		$	406		$	2,853	$	61
Total (gains) losses included in:
Net income	(3)		(2)	(32)		(2)	(679)		(3)	(124)		(3)	(838)		—		(4)
Other comprehensive income (loss)	—			—			—			—			—		(1)
Issues	—			—			87			4			91		8
Settlements	(1)			(25)			(66)			(6)			(98)		(6)
Balance at March 31, 2022	$	52		$	848		$	828		$	280		$	2,008	$	62

Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2022	$	—		$	(32)	(2)	$	(671)	(3)	$	—		$	(703)	$	—

3633

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
Balance, April 1, 2020 $ 33 $ 725 $ 3,276 $ (9) $ 4,025 $ 42
Total (gains) losses included in:
Net income 7 (2) 148 (2) (224) (3) 16 (3) (53) 1 (4)
Issues 1 30 86 2 119 8
Settlements — (21) (9) — (30) (3)
Balance, June 30, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 $ 48
Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2020 $ — $ 148 (2) $ (204) (3) $ — $ (56) $ —


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


Settlements	(1)		—		(1)		(2)


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

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

Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total
(in millions)
Balance, January 1, 2021 $ 772 $ 9 $ 32 $ 813
Total gains (losses) included in:
Net income — — (1) (1) (1)
Other comprehensive income (loss) (3) — — (3)
Purchases 67 78 — 145
Settlements (29) — (1) (30)
Transfers out of Level 3 (416) (87) (24) (527)
Balance, June 30, 2021 $ 391 $ 0 $ 6 $ 397
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2021 $ — $ — $ (1) $ (1) (1)

Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43
Total (gains) losses included in:
Net income 6 (2) 37 (2) (1,204) (3) 175 (3) (986) 1 (4)
Issues — 4 179 (15) 168 6
Settlements (1) (48) 82 (16) 17 (6)
Balance, June 30, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 $ 44
Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2021 $ — $ 37 (2) $ (1,176) (3) $ — $ (1,139) $ —

~~AMERIPRISE FINANCIAL, INC.~~

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

Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total
(in millions)
Balance, January 1, 2020 $ 750 $ 17 $ 19 $ 786
Total gains (losses) included in:
Net income (1) — (1) (2) (1)
Other comprehensive income (loss) 8 1 (2) 7
Purchases 5 187 — 192
Settlements (18) — (1) (19)
Balance, June 30, 2020 $ 744 $ 205 $ 15 $ 964
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2020 $ (1) $ — $ (1) $ (2) (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2020 $ 8 $ 1 $ (2) $ 7


		Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities				Policyholder Account Balances, Future Policy Benefits and Claims														Other Liabilities
		Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			GMWB and GMAB Embedded Derivatives			Structured Annuity Embedded Derivatives			Total						Fixed Deferred Indexed Annuity Embedded Derivatives			IUL Embedded Derivatives			GMWB and GMAB Embedded Derivatives			Structured Variable Annuity Embedded Derivatives			Total
		(in millions)																		(in millions)
Balance, January 1, 2020		$	43		$	881		$	763		$	0		$	1,687	$	44
Balance at January 1, 2021																			Balance at January 1, 2021	$	49		$	935		$	2,316		$	70		$	3,370	$	43
Total (gains) losses included in:	Total (gains) losses included in:																		Total (gains) losses included in:
Net income	Net income	(5)		(2)	3		(2)	2,196		(3)	13		(3)	2,207		(1)		(4)	Net income	4		(2)	29		(2)	(1,729)		(3)	75		(3)	(1,621)		—		(4)
Issues	Issues	3			38			174			(4)			211		10			Issues	—			5			90			(15)			80		2
Settlements	Settlements	—			(40)			(4)			—			(44)		(5)			Settlements	(1)			(20)			38			(6)			11		(2)
Balance, June 30, 2020		$	41		$	882		$	3,129		$	9		$	4,061	$	48
Balance at March 31, 2021																			Balance at March 31, 2021	$	52		$	949		$	715		$	124		$	1,840	$	43

Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2020		$	—		$	3	(2)	$	2,219	(3)	$	—		$	2,222	$	—
Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2021																			Changes in unrealized (gains) losses in net income relating to liabilities held at March 31, 2021	$	—		$	29	(2)	$	(1,705)	(3)	$	—		$	(1,676)	$	—

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

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

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

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

The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was ~~$27~~$25 million and ~~$(1.2) billion,~~$(167) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively.~~

The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $(139) million and $569 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the six months ended June 30, 2021 and 2020, respectively.

Securities transferred from Level 3 primarily represent securities with fair values that are obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant. Securities transferred to Level 3 represent securities with fair values that are now based on a single non-binding broker quote.

3834

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		June 30, 2021										March 31, 2022
		Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average		Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average
		(in millions)										(in millions)
Corporate debt securities (private placements)	Corporate debt securities (private placements)	$	391	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	0.8	%	–	2.3%	1.1%	Corporate debt securities (private placements)	$	487	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	0.9	%	–	3.0%	1.3%
Asset backed securities	Asset backed securities	$	1	Discounted cash flow	Annual short-term default rate (2)	5.4%				5.4%	Asset backed securities	$	2	Discounted cash flow	Annual short-term default rate (2)	0.8%				0.8%
					Annual long-term default rate (2)	4.00 %				4.00 %					Annual long-term default rate (2)	3.5%				3.5%
					Discount rate	13.00 %				13.00 %					Discount rate	13.0%				13.0%
					Constant prepayment rate	10.00 %				10.00 %					Constant prepayment rate	10.0%				10.0%
					Loss recovery	63.60 %				63.60 %					Loss recovery	63.6%				63.6%
Fixed deferred indexed annuity ceded embedded derivatives											Fixed deferred indexed annuity ceded embedded derivatives	$	55	Discounted cash flow	Surrender rate (4)	0.0	%	–	66.8%	1.4%
IUL embedded derivatives	IUL embedded derivatives	$	928	Discounted cash flow	Nonperformance risk (3)	60 bps				60 bps	IUL embedded derivatives	$	848	Discounted cash flow	Nonperformance risk (3)	85 bps				85 bps
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	$	54	Discounted cash flow	Surrender rate (4)	0.0	%	–	66.8%	1.9%	Fixed deferred indexed annuity embedded derivatives	$	52	Discounted cash flow	Surrender rate (4)	0.0	%	–	66.8%	1.4%
					Nonperformance risk (3)	60 bps				60 bps					Nonperformance risk (3)	85 bps				85 bps
GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	$	1,373	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%	GMWB and GMAB embedded derivatives	$	828	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%
					Surrender rate (4)	0.1	%	–	73.5%	3.8%					Surrender rate (4)	0.1	%	–	55.7%	3.6%
					Market volatility (7) (8)	4.0	%	–	16.6%	10.3%					Market volatility (7) (8)	4.3	%	–	16.5%	10.9%
					Nonperformance risk (3)	60 bps				60 bps					Nonperformance risk (3)	85 bps				85 bps
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	$	214	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%	Structured variable annuity embedded derivatives	$	280	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%
					Nonperformance risk (3)	60 bps				60 bps					Nonperformance risk (3)	85 bps				85 bps
Contingent consideration liabilities	Contingent consideration liabilities	$	44	Discounted cash flow	Discount rate (9)	0.0	%	–	9.0%	3.2%	Contingent consideration liabilities	$	62	Discounted cash flow	Discount rate (9)	0.0	%	–	0.0%	0.0%


		December 31, 2020										December 31, 2021
		Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average		Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average
		(in millions)										(in millions)
Corporate debt securities (private placements)	Corporate debt securities (private placements)	$	772	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	1.0	%	–	3.3%	1.5%	Corporate debt securities (private placements)	$	502	Discounted cash flow	Yield/spread to U.S. Treasuries (1)	0.8	%	–	2.4%	1.1%
Asset backed securities	Asset backed securities	$	3	Discounted cash flow	Annual short-term default rate (2)	2.9%		–	3.0%	2.9%	Asset backed securities	$	2	Discounted cash flow	Annual short-term default rate (2)	0.8%				0.8%
					Annual long-term default rate (2)	3.5%		–	4.5%	3.8%					Annual long-term default rate (2)	3.5%				3.5%
					Discount rate	13.0%				13.0%					Discount rate	12.0%				12.0%
					Constant prepayment rate	10.0%				10.0%					Constant prepayment rate	10.0%				10.0%
					Loss recovery	63.6%				63.6%					Loss recovery	63.6%				63.6%
Fixed deferred indexed annuity ceded embedded derivatives											Fixed deferred indexed annuity ceded embedded derivatives	$	59	Discounted cash flow	Surrender rate (4)	0.0	%	–	66.8%	1.4%
IUL embedded derivatives	IUL embedded derivatives	$	935	Discounted cash flow	Nonperformance risk (3)	65 bps				65 bps	IUL embedded derivatives	$	905	Discounted cash flow	Nonperformance risk (3)	65 bps				65 bps
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	$	49	Discounted cash flow	Surrender rate (4)	0.0	%	–	50.0%	1.2%	Fixed deferred indexed annuity embedded derivatives	$	56	Discounted cash flow	Surrender rate (4)	0.0	%	–	66.8%	1.4%
					Nonperformance risk (3)	65 bps				65 bps					Nonperformance risk (3)	65 bps				65 bps
GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	$	2,316	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%	GMWB and GMAB embedded derivatives	$	1,486	Discounted cash flow	Utilization of guaranteed withdrawals (5) (6)	0.0	%	–	48.0%	10.6%
					Surrender rate (4)	0.1	%	–	73.5%	3.8%					Surrender rate (4)	0.1	%	–	55.7%	3.6%
					Market volatility (7) (8)	4.3	%	–	17.1%	11.0%					Market volatility (7) (8)	4.3	%	–	16.8%	10.8%
					Nonperformance risk (3)	65 bps				65 bps					Nonperformance risk (3)	65 bps				65 bps
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	$	70	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%	Structured variable annuity embedded derivatives	$	406	Discounted cash flow	Surrender rate (4)	0.8	%	–	40.0%	0.9%
					Nonperformance risk (3)	65 bps				65 bps					Nonperformance risk (3)	65 bps				65 bps
Contingent consideration liabilities	Contingent consideration liabilities	$	43	Discounted cash flow	Discount rate (9)	0.0%		–	9.0%	3.1%	Contingent consideration liabilities	$	61	Discounted cash flow	Discount rate (9)	0.0	%	–	0.0%	0.0%

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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

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

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

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

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

~~AMERIPRISE FINANCIAL, INC.~~

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

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

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

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

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

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

Uncertainty of Fair Value Measurements

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

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

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

Significant increases (decreases) in the surrender rate used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement.

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

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

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

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

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

Determination of Fair Value

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

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

Assets

Cash Equivalents

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

realization.

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

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

Level 1 securities primarily include equity securities and U.S. Treasuries.

Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, state and municipal obligations, ~~and~~ foreign government securities and other securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can

~~AMERIPRISE FINANCIAL, INC.~~

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

include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active.

Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities with fair value typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of certain asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in certain asset backed securities is classified as Level 3.

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

Separate Account Assets

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

Investments and Cash Equivalents Segregated for Regulatory Purposes

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

Receivables

During the third quarter of 2021, the Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative. The Company uses discounted cash flow models to determine the fair value of these ceded embedded derivatives. The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates. Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3.

Other Assets

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of ~~both June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. See Note 12 and Note 13 for further information on the credit risk of derivative instruments and related collateral.

Liabilities

Policyholder Account Balances, Future Policy Benefits and Claims

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

The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value as the present value of future expected benefit payments less the present value of future

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

expected rider fees attributable to the embedded derivative feature. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions that include margins for risk, all of which the Company believes a market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in ~~policyholder~~Policyholder account balances, future policy benefits and claims.

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

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

~~AMERIPRISE FINANCIAL, INC.~~

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

~~unobservable~~ estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption, ~~to the fair value,~~ the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.

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

Customer Deposits

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

Other Liabilities

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of ~~both June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. See Note 12 and Note 13 for further information on the credit risk of derivative instruments and related collateral.

Securities sold but not yet purchased represent obligations of the Company to deliver specified securities that it does not yet own, creating a liability to purchase the security in the market at prevailing prices. When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, or other model-based valuation techniques such as the present value of cash flows. Level 1 securities sold but not yet purchased primarily include ~~U.S~~equity securities and U.S. Treasuries traded in active markets. Level 2 securities sold but not yet purchased primarily include corporate bonds.

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

Fair Value on a Nonrecurring Basis

The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was ~~$100~~$87 million and ~~$101~~$93 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and is classified as Level 3 in the fair value hierarchy.

As of June 30, 2021, the Company classified certain commercial mortgage loans and syndicated loans as loans held for sale related to the reinsurance transaction. A portion of the commercial mortgage loans and syndicated loans required a valuation allowance to adjust their carrying amounts to the lower of amortized cost or fair value. The balance of commercial mortgage loans and syndicated loans held for sale measured at fair value on a nonrecurring basis was $101 million and $265 million, respectively, as of June 30, 2021, and are classified as Level 2 in the fair value hierarchy. See Note 1 for more information on the reinsurance transaction.

4238

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

~~Asset~~Assets and Liabilities Not Reported at Fair Value

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


		June 30, 2021											March 31, 2022
		Carrying Value		Fair Value									Carrying Value		Fair Value
				Level 1		Level 2		Level 3		Total					Level 1		Level 2		Level 3		Total
		(in millions)											(in millions)
Financial Assets	Financial Assets											Financial Assets
Mortgage loans, net	Mortgage loans, net	$	2,576	$	—	$	983	$	1,694	$	2,677	Mortgage loans, net	$	1,971	$	—	$	45	$	1,890	$	1,935
Policy loans	Policy loans	840		—		840		—		840		Policy loans	833		—		833		—		833
Receivables	Receivables	3,732		107		1,481		2,356		3,944		Receivables	10,482		178		1,744		8,357		10,279
Restricted and segregated cash	Restricted and segregated cash	1,617		1,617		—		—		1,617		Restricted and segregated cash	2,069		2,069		—		—		2,069
Other investments and assets	Other investments and assets	415		—		380		37		417		Other investments and assets	374		—		323		51		374

Financial Liabilities	Financial Liabilities											Financial Liabilities
Policyholder account balances, future policy benefits and claims	Policyholder account balances, future policy benefits and claims	$	11,143	$	—	$	—	$	12,300	$	12,300	Policyholder account balances, future policy benefits and claims	$	12,841	$	—	$	—	$	12,678	$	12,678
Investment certificate reserves	Investment certificate reserves	5,743		—		—		5,740		5,740		Investment certificate reserves	5,195		—		—		5,175		5,175
Banking and brokerage deposits	Banking and brokerage deposits	12,054		12,054		—		—		12,054		Banking and brokerage deposits	16,853		16,853		—		—		16,853
Separate account liabilities — investment contracts	Separate account liabilities — investment contracts	5,623		—		5,623		—		5,623		Separate account liabilities — investment contracts	5,368		—		5,368		—		5,368
Debt and other liabilities	Debt and other liabilities	3,164		155		3,195		11		3,361		Debt and other liabilities	2,776		269		2,517		8		2,794


		December 31, 2020											December 31, 2021
		Carrying Value		Fair Value									Carrying Value		Fair Value
				Level 1		Level 2		Level 3		Total					Level 1		Level 2		Level 3		Total
		(in millions)											(in millions)
Financial Assets	Financial Assets											Financial Assets
Mortgage loans, net	Mortgage loans, net	$	2,718	$	—	$	22	$	2,852	$	2,874	Mortgage loans, net	$	1,953	$	—	$	49	$	1,990	$	2,039
Policy loans	Policy loans	846		—		846		—		846		Policy loans	835		—		835		—		835
Receivables	Receivables	3,563		147		1,258		2,398		3,803		Receivables	10,509		135		1,669		9,404		11,208
Restricted and segregated cash	Restricted and segregated cash	1,958		1,958		—		—		1,958		Restricted and segregated cash	2,195		2,195		—		—		2,195
Other investments and assets	Other investments and assets	732		—		672		62		734		Other investments and assets	368		—		319		49		368

Financial Liabilities	Financial Liabilities											Financial Liabilities
Policyholder account balances, future policy benefits and claims	Policyholder account balances, future policy benefits and claims	$	9,990	$	—	$	—	$	11,686	$	11,686	Policyholder account balances, future policy benefits and claims	$	12,342	$	—	$	—	$	13,264	$	13,264
Investment certificate reserves	Investment certificate reserves	6,752		—		—		6,752		6,752		Investment certificate reserves	5,297		—		—		5,290		5,290
Banking and brokerage deposits	Banking and brokerage deposits	10,891		10,891		—		—		10,891		Banking and brokerage deposits	14,931		14,931		—		—		14,931
Separate account liabilities — investment contracts	Separate account liabilities — investment contracts	5,406		—		5,406		—		5,406		Separate account liabilities — investment contracts	5,657		—		5,657		—		5,657
Debt and other liabilities	Debt and other liabilities	3,214		205		3,253		11		3,469		Debt and other liabilities	3,214		206		3,129		9		3,344

Receivables include ~~the~~ deposit ~~receivable,~~receivables, brokerage margin loans, securities borrowed, pledged asset lines of credit, and loans to financial advisors. Restricted and segregated cash includes cash segregated under federal and other regulations held in special reserve bank accounts for the exclusive benefit of the Company’s brokerage customers. Other investments and assets primarily include syndicated loans, credit card receivables, certificate of deposits with original or remaining maturities at the time of purchase of more than 90 days, the Company’s membership in the FHLB and investments related to the Community Reinvestment Act. See Note 6 for additional information on mortgage loans, policy loans, syndicated loans, credit card receivables and ~~the~~ deposit ~~receivable.~~receivables.

Policyholder account balances, future policy benefits and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts. See Note 8 for additional information on these liabilities. Investment certificate reserves represent customer deposits for fixed rate certificates and stock market certificates. Banking and brokerage deposits are amounts payable to customers related to free credit balances, funds deposited by customers and funds accruing to customers as a result of trades or contracts. Separate account liabilities are primarily investment contracts in pooled pension funds offered by Threadneedle. Debt and other liabilities include the Company’s long-term debt, short-term borrowings, securities loaned and future funding commitments to affordable housing partnerships and other real estate partnerships. See Note 10 for further information on the Company’s long-term debt and short-term borrowings.

4339

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

12. Offsetting Assets and Liabilities

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

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

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


		June 30, 2021															March 31, 2022
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
								Financial Instruments (1)		Cash Collateral		Securities Collateral											Financial Instruments (1)		Cash Collateral		Securities Collateral
		(in millions)															(in millions)
Derivatives:	Derivatives:															Derivatives:
OTC	OTC	$	5,688	$	—	$	5,688	$	(3,970)	$	(1,260)	$	(409)	$	49	OTC	$	4,416	$	—	$	4,416	$	(3,271)	$	(1,089)	$	—	$	56
OTC cleared	OTC cleared	103		—		103		(50)		—		—		53		OTC cleared	156		—		156		(82)		—		—		74
Exchange-traded	Exchange-traded	329		—		329		(101)		(198)		—		30		Exchange-traded	98		—		98		(89)		—		—		9
Total derivatives	Total derivatives	6,120		—		6,120		(4,121)		(1,458)		(409)		132		Total derivatives	4,670		—		4,670		(3,442)		(1,089)		—		139
Securities borrowed	Securities borrowed	107		—		107		(36)		—		(69)		2		Securities borrowed	178		—		178		(64)		—		(111)		3
Total	Total	$	6,227	$	—	$	6,227	$	(4,157)	$	(1,458)	$	(478)	$	134	Total	$	4,848	$	—	$	4,848	$	(3,506)	$	(1,089)	$	(111)	$	142


		December 31, 2020															December 31, 2021
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
								Financial Instruments (1)		Cash Collateral		Securities Collateral											Financial Instruments (1)		Cash Collateral		Securities Collateral
		(in millions)															(in millions)
Derivatives:	Derivatives:															Derivatives:
OTC	OTC	$	5,501	$	—	$	5,501	$	(3,862)	$	(1,287)	$	(315)	$	37	OTC	$	5,387	$	—	$	5,387	$	(3,613)	$	(1,637)	$	(114)	$	23
OTC cleared	OTC cleared	58		—		58		(25)		—		—		33		OTC cleared	88		—		88		(41)		—		—		47
Exchange-traded	Exchange-traded	311		—		311		(91)		(165)		—		55		Exchange-traded	99		—		99		(91)		—		—		8
Total derivatives	Total derivatives	5,870		—		5,870		(3,978)		(1,452)		(315)		125		Total derivatives	5,574		—		5,574		(3,745)		(1,637)		(114)		78
Securities borrowed	Securities borrowed	147		—		147		(43)		—		(103)		1		Securities borrowed	135		—		135		(41)		—		(91)		3
Total	Total	$	6,017	$	—	$	6,017	$	(4,021)	$	(1,452)	$	(418)	$	126	Total	$	5,709	$	—	$	5,709	$	(3,786)	$	(1,637)	$	(205)	$	81

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

4440

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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


		June 30, 2021															March 31, 2022
		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
								Financial Instruments (1)		Cash Collateral		Securities Collateral											Financial Instruments (1)		Cash Collateral		Securities Collateral
		(in millions)															(in millions)
Derivatives:	Derivatives:															Derivatives:
OTC	OTC	$	4,368	$	—	$	4,368	$	(3,970)	$	(84)	$	(301)	$	13	OTC	$	3,839	$	—	$	3,839	$	(3,271)	$	(169)	$	(393)	$	6
OTC cleared	OTC cleared	50		—		50		(50)		—		—		—		OTC cleared	82		—		82		(82)		—		—		—
Exchange-traded	Exchange-traded	102		—		102		(101)		—		—		1		Exchange-traded	181		—		181		(89)		(89)		—		3
Total derivatives	Total derivatives	4,520		—		4,520		(4,121)		(84)		(301)		14		Total derivatives	4,102		—		4,102		(3,442)		(258)		(393)		9
Securities loaned	Securities loaned	155		—		155		(36)		—		(115)		4		Securities loaned	269		—		269		(64)		—		(197)		8
Total	Total	$	4,675	$	—	$	4,675	$	(4,157)	$	(84)	$	(416)	$	18	Total	$	4,371	$	—	$	4,371	$	(3,506)	$	(258)	$	(590)	$	17


		December 31, 2020															December 31, 2021
		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount
								Financial Instruments (1)		Cash Collateral		Securities Collateral											Financial Instruments (1)		Cash Collateral		Securities Collateral
		(in millions)															(in millions)
Derivatives:	Derivatives:															Derivatives:
OTC	OTC	$	4,192	$	—	$	4,192	$	(3,862)	$	(1)	$	(327)	$	2	OTC	$	4,091	$	—	$	4,091	$	(3,613)	$	(183)	$	(292)	$	3
OTC cleared	OTC cleared	25		—		25		(25)		—		—		—		OTC cleared	41		—		41		(41)		—		—		—
Exchange-traded	Exchange-traded	95		—		95		(91)		—		—		4		Exchange-traded	91		—		91		(91)		—		—		—
Total derivatives	Total derivatives	4,312		—		4,312		(3,978)		(1)		(327)		6		Total derivatives	4,223		—		4,223		(3,745)		(183)		(292)		3
Securities loaned	Securities loaned	205		—		205		(43)		—		(157)		5		Securities loaned	207		—		207		(41)		—		(160)		6
Total	Total	$	4,517	$	—	$	4,517	$	(4,021)	$	(1)	$	(484)	$	11	Total	$	4,430	$	—	$	4,430	$	(3,786)	$	(183)	$	(452)	$	9

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

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

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

Freestanding derivative instruments are reflected in ~~other~~Other assets and ~~other~~Other liabilities. Cash collateral pledged by the Company is reflected in ~~other~~Other assets and cash collateral accepted by the Company is reflected in ~~other~~Other liabilities. Securities borrowing and lending agreements are reflected in ~~receivables~~Receivables and ~~other~~Other liabilities, respectively. See Note 13 for additional disclosures related to the Company’s derivative instruments and Note 4 for information related to derivatives held by consolidated investment entities.

4541

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

13. Derivatives and Hedging Activities

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

Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 12 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral.

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


		June 30, 2021						December 31, 2020								March 31, 2022										December 31, 2021
		Notional		Gross Fair Value				Notional		Gross Fair Value						Notional			Gross Fair Value							Notional			Gross Fair Value
				Assets (1)		Liabilities (2)(3)						Liabilities (2)(3)							Assets (1)			Liabilities (2)(3)										Liabilities (2)(3)
		(in millions)										(in millions)
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments											Derivatives designated as hedging instruments

Equity contracts - cash flow hedges																Equity contracts - cash flow hedges		$	19		$	1		$	—			$	19		$	—		$	—
Foreign exchange contracts – net investment hedges	Foreign exchange contracts – net investment hedges	$	105	$	—	$	1	$	32			$	—	$	2		Foreign exchange contracts – net investment hedges		140			4			—				58			—			—
Total qualifying hedges	Total qualifying hedges	105		—		1		32				—		2			Total qualifying hedges		159			5			—				77			—			—

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments													Derivatives not designated as hedging instruments
Interest rate contracts	Interest rate contracts	80,070		1,417		558		77,951		1,755		734		Interest rate contracts		82,224			739			315				79,468			1,252			468
Equity contracts	Equity contracts	57,813		4,678		3,950		57,254		4,090		3,571		Equity contracts		63,450			3,855			3,784				61,142			4,293			3,754
Credit contracts	Credit contracts	1,733		1		7		2,297		2		1		Credit contracts		2,175			45			—				1,748			9			—
Foreign exchange contracts	Foreign exchange contracts	3,487		24		5		3,423		23		4		Foreign exchange contracts		2,614			26			3				2,380			20			1

Total non-designated hedges	Total non-designated hedges	143,103		6,120		4,520		140,925		5,870		4,310		Total non-designated hedges		150,463			4,665			4,102				144,738			5,574			4,223

Embedded derivatives	Embedded derivatives													Embedded derivatives
GMWB and GMAB (4)	GMWB and GMAB (4)	N/A		—		1,373		N/A		—		2,316		GMWB and GMAB (4)		N/A			—			828				N/A			—			1,486
IUL	IUL	N/A		—		928		N/A		—		935		IUL		N/A			—			848				N/A			—			905
Fixed deferred indexed annuities		N/A		—		58		N/A		—		52
Fixed deferred indexed annuities and deposit receivables														Fixed deferred indexed annuities and deposit receivables		N/A			55			57				N/A			59			61
Structured variable annuities	Structured variable annuities	N/A		—		214		N/A		—		70		Structured variable annuities		N/A			—			280				N/A			—			406
SMC	SMC	N/A		—		6		N/A		—		8		SMC		N/A			—			2				N/A			—			4
Total embedded derivatives	Total embedded derivatives	N/A		—		2,579		N/A		—		3,381		Total embedded derivatives		N/A			55			2,015				N/A			59			2,862
Total derivatives	Total derivatives	$	143,208	$	6,120	$	7,100	$	140,957	$	5,870	$	7,693	Total derivatives		$	150,622		$	4,725		$	6,117			$	144,815		$	5,633		$	7,085

N/A Not applicable.

(1) The fair value of freestanding derivative assets is included in Other assets onand the ~~Consolidated Balance Sheets.~~fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables.

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

(3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was ~~$2.9~~$2.4 billion and ~~$3.7~~$3.2 billion as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. See Note 12 for ~~additional~~additional information related to master netting arrangements and cash collateral.

(4) The fair value of the GMWB and GMAB embedded derivatives as of ~~June 30, 2021~~March 31, 2022 included ~~$1.5~~$1.0 billion of individual contracts in a liability position and ~~$154~~$204 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, ~~2020~~2021 included ~~$2.4~~$1.6 billion of individual contracts in a liability position and ~~$67~~$133 million of individual contracts in an asset position.

See Note 11 for additional information regarding the Company’s fair value measurement of derivative instruments.

4642

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, investment securities with a fair value of ~~$418 million~~nil and ~~$325~~$123 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which ~~$418 million~~nil and ~~$325~~$123 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had sold, pledged or rehypothecated ~~NaN~~none of these securities. In addition, as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

Derivatives Not Designated as Hedges

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


		Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense
		(in millions)													Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense
Three Months Ended June 30, 2021
															(in millions)

Three Months Ended March 31, 2022														Three Months Ended March 31, 2022
Interest rate contracts	Interest rate contracts	$	(23)	$	—	$	—	$	—	$	871	$	—	Interest rate contracts	$	—	$	—	$	—	$	—	$	(1,118)	$	—
Equity contracts	Equity contracts	(1)		—		47		30		(304)		6		Equity contracts	8		—		(61)		(16)		224		(7)
Credit contracts	Credit contracts	—		—		1		—		(30)		—		Credit contracts	—		—		(1)		—		97		—
Foreign exchange contracts	Foreign exchange contracts	6		—		—		—		(5)		2		Foreign exchange contracts	(1)		—		—		—		31		—

GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	—		—		—		—		(657)		—		GMWB and GMAB embedded derivatives	—		—		—		—		658		—
IUL embedded derivatives	IUL embedded derivatives	—		—		—		20		—		—		IUL embedded derivatives	—		—		—		57		—		—
Fixed deferred indexed annuity embedded derivatives		—		—		—		(3)		—		—
Fixed deferred indexed annuity and deposit receivables embedded derivatives														Fixed deferred indexed annuity and deposit receivables embedded derivatives	—		—		—		1		—		—
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	—		—		—		—		(100)		—		Structured variable annuity embedded derivatives	—		—		—		—		123		—
SMC embedded derivatives		—		—		—		—		—		—

Total gain (loss)	Total gain (loss)	$	(18)	$	—	$	48	$	47	$	(225)	$	8	Total gain (loss)	$	7	$	—	$	(62)	$	42	$	15	$	(7)

Six Months Ended June 30, 2021
Interest rate contracts		$	(23)	$	—	$	(1)	$	—	$	(954)	$	—
Equity contracts		—		1		80		55		(614)		12
Credit contracts		—		—		1		—		39		—
Foreign exchange contracts		6		—		—		—		6		(2)

GMWB and GMAB embedded derivatives		—		—		—		—		943		—
IUL embedded derivatives		—		—		—		11		—		—
Fixed deferred indexed annuity embedded derivatives		—		—		—		(8)		—		—
Structured variable annuity embedded derivatives		—		—		—		—		(175)		—
SMC embedded derivatives		—		(1)		—		—		—		—
Total gain (loss)		$	(17)	$	—	$	80	$	58	$	(755)	$	10

~~AMERIPRISE FINANCIAL, INC.~~

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


		Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense			Net Investment Income		Banking and Deposit Interest Expense		Distribution Expenses		Interest Credited to Fixed Accounts		Benefits, Claims, Losses and Settlement Expenses		General and Administrative Expense
		(in millions)													(in millions)
Three Months Ended June 30, 2020

Three Months Ended March 31, 2021														Three Months Ended March 31, 2021
Interest rate contracts	Interest rate contracts	$	—	$	—	$	—	$	—	$	60	$	—	Interest rate contracts	$	—	$	—	$	(1)	$	—	$	(1,825)	$	—
Equity contracts	Equity contracts	(1)		5		87		63		(1,467)		13		Equity contracts	1		1		33		25		(310)		6
Credit contracts	Credit contracts	—		—		—		—		(43)		—		Credit contracts	—		—		—		—		69		—
Foreign exchange contracts	Foreign exchange contracts	(1)		—		—		—		5		1		Foreign exchange contracts	—		—		—		—		11		(4)

GMWB and GMAB embedded derivatives	GMWB and GMAB embedded derivatives	—		—		—		—		147		—		GMWB and GMAB embedded derivatives	—		—		—		—		1,600		—
IUL embedded derivatives	IUL embedded derivatives	—		—		—		(127)		—		—		IUL embedded derivatives	—		—		—		(9)		—		—
Fixed deferred indexed annuity embedded derivatives	Fixed deferred indexed annuity embedded derivatives	—		—		—		(7)		—		—		Fixed deferred indexed annuity embedded derivatives	—		—		—		(5)		—		—
Structured variable annuity embedded derivatives	Structured variable annuity embedded derivatives	—		—		—		—		(16)		—		Structured variable annuity embedded derivatives	—		—		—		—		(75)		—
SMC embedded derivatives	SMC embedded derivatives	—		(5)		—		—		—		—		SMC embedded derivatives	—		(1)		—		—		—		—
Total gain (loss)	Total gain (loss)	$	(2)	$	—	$	87	$	(71)	$	(1,314)	$	14	Total gain (loss)	$	1	$	—	$	32	$	11	$	(530)	$	2

Six Months Ended June 30, 2020
Interest rate contracts		$	(1)	$	—	$	2	$	—	$	2,575	$	—
Equity contracts		(1)		(2)		(29)		(49)		526		(3)
Credit contracts		—		—		—		—		(79)		—
Foreign exchange contracts		—		—		—		—		49		(2)

GMWB and GMAB embedded derivatives		—		—		—		—		(2,366)		—
IUL embedded derivatives		—		—		—		37		—		—
Fixed deferred indexed annuity embedded derivatives		—		—		—		5		—		—
Structured variable annuity embedded derivatives		—		—		—		—		(13)		—
SMC embedded derivatives		—		2		—		—		—		—
Total gain (loss)		$	(2)	$	—	$	(27)	$	(7)	$	692	$	(5)

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

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of ~~June 30, 2021:~~March 31, 2022:


		Premiums Payable		Premiums Receivable			Premiums Payable		Premiums Receivable
		(in millions)					(in millions)
2021 (1)		$	78	$	81
2022		205		205
2022 (1)						2022 (1)	$	130	$	192
2023	2023	51		43		2023	50		43
2024	2024	138		25		2024	135		24
2025	2025	125		22		2025	123		21
2026 - 2028		263		88
2026						2026	252		88
2027 - 2028						2027 - 2028	18		—
Total	Total	$	860	$	464	Total	$	708	$	368

(1) ~~2021~~2022 amounts represent the amounts payable and receivable for the period from ~~July~~April 1, ~~2021~~2022 to December 31, ~~2021.~~2022.

~~AMERIPRISE FINANCIAL, INC.~~

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

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

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

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

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

Cash Flow Hedges

The Company has designated derivative instruments as a cash flow hedge for equity exposure of certain compensation-related liabilities and interest rate exposure on forecasted debt interest payments. For derivative instruments that qualify as cash flow hedges, the gain or loss on the derivative instruments is reported in AOCI and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented within the same line item as the earnings impact of the hedged item in interest and debt expense.

For the three months ended March 31, 2022 and ~~six months ended June 30,~~ 2021, ~~and 2020,~~ the amounts reclassified from AOCI to earnings related to cash flow hedges were immaterial. The estimated net amount recorded in AOCI as of ~~June 30, 2021~~March 31, 2022 that the Company expects to reclassify to earnings as a reduction to interest and debt expense within the next twelve months is ~~$0.5~~$0.6 million. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 1514 years and relates to forecasted debt interest payments. See Note 14 for a rollforward of net unrealized derivative gains (losses) included in AOCI related to cash flow hedges.

~~Fair Value Hedges~~

The Company entered into and designated as a fair value hedge an interest rate swap to convert senior notes due 2020 from fixed rate debt to floating rate debt. The interest rate swap related to the senior notes due March 2020 was settled during the first quarter of 2020 when the debt was repaid. The swap had identical terms as the underlying debt being hedged. The Company recognized gains and losses on the derivatives and the related hedged items within interest and debt expense.

The Company has not had any fair value hedges since March 2020. The following table is a summary of the impact of derivatives designated as fair value hedges on the Consolidated Statements of Operations:


	~~Six Months Ended June 30, 2020~~
	~~(in millions)~~
~~Total interest and debt expense per Consolidated Statements of Operations~~	$	87
~~Gain (loss) on interest rate contracts designated as fair value hedges:~~
~~Hedged items~~	$	1
~~Derivatives designated as fair value hedges~~	~~(1)~~

4944

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Net Investment Hedges

The Company entered into, and designated as net investment hedges in foreign operations, forward contracts to hedge a portion of the Company’s foreign currency exchange rate risk associated with its investment in Threadneedle. As the Company determined that the forward contracts are effective, the change in fair value of the derivatives is recognized in AOCI as part of the foreign currency translation adjustment. For the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recognized a ~~loss~~gain of ~~$0.4~~$4 million and a ~~gain of NaN, respectively, in OCI. For the six months ended June 30, 2021 and 2020, the Company recognized a~~ loss of ~~$0.9 million and a gain of $5~~$0.5 million, respectively, in OCI.

Credit Risk

Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 12 for additional information on the Company’s credit exposure related to derivative assets.

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s debt rating (or based on the financial strength of the Company’s life insurance subsidiaries for contracts in which those subsidiaries are the counterparty). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company’s debt does not maintain a specific credit rating (generally an investment grade rating) or the Company’s life insurance subsidiary does not maintain a specific financial strength rating. If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was ~~$307~~$467 million and ~~$326~~$383 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was ~~$299~~$462 million and ~~$324~~$383 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $8$5 million and ~~$2 million,~~nil, respectively.

14. Shareholders’ Equity

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

Three Months Ended June 30,
2021 2020
Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax
(in millions)
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)
$ 336 $ (65) $ 271 $ 1,532 $ (329) $ 1,203
Reclassification of net (gains) losses on securities included in net income (2)
(1) — (1) (4) 1 (3)
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables (163) 34 (129) (637) 134 (503)
Net unrealized gains (losses) on securities 172 (31) 141 891 (194) 697
Foreign currency translation 2 — 2 (8) — (8)
Total other comprehensive income (loss) $ 174 $ (31) $ 143 $ 883 $ (194) $ 689

~~AMERIPRISE FINANCIAL, INC.~~

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


		Six Months Ended June 30,													Three Months Ended March 31,
		2021						2020							2022						2021
		Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax			Pretax		Income Tax Benefit (Expense)		Net of Tax		Pretax		Income Tax Benefit (Expense)		Net of Tax
		(in millions)													(in millions)
Net unrealized gains (losses) on securities:	Net unrealized gains (losses) on securities:													Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period (1)	Net unrealized gains (losses) on securities arising during the period (1)	$	(354)	$	87	$	(267)	$	337	$	(65)	$	272	Net unrealized gains (losses) on securities arising during the period (1)	$	(1,592)	$	347	$	(1,245)	$	(690)	$	152	$	(538)
Reclassification of net (gains) losses on securities included in net income (2)	Reclassification of net (gains) losses on securities included in net income (2)	(51)		11		(40)		4		(1)		3		Reclassification of net (gains) losses on securities included in net income (2)	(20)		4		(16)		(50)		11		(39)
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables	Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables	137		(29)		108		(129)		27		(102)		Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables	516		(108)		408		300		(63)		237
Net unrealized gains (losses) on securities	Net unrealized gains (losses) on securities	(268)		69		(199)		212		(39)		173		Net unrealized gains (losses) on securities	(1,096)		243		(853)		(440)		100		(340)
Net unrealized gains (losses) on derivatives:														Net unrealized gains (losses) on derivatives:
Net unrealized gains (losses) on derivatives arising during the period														Net unrealized gains (losses) on derivatives arising during the period	1		—		1		—		—		—

Net unrealized gains (losses) on derivatives														Net unrealized gains (losses) on derivatives	1		—		1		—		—		—
Defined benefit plans:														Defined benefit plans:
Net gains (losses)														Net gains (losses)	—		—		—		37		(8)		29
Defined benefit plans	Defined benefit plans	37		(8)		29		—		—		—		Defined benefit plans	—		—		—		37		(8)		29
Foreign currency translation	Foreign currency translation	1		—		1		(42)		1		(41)		Foreign currency translation	(58)		12		(46)		(1)		—		(1)

Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	(230)	$	61	$	(169)	$	170	$	(38)	$	132	Total other comprehensive income (loss)	$	(1,153)	$	255	$	(898)	$	(404)	$	92	$	(312)

(1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period.

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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

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


		Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total			Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total
		(in millions)													(in millions)
Balance, April 1, 2021		$	643	$	5	$	(175)	$	(155)	$	(1)	$	317

Balance, January 1, 2022														Balance, January 1, 2022	$	318	$	4	$	(151)	$	(167)	$	(1)	$	3

OCI before reclassifications	OCI before reclassifications	142		—		—		2		—		144		OCI before reclassifications	(837)		1		—		(46)		—		(882)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(1)		—		—		—		—		(1)		Amounts reclassified from AOCI	(16)		—		—		—		—		(16)
Total OCI	Total OCI	141		0		0		2		0		143		Total OCI	(853)		1		—		(46)		—		(898)
Balance, June 30, 2021		$	784	$	5	$	(175)	$	(153)	$	(1)	$	460

Balance, January 1, 2021		$	983	$	5	$	(204)	$	(154)	$	(1)	$	629

OCI before reclassifications		(159)		—		29		1		—		(129)
Amounts reclassified from AOCI		(40)		—		—		—		—		(40)
Total OCI		(199)		0		29		1		0		(169)
Balance, June 30, 2021		$	784	$	5	$	(175)	$	(153)	$	(1)	$	460
Balance, March 31, 2022														Balance, March 31, 2022	$	(535)	$	5	$	(151)	$	(213)	$	(1)	$	(895)

~~AMERIPRISE FINANCIAL, INC.~~

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


		Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total			Net Unrealized Gains (Losses) on Securities		Net Unrealized Gains (Losses) on Derivatives		Defined Benefit Plans		Foreign Currency Translation		Other		Total
		(in millions)													(in millions)
Balance, April 1, 2020		$	52	$	6	$	(138)	$	(214)	$	(1)	$	(295)

Balance, January 1, 2021														Balance, January 1, 2021	$	983	$	5	$	(204)	$	(154)	$	(1)	$	629

OCI before reclassifications	OCI before reclassifications	700		—		—		(8)		—		692		OCI before reclassifications	(301)		—		29		(1)		—		(273)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(3)		—		—		—		—		(3)		Amounts reclassified from AOCI	(39)		—		—		—		—		(39)
Total OCI	Total OCI	697		0		0		(8)		0		689		Total OCI	(340)		—		29		(1)		—		(312)
Balance, June 30, 2020		$	749	$	6	$	(138)	$	(222)	$	(1)	$	394

Balance, January 1, 2020		$	576	$	6	$	(138)	$	(181)	$	(1)	$	262

OCI before reclassifications		170		—		—		(41)		—		129
Amounts reclassified from AOCI		3		—		—		—		—		3
Total OCI		173		0		0		(41)		0		132
Balance, June 30, 2020		$	749	$	6	$	(138)	$	(222)	$	(1)	$	394
Balance, March 31, 2021														Balance, March 31, 2021	$	643	$	5	$	(175)	$	(155)	$	(1)	$	317

For the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company repurchased a total of ~~3.4~~1.4 million shares and ~~4.3~~1.7 million shares, respectively, of its common stock for an aggregate cost of ~~$813~~$429 million and ~~$637~~$363 million, respectively. In August 2020, the Company’s Board of Directors authorized a repurchase of up to $2.5 billion for the repurchase of shares of the Company’s common stock through September 30, 2022. On January 26, 2022, the Company’s Board of Directors authorized an additional $3.0 billion for the repurchase of the Company’s common stock through March 31, 2024. As of ~~June 30, 2021,~~March 31, 2022, the Company had ~~$1.5~~$3.0 billion remaining under the share repurchase authorization.

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

For the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company reacquired 0.3 million shares and 0.3 million shares, respectively, of its common stock through the surrender of shares upon vesting and paid in the aggregate ~~$58~~$89 million and ~~$47~~$57 million, respectively, related to the holders’ income tax obligations on the vesting date. Option holders may elect to net settle their vested awards resulting in the surrender of the number of shares required to cover the strike price and tax obligation of the options exercised. These shares are reacquired by the Company and recorded as treasury shares. For the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company reacquired ~~0.8~~0.2 million shares and 0.6 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of ~~$167~~$62 million and ~~$110~~$134 million, respectively.

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company reissued ~~0.4~~0.5 million and ~~0.5~~0.3 million, respectively, treasury shares for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans.

15. Income Taxes

The Company’s effective tax rate was ~~18.1%~~17.6% and ~~(2.4%)~~11.3% for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

The ~~Company’s~~ effective tax rate ~~was 15.4% and 18.0%~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 is lower than the statutory tax rate as a result of tax preferred items including incentive compensation, foreign tax credits, and ~~2020, respectively.~~low income housing tax credits, partially offset by state income taxes, net of federal benefit.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The effective tax rate for the three months ended ~~June 30,~~March 31, 2021 is lower than the statutory tax rate as a result of tax preferred items including incentive compensation, low income housing tax credits, foreign tax credits and dividends received deduction, partially offset by state income taxes, net of federal benefit. The effective tax rate for the six months ended June 30, 2021 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits, incentive compensation, foreign tax credits, and the dividends received deduction, partially offset by state income taxes, net of federal benefit.

The Company had a negative tax rate of (2.4%) for the three months ended June 30, 2020. This negative tax rate was a result of an income tax expense applied to a pretax loss for the quarter ended June 30, 2020. The income tax expense was primarily due to the reversal of the net operating loss (“NOL”) benefit recorded in the quarter ended March 31, 2020. The Company was no longer forecasting a 2020 NOL due to strong equity market appreciation in the second quarter of 2020, which was a reversal of the equity market dislocation experienced in March of 2020. The NOL benefit reversal was partially offset by tax preferred items including low income housing tax credits for the three months ended June 30, 2020. The effective tax rate for the six months ended June 30, 2020 was lower than the statutory rate as a result of tax preferred items including low income housing tax credits, partially offset by state income taxes, net of federal benefit.

The higher effective tax rate for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~June 30, 2020~~March 31, 2021 is primarily the result of ~~the prior period losses~~higher pretax income and a decrease in low income housing tax ~~expense related to the NOL benefit reversal recorded in the quarter ended June 30, 2020. The lower~~

~~AMERIPRISE FINANCIAL, INC.~~

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

~~effective tax rate for the six months ended June 30, 2021 compared to June 30, 2020 is primarily the result of~~credits, partially offset by an increase in ~~tax preferred items, including foreign tax credits and~~ incentive ~~compensation.~~

compensation in the current period compared to the prior period.

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of ~~$16~~$12 million, net of federal benefit, which will expire beginning December 31, ~~2021.~~2022 and foreign net operating losses of $40 million.

The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of ~~$12~~$11 million, state deferred tax assets of $2$3 million and foreign ~~deferred tax assets~~net operating losses of $1$18 million; therefore, a valuation allowance has been established. The valuation allowance was ~~$15~~$32 million as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively.~~2021.

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had ~~$124~~$130 million and ~~$110~~$125 million, respectively, of gross unrecognized tax benefits. If recognized, approximately ~~$92~~$99 million and ~~$80~~$95 million, net of federal tax benefits, of unrecognized tax benefits as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, would affect the effective tax rate.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by ~~$40~~$35 million to ~~$50~~$45 million in the next 12 months primarily due to Internal Revenue Service (“IRS”) settlements and state exams.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized ~~NaN~~a net increase of $1 million and a net decrease of $1$2 million in interest and penalties for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively. The Company recognized NaN and a net increase of $1 million in interest and penalties for the three and six months ended June 30, 2020,~~ respectively. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had a payable of $9$11 million and $10 million, respectively, related to accrued interest and penalties.

The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The federal statute of limitations are closed on years through 2015, except for one issue for 2014 and 2015 which was claimed on amended returns. The IRS is currently auditing the Company’s U.S. income tax returns for 2016 ~~2017 and 2018.~~through 2020. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2015 through ~~2019.~~2020.

16. Contingencies

Contingencies

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

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

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

and supervision of such activity; and transaction monitoring systems and controls. The Company has cooperated and will continue to cooperate with the applicable regulators.

~~AMERIPRISE FINANCIAL, INC.~~

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

These legal proceedings are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss. The Company cannot predict with certainty if, how or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a loss or range of loss can be reasonably estimated for any proceeding. An adverse outcome in one or more proceedings could eventually result in adverse judgments, settlements, fines, penalties or other sanctions, in addition to further claims, examinations or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

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

Guaranty Fund Assessments

RiverSource Life and RiverSource Life Insurance Co. of NYNew York (“RiverSource Life of NY”) are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated.

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the estimated liability was $12 million. As of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the related premium tax asset was $10 million. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known.

17. Earnings per Share

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

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(in millions, except per share amounts)
Numerator:
Net income $ 591 $ (539) $ 1,028 $ 1,497
Denominator:
Basic: Weighted-average common shares outstanding 118.4 125.0 119.1 125.7
Effect of potentially dilutive nonqualified stock options and other share-based awards 2.8 1.2 2.6 1.5
Diluted: Weighted-average common shares outstanding 121.2 126.2 121.7 127.2
Earnings per share:
Basic $ 4.99 $ (4.31) $ 8.63 $ 11.91
Diluted $ 4.88 $ (4.31) (1) $ 8.45 $ 11.77

~~(1)~~ ~~Diluted~~ ~~shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution.~~


	Three Months Ended March 31,
		2022			2021
			(in millions, except per share amounts)
Numerator:
Net income			$	761		$	437

Denominator:
Basic: Weighted-average common shares outstanding			113.7			119.8
Effect of potentially dilutive nonqualified stock options and other share-based awards			2.5			2.4
Diluted: Weighted-average common shares outstanding			116.2			122.2

Earnings per share:
Basic			$	6.69		$	3.65
Diluted			$	6.55		$	3.58

The calculation of diluted earnings per share excludes the incremental effect of ~~NaN~~0.2 million and ~~1.5~~0.3 million options as of ~~June 30,~~March 31, 2022 and 2021 ~~and 2020,~~ respectively, due to their anti-dilutive effect.

5448

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18. Segment Information

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

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

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

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

Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures. Prior periods have been updated to reflect this change to be consistent with the current period presentation.

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

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(in millions)					(in millions)
Advice & Wealth Management	Advice & Wealth Management	$	22,040	$	21,266	Advice & Wealth Management	$	26,752	$	24,986
Asset Management	Asset Management	9,220		8,406		Asset Management	10,457		10,990
Retirement & Protection Solutions	Retirement & Protection Solutions	116,065		114,850		Retirement & Protection Solutions	112,881		119,469
Corporate & Other	Corporate & Other	24,378		21,361		Corporate & Other	17,435		20,534
Total assets	Total assets	$	171,703	$	165,883	Total assets	$	167,525	$	175,979

5549

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022			2021
		(in millions)											(in millions)
Adjusted operating net revenues:	Adjusted operating net revenues:									Adjusted operating net revenues:
Advice & Wealth Management	Advice & Wealth Management	$	1,980	$	1,537	$	3,859	$	3,232	Advice & Wealth Management			$	2,042		$	1,879
Asset Management	Asset Management	879		668		1,707		1,354		Asset Management			1,017			828
Retirement & Protection Solutions	Retirement & Protection Solutions	808		755		1,595		1,514		Retirement & Protection Solutions			772			787
Corporate & Other	Corporate & Other	119		131		258		280		Corporate & Other			116			139
Eliminations (1)(2)		(399)		(326)		(778)		(664)
Elimination of segment revenues (1)										Elimination of segment revenues (1)			(352)			(379)
Total segment adjusted operating net revenues	Total segment adjusted operating net revenues	3,387		2,765		6,641		5,716		Total segment adjusted operating net revenues			3,595			3,254
Net realized gains (losses)	Net realized gains (losses)	10		(3)		67		(23)		Net realized gains (losses)			17			57
Revenue attributable to consolidated investment entities	Revenue attributable to consolidated investment entities	16		15		50		31		Revenue attributable to consolidated investment entities			17			34
Market impact on non-traditional long-duration products, net	Market impact on non-traditional long-duration products, net	21		(66)		26		(11)		Market impact on non-traditional long-duration products, net			26			5
Mean reversion related impacts		1		1		1		—
Market impact of hedges on investments		(17)		—		(17)		—
Total net revenues per Consolidated Statements of Operations		$	3,418	$	2,712	$	6,768	$	5,713

Total net revenues per consolidated statements of operations										Total net revenues per consolidated statements of operations			$	3,655		$	3,350

(1) Represents the elimination of intersegment revenues recognized for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ in each segment as follows: Advice & Wealth Management ($~~266~~228 million and ~~$208~~$250 million, respectively); Asset Management ($1412 million and $13 million, respectively); Retirement & Protection Solutions ($~~118~~112 million and ~~$105~~$116 million, respectively); and Corporate & Other ~~($1 million~~(nil and nil, respectively).

~~(2)~~ Represents the elimination of intersegment revenues recognized for the six months ended June 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($516 million and $430 million, respectively); Asset Management ($27 million and $26 million, respectively); Retirement & Protection Solutions ($234 million and $209 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022			2021
		(in millions)											(in millions)
Adjusted operating earnings:	Adjusted operating earnings:									Adjusted operating earnings:
Advice & Wealth Management	Advice & Wealth Management	$	423	$	271	$	812	$	649	Advice & Wealth Management			$	440		$	389
Asset Management	Asset Management	253		141		481		298		Asset Management			285			228
Retirement & Protection Solutions	Retirement & Protection Solutions	182		222		365		389		Retirement & Protection Solutions			191			183
Corporate & Other	Corporate & Other	(77)		(57)		(98)		(107)		Corporate & Other			(76)			(21)
Total segment adjusted operating earnings	Total segment adjusted operating earnings	781		577		1,560		1,229		Total segment adjusted operating earnings			840			779
Net realized gains (losses)	Net realized gains (losses)	11		(2)		66		(22)		Net realized gains (losses)			16			55
Net income (loss) attributable to consolidated investment entities	Net income (loss) attributable to consolidated investment entities	(2)		0		(3)		(2)		Net income (loss) attributable to consolidated investment entities			2			(1)
Market impact on non-traditional long-duration products, net	Market impact on non-traditional long-duration products, net	(87)		(1,113)		(483)		670		Market impact on non-traditional long-duration products, net			134			(396)
Mean reversion related impacts	Mean reversion related impacts	42		14		98		(47)		Mean reversion related impacts			(59)			56
Market impact of hedges on investments		(17)		—		(17)		—

Integration and restructuring charges	Integration and restructuring charges	(7)		(2)		(7)		(3)		Integration and restructuring charges			(10)			—
Pretax income per Consolidated Statements of Operations		$	721	$	(526)	$	1,214	$	1,825
Pretax income per consolidated statements of operations										Pretax income per consolidated statements of operations			$	923		$	493

5650

AMERIPRISE FINANCIAL, INC.

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

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow and our Consolidated Financial Statements and Notes presented in Item 1. Our Management’s Discussion and Analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the Securities and Exchange Commission (“SEC”) on February ~~24,~~ 25, 2022 (“2021 ~~(“2020~~ 10-K”), as well as our current reports on Form 8-K and other publicly available information. References below to “Ameriprise Financial,” “Ameriprise,” the “Company,” “we,” “us,” and “our” refer to Ameriprise Financial, Inc. exclusively, to our entire family of companies, or to one or more of our subsidiaries.

Overview

Ameriprise Financial is a diversified financial services company with a more than 125-year history of providing financial solutions. We are a long-standing leader in financial planning and advice with ~~$1.2~~$1.3 trillion in assets under management and administration as of ~~June 30, 2021.~~March 31, 2022. We offer a broad range of products and services designed to achieve individual and institutional clients’ financial objectives.

The coronavirus disease 2019 (‘‘COVID-19’’) pandemic has presented ongoing significant economic and societal disruption and market unpredictability, which has affected our business and operating environment driven by what has been a low interest rate environment and volatility and changes in the equity markets and the potential associated implications to client behavior. In early 2020, we implemented a work-from-home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health Organization, the U.S. Centers for Disease Control and governments. We are thoughtfully transitioning back to our office locations, where it is reasonable to do so, while complying with applicable health agencies’ guidelines and governmental orders. Though there are indications that the effects of the virus are lessening in some areas, COVID-19 continues ~~to deeply~~its ongoing impact ~~other areas~~ and has been occurring in multiple waves, so there are still no reliable estimates of how long the implications from the pandemic will last, the effects current and other new variants will ultimately have, how many people are likely to be affected by it, or its impact on the overall economy. There is still significant uncertainty around the extent to which the COVID-19 pandemic will continue to impact our business, results of operations, and financial condition, which depends on current and future developments, including the ultimate scope, duration and severity of the pandemic, success of worldwide vaccination efforts, multiple mutations of COVID-19 or similar diseases, the effectiveness of our office reopenings, the additional measures that may be taken by various governmental authorities in response to the outbreak, the actions of third parties in response to the pandemic, and the possible further impacts on the global economy. Given the ongoing impact of the pandemic, financial results may not be comparable to previous years and the results presented in this report may not necessarily be indicative of future operating results. For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of our ~~2020~~2021 10-K.

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

Financial markets and macroeconomic conditions have had and will continue to have a significant impact on our operating and performance results. In addition, the business, political and regulatory environments in which we operate are subject to elevated uncertainty and substantial, frequent change. Accordingly, we expect to continue focusing on our key strategic objectives and obtaining operational and strategic leverage from our core capabilities. The success of these and other strategies may be affected by the factors discussed in Item 1A, “Risk Factors” in our ~~2020~~2021 10-K and other factors as discussed herein.

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

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

During the third quarter of 2020, as we continue to reposition the business and implement strategies focusing on product features and sales, the composition of our reportable segments changed from five to four segments. The Chief Operating Decision Maker (“CODM”) now manages the Annuities and Protection business as one operating segment, referred to as Retirement & Protection Solutions. The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). In addition, we moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block. These segment reporting changes align with the way our CODM began assessing the performance of our reportable segments and other business activities effective in the third quarter of 2020. Certain prior

~~AMERIPRISE FINANCIAL, INC.~~

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

On April 12, 2021, we signed a definitive agreement to acquire the European-based asset management business of BMO Financial Group for £615 million, or approximately $845 million (subject to customary and other closing adjustments as well as foreign currency spot rates in effect on the closing date that drive the approximate amount in U.S. dollars). The all-cash transaction is expected to add approximately $124 billion of assets under management (“AUM”) in Europe and is currently expected to close in the fourth quarter of 2021, subject to regulatory approvals in the relevant jurisdictions.

On June 2, 2021, we filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation. We also filed an application to transition the FSB’s personal trust services business to a new limited purpose national trust bank regulated by the Office of the Comptroller of the Currency. If the applications are approved, the proposed changes are not expected to impact our long-term strategy for the bank and

AMERIPRISE FINANCIAL, INC.

should enable us to continue our strong lineup of banking solutions, including deposits, credit cards, mortgages and securities-based lending to our wealth management clients without interruption.

On June 29, 2021, our life insurance companies, RiverSource Life Insurance Company (“RiverSource Life”) and RiverSource Life Insurance Co. of New York (“RiverSource Life of New York”) signed an agreement to reinsure approximately $8.0 billion of fixed deferred and immediate annuity policies. The transaction, effective on July 1, 2021, with RiverSource Life closed on July 8, 2021. The transaction with RiverSource Life of New York is subject to regulatory approval.

We consolidate certain variable interest entities for which we provide asset management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the CIEs impacts our balance sheet and income statement, our exposure to these entities is unchanged and there is no impact to the underlying business results. For further information on CIEs, see Note 4 to our Consolidated Financial Statements. The results of operations of the CIEs are reflected in the Corporate & Other segment. On a consolidated basis, the management fees we earn for the services we provide to the CIEs and the related general and administrative expenses are eliminated and the changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in net investment income. We include the fees from these entities in the management and financial advice fees line within our Asset Management segment.

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

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

Our financial targets are:

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

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

~~AMERIPRISE FINANCIAL, INC.~~

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

Per Diluted Share
Three Months Ended June 30, Three Months Ended June 30,
2021 2020 2021 2020
(in millions, except per share amounts)
Net income (loss) $ 591 $ (539) $ 4.88 $ (4.31) (3)
Add: Basic to diluted share conversion — — — 0.04 (4)
Less: Net realized investment gains (losses) (1)
11 (2) 0.09 (0.02)
Add: Market impact on non-traditional long-duration products (1)
87 1,113 0.71 8.82
Add: Mean reversion related impacts (1)
(42) (14) (0.35) (0.12)
Add: Market impact of hedges on investments (1)
17 — 0.14 —
Add: Integration/restructuring charges (1)
7 2 0.06 0.02
Less: Net income (loss) attributable to CIEs (2) — (0.02) —
Tax effect of adjustments (2)
(12) (231) (0.10) (1.83)
Adjusted operating earnings $ 639 $ 333 $ 5.27 $ 2.64
Weighted average common shares outstanding:
Basic 118.4 125.0
Diluted 121.2 126.2


						Per Diluted Share									Per Diluted Share
		Six Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions, except per share amounts)									(in millions, except per share amounts)
Net income (loss)	Net income (loss)	$	1,028	$	1,497	$	8.45	$	11.77	Net income (loss)	$	761	$	437	$	6.55	$	3.58
Less: Net realized investment gains (losses) (1)	Less: Net realized investment gains (losses) (1)	66		(22)		0.54		(0.17)		Less: Net realized investment gains (losses) (1)	16		55		0.14		0.45
Add: Market impact on non-traditional long-duration products (1)	Add: Market impact on non-traditional long-duration products (1)	483		(670)		3.97		(5.27)		Add: Market impact on non-traditional long-duration products (1)	(134)		396		(1.15)		3.24
Add: Mean reversion related impacts (1)	Add: Mean reversion related impacts (1)	(98)		47		(0.81)		0.37		Add: Mean reversion related impacts (1)	59		(56)		0.51		(0.46)
Add: Market impact of hedges on investments (1)		17		—		0.14		—

Add: Integration/restructuring charges (1)	Add: Integration/restructuring charges (1)	7		3		0.06		0.02		Add: Integration/restructuring charges (1)	10		—		0.09		—
Less: Net income (loss) attributable to CIEs	Less: Net income (loss) attributable to CIEs	(3)		(2)		(0.02)		(0.02)		Less: Net income (loss) attributable to CIEs	2		(1)		0.02		(0.01)
Tax effect of adjustments (2)	Tax effect of adjustments (2)	(72)		126		(0.59)		0.99		Tax effect of adjustments (2)	17		(60)		0.14		(0.49)
Adjusted operating earnings	Adjusted operating earnings	$	1,302	$	1,027	$	10.70	$	8.07	Adjusted operating earnings	$	695	$	663	$	5.98	$	5.43

Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	119.1		125.7						Basic	113.7		119.8
Diluted	Diluted	121.7		127.2						Diluted	116.2		122.2

(1) Pretax adjusted operating adjustments.

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

~~(3)~~ ~~Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution.~~

~~(4)~~ ~~Represents the difference of the per share amount for net loss using basic shares compared to the per share amount for net loss using diluted shares.~~

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AMERIPRISE FINANCIAL, INC.

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


		Twelve Months Ended June 30,					Twelve Months Ended March 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Net income	Net income	$	1,065	$	2,503	Net income	$	3,084	$	(65)
Less: Adjustments (1)	Less: Adjustments (1)	(980)		371		Less: Adjustments (1)	328		(1,804)
Adjusted operating earnings	Adjusted operating earnings	2,045		2,132		Adjusted operating earnings	2,756		1,739

Total Ameriprise Financial, Inc. shareholders’ equity	Total Ameriprise Financial, Inc. shareholders’ equity	5,924		6,190		Total Ameriprise Financial, Inc. shareholders’ equity	5,518		6,126
Less: AOCI, net of tax	Less: AOCI, net of tax	463		194		Less: AOCI, net of tax	(3)		312
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI	Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI	5,461		5,996		Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI	5,521		5,814
Less: Equity impacts attributable to CIEs	Less: Equity impacts attributable to CIEs	1		—		Less: Equity impacts attributable to CIEs	1		1
Adjusted operating equity	Adjusted operating equity	$	5,460	$	5,996	Adjusted operating equity	$	5,520	$	5,813


Return on equity, excluding AOCI	Return on equity, excluding AOCI	19.5	%	41.7	%	Return on equity, excluding AOCI	55.9	%	(1.1)	%
Adjusted operating return on equity, excluding AOCI (2)	Adjusted operating return on equity, excluding AOCI (2)	37.5	%	35.6	%	Adjusted operating return on equity, excluding AOCI (2)	49.9	%	29.9	%

(1) Adjustments reflect the sum of after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; mean reversion related impacts; block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and net income (loss) from consolidated investment entities. After-tax is calculated using the statutory tax rate of 21%.

(2) Adjusted operating return on equity, excluding AOCI is calculated using adjusted operating earnings in the numerator, and Ameriprise Financial shareholders’ equity, excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory tax rate of 21%.

Critical Accounting Estimates

The accounting and reporting policies that we use affect our Consolidated Financial Statements. Certain of our accounting and reporting policies are critical to an understanding of our consolidated results of operations and financial condition and, in some cases, the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of our Consolidated Financial Statements. These accounting policies are discussed in detail in “Management’s Discussion and Analysis — Critical Accounting Estimates” in our ~~2020~~2021 10-K.

Recent Accounting Pronouncements

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

Economic Environment

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


		Three months ended June 30,			Six Months Ended June 30,				Three Months Ended March 31,
		2021	2020	Change	2021	2020	Change		2022	2021	Change
S&P 500	S&P 500							S&P 500
Daily average	Daily average	4,182	2,927	43%	4,022	2,998	34%	Daily average	4,467	3,861	16%
Period end	Period end	4,298	3,100	39%	4,298	3,100	39%	Period end	4,530	3,973	14%
Weighted Equity Index (“WEI”) (1)	Weighted Equity Index (“WEI”) (1)							Weighted Equity Index (“WEI”) (1)
Daily average	Daily average	2,858	1,975	45%	2,761	2,042	35%	Daily average	2,953	2,662	11%
Period end	Period end	2,921	2,099	39%	2,921	2,099	39%	Period end	2,979	2,725	9%

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

See our segment results of operations discussion below for additional information on how changes in the economic environment have and may continue to impact our results. For further information regarding the impact of the economic environment on our financial condition and ~~any~~results of operations, and potentially material effects, see Part 1 - Item 1A “Risk Factors” of our ~~2020~~2021 10-K.

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AMERIPRISE FINANCIAL, INC.

Assets Under Management and Administration

~~AUM~~Assets under management (“AUM”) include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us. AUM also includes certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees in our Asset Management segment, such as the assets of the general account and the variable product funds held in the separate accounts of our life insurance subsidiaries and CIEs.

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

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

The following table presents detail regarding our AUM and AUA:


		June 30,				Change					March 31,				Change
		2021		2020							2022		2021
		(in billions)									(in billions)
Assets Under Management and Administration	Assets Under Management and Administration									Assets Under Management and Administration
Advice & Wealth Management AUM	Advice & Wealth Management AUM	$	426.5	$	314.8	$	111.7	35	%	Advice & Wealth Management AUM	$	443.5	$	396.5	$	47.0	12	%
Asset Management AUM	Asset Management AUM	593.4		476.1		117.3		25		Asset Management AUM	698.6		564.1		134.5		24
Corporate AUM	Corporate AUM	0.1		—		0.1		—		Corporate AUM	0.1		0.1		—		—
Eliminations	Eliminations	(42.0)		(31.8)		(10.2)		(32)		Eliminations	(42.0)		(39.6)		(2.4)		(6)
Total Assets Under Management	Total Assets Under Management	978.0		759.1		218.9		29		Total Assets Under Management	1,100.2		921.1		179.1		19
Total Assets Under Administration	Total Assets Under Administration	233.3		187.7		45.6		24		Total Assets Under Administration	238.9		222.9		16.0		7
Total AUM and AUA	Total AUM and AUA	$	1,211.3	$	946.8	$	264.5	28	%	Total AUM and AUA	$	1,339.1	$	1,144.0	$	195.1	17	%

Total AUM increased ~~$218.9~~$179.1 billion, or ~~29%~~19%, to ~~$978.0~~$1.1 trillion as of March 31, 2022 compared to $921.1 billion as of ~~June 30,~~March 31, 2021 ~~compared to $759.1 billion as of June 30, 2020~~ due to a ~~$111.7~~$47.0 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a ~~$117.3~~$134.5 billion increase in Asset Management AUM driven by ~~market appreciation~~the acquisition of the BMO Global Asset Management (EMEA) business and ~~continued improvement in~~ net ~~flows,~~inflows, partially offset by retail fund distributions. See our segment results of operations discussion below for additional information on changes in our AUM.

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AMERIPRISE FINANCIAL, INC.

Consolidated Results of Operations for the Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~

The following table presents our consolidated results of operations:


		Three Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2021		2020							2022		2021
		(in millions)									(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	Management and financial advice fees	$	2,251	$	1,702	$	549	32	%	Management and financial advice fees	$	2,459	$	2,102	$	357	17	%
Distribution fees	Distribution fees	452		375		77		21		Distribution fees	446		458		(12)		(3)
Net investment income	Net investment income	278		305		(27)		(9)		Net investment income	261		377		(116)		(31)
Premiums, policy and contract charges	Premiums, policy and contract charges	364		272		92		34		Premiums, policy and contract charges	368		347		21		6
Other revenues	Other revenues	75		76		(1)		(1)		Other revenues	123		71		52		73
Total revenues	Total revenues	3,420		2,730		690		25		Total revenues	3,657		3,355		302		9
Banking and deposit interest expense	Banking and deposit interest expense	2		18		(16)		(89)		Banking and deposit interest expense	2		5		(3)		(60)
Total net revenues	Total net revenues	3,418		2,712		706		26		Total net revenues	3,655		3,350		305		9
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	1,233		940		293		31		Distribution expenses	1,297		1,175		122		10
Interest credited to fixed accounts	Interest credited to fixed accounts	124		262		(138)		(53)		Interest credited to fixed accounts	141		159		(18)		(11)
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	404		1,467		(1,063)		(72)		Benefits, claims, losses and settlement expenses	211		653		(442)		(68)
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	63		(248)		311		NM		Amortization of deferred acquisition costs	96		5		91		NM
Interest and debt expense	Interest and debt expense	43		41		2		5		Interest and debt expense	40		42		(2)		(5)
General and administrative expense	General and administrative expense	830		776		54		7		General and administrative expense	947		823		124		15
Total expenses	Total expenses	2,697		3,238		(541)		(17)		Total expenses	2,732		2,857		(125)		(4)
Pretax income (loss)	Pretax income (loss)	721		(526)		1,247		NM		Pretax income (loss)	923		493		430		87
Income tax provision	Income tax provision	130		13		117		NM		Income tax provision	162		56		106		NM
Net income (loss)	Net income (loss)	$	591	$	(539)	$	1,130	NM		Net income (loss)	$	761	$	437	$	324	74%
NM Not Meaningful.

Overall

Pretax income increased ~~$1.2 billion to $721~~$430 million, or 87%, for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~pretax loss of $526 million for~~ the prior year period. The following impacts were significant drivers of the period-over-period change in pretax income:

•The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was ~~an expense~~a benefit of ~~$87~~$134 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to an expense of ~~$1.1 billion~~$396 million for the prior year period.

•A favorable impact from higher average equity markets for the three months ended ~~June 30, 2021~~March 31, 2022 compared to the prior year period.

•A favorable impact from continued client net inflows from Advice & Wealth ~~Management and Asset~~ Management.

•A $20 million favorable impact of higher asset management net performance fees.

•The mean reversion related impact was ~~a benefit~~an expense of ~~$42~~$59 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a benefit of ~~$14~~$56 million for the prior year period.

~~Net Revenues~~•A $45 million unfavorable impact due to more normalized long term care (“LTC”) insurance claims in the current period compared to the benefit of COVID-19 related impacts in the year ago period.

Net ~~revenues increased $706 million, or 26%, to $3.4 billion for the three months ended June 30, 2021 compared to $2.7 billion for the prior year period.~~Revenues

Management and financial advice fees increased ~~$549~~$357 million, or ~~32%~~17%, ~~to $2.3 billion~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$1.7 billion for~~ the prior year period reflecting higher average equity markets, ~~and higher~~revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business, continued wrap account net ~~inflows.~~inflows, and a $53 million increase in performance fees.

Distribution fees ~~increased $77~~decreased $12 million, or ~~21%~~3%, ~~to $452 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$375 million for~~ the prior year period due to ~~increased~~decreased transactional activity, ~~and~~partially offset by higher average equity markets.

AMERIPRISE FINANCIAL, INC.

Net investment income decreased ~~$27~~$116 million, or 9%31%, ~~to $278 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$305 million for~~ the prior year period primarily reflecting the following items:

•Net realized investment gains of ~~$11~~$20 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to net realized investment ~~losses~~gains of $3$69 million for the prior year period. Net realized investment gains ~~for~~included a $15 million gain on a strategic investment in the ~~three months ended June 30, 2021 included net~~prior year period.

•

~~AMERIPRISE FINANCIAL, INC.~~

~~realized gains~~The unfavorable impact of ~~$14 million on Available-for-Sale securities~~lower average invested assets due to ~~sales, calls,~~the sale of investments to a reinsurer as a result of the fixed deferred and tenders, which was mostly offset by a $13 million loss associated with certain Available-for-Sale securities for which we have the intent to sell. Also included in net realized investment gains was a $13 million net gain primarily related to commercial mortgage loans and syndicated loans, reflecting reductions in the allowance for credit losses partially offset by the recording of a valuation allowance related to loans reclassified to held for sale. Net realized investment losses for the three months ended June 30, 2020 included a $4 million increase in the allowance for credit losses for Available-for-Sale securities and financing receivables.immediate annuity reinsurance transaction.

•A $17 million ~~unfavorable change~~decrease in ~~the market impact~~net investment income of ~~hedges to offset interest rate and currency changes on certain investments.~~CIEs.

•The unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificate ~~and on-balance sheet brokerage cash~~ products.

Premiums, policy and contract charges increased ~~$92~~$21 million, or ~~34% to $364 million~~6%, for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$272 million for~~ the prior year primarily reflecting a favorable change in unearned revenue amortization and the reinsurance accrual offset to the market impact on IUL benefits.

Other revenues increased $52 million, or 73%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Banking and deposit interest expense decreased ~~$16~~$3 million, or ~~89%~~60%, ~~to $2 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$18 million~~the prior year period due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

~~Total~~Distribution expenses ~~decreased $541~~increased $122 million, or ~~17%~~10%, ~~to $2.7 billion~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$3.2 billion for the prior year period.~~

~~Distribution expenses increased $293 million, or 31%, to $1.2 billion for the three months ended June 30, 2021 compared to $940 million for~~ the prior year period reflecting higher advisor compensation primarily due to an increase in average wrap account balances, ~~and increased~~partially offset by decreased transactional activity.

Interest credited to fixed accounts decreased ~~$138~~$18 million, or ~~53%~~11%, ~~to $124 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$262 million for~~ the prior year period primarily reflecting the following items:

•A ~~$180~~$29 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The ~~unfavorable~~favorable impact of the nonperformance credit spread was ~~$13~~$28 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to an unfavorable impact of ~~$193~~$1 million for the prior year period.

•A ~~$49~~$14 million increase in expense from other market impacts on IUL benefits, net of hedges, which was ~~a benefit~~an expense of ~~$50~~$12 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a benefit of ~~$99~~$2 million for the prior year period. The increase in expense was primarily due to ~~a decrease~~an increase in the IUL embedded derivative in the ~~prior year~~current period, which reflected ~~lower~~higher option costs due to ~~lower credit spreads.~~a higher new money rate.

Benefits, claims, losses and settlement expenses decreased ~~$1.1 billion to $404~~$442 million, ~~for~~or 68%, the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~a benefit of $1.5 billion for~~ the prior year period primarily reflecting the following items:

•A ~~$1.0 billion~~$207 million decrease in expense primarily reflecting the impact of year-over-year changes in the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits. The ~~favorable~~unfavorable impact of ~~$63~~the nonperformance credit spread was $18 million for the three months ended ~~June 30, 2021 was driven by changes in the undiscounted embedded derivative liability~~March 31, 2022 compared to an unfavorable impact of ~~$953~~$225 million for the prior year period primarily as a result of the nonperformance credit spread decreasing by 115 basis points in the prior year quarter due to improvement in credit markets following market volatility related to the COVID-19 pandemic.period. As the undiscounted embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread on benefits expenses is favorable (unfavorable) ~~to expense.~~. Additionally, as the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease.

•A ~~$77~~$339 million decrease in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization. This ~~increase~~decrease was the result of a favorable ~~$2.0~~$1.3 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by an unfavorable ~~$1.9 billion~~$950 million change in the market impact on variable annuity guaranteed living benefits reserves. The main market drivers contributing to these changes are summarized below:

•Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a ~~lower expense~~benefit for the three months ended ~~June 30, 2021~~March 31, 2022 compared to an expense for the prior year period.

•Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in ana higher expense for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~a benefit for~~ the prior year period.

•Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in ana lower expense for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~a benefit for~~ the prior year period.

6356

AMERIPRISE FINANCIAL, INC.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a ~~lower~~ net ~~benefit~~expense for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a net benefit for the prior year period.

•The mean reversion related impact was ~~a benefit~~an expense of ~~$25~~$34 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~an expense~~a benefit of $5$34 million for the prior year period.

•A $41 million increase in expense on LTC insurance as claims returned to more normalized levels compared to the prior year period which benefited from COVID-19 related impacts.

Amortization of DAC increased ~~$311 million to $63~~$91 million, for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~a benefit of $248 million for~~ the prior year period primarily reflecting the following items:

•The DAC offset to the market impact on non-traditional long-duration products was an expense of $5$11 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a benefit of ~~$265~~$46 million for the prior year period.

•The mean reversion related impact was ~~a benefit~~an expense of ~~$16~~$25 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a benefit of ~~$18~~$22 million for the prior year period.

•A ~~higher level of normalized~~decrease in amortization ~~due to the growth of variable annuities and unlocked market and policyholder assumptions in the prior year.~~reflecting lower than expected client exit rates.

General and administrative expense increased ~~$54~~$124 million, or 7%15%, ~~to $830 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$776 million for~~ the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, higher ~~volume~~performance fee related compensation, and $10 million of integration related expenses, partially offset by an unfavorable ~~foreign exchange~~change in the mark-to-market impact ~~and higher performance-based compensation.~~on share-based compensation in the prior year period.

Income Taxes

Our effective tax rate was ~~18.1%~~17.6% for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~(2.4)%~~11.3% for the prior year period. The higher effective tax rate for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~the prior year period~~March 31, 2021 is primarily the result of ~~the net operating loss benefit reversal~~higher pretax income and a decrease in low income housing tax credits, partially offset by an increase in incentive compensation in the current period compared to the prior ~~year~~ period. See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment for the Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~

Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. See Note 18 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.

The following table presents summary financial information by segment:


		Three Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Advice & Wealth Management	Advice & Wealth Management					Advice & Wealth Management
Net revenues	Net revenues	$	1,980	$	1,537	Net revenues	$	2,042	$	1,879
Expenses	Expenses	1,557		1,266		Expenses	1,602		1,490
Adjusted operating earnings	Adjusted operating earnings	$	423	$	271	Adjusted operating earnings	$	440	$	389
Asset Management	Asset Management					Asset Management
Net revenues	Net revenues	$	879	$	668	Net revenues	$	1,017	$	828
Expenses	Expenses	626		527		Expenses	732		600
Adjusted operating earnings	Adjusted operating earnings	$	253	$	141	Adjusted operating earnings	$	285	$	228
Retirement & Protection Solutions	Retirement & Protection Solutions					Retirement & Protection Solutions
Net revenues	Net revenues	$	808	$	755	Net revenues	$	772	$	787
Expenses	Expenses	626		533		Expenses	581		604
Adjusted operating earnings	Adjusted operating earnings	$	182	$	222	Adjusted operating earnings	$	191	$	183
Corporate & Other	Corporate & Other					Corporate & Other
Net revenues	Net revenues	$	119	$	131	Net revenues	$	116	$	139
Expenses	Expenses	196		188		Expenses	192		160
Adjusted operating loss	Adjusted operating loss	$	(77)	$	(57)	Adjusted operating loss	$	(76)	$	(21)

6457

AMERIPRISE FINANCIAL, INC.

Advice & Wealth Management

The following table presents the changes in wrap account assets and average balances for the three months ended ~~June 30:~~March 31:


		2021		2020			2022		2021
		(in billions)					(in billions)
Beginning balance	Beginning balance	$	399.8	$	275.5	Beginning balance	$	464.7	$	380.0
Net flows ~~(1)~~	Net flows ~~(1)~~	10.0		5.6		Net flows ~~(1)~~	8.7		10.4
Market appreciation (depreciation) and other ~~(1)~~	Market appreciation (depreciation) and other ~~(1)~~	20.2		36.5		Market appreciation (depreciation) and other ~~(1)~~	(26.4)		9.4
Ending balance	Ending balance	$	430.0	$	317.6	Ending balance	$	447.0	$	399.8

Advisory wrap account assets ending balance ~~(2)~~(1)	Advisory wrap account assets ending balance ~~(2)~~(1)	$	425.2	$	313.9	Advisory wrap account assets ending balance ~~(2)~~(1)	$	442.1	$	395.3
Average advisory wrap account assets ~~(3)~~(2)	Average advisory wrap account assets ~~(3)~~(2)	$	407.7	$	290.9	Average advisory wrap account assets ~~(3)~~(2)	$	445.7	$	379.3

(1) Beginning in the first quarter of 2021, wrap net flows is calculated including dividends and interest less fees, which were previously recorded in Market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

~~(2)~~ Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

~~(3)~~(2) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

Wrap account assets ~~increased $30.2~~decreased $17.7 billion, or 8%4%, during the three months ended ~~June 30, 2021~~March 31, 2022 due to market depreciation of $26.4 billion, partially offset by net inflows of ~~$10.0 billion and market appreciation of $20.2~~$8.7 billion. Average advisory wrap account assets increased ~~$116.8~~$66.4 billion, or ~~40%~~18%, compared to the prior year period primarily reflecting net inflows, along with market ~~appreciation and net inflows.~~appreciation.

The following table presents the results of operations of our Advice & Wealth Management segment on an adjusted operating basis:


		Three Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2021		2020							2022		2021
		(in millions)									(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	Management and financial advice fees	$	1,299	$	969	$	330	34	%	Management and financial advice fees	$	1,380	$	1,205	$	175	15	%
Distribution fees	Distribution fees	562		453		109		24		Distribution fees	529		559		(30)		(5)
Net investment income	Net investment income	63		77		(14)		(18)		Net investment income	78		64		14		22
Other revenues	Other revenues	58		56		2		4		Other revenues	57		56		1		2
Total revenues	Total revenues	1,982		1,555		427		27		Total revenues	2,044		1,884		160		8
Banking and deposit interest expense	Banking and deposit interest expense	2		18		(16)		(89)		Banking and deposit interest expense	2		5		(3)		(60)
Total net revenues	Total net revenues	1,980		1,537		443		29		Total net revenues	2,042		1,879		163		9
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	1,194		913		281		31		Distribution expenses	1,232		1,135		97		9
Interest and debt expense	Interest and debt expense	2		3		(1)		(33)		Interest and debt expense	2		3		(1)		(33)
General and administrative expense	General and administrative expense	361		350		11		3		General and administrative expense	368		352		16		5
Total expenses	Total expenses	1,557		1,266		291		23		Total expenses	1,602		1,490		112		8
Adjusted operating earnings	Adjusted operating earnings	$	423	$	271	$	152	56	%	Adjusted operating earnings	$	440	$	389	$	51	13	%

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased ~~$152~~$51 million, or ~~56%~~13%, ~~to $423 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$271 million for~~ the prior year period primarily reflecting higher average wrap account balances due to net inflows, ~~and~~ market appreciation, and ~~improved transactional activity.~~increased bank profitability. Pretax adjusted operating margin was ~~21.4%~~21.5% for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~17.6%~~20.7% for the prior year period. Cash balances increased $5.3 billion to $45.7 billion contrary to normal seasonal patterns in the first quarter.

Ameriprise Bank, FSB ~~has continued to add deposits,~~is continuing its deposit growth trend, with ~~$8.7 billion of~~ cash sweep balances ~~as of June 30, 2021. In~~increasing $5.2 billion from the ~~fourth quarter of 2020, we acquired $224 million in an existing portfolio of~~prior year period to $13.2 billion and brokerage client pledged asset lines of credit ~~which has grown~~increasing to ~~over $350~~$520 million as of ~~June 30, 2021.~~

~~AMERIPRISE FINANCIAL, INC.~~

March 31, 2022.

Net Revenues

Net revenues exclude net realized investment gains or losses. Net revenues increased $443 million, or 29%, to $2.0 billion for the three months ended June 30, 2021 compared to $1.5 billion for the prior year period. Adjusted operating net revenue per advisor increased to $197,000 for the three months ended June 30, 2021, up 27%, compared to $155,000 for the prior year period.

Management and financial advice fees increased ~~$330~~$175 million, or ~~34%~~15%, ~~to $1.3 billion~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$1.0 billion for~~ the prior year period primarily due to growth in average wrap account assets. Average advisory wrap account assets increased ~~$116.8~~$66.4 billion, or ~~40%~~18%, compared to the prior year period reflecting net inflows and market ~~appreciation and net inflows.~~appreciation.

Distribution fees ~~increased $109~~decreased $30 million, or ~~24%~~5%, ~~to $562 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$453 million for~~ the prior year period reflecting ~~increased~~decreased transactional activity, ~~and~~partially offset by higher average equity markets.

AMERIPRISE FINANCIAL, INC.

Net investment income, which excludes net realized investment gains or losses, ~~decreased~~increased $14 million, or ~~18%~~22%, ~~to $63 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$77 million for~~ the prior year period primarily due to higher average invested assets due to increased bank deposits, partially offset by lower certificate balances and the unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificate ~~and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.~~products.

Banking and deposit interest expense decreased ~~$16~~$3 million, or ~~89%~~60%, ~~to $2 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$18 million for~~ the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

Expenses

~~Total~~Distribution expenses increased ~~$291~~$97 million, or ~~23%~~9%, ~~to $1.6 billion~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$1.3 billion for the prior year period.~~

~~Distribution expenses increased $281 million, or 31%, to $1.2 billion for the three months ended June 30, 2021 compared to $913 million for~~ the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets, ~~and increased~~partially offset by decreased transactional activity.

General and administrative expense increased ~~$11~~$16 million, or 3%5%, ~~to $361 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$350 million for~~ the prior year period primarily ~~due to~~reflecting higher volume related ~~expenses and higher performance-based compensation~~ expenses.

~~Asset Management~~

~~The following tables present the fund performance of our retail Columbia Threadneedle Investments funds as of June 30, 2021:~~

Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted 1 year 3 year 5 year 10 year
Equity 61% 87% 87% 88%
Fixed Income 87% 73% 91% 90%
Asset Allocation 39% 88% 95% 89%
4- or 5-star Morningstar rated funds Overall 3 year 5 year 10 year
Number of rated funds 110 100 98 88
Percent of rated assets 71% 64% 63% 73%

Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index. Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees. Comparisons to Index are measured Gross of Fees.

To calculate asset weighted performance, the sum of the total assets of the funds with above median ranking are divided by total assets of all funds. Funds with more assets will receive a greater share of the total percentage above or below median.

~~Aggregated Asset Allocation Funds may include funds that invest in other Columbia or Threadneedle branded mutual funds included in both equity and fixed income.~~

~~AMERIPRISE FINANCIAL, INC.~~

The following table presents global managed assets by type:
Average (1)
Change
As of June 30, Change Three Months Ended June 30,
2021 2020 2021 2020
(in billions)
Equity $ 339.0 $ 251.4 $ 87.6 35 % $ 330.8 $ 235.8 $ 95.0 40 %
Fixed income 203.1 183.1 20.0 11 200.2 179.0 21.2 12
Money market 5.5 5.0 0.5 10 5.8 5.1 0.7 14
Alternative 3.9 3.1 0.8 26 3.8 3.0 0.8 27
Hybrid and other 41.9 33.5 8.4 25 41.2 33.4 7.8 23
Total managed assets $ 593.4 $ 476.1 $ 117.3 25 % $ 581.8 $ 456.3 $ 125.5 28 %

~~(1)~~ ~~Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.~~

~~The following table presents the changes in global managed assets:~~

Three Months Ended June 30,
2021 2020
(in billions)
Global Retail Funds
Beginning assets $ 340.2 $ 239.0
Inflows 19.4 15.9
Outflows (17.1) (14.2)
Net VP/VIT fund flows (1.0) (0.6)
Net new flows 1.3 1.1
Reinvested dividends 2.9 2.0
Net flows 4.2 3.1
Distributions (3.3) (2.3)
Market appreciation (depreciation) and other 18.1 34.3
Foreign currency translation (1)
0.3 —
Total ending assets 359.5 274.1
Global Institutional
Beginning assets 223.9 187.2
Inflows (2)
9.3 6.4
Outflows (2)
(6.8) (6.9)
Net flows 2.5 (0.5)
Market appreciation (depreciation) and other (3)
7.1 15.7
Foreign currency translation (1)
0.4 (0.4)
Total ending assets 233.9 202.0
Total managed assets $ 593.4 $ 476.1
Total net flows $ 6.7 $ 2.6
Legacy insurance partners net flows (4)
$ (1.4) $ (1.3)

~~(1)~~ ~~Amounts represent local currency to US dollar translation for reporting purposes.~~

~~(2)~~ ~~Global Institutional inflows and outflows include net flows from our RiverSource Structured Annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.~~

~~(3)~~ Included in Market appreciation (depreciation) and other for Global Institutional is the change in affiliated general account balance, excluding net flows related to our structured variable annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.

~~(4)~~ ~~Legacy insurance partners assets and net flows are included in the rollforwards above.~~

~~AMERIPRISE FINANCIAL, INC.~~

The United Kingdom’s (“U.K.”) and the European Union’s (“EU”) trade and cooperation agreement did not include cross-border financial services. As a result, our U.K. asset management business is no longer able to market its services into the EU on a passporting basis and must now comply with local EU and country requirements as a non-EU firm, which includes leveraging our Luxembourg-based management company affiliate to provide services and marketing to EU clients and investors. As a result, the full impact of Brexit remains uncertain.

Total segment AUM increased $29.3 billion, or 5%, during the three months ended June 30, 2021. Net inflows were $6.7 billion in the second quarter of 2021, a $4.1 billion increase compared to the prior year period. Global retail net inflows were $4.2 billion. Global institutional net inflows were $2.5 billion and included $1.4 billion of outflows from legacy insurance partners assets.

~~The following table presents the results of operations of our Asset Management segment on an adjusted operating basis:~~

Three Months Ended June 30, Change
2021 2020
(in millions)
Revenues
Management and financial advice fees $ 758 $ 570 $ 188 33 %
Distribution fees 118 96 22 23
Net investment income 2 1 1 NM
Other revenues 1 1 — —
Total revenues 879 668 211 32
Banking and deposit interest expense — — — —
Total net revenues 879 668 211 32
Expenses
Distribution expenses 282 220 62 28
Amortization of deferred acquisition costs 3 3 — —
Interest and debt expense 1 1 — —
General and administrative expense 340 303 37 12
Total expenses 626 527 99 19
Adjusted operating earnings $ 253 $ 141 $ 112 79 %
NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $112 million, or 79%, to $253 million for the three months ended June 30, 2021 compared to $141 million for the prior year period primarily due to a higher level of average AUM from market appreciation and net inflows.

~~Net Revenues~~

Net revenues, which exclude net realized investment gains or losses, increased $211 million, or 32%, to $879 million for the three months ended June 30, 2021 compared to $668 million for the prior year period.

Management and financial advice fees increased $188 million, or 33%, to $758 million for the three months ended June 30, 2021 compared to $570 million for the prior year period primarily due to higher average equity markets, the impact from net inflows and the impact of foreign exchange rates.

Distribution fees increased $22 million, or 23%, to $118 million for the three months ended June 30, 2021 compared to $96 million for the prior year period primarily due to higher average equity markets.

~~Expenses~~

~~Total expenses increased $99 million, or 19%, to $626 million for the three months ended June 30, 2021 compared to $527 million for the prior year period.~~

Distribution expenses increased $62 million, or 28%, to $282 million for the three months ended June 30, 2021 compared to $220 million for the prior year period reflecting higher average equity markets.

General and administrative expense increased $37 million, or 12%, to $340 million for the three months ended June 30, 2021 compared to $303 million for the prior year period primarily reflecting higher performance-based compensation expenses related to stronger business performance and the impact of foreign exchange rates.

~~AMERIPRISE FINANCIAL, INC.~~

~~Retirement & Protection Solutions~~

~~The following table presents the results of operations of our Retirement & Protection Solutions segment on an adjusted operating basis:~~

Three Months Ended June 30, Change
2021 2020
(in millions)
Revenues
Management and financial advice fees $ 234 $ 200 $ 34 17 %
Distribution fees 122 106 16 15
Net investment income 127 129 (2) (2)
Premiums, policy and contract charges 325 320 5 2
Total revenues 808 755 53 7
Banking and deposit interest expense — — — —
Total net revenues 808 755 53 7
Expenses
Distribution expenses 134 111 23 21
Interest credited to fixed accounts 98 97 1 1
Benefits, claims, losses and settlement expenses 241 212 29 14
Amortization of deferred acquisition costs 70 30 40 NM
Interest and debt expense 9 11 (2) (18)
General and administrative expense 74 72 2 3
Total expenses 626 533 93 17
Adjusted operating earnings $ 182 $ 222 $ (40) (18) %
NM Not Meaningful.

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization, unearned amortization and the reinsurance accrual), and mean reversion related impacts, decreased $40 million, or 18%, to $182 million for the three months ended June 30, 2021 compared to $222 million for the prior year period.

RiverSource variable annuity account balances increased 17% to $90.5 billion as of June 30, 2021 compared to the prior year period due to market appreciation, partially offset by net outflows of $1.8 billion. Variable annuity sales increased 88% compared to the prior year period reflecting an increase in sales of structured variable annuities launched in 2020. Sales of variable annuities without living benefit guarantees comprised 66% of total variable annuity sales for the three months ended June 30, 2021 compared to 51% for the prior year period. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

~~Net Revenues~~

Management and financial advice fees increased $34 million, or 17%, to $234 million for the three months ended June 30, 2021 compared to $200 million for the prior year period primarily due to market appreciation, partially offset by variable annuity net outflows.

~~Distribution fees increased $16 million, or 15%, to $122 million for the three months ended June 30, 2021 compared to $106 million for the prior year period due to higher average equity markets.~~

~~Expenses~~

Distribution expenses increased $23 million, or 21%, to $134 million for the three months ended June 30, 2021 compared to $111 million for the prior year period primarily reflecting higher average equity markets and increased variable annuity and insurance sales.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, increased $29 million, or 14%, to $241 million for the three months ended June 30, 2021 compared to $212 million for the prior year period primarily reflecting higher reserve funding as surrenders and withdrawals returned to more normalized levels versus the historically low levels experienced in the prior year period.

~~AMERIPRISE FINANCIAL, INC.~~

Amortization of DAC, which excludes mean reversion related impacts, the DAC offset to the market impact on variable annuity contracts and IUL contracts and the DAC offset to net realized investment gains or losses, increased $40 million to $70 million for the three months ended June 30, 2021 compared to $30 million for the prior year period primarily reflecting the higher level of normalized amortization.

~~Corporate & Other~~

~~The following table presents the results of operations of our Corporate & Other segment on an adjusted operating basis:~~

Three Months Ended June 30, Change
2021 2020
(in millions)
Revenues
Net investment income $ 79 $ 88 $ (9) (10) %
Premiums, policy and contract charges 25 25 — —
Other revenues 16 19 (3) (16)
Total revenues 120 132 (12) (9)
Banking and deposit interest expense 1 1 — —
Total net revenues 119 131 (12) (9)
Expenses
Distribution expenses (2) (2) — —
Interest credited to fixed accounts 62 64 (2) (3)
Benefits, claims, losses and settlement expenses 54 42 12 29
Amortization of deferred acquisition costs 2 3 (1) (33)
Interest and debt expense 17 16 1 6
General and administrative expense 63 65 (2) (3)
Total expenses 196 188 8 4
Adjusted operating loss $ (77) $ (57) $ (20) (35) %

~~Our Corporate & Other segment includes our closed blocks of long term care (“LTC”) insurance and fixed annuity and fixed indexed annuity (“FA”) business.~~

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs. Our Corporate & Other segment pretax adjusted operating loss increased $20 million, or 35%, to $77 million for the three months ended June 30, 2021 compared to $57 million for the prior year period primarily reflecting higher claims in LTC insurance and lower investment income, including a $7 million impairment in our affordable housing partnerships.

LTC insurance had pretax adjusted operating earnings of $3 million for the three months ended June 30, 2021 compared to pretax adjusted operating earnings of $17 million for the prior year period reflecting the return to more normalized results compared to the COIVD-19 related impacts in the year ago period.

FA business had a pretax adjusted operating loss of $6 million for the three months ended June 30, 2021 compared to a pretax adjusted operating earnings of $3 million for the prior year period reflecting the low interest rate impact on spread income.

RiverSource fixed deferred annuity account balances declined 4% to $7.8 billion as of June 30, 2021 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities and fixed index annuities due to the low interest rate environment as well as our strategic decisions regarding our fixed annuity business.

~~Net Revenues~~

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, integration and restructuring charges, and the impact of consolidating CIEs, decreased $9 million, or 10%, to $79 million for the three months ended June 30, 2021 compared to $88 million for the prior year period primarily reflecting lower average invested assets due to fixed annuity net outflows and lower portfolio yields, as well as a $7 million impairment in our affordable housing partnerships.

~~AMERIPRISE FINANCIAL, INC.~~

~~Expenses~~

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, increased $12 million, or 29%, to $54 million for the three months ended June 30, 2021 compared to $42 million for the prior year period primarily reflecting the impacts from COVID-19 on LTC insurance in the prior year period.

~~Consolidated Results of Operations for the Six Months Ended June 30, 2021 and 2020~~

~~The following table presents our consolidated results of operations:~~

Six Months Ended June 30, Change
2021 2020
(in millions)
Revenues
Management and financial advice fees $ 4,353 $ 3,472 $ 881 25 %
Distribution fees 910 839 71 8
Net investment income 655 633 22 3
Premiums, policy and contract charges 711 667 44 7
Other revenues 146 145 1 1
Total revenues 6,775 5,756 1,019 18
Banking and deposit interest expense 7 43 (36) (84)
Total net revenues 6,768 5,713 1,055 18
Expenses
Distribution expenses 2,408 1,935 473 24
Interest credited to fixed accounts 283 353 (70) (20)
Benefits, claims, losses and settlement expenses 1,057 (280) 1,337 NM
Amortization of deferred acquisition costs 68 264 (196) (74)
Interest and debt expense 85 87 (2) (2)
General and administrative expense 1,653 1,529 124 8
Total expenses 5,554 3,888 1,666 43
Pretax income 1,214 1,825 (611) (33)
Income tax provision 186 328 (142) (43)
Net income $ 1,028 $ 1,497 $ (469) (31) %
NM Not Meaningful.

~~Overall~~

~~Pretax income decreased $611 million, or 33%, to $1.2 billion for the six months ended June 30, 2021 compared to $1.8 billion for the prior year period.~~

•The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $483 million for the six months ended June 30, 2021 compared to a benefit of $670 million for the prior year period.

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

•~~A positive impact from higher average equity markets during the six months ended June 30, 2021 compared to the prior year period.~~

•~~The mean reversion related impact was a benefit of $98 million for the six months ended June 30, 2021 compared to an expense of $47 million for the prior year period.~~

•~~A positive impact from higher client net inflows and higher transactional activity during the six months ended June 30, 2021 compared to the prior year period.~~

~~Net Revenues~~

~~Net revenues increased $1.1 billion, or 18%, to $6.8 billion for the six months ended June 30, 2021 compared to $5.7 billion for the prior year period.~~

Management and financial advice fees increased $881 million, or 25%, to $4.4 billion for the six months ended June 30, 2021 compared to $3.5 billion for the prior year period reflecting higher average equity markets and higher wrap account net inflows and an unfavorable $19 million performance fee correction in the prior year period.

~~AMERIPRISE FINANCIAL, INC.~~

Distribution fees increased $71 million, or 8%, to $910 million for the six months ended June 30, 2021 compared to $839 million due to higher average equity markets and increased transactional activity, partially offset by $55 million of lower fees on off-balance sheet brokerage cash primarily due to a decrease in short-term interest rates.

~~Net investment income increased $22 million, or 3%, to $655 million for the six months ended June 30, 2021 compared to $633 million for the prior year period primarily reflecting:~~

•Net realized investment gains of $65 million for the six months ended June 30, 2021 compared to net realized investment losses of $22 million for the prior year period. Net realized investment gains for the six months ended June 30, 2021 included a $15 million gain on a strategic investment and net realized gains of $64 million on Available-for-Sale securities due to sales, calls, and tenders, partially offset by a $13 million loss associated with certain Available-for-Sale securities for which we have the intent to sell. Also included in net realized investment gains was a $16 million net gain related to commercial mortgage loans and syndicated loans, primarily reflecting reductions in the allowance for credit losses partially offset by the recording of a valuation allowance related to loans reclassified to held for sale. Net realized investment losses for the six months ended June 30, 2020 included a $27 million increase in allowance for credit losses for Available-for-Sale securities and financing receivables.

•~~An increase of $20 million in net investment income of CIEs~~

•~~The unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products.~~

•~~A $17 million unfavorable change in the market impact of hedges to offset interest rate and currency changes on certain investments.~~

Premiums, policy and contract charges increased $44 million, or 7% to $711 million for the six months ended June 30, 2021 compared to $667 million primarily reflecting a favorable change in unearned revenue amortization and the reinsurance accrual offset to the market impact on IUL benefits, partially offset by lower sales of immediate annuities with a life contingent feature.

Banking and deposit interest expense decreased $36 million, or 84%, to $7 million for the six months ended June 30, 2021 compared to $43 million due to lower average crediting rates on certificates and lower average certificate balances.

~~Expenses~~

~~Total expenses increased $1.7 billion, or 43%, to $5.6 billion for the six months ended June 30, 2021 compared to $3.9 billion for the prior year period.~~

Distribution expenses increased $473 million, or 24%, to $2.4 billion for the six months ended June 30, 2021 compared to $1.9 billion for the prior year period reflecting higher advisor compensation due to an increase in average wrap account balances and increased transactional activity.

Interest credited to fixed accounts decreased $70 million, or 20%, to $283 million for the six months ended June 30, 2021 compared to $353 million for the prior year period primarily reflecting the following items:

•A $55 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The unfavorable impact of the nonperformance credit spread was $14 million for the six months ended June 30, 2021 compared to a favorable impact of $41 million for the prior year period.

•A $119 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $52 million for the six months ended June 30, 2021 compared to an expense of $67 million for the prior year period. The decrease in expense was primarily due to a decrease in the IUL embedded derivative in the current period, which reflected lower option costs due to higher discount rates compared to an increase in the IUL embedded derivative in the prior year period, which reflected higher option costs due to lower discount rates.

Benefits, claims, losses and settlement expenses increased $1.3 billion to $1.1 billion for the six months ended June 30, 2021 compared to a benefit of $280 million for the prior year period primarily reflecting the following items:

•A $795 million increase in expense primarily reflecting the impact of year-over-year changes in the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits. The unfavorable impact of the nonperformance credit spread was $162 million for the six months ended June 30, 2021 and was driven by changes in the undiscounted embedded derivative liability compared to a favorable impact of $633 million for the prior year period. As the undiscounted embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense. Additionally, as the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease

•A $649 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization. This increase was the result of an unfavorable $4.6 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by a favorable $3.9 billion change in the market impact on variable annuity guaranteed living benefits reserves. The main market drivers contributing to these changes are summarized below:

~~AMERIPRISE FINANCIAL, INC.~~

•Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in an expense for the six months ended June 30, 2021 compared to a benefit in the prior year period.

•Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the six months ended June 30, 2021 compared to the prior year period.

•Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the six months ended June 30, 2021 compared to the prior year period.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a net benefit for the six months ended June 30, 2021 compared to a net expense for the prior year period.

•~~The mean reversion related impact was a benefit of $59 million for the six months ended June 30, 2021 compared to an expense of $29 million for the prior year period.~~

•~~A decrease in LTC claims reflecting fewer LTC clients entering nursing homes as well as increased mortality-related client terminations due to COVID-19.~~

•~~A $13 million decrease in reserves for immediate annuities with a life contingent feature primarily due to lower sales. This impact is offset by a decrease in premiums.~~

Amortization of DAC decreased $196 million, or 74%, to $68 million for the six months ended June 30, 2021 compared to $264 million for the prior year period primarily reflecting the following items:

•The DAC offset to the market impact on non-traditional long-duration products was a benefit of $40 million for the six months ended June 30, 2021 compared to an expense of $152 million for the prior year period.

•~~The mean reversion related impact was a benefit of $38 million for the six months ended June 30, 2021 compared to an expense of $18 million for the prior year period.~~

General and administrative expense increased $124 million, or 8%, to $1.7 billion for the six months ended June 30, 2021 compared to $1.5 billion for the prior year period primarily reflecting higher performance related compensation, higher expenses from CIEs, and an unfavorable foreign exchange impact, partially offset by disciplined expense management and reengineering.

~~Income Taxes~~

Our effective tax rate was 15.4% for the six months ended June 30, 2021 compared to 18.0% for the prior year period. The lower effective tax rate for the six months ended June 30, 2021 compared to June 30, 2020 is primarily the result of an increase in tax preferred items, including foreign tax credits and incentive compensation, partially offset by lower income in the quarter relative to income expected for the full year. See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

~~Results of Operations by Segment for the Six Months Ended June 30, 2021 and 2020~~

~~The following table presents summary financial information by segment:~~

Six Months Ended June 30,
2021 2020
(in millions)
Advice & Wealth Management
Net revenues $ 3,859 $ 3,232
Expenses 3,047 2,583
Adjusted operating earnings $ 812 $ 649
Asset Management
Net revenues $ 1,707 $ 1,354
Expenses 1,226 1,056
Adjusted operating earnings $ 481 $ 298
Retirement & Protection Solutions
Net revenues $ 1,595 $ 1,514
Expenses 1,230 1,125
Adjusted operating earnings $ 365 $ 389
Corporate & Other
Net revenues $ 258 $ 280
Expenses 356 387
Adjusted operating loss $ (98) $ (107)

~~AMERIPRISE FINANCIAL, INC.~~

~~Advice & Wealth Management~~

~~The following table presents the changes in wrap account assets and average balances for the six months ended June 30:~~

2021 2020
(in billions)
Beginning balance $ 380.0 $ 317.5
Net flows (1)
20.4 12.3
Market appreciation (depreciation) and other (1)
29.6 (12.2)
Ending balance $ 430.0 $ 317.6
Advisory wrap account assets ending balance (2)
$ 425.2 $ 313.9
Average advisory wrap account assets (3)
$ 393.5 $ 301.0

~~(1)~~ Beginning in the first quarter of 2021, wrap net flows is calculated including dividends and interest less fees which were previously recorded in Market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

~~(3)~~ Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the six months ended June 30, 2021 and 2020.

Wrap account assets increased $50.0 billion, or 13%, during the six months ended June 30, 2021 due to net inflows of $20.4 billion and market appreciation and other of $29.6 billion. Average advisory wrap account assets increased $92.5 billion, or 31%, compared to the prior year period primarily reflecting market appreciation and net inflows.

~~The following table presents the results of operations of our Advice & Wealth Management segment on an adjusted operating basis:~~

Six Months Ended June 30, Change
2021 2020
(in millions)
Revenues
Management and financial advice fees $ 2,504 $ 1,993 $ 511 26 %
Distribution fees 1,121 1,001 120 12
Net investment income 127 177 (50) (28)
Other revenues 114 104 10 10
Total revenues 3,866 3,275 591 18
Banking and deposit interest expense 7 43 (36) (84)
Total net revenues 3,859 3,232 627 19
Expenses
Distribution expenses 2,329 1,883 446 24
Interest and debt expense 5 5 — —
General and administrative expense 713 695 18 3
Total expenses 3,047 2,583 464 18
Adjusted operating earnings $ 812 $ 649 $ 163 25 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $163 million, or 25%, to $812 million for the six months ended June 30, 2021 compared to $649 million for the prior year period due to higher average wrap account balances and increased transactional activity, partially offset by lower earnings on brokerage cash as a result of low interest rates. Pretax adjusted operating margin was 21.0% for the for the six months ended June 30, 2021 compared to 20.1% for the prior year period.

~~Net Revenues~~

Net revenues exclude net realized investment gains or losses. Net revenues increased $627 million, or 19%, to $3.9 billion for the six months ended June 30, 2021 compared to $3.2 billion for the prior year period .

Management and financial advice fees increased $511 million, or 26%, to $2.5 billion for the six months ended June 30, 2021 compared to $2.0 billion for the prior year period primarily due to growth in average wrap account assets. Average advisory wrap

~~AMERIPRISE FINANCIAL, INC.~~

~~account assets increased $92.5 billion, or 31%, compared to the prior year period primarily reflecting market appreciation and net inflows.~~

Distribution fees increased $120 million, or 12%, to $1.1 billion for the six months ended June 30, 2021 compared to $1.0 billion for the prior year period reflecting increased transactional activity and higher average equity markets, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, decreased $50 million, or 28%, to $127 million for the six months ended June 30, 2021 compared to $177 million for the prior year period primarily due to lower certificate balances and the unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificates and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $36 million, or 84%, to $7 million for the six months ended June 30, 2021 compared to $43 million for the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

~~Expenses~~

~~Total expenses increased $464 million, or 18%, to $3.0 billion for the six months ended June 30, 2021 compared to $2.6 billion for the prior year period.~~

Distribution expenses increased $446 million, to $2.3 billion for the six months ended June 30, 2021 compared to $1.9 billion for the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets and increased investments in recruiting experienced advisors.

General and administrative expense increased $18 million, or 3%, to $713 million for the six months ended June 30, 2021 compared to $695 million for the prior year period primarily due to higher volume related expenses and higher performance-based compensation expenses.

Asset Management

The following table presents global managed assets by type:
Average (1)
Change
As of June 30, Change Six Months Ended June 30,
2021 2020 2021 2020
(in billions)
Equity $ 339.0 $ 251.4 $ 87.6 35 % $ 319.8 $ 245.7 $ 74.1 30 %
Fixed income 203.1 183.1 20.0 11 198.5 180.9 17.6 10
Money market 5.5 5.0 0.5 10 5.9 4.9 1.0 20
Alternative 3.9 3.1 0.8 26 3.8 3.1 0.7 23
Hybrid and other 41.9 33.5 8.4 25 40.2 34.5 5.7 17
Total managed assets $ 593.4 $ 476.1 $ 117.3 25 % $ 568.2 $ 469.1 $ 99.1 21 %
The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds, including recently acquired BMO branded funds, as of March 31, 2022:


Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted(1)	1 year	3 year	5 year	10 year
Equity	28%	81%	85%	88%
Fixed Income	53%	90%	94%	91%
Asset Allocation	45%	80%	86%	91%

4- or 5-star Morningstar rated funds(2)	Overall	3 year	5 year	10 year
Number of rated funds	129	108	104	104
Percent of rated assets	69%	62%	62%	72%

(1) Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index. Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees. Comparisons to Index are measured Gross of Fees.

Aggregated Asset Allocation Funds may include funds that invest in other Columbia or Threadneedle branded mutual funds included in both equity and fixed income.

(2) Columbia funds are available for purchase by U.S. customers. Out of 95 Columbia funds (Institutional shares) rated, 13 received a 5-star Overall Rating and 39 received a 4-star Overall Rating. Out of 92 Threadneedle funds (highest rated share class) rated, 18 received a 5-star Overall Rating and 32 received a 4-star Overall Rating. Out of 63 BMO branded funds (highest rated share class) rated, 6 received a 5-star Overall Rating and 21 received a 4-star Overall Rating. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.


The following table presents global managed assets by type:									Average (1)				Change
	As of March 31,				Change				Three Months Ended March 31,
	2022		2021						2022		2021
	(in billions)
Equity	$	367.1	$	319.4	$	47.7	15	%	$	379.6	$	308.8	$	70.8	23	%
Fixed income	256.5		194.3		62.2		32		267.2		195.2		72.0		37
Money market	12.9		5.8		7.1		NM		11.8		5.9		5.9		NM
Alternative	40.2		22.9		17.3		76		40.1		22.7		17.4		77
Hybrid and other	21.9		21.7		0.2		1		22.5		20.9		1.6		8
Total managed assets(2)	$	698.6	$	564.1	$	134.5	24	%	$	721.2	$	553.5	$	167.7	30	%
NM Not Meaningful.

(1) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.

(2) In the fourth quarter of 2021, the definition of Alternative AUM was changed to now include real estate, CLOs, private equity, hedge funds (direct and fund of funds), infrastructure and commodities to better demonstrate our underlying business and the additional assets from the acquisition of the BMO Global Asset Management (EMEA) business. Prior periods have been restated to reflect this change.

AMERIPRISE FINANCIAL, INC.

The following table presents the changes in global managed assets:


		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(in billions)					(in billions)
Global Retail Funds(1)	Global Retail Funds(1)					Global Retail Funds(1)
Beginning assets	Beginning assets	$	323.5	$	287.5	Beginning assets	$	409.4	$	323.5
Inflows	Inflows	41.9		33.3		Inflows	21.8		22.5
Outflows	Outflows	(34.7)		(34.2)		Outflows	(23.2)		(17.6)
Net VP/VIT fund flows	Net VP/VIT fund flows	(2.0)		(1.4)		Net VP/VIT fund flows	(1.1)		(1.0)
Net new flows(2)	Net new flows(2)	5.2		(2.3)		Net new flows(2)	(2.5)		3.9
Reinvested dividends	Reinvested dividends	3.6		2.4		Reinvested dividends	0.6		0.7
Net flows	Net flows	8.8		0.1		Net flows	(1.9)		4.6
Distributions	Distributions	(4.2)		(2.9)		Distributions	(0.8)		(0.9)

Market appreciation (depreciation) and other	Market appreciation (depreciation) and other	31.3		(9.2)		Market appreciation (depreciation) and other	(25.8)		13.2
Foreign currency translation (1)		0.1		(1.4)
Foreign currency translation (3)						Foreign currency translation (3)	(0.9)		(0.2)
Total ending assets	Total ending assets	359.5		274.1		Total ending assets	380.0		340.2

Global Institutional
Global Institutional (1)						Global Institutional (1)
Beginning assets	Beginning assets	223.1		206.7		Beginning assets	344.7		223.1
Inflows (2)		17.1		15.0
Outflows (2)		(14.3)		(14.9)
Net flows		2.8		0.1
Market appreciation (depreciation) and other (3)		7.3		(0.9)
Foreign currency translation (1)		0.7		(3.9)
Inflows (4)						Inflows (4)	12.7		7.8
Outflows (4)						Outflows (4)	(11.5)		(7.5)
Net flows (2)						Net flows (2)	1.2		0.3

Market appreciation (depreciation) and other (5)						Market appreciation (depreciation) and other (5)	(21.7)		0.2
Foreign currency translation (3)						Foreign currency translation (3)	(5.6)		0.3
Total ending assets	Total ending assets	233.9		202.0		Total ending assets	318.6		223.9
Total managed assets						Total managed assets	$	698.6	$	564.1

Total managed assets		$	593.4	$	476.1
Total net flows	Total net flows	$	11.6	$	0.2	Total net flows	$	(0.7)	$	4.9

Legacy insurance partners net flows (4)		$	(2.6)	$	(1.9)
Legacy insurance partners net flows (6)						Legacy insurance partners net flows (6)	$	(0.7)	$	(1.3)

(1) The beginning balances as of January 1, 2022 for Global Retail Funds and Global Institutional were corrected by $8.9 billion due to a reclassification of assets. Total AUM as of January 1, 2022 remained unchanged.

(2) Included in the first quarter 2022 net flows are $2.5 billion of retail and $0.1 billion of institutional net flows from the US asset transfer from the BMO acquisition.

(3) Amounts represent local currency to US dollar translation for reporting purposes.

~~(2)~~(4) Global Institutional inflows and outflows include net flows from our RiverSource Structured Annuity product ~~beginning in Q1 2020~~ and Ameriprise Bank, ~~FSB beginning in Q1 2021.~~FSB.

~~(3)~~(5) Included in Market appreciation (depreciation) and other for Global Institutional is the change in affiliated general account balance, excluding net flows related to our structured variable annuity product ~~beginning in Q1 2020~~ and Ameriprise Bank, ~~FSB beginning in Q1 2021.~~FSB.

~~(4)~~(6) Legacy insurance partners assets and net flows are included in the rollforwards above.

Total segment AUM increased $46.8 billion, or 9%, during the six months ended June 30, 2021. Net flows were $11.6 billion for the six months ended June 30, 2021, an $11.4 billion improvement compared to the prior year period.

7660

AMERIPRISE FINANCIAL, INC.

Total segment AUM decreased $55.5 billion, or 7%, during the three months ended March 31, 2022. Net outflows were $0.7 billion in the first quarter of 2022, a $5.6 billion decrease compared to the prior year period. Global retail net outflows were $1.9 billion. Global institutional net inflows were $1.2 billion and included $0.7 billion of outflows from legacy insurance partners assets.

The following table presents the results of operations of our Asset Management segment on an adjusted operating basis:


		Six Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2021		2020							2022		2021
		(in millions)									(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	Management and financial advice fees	$	1,471	$	1,153	$	318	28	%	Management and financial advice fees	$	898	$	713	$	185	26	%
Distribution fees	Distribution fees	232		199		33		17		Distribution fees	111		114		(3)		(3)
Net investment income	Net investment income	3		1		2		NM		Net investment income	4		1		3		NM
Other revenues	Other revenues	1		1		—		—		Other revenues	4		—		4		—
Total revenues	Total revenues	1,707		1,354		353		26		Total revenues	1,017		828		189		23
Banking and deposit interest expense	Banking and deposit interest expense	—		—		—		—		Banking and deposit interest expense	—		—		—		—
Total net revenues	Total net revenues	1,707		1,354		353		26		Total net revenues	1,017		828		189		23
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	550		451		99		22		Distribution expenses	277		268		9		3
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	6		6		—		—		Amortization of deferred acquisition costs	3		3		—		—
Interest and debt expense	Interest and debt expense	2		2		—		—		Interest and debt expense	1		1		—		—
General and administrative expense	General and administrative expense	668		597		71		12		General and administrative expense	451		328		123		38
Total expenses	Total expenses	1,226		1,056		170		16		Total expenses	732		600		132		22
Adjusted operating earnings	Adjusted operating earnings	$	481	$	298	$	183	61	%	Adjusted operating earnings	$	285	$	228	$	57	25	%
NM Not Meaningful.	NM Not Meaningful.									NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased ~~$183~~$57 million, or ~~61%~~25%, ~~to $481 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$298 million for~~ the prior year period primarily due to a higher level of average AUM from the acquisition of the BMO Global Asset Management (EMEA) business, equity market appreciation and ~~disciplined expense management.~~cumulative net inflows, as well as higher performance fees.

Net Revenues

Net revenues, which exclude net realized investment gains or losses, increased $353 million, or 26%, to $1.7 billion for the six months ended June 30, 2021 compared to $1.4 billion for the prior year period .

Management and financial advice fees increased ~~$318~~$185 million, or ~~28%~~26%, ~~to $1.5 billion~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$1.2 billion for~~ the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business, $53 million of higher performance fees, higher average equity markets, and ~~an unfavorable $19 million performance fee correction in~~ the ~~prior year period.~~cumulative impact from net inflows.

Expenses

Distribution ~~fees~~expenses increased ~~$33~~$9 million, or ~~17%~~3%, ~~to $232 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$199 million for~~ the prior year period primarily ~~due to higher average equity markets.~~

~~Expenses~~

~~Total expenses increased $170 million, or 16%, to $1.2 billion for the six months ended June 30, 2021 compared to $1.1 billion for the prior year period.~~

~~Distribution expenses increased $99 million, or 22%, to $550 million for the six months ended June 30, 2021 compared to $451 million for the prior year period~~ reflecting higher average equity markets.

General and administrative expense increased ~~$71~~$123 million, or ~~12%~~38%, ~~to $668 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$597 million for~~ the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business and higher performance fee related compensation ~~expenses related to stronger business performance, higher volume related expenses, and the negative impact of foreign exchange rates.~~expenses.

7761

AMERIPRISE FINANCIAL, INC.

Retirement & Protection Solutions

The following table presents the results of operations of our Retirement & Protection Solutions segment on an adjusted operating basis:


		Six Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2021		2020							2022		2021
		(in millions)									(in millions)
Revenues	Revenues									Revenues
Management and financial advice fees	Management and financial advice fees	$	456	$	399	$	57	14	%	Management and financial advice fees	$	218	$	222	$	(4)	(2)	%
Distribution fees	Distribution fees	238		211		27		13		Distribution fees	112		116		(4)		(3)
Net investment income	Net investment income	253		259		(6)		(2)		Net investment income	114		126		(12)		(10)
Premiums, policy and contract charges	Premiums, policy and contract charges	648		645		3		—		Premiums, policy and contract charges	325		323		2		1

Other revenues										Other revenues	3		—		3		—
Total revenues	Total revenues	1,595		1,514		81		5		Total revenues	772		787		(15)		(2)
Banking and deposit interest expense	Banking and deposit interest expense	—		—		—		—		Banking and deposit interest expense	—		—		—		—
Total net revenues	Total net revenues	1,595		1,514		81		5		Total net revenues	772		787		(15)		(2)
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	263		221		42		19		Distribution expenses	119		129		(10)		(8)
Interest credited to fixed accounts	Interest credited to fixed accounts	194		197		(3)		(2)		Interest credited to fixed accounts	96		96		—		—
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	475		457		18		4		Benefits, claims, losses and settlement expenses	230		234		(4)		(2)
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	133		84		49		58		Amortization of deferred acquisition costs	53		63		(10)		(16)
Interest and debt expense	Interest and debt expense	19		21		(2)		(10)		Interest and debt expense	9		10		(1)		(10)
General and administrative expense	General and administrative expense	146		145		1		1		General and administrative expense	74		72		2		3
Total expenses	Total expenses	1,230		1,125		105		9		Total expenses	581		604		(23)		(4)
Adjusted operating earnings	Adjusted operating earnings	$	365	$	389	$	(24)	(6)	%	Adjusted operating earnings	$	191	$	183	$	8	4	%

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity ~~guaranteed benefits (net~~contracts and IUL contracts, net of hedges and the related DSIC and DAC ~~amortization), the market impact on IUL benefits (net of hedges and the related DAC~~ amortization, unearned ~~revenue~~ amortization and the reinsurance accrual), ~~and~~ mean reversion related impacts, ~~decreased $24~~and block transfer reinsurance transaction impacts increased $8 million, or 6%4%, ~~to $365 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$389 million for~~prior year period.

Variable annuity account balances decreased 1% to $85.8 billion as of March 31, 2022 compared to the prior year ~~period.~~period due to net outflows of $1.9 billion, partially offset by market appreciation. Variable annuity sales decreased 27% compared to the prior year period reflecting a decrease in sales of variable annuities with living benefit guarantees. The risk profile of our in force block continues to improve, with account values with living benefit riders down to 60% as of March 31, 2022 compared to 63% a year ago. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

We continue to optimize our risk profile and shift our business mix to lower risk offerings. During the fourth quarter of 2021, we made the decision to discontinue new sales of substantially all of our variable annuities with living benefit guarantees at the end of 2021, with a full exit by mid-2022. In addition, we discontinued new sales of our universal life insurance with secondary guarantees and our single-pay fixed universal life with a long term care rider products at the end of 2021.

Net Revenues

~~Management and financial advice fees increased $57~~Net investment income, which excludes net realized investment gains or losses, decreased $12 million, or ~~14%~~10%, ~~to $456 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$399 million for~~ the prior year period primarily due to ~~market appreciation, partially offset by variable annuity net outflows.~~

~~Distribution fees increased $27 million, or 13%, to $238 million for~~lower yields on the ~~six months ended June 30, 2021 compared to $211 million for the prior year period due to higher average equity markets.~~investment portfolio.

Expenses

Distribution expenses ~~increased $42~~decreased $10 million, or ~~19%~~8%, ~~to $263 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$221 million for~~ the prior year period primarily reflecting ~~market appreciation and higher~~decreased variable annuity ~~and insurance~~ sales.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC amortization) and mean reversion related impacts, increased $18 million, or 4%, to $475 million for the six months ended June 30, 2021 compared to $457 million for the prior year period primarily reflecting higher reserve funding as surrenders and withdrawals returned to more normalized levels versus the historically low levels experienced in the prior year period and higher disability income claims, partially offset by lower sales of immediate annuities with a life contingent feature.

Amortization of DAC, which excludes mean reversion related impacts, ~~and~~ the DAC offset to the market impact on variable annuity ~~guaranteed benefits, increased $49 million,~~contracts and IUL contracts and the DAC offset to net realized investment gains or ~~58%, to $133~~losses, decreased $10 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$84 million for~~ the prior year period primarily reflecting ~~the higher level of normalized amortization.~~lower than expected client exit rates.

7862

AMERIPRISE FINANCIAL, INC.

Corporate & Other

The following table presents the results of operations of our Corporate & Other segment on an adjusted operating basis:


		Six Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2021		2020							2022		2021
		(in millions)									(in millions)
Revenues	Revenues									Revenues

Net investment income	Net investment income	$	179	$	192	$	(13)	(7)	%	Net investment income	$	33	$	100	$	(67)	(67)	%
Premiums, policy and contract charges	Premiums, policy and contract charges	49		50		(1)		(2)		Premiums, policy and contract charges	24		24		—		—
Other revenues	Other revenues	31		40		(9)		(23)		Other revenues	59		15		44		NM
Total revenues	Total revenues	259		282		(23)		(8)		Total revenues	116		139		(23)		(17)
Banking and deposit interest expense	Banking and deposit interest expense	1		2		(1)		(50)		Banking and deposit interest expense	—		—		—		—
Total net revenues	Total net revenues	258		280		(22)		(8)		Total net revenues	116		139		(23)		(17)
Expenses	Expenses									Expenses
Distribution expenses	Distribution expenses	(4)		(3)		(1)		(33)		Distribution expenses	(1)		(2)		1		50
Interest credited to fixed accounts	Interest credited to fixed accounts	123		130		(7)		(5)		Interest credited to fixed accounts	61		61		—		—
Benefits, claims, losses and settlement expenses	Benefits, claims, losses and settlement expenses	67		101		(34)		(34)		Benefits, claims, losses and settlement expenses	54		13		41		NM
Amortization of deferred acquisition costs	Amortization of deferred acquisition costs	6		5		1		20		Amortization of deferred acquisition costs	3		4		(1)		(25)
Interest and debt expense	Interest and debt expense	32		35		(3)		(9)		Interest and debt expense	16		15		1		7
General and administrative expense	General and administrative expense	132		119		13		11		General and administrative expense	59		69		(10)		(14)
Total expenses	Total expenses	356		387		(31)		(8)		Total expenses	192		160		32		20
Adjusted operating loss	Adjusted operating loss	$	(98)	$	(107)	$	9	8	%	Adjusted operating loss	$	(76)	$	(21)	$	(55)	NM
NM Not Meaningful.										NM Not Meaningful.

Our Corporate & Other segment includes our closed blocks of LTC insurance and fixed annuity and fixed indexed annuity (“FA”) business.

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed ~~index~~deferred annuity ~~benefits~~contracts (net of hedges and the related DAC amortization), the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, block transfer reinsurance transaction impacts, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs. Our Corporate & Other segment pretax adjusted operating loss ~~decreased $9 million, or 8%, to $98~~increased $55 million, for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$107 million for~~ the prior year ~~period .~~period.

LTC insurance had a pretax adjusted operating earnings of ~~$49~~$1 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$19~~pretax adjusted operating earnings of $46 million for the prior year period reflecting ~~increased mortality-related client terminations due~~the return to ~~COVID-19.~~more normalized results compared to the COVID-19 related impacts in the year ago period.

FA business had a pretax adjusted operating loss of ~~$10~~$5 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to a pretax adjusted operating ~~earnings~~loss of ~~$3 million for~~$4 million. Fixed deferred annuity account balances declined 4% to $7.5 billion as of March 31, 2022 compared to the prior year period ~~reflecting fixed annuity net outflows~~as policies continue to lapse and the ~~impact~~discontinuance of ~~low interest rates.~~new sales of fixed deferred annuities. During the third quarter of 2021, we closed on a transaction to reinsure RiverSource Life’s fixed deferred and immediate annuity policies.

Net Revenues

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, block transfer reinsurance transaction impacts, integration and restructuring charges, and the impact of consolidating CIEs, decreased ~~$13~~$67 million, or 7%67%, ~~to $179 million~~ for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$192 million for~~ the prior year period primarily reflecting lower average invested assets due to the sale of investments to a reinsurer as a result of the fixed deferred and immediate annuity ~~net outflows, lower asset earned rates,~~reinsurance transaction and ~~a $7 million impairment in our affordable housing partnerships, partially offset by~~ a $15 million gain on a strategic ~~investment.~~investment in the prior year period.

Other revenues increased $44 million to $59 million for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

AMERIPRISE FINANCIAL, INC.

Expenses

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, ~~decreased $34 million, or 34%, to $67~~increased $41 million, for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$101~~the prior year period primarily reflecting more normalized claims on LTC insurance, which benefited from COVID-19 related impacts in the prior year period.

General and administrative expense decreased $10 million, or 14%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the ~~impacts from COVID-19 on LTC insurance.~~

General and administrative expense, which excludes integration and restructuring charges, increased $13 million, or 11%, to $132 million for the six months ended June 30, 2021 compared to $119 million for the prior year period primarily due to an unfavorable ~~change in the~~ mark-to-market impact on share-based compensation ~~expense.~~

expense in the prior year period.

~~AMERIPRISE FINANCIAL, INC.~~

Market Risk

Our primary market risk exposures are interest rate, equity price, foreign currency exchange rate and credit risk. Equity price and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects they have on the asset management and other asset-based fees we earn, the spread income generated on our fixed ~~deferred annuities, fixed~~ insurance, brokerage client cash balances, banking deposits, face-amount certificate products, ~~and the~~ fixed portion of our variable annuities and variable insurance contracts, the value of DAC and DSIC assets, the value of liabilities for guaranteed benefits associated with our variable annuities and the value of derivatives held to hedge these benefits.

Our earnings from fixed ~~deferred annuities, fixed~~ insurance, ~~and~~ the fixed portion of variable annuities and variable insurance contracts, and fixed deferred annuities are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts. We primarily invest in fixed rate securities to fund the rate credited to clients. We guarantee an interest rate to the holders of these products. Investment assets and client liabilities generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals than the yield on the underlying investments. Therefore, in an increasing interest rate environment, higher interest rates may be reflected in crediting rates to clients sooner than in rates earned on invested assets, which could result in a reduced spread between the two rates, reduced earned income and a negative impact on pretax income. However, the current low interest rate environment is resulting in interest rates below the level of some of our liability guaranteed minimum interest rates (“GMIRs”). Hence, a modest rise in interest rates would not necessarily result in changes to all the liability credited rates while projected asset purchases would capture the full increase in interest rates. This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business.

As a result of the ~~low~~current interest rate environment, our ~~current~~ reinvestment yields are generally lower than the current portfolio yield. We expect our portfolio income yields to continue to decline in future periods ifshould interest rates remain comparatively low. The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through ~~June 30, 2023~~March 31, 2024 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were ~~$4.4~~$2.5 billion and ~~2.3%~~1.9%, respectively, as of ~~June 30, 2021.~~March 31, 2022. In addition, residential mortgage backed securities, which ~~are~~could be subject to prepayment risk ~~as a result of~~if the low interest rate environment continues, totaled ~~$9.7~~$11.7 billion and had a weighted average yield of ~~1.6%~~1.8% as of ~~June 30, 2021.~~March 31, 2022. While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields. In addition to the interest rate environment, the mix of benefit payments versus product sales as well as the timing and volumes associated with such mix may impact our investment yield. Furthermore, reinvestment activities and the associated investment yield may also be impacted by corporate strategies implemented at management’s discretion. The average yield for investment purchases during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was approximately ~~1.3%~~2.4%.

The reinvestment of proceeds from maturities, calls and prepayments at rates below the current portfolio yield, which may be below the level of some liability GMIRs, will have a negative impact to future operating results. To mitigate the unfavorable impact that the low interest rate environment has on our spread income, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework. In addition, we may reduce the crediting rates on our fixed products when warranted, subject to guaranteed minimums.

In addition to the fixed rate exposures noted above, RiverSource Life has the following variable annuity guarantee benefits: guaranteed minimum withdrawal benefits (“GMWB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”). Each of these benefits guarantees payouts to the annuity holder under certain specific conditions regardless of the performance of the underlying invested assets.

The variable annuity guarantees continue to be managed by utilizing a hedging program which attempts to match the sensitivity of the assets with the sensitivity of the liabilities. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. Our comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities: Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. We use various options, swaptions, swaps and futures to manage risk exposures. The exposures are measured and monitored daily, and adjustments to the hedge portfolio are made as necessary.

We have a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on our statutory surplus and to cover some of the residual risks not covered by other hedging activities. We assess the residual risk under

AMERIPRISE FINANCIAL, INC.

a range of scenarios in creating and executing the macro hedge program. As a means of economically hedging these risks, we may use a combination of futures, options, swaps and swaptions. Certain of the macro hedge derivatives used contain settlement provisions linked to both equity returns and interest rates; the remaining are interest rate contracts or equity contracts. The macro hedge program could result in additional earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory capital volatility, may not be closely aligned to changes in the variable annuity guarantee embedded derivatives.

To evaluate interest rate and equity price risk we perform sensitivity testing which measures the impact on pretax income from the sources listed below for a 12-month period following a hypothetical 100 basis point increase in interest rates or a hypothetical 10%

~~AMERIPRISE FINANCIAL, INC.~~

decline in equity prices. The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then staying at those levels for the next 12 months. The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months. In estimating the values of variable annuities, ~~fixed deferred~~ indexed annuities, stock market certificates, ~~IUL~~indexed universal life (“IUL”) insurance and the associated hedge assets, we assume no change in implied market volatility despite the 10% drop in equity prices.

The following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of ~~June 30, 2021:~~March 31, 2022:


Equity Price Decline 10%	Equity Price Decline 10%	Equity Price Exposure to Pretax Income							Equity Price Decline 10%	Equity Price Exposure to Pretax Income
		Before Hedge Impact		Hedge Impact		Net Impact				Before Hedge Impact		Hedge Impact		Net Impact
		(in millions)								(in millions)
Asset-based management and distribution fees (1)	Asset-based management and distribution fees (1)	$	(340)	$	4	$	(336)		Asset-based management and distribution fees (1)	$	(339)	$	4	$	(335)
DAC and DSIC amortization (2)(3)	DAC and DSIC amortization (2)(3)	(6)		—		(6)			DAC and DSIC amortization (2)(3)	(27)		—		(27)
Variable annuities:	Variable annuities:								Variable annuities:
GMDB and GMIB (3)	GMDB and GMIB (3)	(2)		—		(2)			GMDB and GMIB (3)	(12)		—		(12)
GMWB (3)	GMWB (3)	(280)		255		(25)			GMWB (3)	(499)		556		57
GMAB	GMAB	(18)		18		—			GMAB	(27)		28		1
Structured variable annuities	Structured variable annuities	255		(212)		43			Structured variable annuities	397		(365)		32
DAC and DSIC amortization (4)	DAC and DSIC amortization (4)	N/A		N/A		(4)			DAC and DSIC amortization (4)	N/A		N/A		(12)
Total variable annuities	Total variable annuities	(45)		61		12			Total variable annuities	(141)		219		66
Macro hedge program (5)	Macro hedge program (5)	—		201		201			Macro hedge program (5)	—		119		119
Fixed deferred indexed annuities		5		(1)		4

Certificates	Certificates	—		—		—			Certificates	—		—		—
IUL insurance	IUL insurance	44		(41)		3			IUL insurance	66		(71)		(5)
Total	Total	$	(342)	$	224	$	(122)	(6)	Total	$	(441)	$	271	$	(182)	(6)
N/A Not Applicable.	N/A Not Applicable.								N/A Not Applicable.


Interest Rate Increase 100 Basis Points	Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income						Interest Rate Increase 100 Basis Points	Interest Rate Exposure to Pretax Income
		Before Hedge Impact		Hedge Impact		Net Impact			Before Hedge Impact		Hedge Impact		Net Impact
		(in millions)							(in millions)
Asset-based management and distribution fees (1)	Asset-based management and distribution fees (1)	$	(62)	$	—	$	(62)	Asset-based management and distribution fees (1)	$	(63)	$	—	$	(63)
Variable annuities:	Variable annuities:							Variable annuities:

GMWB	GMWB	1,413		(1,706)		(293)		GMWB	1,031		(1,263)		(232)
GMAB	GMAB	20		(25)		(5)		GMAB	9		(12)		(3)
Structured variable annuities	Structured variable annuities	(15)		79		64		Structured variable annuities	(20)		117		97
DAC and DSIC amortization (4)	DAC and DSIC amortization (4)	N/A		N/A		35		DAC and DSIC amortization (4)	N/A		N/A		21
Total variable annuities	Total variable annuities	1,418		(1,652)		(199)		Total variable annuities	1,020		(1,158)		(117)
Macro hedge program (5)	Macro hedge program (5)	—		(4)		(4)		Macro hedge program (5)	—		(1)		(1)
Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	46		—		46		Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	53		—		53
Banking deposits	Banking deposits	56		—		56		Banking deposits	57		—		57
Brokerage client cash balances	Brokerage client cash balances	209		—		209		Brokerage client cash balances	230		—		230
Fixed deferred indexed annuities		(1)		—		(1)

Certificates	Certificates	16		—		16		Certificates	12		—		12
IUL insurance	IUL insurance	18		1		19		IUL insurance	19		2		21
Total	Total	$	1,700	$	(1,655)	$	80	Total	$	1,328	$	(1,157)	$	192
N/A Not Applicable.	N/A Not Applicable.							N/A Not Applicable.

(1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.

(2) Market impact on DAC and DSIC amortization resulting from lower projected profits.

AMERIPRISE FINANCIAL, INC.

(3) In estimating the impact to pretax income on DAC and DSIC amortization and additional insurance benefit reserves, our assumed equity asset growth rates reflect what management would follow in its mean reversion guidelines.

(4) Market impact on DAC and DSIC amortization related to variable annuity riders is modeled net of hedge impact.

(5) The market impact of the macro hedge program is modeled net of any related impact to DAC and DSIC amortization.

(6) Represents the net impact to pretax income. The estimated net impact to pretax adjusted operating income is approximately ~~$(336)~~$(335) million.

~~AMERIPRISE FINANCIAL, INC.~~

The above results compare to an estimated negative net impact to pretax income of ~~$73~~$190 million related to a 10% equity price decline and an estimated positive net impact to pretax income of $2$80 million related to a 100 basis point increase in interest rates as of December 31, ~~2020.~~2021. The change in interest rate exposure as of ~~June 30, 2021~~March 31, 2022 compared to December 31, ~~2020~~2021 was driven by variable annuity riders, specifically GMWB, primarily due to changes in market rates.

Net impacts shown in the above table from GMWB riders result largely from differences between the liability valuation basis and the hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions and with discount rates increased to reflect a current market estimate of our risk of nonperformance specific to these liabilities. Our hedging is based on our determination of economic risk, which excludes certain items in the liability valuation including the nonperformance spread risk.

Actual results ~~could~~will differ materially from those illustrated above as they are based on a number of estimates and assumptions. These include assuming that implied market volatility does not change when equity prices fall by 10% and that the 100 basis point increase in interest rates is a parallel shift of the yield curve. Furthermore, we have not tried to anticipate changes in client preferences for different types of assets or other changes in client behavior, nor have we tried to anticipate all strategic actions management might take to increase revenues or reduce expenses in these scenarios.

The selection of a 100 basis point interest rate increase as well as a 10% equity price decline should not be construed as a prediction of future market events. Impacts of larger or smaller changes in interest rates or equity prices may not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices.

Fair Value Measurements

We report certain assets and liabilities at fair value; specifically, separate account assets, derivatives, embedded derivatives and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions and is not the result of a forced liquidation or distressed sale. We include actual market prices, or observable inputs, in our fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. We validate prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 11 to the Consolidated Financial Statements for additional information on our fair value measurements.

Fair Value of Liabilities and Nonperformance Risk

Companies are required to measure the fair value of liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for our obligations of our variable annuity riders, fixed deferred indexed annuities, structured variable annuities, and IUL insurance, we consider the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, we adjust the valuation of variable annuity riders, fixed deferred indexed annuities, structured annuities, and IUL insurance by updating certain contractholder assumptions, adding explicit margins to provide for ~~profit,~~ risk, ~~and expense,~~ and adjusting the rates used to discount expected cash flows to reflect a current market estimate of our nonperformance risk. The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of ~~June 30, 2021.~~March 31, 2022. As our estimate of this spread widens or tightens, the liability will decrease or increase. If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to future net income would be approximately ~~$360~~$420 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on ~~June 30, 2021~~March 31, 2022 credit spreads.

Liquidity and Capital Resources

Overview

We maintained substantial liquidity during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had ~~$7.1~~$6.6 billion and ~~$6.8~~$7.1 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the parent company had ~~$1.6 billion~~$316 million and ~~$1.1 billion,~~$841 million, respectively, in cash, cash equivalents, and unencumbered liquid securities. Liquid securities predominantly include U.S. government agency mortgage back securities. Additional sources of liquidity include a line of credit with an affiliate up to ~~$ 1.0 billion~~$729 million and an unsecured revolving committed credit facility for up to $1.0 billion that expires in June 2026. Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of ~~June 30, 2021~~March 31, 2022 was ~~$3.0~~$1.5 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

AMERIPRISE FINANCIAL, INC.

Under the terms of the committed credit facility, we can increase the availability to $1.25 billion upon satisfaction of certain approval requirements. Available borrowings under this facility are reduced by any outstanding letters of credit. At ~~June 30, 2021,~~March 31, 2022, we had no outstanding borrowings under this credit facility and had ~~$1.1~~$1 million of outstanding letters of credit. Our credit facility contains various administrative, reporting, legal and financial covenants. ~~Compliance with these covenants is not currently impaired by the COVID-19 pandemic, and we~~We remain in compliance with all such covenants at ~~June 30, 2021.~~

~~AMERIPRISE FINANCIAL, INC.~~

March 31, 2022.

In addition, we have access to collateralized borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances. Our subsidiaries, RiverSource Life Insurance Company (“RiverSource Life”), and Ameriprise Bank, FSB are members of the FHLB of Des Moines, which provides access to collateralized borrowings. WeAs of March 31, 2022 and December 31, 2021, we had $8.2 billion and $8.1 billion, respectively, under the FHLB facilities, of which $200 million was outstanding as of ~~borrowings from the FHLB, which~~both March 31, 2022 and December 31, 2021, and is collateralized with commercial mortgage backed securities and residential mortgage backed ~~securities for both June 30, 2021 and December 31, 2020.~~securities. We believe cash flows from operating activities, available cash balances and our availability of revolver borrowings will be sufficient to fund our operating liquidity needs and stress requirements.

There have been no material changes to our contractual obligations disclosed in our 2021 10-K.

We repaid $500 million principal amount of its 3.0% senior notes at maturity on March 22, 2022. See Note 10 to our Consolidated Financial Statements for further information about our long-term debt maturities.

We believe cash flows from operating activities, available cash balances, our availability of revolver borrowings and dividends from our subsidiaries will be sufficient to fund our short-term and long-term operating liquidity needs and stress requirements.

We continue to monitor and respond to the ongoing COVID-19 pandemic. Our risk management strategy is designed to provide proactive protection during stress events such as the current pandemic. We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

Dividends from Subsidiaries

Ameriprise Financial is primarily a parent holding company for the operations carried out by our wholly-owned subsidiaries. Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), AMPF Holding Corporation, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, LLC (“AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc. (“AEIS”), our transfer agent subsidiary, Columbia Management Investment Services Corp., our investment advisory company, Columbia Management Investment Advisers, LLC, TAM UK International Holdings Ltd, which includes Threadneedle Asset Management Holdings Sàrl and Ameriprise International Holdings GmbH ~~which is the parent company of~~within its organizational structure, and Columbia Threadneedle ~~Asset Management Holdings Sàrl.~~Investments UK International Ltd. The payment of dividends by many of our subsidiaries is restricted and certain of our subsidiaries are subject to regulatory capital requirements.

Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows:


		Actual Capital				Regulatory Capital Requirements				Actual Capital				Regulatory Capital Requirements
		June 30, 2021		December 31, 2020		June 30, 2021	December 31, 2020			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
		(in millions)								(in millions)
RiverSource Life (1)(2)	RiverSource Life (1)(2)	$	4,285	$	5,021	N/A	$	993	RiverSource Life (1)(2)	$	3,131	$	3,419	N/A		$	502
RiverSource Life of NY (1)(2)	RiverSource Life of NY (1)(2)	306		323		N/A	42		RiverSource Life of NY (1)(2)	273		310		N/A		42
ACC (4)(5)	ACC (4)(5)	342		387		310	362		ACC (4)(5)	299		304		$	278	283
Threadneedle Asset Management Holdings Sàrl (6)		603		445		214	204
TAM UK International Holdings Ltd (6)									TAM UK International Holdings Ltd (6)	321		330		241		248

Ameriprise Bank, FSB (4) (7)	Ameriprise Bank, FSB (4) (7)	695		658		236	543		Ameriprise Bank, FSB (4) (7)	985		853		674		589
AFS (3)(4)	AFS (3)(4)	154		134		#	#		AFS (3)(4)	128		103		#		#
Ameriprise Captive Insurance Company (3)	Ameriprise Captive Insurance Company (3)	41		41		13	8		Ameriprise Captive Insurance Company (3)	38		39		13		10
Ameriprise Trust Company (3)	Ameriprise Trust Company (3)	44		42		41	37		Ameriprise Trust Company (3)	49		47		42		44
AEIS (3)(4)	AEIS (3)(4)	132		122		29	25		AEIS (3)(4)	162		155		30		29
RiverSource Distributors, Inc. (3)(4)	RiverSource Distributors, Inc. (3)(4)	12		12		#	#		RiverSource Distributors, Inc. (3)(4)	11		10		#		#
Columbia Management Investment Distributors, Inc. (3)(4)	Columbia Management Investment Distributors, Inc. (3)(4)	13		16		#	#		Columbia Management Investment Distributors, Inc. (3)(4)	19		14		#		#
Columbia Threadneedle Investments UK International Ltd. (8)									Columbia Threadneedle Investments UK International Ltd. (8)	337		348		165		170

N/A Not applicable as only required to be calculated annually.

# Amounts are less than $1 million.

(1)Actual capital is determined on a statutory basis.

AMERIPRISE FINANCIAL, INC.

(2)Regulatory capital requirement is the company action level and is based on the statutory risk-based capital filing.

(3)Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

(4)Actual capital is determined on an adjusted GAAP basis.

(5)ACC is required to hold capital in compliance with the Minnesota Department of Commerce and SEC capital requirements.

(6)Actual capital and regulatory capital requirements are determined in accordance with U.K. regulatory legislation. ~~The regulatory capital requirements at June 30, 2021 represent calculations at December 31, 2020 of the rule based requirements, as specified by FCA regulations.~~

(7)Regulatory capital requirement is based on minimum requirements for well capitalized banks in accordance with the Office of the Comptroller of the Currency (“OCC”). Beginning in the first quarter of 2021, Ameriprise Bank transitioned to the Simplified Supervisory Formula Approach (“SSFA”) for risk-weighting non-agency securitized investments, resulting in a significant reduction in risk-weighted assets

(8) Actual capital and ~~an improvement in~~ regulatory capital ~~ratios that were already~~requirements are determined in ~~a well-capitalized position.~~accordance with U.K. regulatory legislation.

In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, we take into account the overall health of the business, capital levels and risk management considerations in determining a strategy for payments to our parent holding company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries.

~~AMERIPRISE FINANCIAL, INC.~~

During the ~~six~~three months ended ~~June 30,~~March 31, 2022, the parent holding company received cash dividends or a return of capital from its subsidiaries of $777 million (including $300 million from RiverSource Life) and contributed cash to its subsidiaries of $129 million (including $95 million to Ameriprise Bank, FSB). During the three months ended March 31, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of ~~$1.6 billion~~$621 million (including ~~$750~~$250 million from RiverSource Life) and contributed cash to its subsidiaries of $71 million (including $7 million to Ameriprise Bank, FSB). During the six months ended June 30, 2020, the parent holding company received cash dividends or a return of capital from its subsidiaries of $1.0 billion (including $500 million from RiverSource Life) and contributed cash to its subsidiaries of $203 million (including $150 million to Ameriprise Bank, FSB).$34 million.

In 2009, RiverSource Life established an agreement to protect its exposure to Genworth Life Insurance Company (“GLIC”) for its reinsured LTC. In 2016, substantial enhancements to this reinsurance protection agreement were finalized. The terms of these confidential provisions within the agreement have been shared, in the normal course of regular reviews, with our domiciliary regulator and rating agencies. GLIC is domiciled in Delaware so in the event GLIC were subjected to rehabilitation or insolvency proceedings, such proceedings would be located in (and governed by) Delaware laws. Delaware courts have a long tradition of respecting commercial and reinsurance affairs as well as contracts among sophisticated parties. Similar credit protections to what we have with GLIC have been tested and respected in Delaware and elsewhere in the United States, and as a result we believe our credit protections would be respected even in the unlikely event that GLIC becomes subject to rehabilitation or insolvency proceedings in Delaware. Accordingly, while no credit protections are perfect, we believe the correct way to think about the risks represented by our counterparty credit exposure to GLIC is not the full amount of the gross liability that GLIC reinsures, but a much smaller net exposure to GLIC (if any that might exist after taking into account our credit protections). Thus, management believes that our agreement and offsetting non LTC legacy arrangements with Genworth will enable RiverSource Life to recover on all net exposure in all material respects in the event of a rehabilitation or insolvency of GLIC.

Dividends Paid to Shareholders and Share Repurchases

We paid regular quarterly dividends to our shareholders totaling ~~$263~~$133 million and ~~$257~~$129 million for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. On ~~July 26, 2021,~~April 25, 2022, we announced a quarterly dividend of ~~$1.13~~$1.25 per common share. The dividend will be paid on ~~August~~May 20, ~~2021~~2022 to our shareholders of record at the close of business on ~~August~~May 9, ~~2021.~~2022.

In August 2020, ~~our~~the Company’s Board of Directors authorized us to repurchase up to $2.5 billion of our common stock through September 30, 2022. In January 2022, the Company’s Board of Directors authorized an additional $3.0 billion for the repurchase of the Company’s common stock through March 31, 2024. As of ~~June 30, 2021,~~March 31, 2022, we had ~~$1.5~~$3.0 billion remaining under ~~this~~these share repurchase authorizations. We intend to fund share repurchases through existing working capital, future earnings and other customary financing methods. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means. During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we repurchased a total of ~~3.4~~1.4 million shares of our common stock at an average price of ~~$237.52~~$299.14 per share.

Cash Flows

Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities. Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial cash available for general use by its CIEs. Cash and cash equivalents segregated under federal and other regulations is held for the exclusive benefit of our brokerage customers and is not available for general use by Ameriprise Financial.

Operating Activities

Net cash provided by operating activities ~~decreased $3.8~~increased $1.4 billion to $409 million for the three months ended March 31, 2022 compared to net cash used in operating activities of ~~$931 million for the six months ended June 30, 2021 compared to net cash provided by operating activities of $4.7~~$1.0 billion for the prior year period primarily reflecting a ~~$2.3 billion decrease~~$882 million increase in policyholder account balances, future policy benefits and claims, net, a ~~$469~~$324 million ~~decrease~~increase in net income ~~a $309 decrease in deferred taxes, net,~~ and a ~~$296~~$222 million ~~decrease~~increase in cash ~~from changes in~~related to brokerage deposits.

AMERIPRISE FINANCIAL, INC.

Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net flows of our investment certificate, fixed annuity and universal life products reflected in financing activities.

Net cash used in investing activities increased ~~$13~~$856 million to ~~$909 million~~$1.7 billion for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~$896~~$809 million for the prior year period primarily reflecting a ~~$1.6 billion increase~~$755 million decrease in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities, a $727 million increase in cash used for purchases of Available-for-Sale securities, partially offset by a ~~$913 million decrease in proceeds from sales of Available-for-Sale securities and a $589~~$490 million decrease in net cash flows used related to investments of consolidated investment ~~entities~~entities.

Financing Activities

Net cash provided by financing activities ~~decreased $218~~increased $85 million to ~~net cash used of $101~~$518 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~net cash provided by of $117~~$433 million for the prior year period primarily reflecting a ~~$945~~$1.2 billion increase in banking deposits, a $399 million ~~decrease~~reduction in net cash ~~flows~~outflows from investment certificates, ~~a $717 million decrease in repayments of debt by consolidated investment entities and a $242 million decrease in cash from changes in banking deposits,~~ partially offset by a ~~$1.4 billion increase~~$797 million decrease in borrowings by ~~consolidated investment entities~~CIEs and a ~~$358~~$500 million increase in ~~net cash flows related to purchased options with deferred premiums.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~Contractual Commitments~~

~~There have been no material changes to our contractual obligations disclosed in our 2020 10-K.~~

~~Off-Balance Sheet Arrangements~~

We provide asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds, property funds and other private funds, which are sponsored by us. We consolidate certain CLOs. We have determined that consolidation is not required for hedge funds, property funds and other private funds, which are sponsored by us. Our maximum exposure to loss with respect to our investment in these non-consolidated entities is limited to our carrying value. We have no obligation to provide further financial or other support to these investment entities nor have we provided any support to these investment entities. See Note 4 to our Consolidated Financial Statements for additional information on our arrangements with these investment entities.repayments of long-term debt.

Forward-Looking Statements

This report contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

•statements of the Company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth opportunities;

•statements of the Company’s position, future performance and ability to pursue business strategy relative to the spread and impact of the COVID-19 pandemic and the related market, economic, client, governmental and healthcare system response;

•statements about the expected trend in the shift ofto lower-risk products, including the ~~retirement product sales business to lower risk products over time, such as products without~~exit from variable annuities with living benefit ~~guarantees;~~

•~~statements about the Company’s announced acquisition of BMO’s European-based asset management business, including the expected timing to close the transaction~~riders and the ~~expected AUM~~discontinuance of ~~the acquired business;~~

•~~statements about the announced reinsurance transaction, including the occurrence~~new sales of any event, change or circumstance that could give rise to changes in the amount of freed up capital (including that a regulator may prohibit, delay or refuse to grant approval for the consummation of the remaining part of the proposed transaction that reduces the expected capital release);universal life insurance with secondary guarantees;

•statements about the outcomes from the application to convert Ameriprise Bank, FSB to a state-chartered bank and national trust ~~bank;~~bank or the anticipated deposit growth or impacts from possible future interest rate increases;

•other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and

•statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case”~~, “appear”, “expand”~~ and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements.

Such factors include, but are not limited to:

•the impacts on our business of the COVID-19 pandemic and the related economic, client, governmental and healthcare system responses;

•market fluctuations and general economic and political factors, including volatility in the U.S. and global market conditions, client behavior and volatility in the markets for our products;

•changes in interest rates and periods of low interest rates;

•adverse capital and credit market conditions or any downgrade in our credit ratings;

•effects of competition and ~~the economics~~our larger competitors’ economies of ~~changes in our product revenue mix and distribution channels;~~scale;

•declines in our investment management performance;

•our ability to compete in attracting and retaining talent, including financial advisors;

•impairment, negative performance or default by financial institutions or other counterparties;

•the ability to maintain our unaffiliated third-party distribution channels and the impacts of sales of unaffiliated products;

•changes in valuation of securities and investments included in our assets;

•the determination of the amount of allowances taken on loans and investments;

•the illiquidity of our investments;

•effects of the elimination of LIBOR on, and value of, securities and other assets and liabilities tied to LIBOR;

•failures by other insurers that lead to higher assessments we owe to state insurance guaranty funds;

•failures or defaults by counterparties to our reinsurance arrangements;

•inadequate reserves for future policy benefits and claims or for future redemptions and maturities;

AMERIPRISE FINANCIAL, INC.

•deviations from our assumptions regarding morbidity, mortality and persistency affecting our insurance profitability;

~~AMERIPRISE FINANCIAL, INC.~~

•changes to our reputation arising from employee or advisor misconduct or otherwise;

•direct or indirect effects of or responses to climate change;

•interruptions or other failures in our operating systems and networks, including errors or failures caused by third-party service providers, interference or third-party attacks;

•interruptions or other errors in our telecommunications or data processing systems;

• identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk;

• ability of our subsidiaries to transfer funds to us to pay dividends;

• changes in exchange rates and other risks in connection with our international operations and earnings and income generated overseas;

• occurrence of natural or man-made disasters and catastrophes;

• risks in acquisition transactions, such as the integration of the BMO Global Asset Management (EMEA) business or other potential strategic acquisitions or divestitures;

• legal and regulatory actions brought against us;

• changes to laws and regulations that govern operation of our business;

• supervision by bank regulators and related regulatory and prudential standards as a savings and loan holding company that may limit our activities and strategies;

• changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting our products;

• protection of our intellectual property and claims we infringe the intellectual property of others; and

•changes in and the adoption of new accounting ~~standards;~~

•~~changes that could give rise to the termination of the purchase agreement with BMO Financial Group or our ability to recognize the expected benefits from the transaction;~~

•~~changes that could give rise to limitations to the successful completion or the amount of capital freed in the reinsurance transaction with RiverSource Life and RiverSource Life of NY; and~~

•~~regulatory, political, or business changes that could reduce our desire to convert Ameriprise Bank FSB to a state industrial bank and a national trust bank.~~standards.

Management cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that management is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management undertakes no obligation to update publicly or revise any forward-looking statements. The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion included in Part I, Item 1A of our ~~2020~~2021 10-K.

Ameriprise Financial announces financial and other information to investors through the Company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this report or in any other report or document the Company furnishes or files with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk” in this report is incorporated herein by reference. These disclosures should be read in conjunction with the “Quantitative and Qualitative Disclosures About Market Risk” discussion included as Part II, Item 7A of our ~~2020~~2021 10-K filed with the SEC on February ~~24, 2021.~~25, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in and pursuant to SEC regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. It should be noted that, because of inherent limitations, our company’s disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of ~~June 30, 2021.~~March 31, 2022.

8670

AMERIPRISE FINANCIAL, INC.

Changes in Internal Control over Financial Reporting

We implemented a new financial system during the first quarter of fiscal 2021. The new system allows us to maximize financial system functionality, enable a scalable platform and simplify processes for reporting and analytics. As part of the financial system implementation, we enhanced and modified certain existing internal controls within our general ledger, accounts payable, fixed assets, and financial reporting functions. We will continue to monitor and ensure effectiveness of any changes in internal controls. There have not been ~~no other~~any changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 16 to the Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of our ~~2020~~2021 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during the ~~second~~first quarter of ~~2021:~~2022:


Period	Period	(a)	(b)		(c)	(d)		Period	(a)	(b)		(c)	(d)
		Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)			Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 1 to April 30, 2021
January 1 to January 31, 2022								January 1 to January 31, 2022
Share repurchase program (1)	Share repurchase program (1)	116,104	$	258.40	116,104	$	1,884,594,802	Share repurchase program (1)	334,220	$	311.16	334,220	$	3,328,441,337
Employee transactions (2)	Employee transactions (2)	68,047	$	255.57	N/A	N/A		Employee transactions (2)	110,082	$	304.64	N/A	N/A

May 1 to May 31, 2021
February 1 to February 28, 2022								February 1 to February 28, 2022
Share repurchase program (1)	Share repurchase program (1)	776,497	$	257.58	776,497	$	1,684,582,940	Share repurchase program (1)	475,911	$	304.67	475,911	$	3,183,446,834
Employee transactions (2)	Employee transactions (2)	36,015	$	260.52	N/A	N/A		Employee transactions (2)	289,352	$	311.08	N/A	N/A

June 1 to June 30, 2021
March 1 to March 31, 2022								March 1 to March 31, 2022
Share repurchase program (1)	Share repurchase program (1)	868,734	$	253.08	868,734	$	1,464,727,947	Share repurchase program (1)	623,973	$	288.49	623,973	$	3,003,438,420
Employee transactions (2)	Employee transactions (2)	28,954	$	260.90	N/A	N/A		Employee transactions (2)	91,123	$	297.15	N/A	N/A

Totals	Totals							Totals
Share repurchase program (1)	Share repurchase program (1)	1,761,335	$	255.41	1,761,335			Share repurchase program (1)	1,434,104	$	299.14	1,434,104
Employee transactions (2)	Employee transactions (2)	133,016	$	258.07	N/A			Employee transactions (2)	490,557	$	307.05	N/A
		1,894,351			1,761,335				1,924,661			1,434,104

N/A Not applicable.

(1) In August 2020, our Board of Directors authorized an expenditure of up to $2.5 billion for the repurchase of our common stock through September 30, 2022. In January 2022, our Board of Directors authorized an additional $3.0 billion for the repurchase of our common stock through March 31, 2024. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means.

(2) Includes restricted shares withheld pursuant to the terms of awards under the Company’s share-based compensation plans to offset tax withholding obligations that occur upon vesting and release of restricted shares. The value of the restricted shares withheld is the closing price of common stock of Ameriprise Financial, Inc. on the date the relevant transaction occurs. Also includes shares withheld pursuant to the net settlement of Non-Qualified Stock Option (“NQSO”) exercises to offset tax withholding obligations that occur upon exercise and to cover the strike price of the NQSO. The value of the shares withheld pursuant to the net settlement of NQSO exercises is the closing price of common stock of Ameriprise Financial, Inc. on the day prior to the date the relevant transaction occurs.

8771

AMERIPRISE FINANCIAL, INC.

ITEM 6. EXHIBITS

Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed certain agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.

The following exhibits are filed as part of this Quarterly Report on Form 10-Q. The exhibit numbers followed by an asterisk (*) indicate exhibits electronically filed herewith. All other exhibit numbers indicate exhibits previously filed and are hereby incorporated herein by reference.


Exhibit			Description

3.1			Amended and Restated Certificate of Incorporation of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, File No. 1-32525, filed on May 1, 2014).
3.2			Amended and Restated Bylaws of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K, File No. 1-32525, filed on February 24, 2021).
4.1			Form of Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Form 10 Registration Statement, File No. 1-32525, filed on August 19, 2005). Other instruments defining the rights of holders of long-term debt securities of the registrant are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The registrant agrees to furnish copies of these instruments to the SEC upon request.
10.1†*			~~Fourth Amended and Restated Credit Agreement dated as of June 11, 2021 among~~ Ameriprise Financial Inc., as Borrower, the lenders party thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A. and Citibank, N.A. as Co-Syndication Agents, and Credit Suisse AG, New York Branch, Goldman Sachs Bank USA, HSBC Bank USA, National Association, JPMorgan Chase Bank, N.A., U.S. Bank National Association and BMO Harris Bank N.A. as Co-Documentation Agents, and Wells Fargo Securities, LLC, BofA Securities, Inc. and Citibank, N.A. as Joint Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on June 11, 2021).Long-Term Incentive Award Program Guide
31.1*			Certification of James M. Cracchiolo pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*			Certification of Walter S. Berman pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32*			Certification of James M. Cracchiolo and Walter S. Berman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following materials from Ameriprise Financial, Inc.’s Quarterly Report on Form 10-Q for the period ended ~~June 30, 2021~~March 31, 2022 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2022 and ~~six months ended June 30, 2021 and 2020;~~2021; (ii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and ~~six months ended June 30, 2021 and 2020;~~2021; (iii) Consolidated Balance Sheets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020;~~2021; (iv) Consolidated Statements of Equity for the three months ended March 31, 2022 and ~~six months ended June 30, 2021 and 2020;~~2021; (v) Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020;~~2021; and (vi) Notes to the Consolidated Financial Statements.
104			The cover page from Ameriprise Financial, Inc.’s Quarterly Report on Form 10-Q for the period ended ~~June 30, 2021~~March 31, 2022 is formatted in iXBRL and contained in Exhibit 101.
* Filed electronically herewithin.
† Management contract or compensation plan or arrangement

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AMERIPRISE FINANCIAL, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


									AMERIPRISE FINANCIAL, INC.
									(Registrant)


Date:	~~August 9, 2021~~May 2, 2022	By:	/s/ Walter S. Berman
			Walter S. Berman
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)


Date:	~~August 9, 2021~~May 2, 2022	By:	/s/ John R. Hutt
			John R. Hutt
			~~Senior~~Executive Vice President / LFO – ~~Corporate~~ Finance ~~and Controller~~
			(Principal Accounting Officer)

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