Docoh
Loading...

AMP Ameriprise Financial

Filed: 9 Nov 21, 2:10pm
0000820027srt:ConsolidatedEntityExcludingVariableInterestEntitiesVIEMemberamp:GMWBAndGMABEmbeddedDerivativesMember2021-06-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period EndedSeptember 30, 2021
OR
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 CenterMinneapolisMinnesota55474
(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 classTrading Symbol Name of each exchange on which registered
Common Stock (par value $.01 per share)AMPNew 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.  YesNo
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).  YesNo
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 FilerAccelerated FilerNon-accelerated Filer
Smaller reporting companyEmerging 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).  YesNo
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding at October 29, 2021
Common Stock (par value $.01 per share)111,889,817 shares


AMERIPRISE FINANCIAL, INC.
FORM 10-Q
INDEX 
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Operations — Three months and nine months ended September 30, 2021 and 2020
Consolidated Statements of Comprehensive Income — Three months and nine months ended September 30, 2021 and 2020
Consolidated Balance Sheets — September 30, 2021 and December 31, 2020
Consolidated Statements of Equity — Three months and nine months ended September 30, 2021 and 2020
Consolidated Statements of Cash Flows — Nine months ended September 30, 2021 and 2020
Notes to Consolidated Financial Statements
1.Basis of Presentation
2.Recent Accounting Pronouncements
3.Revenue from Contracts with Customers
4.Variable Interest Entities
5.Investments
6.Financing Receivables
7.Reinsurance
8.Deferred Acquisition Costs and Deferred Sales Inducement Costs
9.Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities
10.Variable Annuity and Insurance Guarantees
11.Debt
12.Fair Values of Assets and Liabilities
13.Offsetting Assets and Liabilities
14.Derivatives and Hedging Activities
15.Shareholders’ Equity
16.Income Taxes
17.Contingencies
18.Earnings per Share
19.Segment Information
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
Item 4.  Controls and Procedures
Part II.  Other Information
Item 1.  Legal Proceedings
Item 1A.  Risk Factors
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.  Exhibits
Signatures
2

AMERIPRISE FINANCIAL, INC.
PART I. FINANCIAL INFORMATION 
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


 Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions, except per share amounts) 
Revenues
Management and financial advice fees$2,367 $1,893 $6,720 $5,365 
Distribution fees458 400 1,368 1,239 
Net investment income773 300 1,428 933 
Premiums, policy and contract charges(805)352 (94)1,019 
Other revenues113 68 259 213 
Total revenues2,906 3,013 9,681 8,769 
Banking and deposit interest expense10 10 53 
Total net revenues2,903 3,003 9,671 8,716 
Expenses
Distribution expenses1,285 1,028 3,693 2,963 
Interest credited to fixed accounts172 170 455 523 
Benefits, claims, losses and settlement expenses(719)1,104 338 824 
Amortization of deferred acquisition costs85 77 349 
Interest and debt expense64 37 149 124 
General and administrative expense822 763 2,475 2,292 
Total expenses1,633 3,187 7,187 7,075 
Pretax income (loss)1,270 (184)2,484 1,641 
Income tax provision (benefit)239 (44)425 284 
Net income (loss)$1,031 $(140)$2,059 $1,357 
Earnings per share
Basic$8.86 $(1.14)$17.42 $10.87 
Diluted$8.65 $(1.14)$17.03 $10.73 
See Notes to Consolidated Financial Statements.
3

AMERIPRISE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions) 
Net income (loss)$1,031 $(140)$2,059 $1,357 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(22)27 (21)(14)
Net unrealized gains (losses) on securities(339)95 (538)268 
Defined benefit plans— — 29 — 
Total other comprehensive income (loss), net of tax(361)122 (530)254 
Total comprehensive income (loss)$670 $(18)$1,529 $1,611 
See Notes to Consolidated Financial Statements.
4

AMERIPRISE FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)


 September 30, 2021December 31, 2020
(in millions, except share amounts)
Assets
Cash and cash equivalents$7,736 $6,751 
Cash of consolidated investment entities68 94 
Investments (allowance for credit losses: 2021, $19; 2020, $52)33,518 41,031 
Investments of consolidated investment entities, at fair value2,170 1,918 
Separate account assets95,129 92,611 
Receivables (allowance for credit losses: 2021, $52; 2020, $49)15,920 7,819 
Receivables of consolidated investment entities, at fair value18 16 
Deferred acquisition costs2,735 2,532 
Restricted and segregated cash, cash equivalents and investments2,351 2,558 
Other assets11,079 10,551 
Other assets of consolidated investment entities, at fair value
Total assets$170,726 $165,883 
Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims$34,864 $33,992 
Separate account liabilities95,129 92,611 
Customer deposits18,693 17,641 
Short-term borrowings200 200 
Long-term debt2,831 2,831 
Debt of consolidated investment entities, at fair value2,163 1,913 
Accounts payable and accrued expenses2,146 1,998 
Other liabilities8,922 8,761 
Other liabilities of consolidated investment entities, at fair value71 69 
Total liabilities165,019 160,016 
Equity:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 334,347,693 and 332,390,132, respectively)
Additional paid-in capital9,118 8,822 
Retained earnings16,955 15,292 
Treasury shares, at cost (221,950,106 and 215,624,519 shares, respectively)(20,468)(18,879)
Accumulated other comprehensive income (loss), net of tax99 629 
Total equity5,707 5,867 
Total liabilities and equity$170,726 $165,883 
See Notes to Consolidated Financial Statements.

5

AMERIPRISE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
Number of Outstanding SharesCommon SharesAdditional Paid-In CapitalRetained EarningsTreasury
Shares
Accumulated Other 
Comprehensive Income (Loss)
Total
(in millions, except per share data)
Balances at July 1, 2020120,607,501 $$8,622 $15,510 $(18,029)$394 $6,500 
Comprehensive income (loss):
Net income (loss)— — — (140)— — (140)
Other comprehensive income, net of tax— — — — — 122 122 
Total comprehensive loss(18)
Dividends to shareholders— — — (129)— — (129)
Repurchase of common shares(2,215,753)— — — (341)— (341)
Share-based compensation plans239,861 — 55 — — — 55 
Balances at September 30, 2020118,631,609 $$8,677 $15,241 $(18,370)$516 $6,067 
Balances at July 1, 2021114,297,434 $$9,049 $16,057 $(19,883)$460 $5,686 
Comprehensive income (loss):
Net income— — — 1,031 — — 1,031 
Other comprehensive loss, net of tax— — — — — (361)(361)
Total comprehensive income670 
Dividends to shareholders— — — (133)— — (133)
Repurchase of common shares(2,236,129)— — — (586)— (586)
Share-based compensation plans336,282 — 69 — — 70 
Balances at September 30, 2021112,397,587 $$9,118 $16,955 $(20,468)$99 $5,707 
Balances at January 1, 2020123,939,234 $$8,461 $14,279 $(17,276)$262 $5,729 
Cumulative effect of adoption of adoption of current expected credit losses guidance— — — (9)— — (9)
Comprehensive income:
Net income— — — 1,357 — — 1,357 
Other comprehensive income, net of tax— — — — — 254 254 
Total comprehensive income1,611 
Dividends to shareholders— — — (386)— — (386)
Repurchase of common shares(7,392,430)— — — (1,135)(1,135)
Share-based compensation plans2,084,805 — 216 — 41 — 257 
Balances at September 30, 2020118,631,609 $$8,677 $15,241 $(18,370)$516 $6,067 
Balances at January 1, 2021116,765,613 $$8,822 $15,292 $(18,879)$629 $5,867 
Comprehensive income:
Net income— — — 2,059 — — 2,059 
Other comprehensive loss, net of tax— — — — — (530)(530)
Total comprehensive income1,529 
Dividends to shareholders— — — (396)— — (396)
Repurchase of common shares(6,724,301)— — — (1,624)— (1,624)
Share-based compensation plans2,356,275 — 296 — 35 — 331 
Balances at September 30, 2021112,397,587 $$9,118 $16,955 $(20,468)$99 $5,707 
See Notes to Consolidated Financial Statements.
6

AMERIPRISE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine Months Ended September 30,
20212020
(in millions)
Cash Flows from Operating Activities
Net income$2,059 $1,357 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion, net95 150 
Deferred income tax expense (benefit)63 198 
Share-based compensation124 107 
Net realized investment (gains) losses(627)(14)
Net trading (gains) losses(9)
Loss from equity method investments58 58 
Impairments and provision for loan losses19 
Net (gains) losses of consolidated investment entities(17)(7)
Changes in operating assets and liabilities:
Restricted and segregated investments(101)— 
Deferred acquisition costs(128)186 
Policyholder account balances, future policy benefits and claims, net1,174 3,252 
Derivatives, net of collateral(290)265 
Receivables(360)(216)
Brokerage deposits(45)205 
Accounts payable and accrued expenses146 (94)
Current income tax expense (benefit)(393)(100)
 Deferred taxes, net(112)— 
Other operating assets and liabilities of consolidated investment entities, net15 20 
Other, net108 262 
Net cash provided by (used in) operating activities1,774 5,639 
Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales555 1,690 
Maturities, sinking fund payments and calls8,992 6,568 
Purchases(10,047)(10,197)
Proceeds from sales, maturities and repayments of mortgage loans242 146 
Funding of mortgage loans(166)(147)
Proceeds from sales, maturities and collections of other investments155 139 
Purchase of other investments(73)(219)
Purchase of investments by consolidated investment entities(1,461)(679)
Proceeds from sales, maturities and repayments of investments by consolidated investment entities850 454 
Purchase of land, buildings, equipment and software(86)(107)
Cash paid for written options with deferred premiums(314)(292)
Cash received from written options with deferred premiums60 129 
Cash paid for deposit receivable(216)(3)
Cash received for deposit receivable132 74 
Other, net23 
Net cash provided by (used in) investing activities(1,373)(2,421)
See Notes to Consolidated Financial Statements.
7

AMERIPRISE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
Nine Months Ended September 30,
20212020
(in millions)
Cash Flows from Financing Activities
Investment certificates:
Proceeds from additions$2,004 $3,428 
Maturities, withdrawals and cash surrenders(3,320)(3,780)
Policyholder account balances:
Deposits and other additions1,131 1,202 
Net transfers from (to) separate accounts(206)(63)
Surrenders and other benefits(1,002)(1,035)
Change in banking deposits, net2,412 2,532 
Cash paid for purchased options with deferred premiums(94)(177)
Cash received from purchased options with deferred premiums580 40 
Issuance of long-term debt494 
Repayments of long-term debt(6)(760)
Dividends paid to shareholders(384)(375)
Repurchase of common shares(1,467)(1,036)
Exercise of stock options— 
Borrowings by consolidated investment entities1,375 382 
Repayments of debt by consolidated investment entities(757)(55)
Other, net(11)(6)
Net cash provided by (used in) financing activities259 793 
Effect of exchange rate changes on cash(9)(5)
Net increase (decrease) in cash and cash equivalents, including amounts restricted651 4,006 
Cash and cash equivalents, including amounts restricted, at beginning of period8,903 6,213 
Cash and cash equivalents, including amounts restricted, at end of period$9,554 $10,219 
Supplemental Disclosures:
Interest paid excluding consolidated investment entities$85 $136 
Interest paid by consolidated investment entities73 45 
Income taxes paid, net867 116 
Leased assets obtained in exchange for operating lease liabilities63 68 
Non-cash investing activity:
Partnership commitments not yet remitted— 
Investments transferred in connection with reinsurance transaction7,527 — 
 Exchange of an investment that resulted in a realized gain and an increase to amortized cost17 — 
September 30, 2021December 31, 2020
(in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:
Cash and cash equivalents$7,736 $6,751 
Cash of consolidated investment entities68 94 
Restricted and segregated cash, cash equivalents and investments2,351 2,558 
Less: Restricted and segregated investments(601)(500)
Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows$9,554 $8,903 

See Notes to Consolidated Financial Statements.
8

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 TAM UK International Holdings 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.
In the first quarter of 2021, the Company recorded an unfavorable 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 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, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2021 (“2020 10-K”).
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.
During the third quarter of 2021, RiverSource Life Insurance Company (“RiverSource Life”), one of the Company’s life insurance subsidiaries, closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $7.0 billion of fixed deferred and immediate annuity policies. As part of the transaction, RiverSource Life transferred $7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash. The transaction resulted in a net realized gain of approximately $532 million on investments sold. A similar previously announced transaction with RiverSource Life Insurance Co. of New York did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties.
On November 8, 2021, the Company completed its previously announced acquisition of the European-based asset management business of BMO Financial Group. At close, the consideration transferred consisted of £615 million (or $829 million) for initial price, plus an additional £103 million (or $138 million) largely associated with a customary adjustment for excess capital surplus that will be accessible over time. The overall purchase price will continue to be subject to further customary post-close adjustments. The all-cash transaction will add approximately $131 billion of assets under management in EMEA.
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 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 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)
9

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
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 – Expedients for Contract Modifications
In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR). The following expedients are provided for modified contracts whose reference rate is changed: (1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and
10

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
(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. The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated results of operations, financial condition and disclosures.
11

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 September 30, 2021
Advice & Wealth ManagementAsset ManagementRetirement & Protection SolutionsCorporate & OtherTotal SegmentsNon-operating
Revenue
Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail$— $587 $— $— $587 $— $587 
Institutional— 143 — — 143 — 143 
Advisory fees1,189 — — — 1,189 — 1,189 
Financial planning fees91 — — — 91 — 91 
Transaction and other fees94 57 18 — 169 — 169 
Total management and financial advice fees1,374 787 18 — 2,179 — 2,179 
Distribution fees:
Mutual funds219 70 — — 289 — 289 
Insurance and annuity246 50 104 — 400 — 400 
Other products96 — — — 96 — 96 
Total distribution fees561 120 104 — 785 — 785 
Other revenues46 — 48 — 48 
Total revenue from contracts with customers1,981 908 122 3,012 — 3,012 
Revenue from other sources (1)
70 712 112 901 (605)296 
Total segment gross revenues2,051 915 834 113 3,913 (605)3,308 
Banking and deposit interest expense(3)— — — (3)— (3)
Total segment net revenues2,048 915 834 113 3,910 (605)3,305 
Intersegment revenues(261)(12)(122)— (395)(7)(402)
Total net revenues$1,787 $903 $712 $113 $3,515 $(612)$2,903 
Nine Months Ended September 30, 2021
Advice & Wealth ManagementAsset ManagementRetirement & Protection SolutionsCorporate & OtherTotal SegmentsNon-operating
Revenue
Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail$— $1,685 $— $— $1,685 $— $1,685 
Institutional— 397 — — 397 — 397 
Advisory fees3,330 — — — 3,330 — 3,330 
Financial planning fees272 — — — 272 — 272 
Transaction and other fees276 165 52 — 493 — 493 
Total management and financial advice fees3,878 2,247 52 — 6,177 — 6,177 
Distribution fees:
Mutual funds638 206 — — 844 — 844 
Insurance and annuity738 146 304 — 1,188 — 1,188 
Other products306 — — — 306 — 306 
Total distribution fees1,682 352 304 — 2,338 — 2,338 
Other revenues146 — 157 — 157 
Total revenue from contracts with customers5,706 2,608 356 8,672 — 8,672 
Revenue from other sources (1)
211 14 2,073 370 2,668 (472)2,196 
Total segment gross revenues5,917 2,622 2,429 372 11,340 (472)10,868 
Banking and deposit interest expense(10)— — (1)(11)— (11)
Total segment net revenues5,907 2,622 2,429 371 11,329 (472)10,857 
Intersegment revenues(777)(39)(356)(1)(1,173)(13)(1,186)
Total net revenues$5,130 $2,583 $2,073 $370 $10,156 $(485)$9,671 
12

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Three Months Ended September 30, 2020
Advice & Wealth ManagementAsset ManagementRetirement & Protection SolutionsCorporate & OtherTotal SegmentsNon-operating
Revenue
Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail$— $466 $— $— $466 $— $466 
Institutional— 122 — — 122 — 122 
Advisory fees907 — — — 907 — 907 
Financial planning fees81 — — — 81 — 81 
Transaction and other fees89 47 14 — 150 — 150 
Total management and financial advice fees1,077 635 14 — 1,726 — 1,726 
Distribution fees:
Mutual funds186 59 — — 245 — 245 
Insurance and annuity202 45 75 — 322 — 322 
Other products91 — — — 91 — 91 
Total distribution fees479 104 75 — 658 — 658 
Other revenues44 — — 49 — 49 
Total revenue from contracts with customers1,600 739 94 — 2,433 — 2,433 
Revenue from other sources (1)
77 — 687 132 896 27 923 
Total segment gross revenues1,677 739 781 132 3,329 27 3,356 
Banking and deposit interest expense(10)— — — (10)— (10)
Total segment net revenues1,667 739 781 132 3,319 27 3,346 
Intersegment revenues(219)(13)(110)— (342)(1)(343)
Total net revenues$1,448 $726 $671 $132 $2,977 $26 $3,003 
Nine Months Ended September 30, 2020
Advice & Wealth ManagementAsset ManagementRetirement & Protection SolutionsCorporate & OtherTotal SegmentsNon-operating
Revenue
Total
(in millions)
Management and financial advice fees:
Asset management fees:
Retail$— $1,330 $— $— $1,330 $— $1,330 
Institutional— 308 — — 308 — 308 
Advisory fees2,558 — — — 2,558 — 2,558 
Financial planning fees248 — — — 248 — 248 
Transaction and other fees264 139 45 — 448 — 448 
Total management and financial advice fees3,070 1,777 45 — 4,892 — 4,892 
Distribution fees:
Mutual funds540 174 — — 714 — 714 
Insurance and annuity606 129 266 — 1,001 — 1,001 
Other products334 — — — 334 — 334 
Total distribution fees1,480 303 266 — 2,049 — 2,049 
Other revenues138 148 — 148 
Total revenue from contracts with customers4,688 2,082 316 7,089 — 7,089 
Revenue from other sources (1)
264 11 1,979 411 2,665 28 2,693 
Total segment gross revenues4,952 2,093 2,295 414 9,754 28 9,782 
Banking and deposit interest expense(53)— — (2)(55)— (55)
Total segment net revenues4,899 2,093 2,295 412 9,699 28 9,727 
Intersegment revenues(649)(39)(319)(1,006)(5)(1,011)
Total net revenues$4,250 $2,054 $1,976 $413 $8,693 $23 $8,716 
(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.
13

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.”), Société d'Investissement à Capital Variable (“SICAVs”) and other pooled investments sponsored by the Company in Europe, typically 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’ 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.
Financial Planning Fees
The Company earns revenue for providing financial plans to its clients. The revenue earned for each financial plan is either a fixed fee (received monthly, quarterly or annually) or a variable fee (received monthly) based on a contractual fixed rate applied, as a percentage, to the prior month end assets held in a client’s investment advisory account. The financial planning fee is based on the complexity of a client’s financial and life situation and his or her advisor’s experience. The performance obligation is satisfied at the time the financial plan is delivered to the customer. The Company records a contract liability for the unearned revenue when cash is received before the plan is delivered. The financial plan contracts with clients are annual contracts. Amounts recorded as a contract liability are recognized as revenue when the financial plan is delivered, which occurs within the annual contract period.
For fixed fee arrangements, revenue is recognized when the financial plan is delivered. The Company accrues revenue for any amounts that have not been received at the time the financial plan is delivered.
For variable fee arrangements, revenue is recognized for cash that has been received when the financial plan is delivered. The amount received after the plan is delivered is variably constrained due to factors outside the Company’s control including market volatility and client behavior. The revenue is recognized when it is probable that a significant reversal will not occur that is generally each month end as the advisory account balance uncertainty is resolved.
Contract liabilities for financial planning fees, which are included in other liabilities in the Consolidated Balance Sheets, were $144 million and $146 million as of September 30, 2021 and December 31, 2020, 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 assets in the Consolidated Balance Sheets and were $115 million and $117 million as of September 30, 2021 and December 31, 2020, 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
14

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 liabilities in the Consolidated Balance Sheets, were $14 million and nil as of September 30, 2021 and December 31, 2020, respectively.
The Company earns revenue for providing trade execution services to franchise advisors. The trade execution performance obligation is satisfied at the time of each trade and the revenue is primarily earned based on a fixed fee per trade. These fees are invoiced and collected on a semi-monthly basis.
Distribution Fees
Mutual Funds and Insurance and Annuity Products
The Company earns revenue for selling affiliated and unaffiliated mutual funds, fixed and variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). This ongoing revenue may be recognized for many years after the initial sale. The revenue will not be recognized until it is probable that a significant reversal will not occur.
The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis.
Other Products
The Company earns revenue for selling unaffiliated alternative products. The performance obligation 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
15

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.
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 $500 million and $403 million as of September 30, 2021 and December 31, 2020, 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 $27 million and $13 million as of September 30, 2021 and December 31, 2020, respectively.
CLOs
CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and 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 $2 million and $3 million as of September 30, 2021 and December 31, 2020, 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 $23 million as of both September 30, 2021 and December 31, 2020.
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 nil as of both September 30, 2021 and December 31, 2020.
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 $26 million and $20 million as of September 30, 2021 and December 31, 2020, respectively.
16

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 $151 million and $200 million as of September 30, 2021 and December 31, 2020, respectively. The Company had a $9 million liability recorded as of both September 30, 2021 and December 31, 2020 related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments.
Structured Investments
The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its amortized cost. See Note 5 for additional information on these structured investments.
Fair Value of Assets and Liabilities
The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 12 for the definition of the three levels of the fair value hierarchy.
The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis:
 September 30, 2021
Level 1Level 2Level 3Total
(in millions)
Assets
Investments:
Common stocks$— $$— $
Syndicated loans— 2,123 45 2,168 
Total investments— 2,125 45 2,170 
Receivables— 18 — 18 
Other assets— — 
Total assets at fair value$— $2,145 $45 $2,190 
Liabilities
Debt (1)
$— $2,163 $— $2,163 
Other liabilities— 71 — 71 
Total liabilities at fair value$— $2,234 $— $2,234 
17

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
 December 31, 2020
Level 1Level 2Level 3Total
(in millions)
Assets
Investments:
Corporate debt securities$— $$— $
Common stocks— — 
Syndicated loans— 1,817 92 1,909 
Total investments— 1,826 92 1,918 
Receivables— 16 — 16 
Other assets— — 
Total assets at fair value$— $1,842 $94 $1,936 
Liabilities
Debt (1)
$— $1,913 $— $1,913 
Other liabilities— 69 — 69 
Total liabilities at fair value$— $1,982 $— $1,982 
(1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, 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, July 1, 2021$112 
Purchases
Sales(4)
Settlements(10)
Transfers into Level 3
Transfers out of Level 3(47)
Deconsolidation of consolidated investment entities(18)
Balance, September 30, 2021$45 
 Syndicated Loans
(in millions)
Balance, July 1, 2020$211 
Total gains (losses) included in:
Net income(1)
Purchases35 
Sales(12)
Settlements(6)
Transfers into Level 329 
Transfers out of Level 3(141)
Balance, September 30, 2020$118 
Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020$(1)
18

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Syndicated LoansOther Assets
(in millions)
Balance, January 1, 2021$92 $
Total gains (losses) included in:
Net income(1)— 
Purchases88 — 
Sales(38)— 
Settlements(49)— 
Transfers into Level 390 — 
Transfers out of Level 3(122)(2)
Deconsolidation of consolidated investment entities(18)— 
Balance, September 30, 2021$45 $— 
 Syndicated Loans
(in millions)
Balance, January 1, 2020$143 
Total gains (losses) included in:
Net income(19)(1)
Purchases80 
Sales(27)
Settlements(32)
Transfers into Level 3379 
Transfers out of Level 3(406)
Balance, September 30, 2020$118 
Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020$(2)(1)
(1) Included in net investment income in the Consolidated Statements of Operations.
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 September 30, 2021 and December 31, 2020 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.
Determination of Fair Value
Assets
Investments
The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 12 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.
19

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.
The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected:
 September 30, 2021December 31, 2020
(in millions)
Syndicated loans
Unpaid principal balance$2,223 $1,990 
Excess unpaid principal over fair value(55)(81)
Fair value$2,168 $1,909 
Fair value of loans more than 90 days past due$$
Fair value of loans in nonaccrual status19 
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both24 
Debt
Unpaid principal balance$2,298 $2,069 
Excess unpaid principal over fair value(135)(156)
Carrying value (1)
$2,163 $1,913 
(1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively.
During the first quarter of 2021, the Company launched two new CLOs and issued debt of $817 million.
Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in net investment income. Gains and losses related to changes in the fair value of investments and gains and losses on sales of investments are also recorded in net investment income. Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in net investment income.
Total net gains (losses) recognized in net investment income related to the changes in 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 and nine months ended September 30, 2021 and 2020.
Debt of the consolidated investment entities and the stated interest rates were as follows:
 Carrying ValueWeighted Average Interest Rate
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(in millions) 
Debt of consolidated CLOs due 2025-2034$2,163 $1,913 1.7 %2.1 %
The debt of the consolidated CLOs has both fixed and floating interest rates, which range from 0.0% to 8.8%. The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates.
20

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
5.  Investments
The following is a summary of Ameriprise Financial investments:
September 30, 2021December 31, 2020
(in millions)
Available-for-Sale securities, at fair value$30,114 $36,283 
Mortgage loans (allowance for credit losses: 2021, $14; 2020, $29)1,911 2,718 
Policy loans836 846 
Other investments (allowance for credit losses: 2021, $4; 2020, $12)657 1,184 
Total$33,518 $41,031 
Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days.
The following is a summary of net investment income:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions)
Investment income on fixed maturities$202 $275 $733 $887 
Net realized gains (losses)546 627 (18)
Affordable housing partnerships(20)(14)(58)(50)
Other13 28 58 
Consolidated investment entities44 22 98 56 
Total$773 $300 $1,428 $933 
Available-for-Sale securities distributed by type were as follows:
September 30, 2021
Description of SecuritiesAmortized CostGross Unrealized GainsGross Unrealized LossesAllowance for Credit LossesFair Value
 (in millions)
Corporate debt securities$8,455 $1,301 $(31)$— $9,725 
Residential mortgage backed securities9,628 90 (19)— 9,699 
Commercial mortgage backed securities4,712 92 (9)— 4,795 
Asset backed securities3,465 31 (1)— 3,495 
State and municipal obligations857 249 (1)(1)1,104 
U.S. government and agency obligations1,196 — — — 1,196 
Foreign government bonds and obligations82 (1)— 87 
Other securities13 — — — 13 
Total$28,408 $1,769 $(62)$(1)$30,114 
21

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Description of SecuritiesDecember 31, 2020
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance for Credit LossesFair Value
(in millions)
Corporate debt securities$11,762 $1,924 $(2)$(10)$13,674 
Residential mortgage backed securities9,845 188 (4)— 10,029 
Commercial mortgage backed securities5,867 242 (21)— 6,088 
Asset backed securities3,283 52 (5)(1)3,329 
State and municipal obligations1,088 297 (1)— 1,384 
U.S. government and agency obligations1,456 — — — 1,456 
Foreign government bonds and obligations241 22 (1)— 262 
Other securities59 — — 61 
Total$33,601 $2,727 $(34)$(11)$36,283 
As of September 30, 2021 and December 31, 2020, accrued interest of $144 million and $178 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in receivables on the Consolidated Balance Sheets.
As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $3.0 billion and $3.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $403 million and $454 million, respectively, may be sold, pledged or rehypothecated by the counterparty.
As of September 30, 2021 and December 31, 2020, fixed maturity securities comprised approximately 90% and 88%, respectively, of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or, if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of September 30, 2021 and December 31, 2020, the Company’s internal analysts rated $545 million and $605 million, respectively, of securities using criteria similar to those used by NRSROs.
A summary of fixed maturity securities by rating was as follows:
RatingsSeptember 30, 2021December 31, 2020
Amortized CostFair ValuePercent of Total Fair ValueAmortized CostFair ValuePercent of Total Fair Value
 (in millions, except percentages)
AAA$18,695 $18,871 63 %$19,815 $20,253 56 %
AA727 903 1,082 1,312 
A1,748 2,114 2,953 3,534 10 
BBB6,273 7,110 23 8,271 9,542 26 
Below investment grade (1)
965 1,116 1,480 1,642 
Total fixed maturities$28,408 $30,114 100 %$33,601 $36,283 100 %
(1) Both the amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $2 million as of September 30, 2021, and $3 million as of December 31, 2020. These securities are not rated but are included in below investment grade due to their risk characteristics.
As of September 30, 2021 and December 31, 2020, approximately 32% and 33%, respectively, of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any issuer were greater than 10% of total equity.
22

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
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 SecuritiesSeptember 30, 2021
Less than 12 months12 months or moreTotal
Number of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized Losses
 (in millions, except number of securities)
Corporate debt securities83 $1,474 $(29)$23 $(2)88 $1,497 $(31)
Residential mortgage backed securities99 2,872 (18)59 195 (1)158 3,067 (19)
Commercial mortgage backed securities57 1,026 (8)10 168 (1)67 1,194 (9)
Asset backed securities12 317 (1)147 — 19 464 (1)
State and municipal obligations18 49 (1)— — — 18 49 (1)
Foreign government bonds and obligations— (1)11 10 (1)
Total274 $5,744 $(57)87 $537 $(5)361 $6,281 $(62)
Description of SecuritiesDecember 31, 2020
Less than 12 months12 months or moreTotal
Number of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized Losses
(in millions, except number of securities)
Corporate debt securities26 $228 $(1)11 $19 $(1)37 $247 $(2)
Residential mortgage backed securities72 833 (2)71 391 (2)143 1,224 (4)
Commercial mortgage backed securities35 781 (11)19 393 (10)54 1,174 (21)
Asset backed securities17 344 (3)13 231 (2)30 575 (5)
State and municipal obligations— (1)(1)
Foreign government bonds and obligations— (1)11 (1)
Total153 $2,193 $(17)122 $1,046 $(17)275 $3,239 $(34)
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 nine months ended September 30, 2021 is primarily attributable to higher interest rates, partially offset by tighter credit spreads. The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of September 30, 2021 and December 31, 2020, 93% and 92%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.
23

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 SecuritiesAsset Backed SecuritiesState and Municipal ObligationsTotal
(in millions)
Balance, July 1, 2021$$$$
Additions for which credit losses were not previously recorded1
Charge-offs— 
Balance, September 30, 2021$$$1$1
Balance, July 1, 2020$13$1$$14
Additions for which credit losses were not previously recorded
Balance, September 30, 2020$13$1$$14
Balance at January 1, 2021 (1)
$10$1$$11
Additions for which credit losses were not previously recorded11
Charge-offs(10)(1)(11)
Balance, September 30, 2021$$$1$1
Balance at January 1, 2020 (1)
$— $— $— $— 
Additions for which credit losses were not previously recorded13 — — 13 
Additional increases (decreases) on securities that had an allowance recorded in a previous period— — 
Balance at September 30, 2020$13 $$— $14 
(1) Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired.
Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net investment income were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions)
Gross realized investment gains$508$$573$17
Gross realized investment losses(5)— (6)(3)
Credit losses(1)— (1)(14)
Other impairments— (13)
Total$502$4$553$
Credit losses for the three months and nine months ended September 30, 2021 primarily related to recording an allowance for credit losses on a state and municipal security. For the nine months ended September 30, 2020, credit losses primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry. Other impairments for the nine months ended September 30, 2021 related to Available-for-Sale securities that were impaired prior to being sold in the reinsurance transaction. See Note 1 for more information on the reinsurance transaction.
See Note 15 for a rollforward of net unrealized investment gains (losses) included in AOCI.
24

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Available-for-Sale securities by contractual maturity as of September 30, 2021 were as follows:
Amortized CostFair Value
(in millions)
Due within one year$1,728$1,736
Due after one year through five years2,1832,324
Due after five years through 10 years3,0523,169
Due after 10 years3,6404,896
 10,60312,125
Residential mortgage backed securities9,6289,699
Commercial mortgage backed securities4,7124,795
Asset backed securities3,4653,495
Total$28,408$30,114
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.
Allowance for Credit Losses
The following tables present a rollforward of the allowance for credit losses for the nine months ended September 30:
 Commercial LoansConsumer LoansTotal
(in millions)
Balance, January 1, 2021$66 $$68 
Provisions(14)(13)
Charge-offs(6)(1)(7)
Recoveries— 
Other— 
Balance, September 30, 2021$48 $$51 
 Commercial LoansConsumer LoansTotal
(in millions)
Balance, December 31, 2019 (1)
$51 $— $51 
Cumulative effect of adoption of current expected credit losses guidance
Balance, January 1, 202053 56 
Provisions16 19 
Charge-offs(2)(2)(4)
Balance, September 30, 2020$67 $$71 
(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 decrease in the allowance for credit losses provision for commercial loans reflects the sale of certain commercial mortgage loans and syndicated loans in conjunction with the fixed deferred and immediate annuity reinsurance transaction discussed in Note 1.
Accrued interest on commercial loans was $13 million and $16 million as of September 30, 2021 and December 31, 2020, respectively, and is recorded in receivables on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans.
Purchases and Sales
During the three months and nine months ended September 30, 2021, the Company sold $746 million of commercial mortgage loans.
25

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
During the three months ended September 30, 2021 and 2020, the Company purchased nil and $96 million, respectively, of syndicated loans, and sold $360 million and $5 million, respectively, of syndicated loans. During the nine months ended September 30, 2021 and 2020, the Company purchased $37 million and $165 million, respectively, of syndicated loans, and sold $368 million and $12 million, respectively, of syndicated loans.
During the three months ended September 30, 2021 and 2020, the Company purchased $1 million and nil, respectively, of residential mortgage loans, and sold $3 million and nil, respectively, of residential mortgage loans. During the nine months ended September 30, 2021 and 2020, the Company purchased $7 million and $22 million, respectively, of residential mortgage loans, and sold $3 million and nil, respectively, of residential mortgage loans. The allowance for credit losses for residential mortgage loans was not material as of both September 30, 2021 and 2020.
The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.
Credit Quality Information
Nonperforming loans were $9 million and $21 million as of September 30, 2021 and December 31, 2020, respectively. All other loans were considered to be performing.
Commercial Loans
Commercial Mortgage Loans
The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review.
Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates 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 September 30, 2021 and December 31, 2020. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. Total commercial mortgage loan modifications through December 31, 2020 due to the COVID-19 pandemic consisted of 93 loans with a total unpaid balance of $369 million. Modifications primarily consisted of short-term forbearance and interest only payments. There were no additional modifications through September 30, 2021. As of September 30, 2021, there were no loans remaining that were modified due to COVID-19. All loans returned to their normal payment schedules. Total commercial mortgage loans past due were nil as of September 30, 2021 and December 31, 2020, respectively.
The tables below present the amortized cost basis of commercial mortgage loans by the year of origination and loan-to-value ratio :
September 30, 2021
Loan-to-Value Ratio20212020201920182017PriorTotal
(in millions)
> 100%$— $— $20 $10 $— $30 $60 
80% - 100%14 — 37 75 
60% - 80%95 69 68 29 61 133 455 
40% - 60%23 34 95 69 60 420 701 
< 40%41 56 494 610 
Total$136 $124 $233 $117 $177 $1,114 $1,901 

December 31, 2020
Loan-to-Value Ratio20202019201820172016PriorTotal
(in millions)
> 100%$— $— $$— $— $10 $12 
80% - 100%15 16 12 15 68 
60% - 80%89 166 27 32 46 144 504 
40% - 60%23 57 74 155 113 551 973 
< 40%23 80 99 64 895 1,168 
Total$134 $262 $195 $289 $230 $1,615 $2,725 
Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type.
26

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:
 LoansPercentage
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(in millions)  
East North Central$187 $259 10 %10 %
East South Central69 115 
Middle Atlantic125 178 
Mountain124 247 
New England29 54 
Pacific608 825 32 30 
South Atlantic496 681 26 25 
West North Central140 198 
West South Central123 168 
 1,901 2,725 100 %100 %
Less: allowance for credit losses14 29   
Total$1,887 $2,696   
Concentrations of credit risk of commercial mortgage loans by property type were as follows:
 LoansPercentage
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(in millions)  
Apartments$499 $713 26 %26 %
Hotel15 50 
Industrial306 427 16 16 
Mixed use68 87 
Office272 372 14 14 
Retail625 881 33 32 
Other116 195 
 1,901 2,725 100 %100 %
Less: allowance for credit losses14 29   
Total$1,887 $2,696   
Syndicated Loans
The recorded investment in syndicated loans as of September 30, 2021 and December 31, 2020 were $152 million and $595 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were nil and $3 million as of September 30, 2021 and December 31, 2020, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.
The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:
September 30, 2021
Internal Risk Rating20212020201920182017PriorTotal
(in millions)
Risk 5$— $— $— $— $— $— $— 
Risk 4— — 
Risk 3— — 22 
Risk 216 11 16 66 
Risk 116 16 60 
Total$25 $$21 $25 $38 $35 $152 
27

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
December 31, 2020
Internal Risk Rating20202019201820172016PriorTotal
(in millions)
Risk 5$— $— $— $— $— $$
Risk 4— — — 10 23 
Risk 3— 25 13 25 80 
Risk 230 57 62 69 14 41 273 
Risk 117 32 47 58 22 40 216 
Total$47 $98 $121 $161 $49 $119 $595 
Financial Advisor Loans
The Company offers loans to financial advisors for transitional cost assistance. Repayment of the loan is highly dependent on the retention of the financial advisor. In the event a financial advisor is no longer affiliated with the Company, any unpaid balances become immediately due. Accordingly, the primary risk factor for advisor loans is termination status. The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was $6 million and $7 million as of September 30, 2021 and December 31, 2020, respectively.
The tables below present the amortized cost basis of advisor loans by origination year and termination status:
September 30, 2021
Termination Status20212020201920182017PriorTotal
(in millions)
Active$104 $155 $124 $91 $119 $128 $721 
Terminated— — — 10 
Total$106 $155 $124 $91 $120 $135 $731 
December 31, 2020
Termination Status20202019201820172016PriorTotal
(in millions)
Active$171 $137 $101 $127 $83 $86 $705 
Terminated— — — 10 
Total$171 $137 $101 $128 $84 $94 $715 
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 September 30, 2021 and December 31, 2020.
The table below presents the amortized cost basis of credit card receivables by FICO score:
September 30, 2021December 31, 2020
(in millions)
> 800$27 $28 
750 - 79923 23 
700 - 74924 25 
650 - 69914 15 
< 650
Total$93 $96 
Policy Loans
Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is 0 allowance for credit losses.
28

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Margin Loans
The margin loans balance was $1.2 billion and $1.0 billion as of September 30, 2021 and December 31, 2020, respectively. The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. As of both September 30, 2021 and December 31, 2020, the allowance for credit losses on margin loans was not material.
Pledged Asset Lines of Credit
The pledged asset lines of credit balance was $408 million and $224 million as of September 30, 2021 and December 31, 2020, 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 September 30, 2021 and December 31, 2020, there was no allowance for credit losses on pledged asset lines of credit.
Deposit Receivable
The deposit receivable was $8.0 billion and $1.4 billion as of September 30, 2021 and December 31, 2020, respectively. The deposit receivable is fully collateralized by the fair value of the assets held in trusts. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was no allowance for credit losses for the deposit receivable as of both September 30, 2021 and December 31, 2020. The increase in the deposit receivable is primarily driven by the reinsurance transaction, effective July 1, 2021, to reinsure fixed deferred and non-life contingent immediate annuity policies. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction.
Troubled Debt Restructurings
There were no loans accounted for as a troubled debt restructuring by the Company during the each of the three months and nine months ended September 30, 2021 and 2020. There are no commitments to lend additional funds to borrowers whose loans have been restructured.
7. Reinsurance
During the third quarter of 2021, RiverSource Life reinsured 100% of its insurance risk associated with its life contingent immediate annuity policies in force as of July 1, 2021 through a reinsurance agreement with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company. Policies issued after July 1, 2021 are not subject to this reinsurance agreement. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction.
The ceded premiums associated with life contingent immediate annuity policies were $1.2 billion for the three months and nine months ended September 30, 2021.
Receivables included $1.1 billion of reinsurance recoverables related to life contingent immediate annuity policies as of September 30, 2021.
8.  Deferred Acquisition Costs and Deferred Sales Inducement Costs
During the third quarter of the year, management updated market-related inputs and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC in the third quarter of 2021 primarily reflected a favorable impact from lower surrenders on variable annuities with living benefits and UL and VUL insurance products. The impact of unlocking to DAC in the third quarter of 2020 primarily reflected an unfavorable impact from updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on variable annuities with living benefit guarantees.
The balances of and changes in DAC were as follows:
20212020
(in millions)
Balance at January 1$2,532 $2,698 
Capitalization of acquisition costs205 162 
Amortization(137)(249)
Amortization, impact of valuation assumptions review60 (100)
Impact of change in net unrealized (gains) losses on securities75 (61)
Balance at September 30$2,735 $2,450 
29

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
The balances of and changes in DSIC, which is included in other assets, were as follows:
20212020
(in millions)
Balance at January 1$189 $218 
Capitalization of sales inducement costs
Amortization(15)(19)
Amortization, impact of valuation assumptions review(16)
Impact of change in net unrealized (gains) losses on securities11 (1)
Balance at September 30$188 $183 
9.  Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities
Policyholder account balances, future policy benefits and claims consisted of the following:

September 30, 2021December 31, 2020
(in millions)
Policyholder account balances
Fixed annuities (1)
$8,229 $8,531 
Variable annuity fixed sub-accounts5,020 5,104 
Universal life (“UL”)/variable universal life (“VUL”) insurance3,098 3,122 
Indexed universal life (“IUL”) insurance2,461 2,269 
Structured variable annuities3,552 1,371 
Other life insurance580 605 
Total policyholder account balances22,940 21,002 
Future policy benefits
Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)2,256 3,049 
Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2)
(14)
Other annuity liabilities73 211 
Fixed annuity life contingent liabilities1,303 1,370 
Life and disability income insurance1,152 1,187 
Long term care insurance5,664 5,722 
UL/VUL and other life insurance additional liabilities1,278 1,259 
Total future policy benefits11,712 12,799 
Policy claims and other policyholders’ funds212 191 
Total policyholder account balances, future policy benefits and claims$34,864 $33,992 
(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 September 30, 2021 reported as a contra liability. 
Separate account liabilities consisted of the following:
September 30, 2021December 31, 2020
(in millions)
Variable annuity$81,063 $79,299 
VUL insurance8,931 8,226 
Other insurance32 31 
Threadneedle investment liabilities5,103 5,055 
Total$95,129 $92,611 
30

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.  Variable Annuity and Insurance Guarantees
The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.
Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.
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)
September 30, 2021December 31, 2020
Total Contract ValueContract Value in Separate AccountsNet Amount
at Risk
Weighted Average
Attained Age
Total Contract ValueContract Value in Separate AccountsNet Amount
at Risk
Weighted Average
Attained Age
(in millions, except age)
GMDB:
Return of premium$68,486 $66,600 $18 69$66,874 $64,932 $68
Five/six-year reset8,181 5,467 13 688,116 5,386 68
One-year ratchet6,105 5,786 40 716,094 5,763 71
Five-year ratchet1,425 1,371 671,436 1,381 — 67
Other1,281 1,264 46 741,261 1,243 45 73
Total — GMDB$85,478 $80,488 $119 69$83,781 $78,705 $64 68
GGU death benefit$1,221 $1,166 $176 72$1,183 $1,126 $162 71
GMIB$186 $172 $71$187 $173 $71
GMWB:
GMWB$1,903 $1,897 $75$1,972 $1,967 $74
GMWB for life51,275 51,226 215 6950,142 50,057 185 69
Total — GMWB$53,178 $53,123 $216 69$52,114 $52,024 $186 69
GMAB$2,037 $2,037 $— 62$2,291 $2,291 $— 61
(1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.
The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.
The following table provides information related to insurance guarantees for which the Company has established additional liabilities:
 September 30, 2021 December 31, 2020
Net Amount
at Risk
Weighted Average Attained AgeNet Amount
at Risk
Weighted Average Attained Age
(in millions, except age)
UL secondary guarantees$6,563 68$6,587 67
The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance.
31

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 & GGUGMIB
GMWB (1)
GMAB (1)
UL
(in millions)
Balance at January 1, 2020$16 $$1,462 $(39)$758 
Incurred claims10 2,219 63 172 
Paid claims(6)(1)— — (34)
Balance at September 30, 2020$20 $$3,681 $24 $896 
Balance at January 1, 2021$24 $$3,049 $$916 
Incurred claims12 (793)(15)106 
Paid claims(3)(1)— — (27)
Balance at September 30, 2021$33 $$2,256 $(14)$995 
(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:
September 30, 2021December 31, 2020
(in millions)
Mutual funds:
Equity$47,854 $45,947 
Bond24,779 26,073 
Other8,067 6,911 
Total mutual funds$80,700 $78,931 
11.  Debt
The balances and the stated interest rates of outstanding debt of Ameriprise Financial were as follows: 
 Outstanding BalanceStated Interest Rate
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
(in millions) 
Long-term debt:
Senior notes due 2022$500 $500 3.0 %3.0 %
Senior notes due 2023750 750 4.0 4.0 
Senior notes due 2024550 550 3.7 3.7 
Senior notes due 2025500 500 3.0 3.0 
Senior notes due 2026500 500 2.9 2.9 
Finance lease liabilities41 44 N/AN/A
Other(10)(13)N/AN/A
Total long-term debt2,831 2,831 
Short-term borrowings:
Federal Home Loan Bank (“FHLB”) advances200 200 0.3 0.4 
Total$3,031 $3,031   
32

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
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 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 and was $1.1 billion and $1.3 billion, of commercial mortgage backed securities, and $518 million and $604 million, of residential mortgage backed securities, as of September 30, 2021 and December 31, 2020, respectively. The remaining maturity of outstanding FHLB advances was less than three months as of both September 30, 2021 and December 31, 2020. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on outstanding borrowings as of the balance sheet date.
On 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 September 30, 2021 and December 31, 2020, the Company had no borrowings outstanding and had $1.1 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 September 30, 2021 and December 31, 2020.
12.  Fair Values of Assets and Liabilities
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.
Valuation Hierarchy
The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:
Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
33

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: 
 September 30, 2021 
Level 1Level 2Level 3Total
(in millions)
Assets
Cash equivalents$3,077 $3,322 $— $6,399  
Available-for-Sale securities:
Corporate debt securities— 9,205 520 9,725  
Residential mortgage backed securities— 9,699 — 9,699  
Commercial mortgage backed securities— 4,795 — 4,795  
Asset backed securities— 3,488 3,495  
State and municipal obligations— 1,104 — 1,104  
U.S. government and agency obligations1,196 — — 1,196  
Foreign government bonds and obligations— 87 — 87  
Other securities— 13 — 13 
Total Available-for-Sale securities1,196 28,391 527 30,114  
Investments at net asset value (“NAV”)(1)
Trading and other securities11 22 — 33 
Separate account assets at NAV95,129 (1)
Investments and cash equivalents segregated for regulatory purposes650 — — 650 
Receivables:
Fixed deferred indexed annuity ceded embedded derivatives— — 56 56 
Other assets:
Interest rate derivative contracts1,184 — 1,185  
Equity derivative contracts486 3,979 — 4,465  
Credit derivative contracts— 18 — 18 
Foreign exchange derivative contracts— 19 — 19  
Total other assets487 5,200 — 5,687  
Total assets at fair value$5,421 $36,935 $583 $138,076  
Liabilities
Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives$— $$54 $58  
IUL embedded derivatives— — 917 917  
GMWB and GMAB embedded derivatives— — 1,436 1,436 (2)
Structured variable annuity embedded derivatives— — 217 217 
Total policyholder account balances, future policy benefits and claims— 2,624 2,628 (3)
Customer deposits— —  
Other liabilities:
Interest rate derivative contracts— 476 — 476  
Equity derivative contracts169 3,450 — 3,619  
Foreign exchange derivative contracts17 — 19 
Other40 52  
Total other liabilities179 3,947 40 4,166  
Total liabilities at fair value$179 $3,956 $2,664 $6,799  
34

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
 December 31, 2020 
Level 1Level 2Level 3Total
(in millions)
Assets
Cash equivalents$2,935 $2,506 $— $5,441  
Available-for-Sale securities:
Corporate debt securities— 12,902 772 13,674  
Residential mortgage backed securities— 10,020 10,029  
Commercial mortgage backed securities— 6,088 — 6,088  
Asset backed securities— 3,297 32 3,329  
State and municipal obligations— 1,384 — 1,384  
U.S. government and agency obligations1,456 — — 1,456  
Foreign government bonds and obligations— 262 — 262  
Other securities— 61 — 61 
Total Available-for-Sale securities1,456 34,014 813 36,283  
Investments at NAV(1)
Trading and other securities61 27 — 88  
Separate account assets at NAV92,611 (1)
Investments and cash equivalents segregated for regulatory purposes600 — — 600 
Other assets:
Interest rate derivative contracts1,754 — 1,755  
Equity derivative contracts408 3,682 — 4,090  
Credit derivative contracts— — 
Foreign exchange derivative contracts22 — 23  
Total other assets410 5,460 — 5,870  
Total assets at fair value$5,462 $42,007 $813 $140,901  
Liabilities
Policyholder account balances, future policy benefits and claims:
Fixed deferred indexed annuity embedded derivatives$— $$49 $52  
IUL embedded derivatives— — 935 935  
GMWB and GMAB embedded derivatives— — 2,316 2,316 (4)
Structured variable annuity embedded derivatives— — 70 70 
Total policyholder account balances, future policy benefits and claims— 3,370 3,373 (5)
Customer deposits— —  
Other liabilities:
Interest rate derivative contracts— 734 — 734  
Equity derivative contracts183 3,388 — 3,571  
Credit derivative contracts— — 
Foreign exchange derivative contracts— 
Other43 48  
Total other liabilities187 4,130 43 4,360  
Total liabilities at fair value$187 $4,141 $3,413 $7,741  
(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 $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021.
(3) The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021.
(4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020.
(5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020.
35

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 SecuritiesReceivables
Corporate Debt SecuritiesAsset Backed SecuritiesTotalFixed Deferred Indexed Annuity Ceded Embedded Derivatives
(in millions)
Balance, July 1, 2021$391 $$397 $— 
Total gains (losses) included in:
Net income(1)— (1)— 
Other comprehensive income (loss)(3)— (3)— 
Purchases— — 
Sales— (1)(1)— 
Issues— — — 57 (5)
Settlements(44)(1)(45)(1)
Transfers into Level 3168 170 — 
Balance, September 30, 2021$520 $$527 $56 
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021$(4)$— $(4)$— 
Policyholder Account Balances, Future Policy Benefits and ClaimsOther Liabilities
Fixed Deferred Indexed Annuity Embedded DerivativesIUL Embedded DerivativesGMWB and GMAB Embedded DerivativesStructured Variable Annuity Embedded DerivativesTotal
(in millions)
Balance, July 1, 2021$54 $928 $1,373 $214 $2,569 $44 
Total (gains) losses included in:
Net income(2)14 (2)(69)(3)17 (3)(37)(5)(4)
Issues— — 95 (7)88 
Settlements(1)(25)37 (7)(4)
Balance, September 30, 2021$54 $917 $1,436 $217 $2,624 $40 
Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021$— $14 (2)$(60)(3)$— $(46)$— 
Available-for-Sale Securities
Corporate Debt SecuritiesResidential Mortgage Backed SecuritiesAsset Backed SecuritiesTotal
(in millions)
Balance, July 1, 2020$744 $205 $15 $964 
Total gains (losses) included in:
Other comprehensive income (loss)— 
Purchases33 — 40 
Settlements(14)— (13)
Transfers into Level 3— — 13 13 
Transfers out of Level 3— (188)— (188)
Balance, September 30, 2020$742 $50 $30 $822 
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020$$— $$
36

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Policyholder Account Balances, Future Policy Benefits and ClaimsOther Liabilities
Fixed Deferred Indexed Annuity Embedded DerivativesIUL Embedded DerivativesGMWB and GMAB Embedded DerivativesStructured Variable Annuity Embedded DerivativesTotal
(in millions)
Balance, July 1, 2020$41 $882 $3,129 $$4,061 $48 
Total (gains) losses included in:
Net income(2)50 (2)(296)(3)(3)(240)(11)(4)
Issues— 15 93 (3)105 
Settlements— (21)17 — (4)(2)
Balance, September 30, 2020$44 $926 $2,943 $$3,922 $40 
Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020$— $50 (2)$(283)(3)$— $(233)$— 
Available-for-Sale SecuritiesReceivables
Corporate Debt SecuritiesResidential Mortgage Backed SecuritiesAsset Backed SecuritiesTotalFixed Deferred Indexed Annuity Ceded Embedded Derivatives
(in millions)
Balance, January 1, 2021$772 $$32 $813 $— 
Total gains (losses) included in:
Net income(1)— — (1)(1)— 
Other comprehensive income (loss)(6)— — (6)— 
Purchases76 78 — 154 — 
Sales— — (1)(1)— 
Issues— — — — 57 (5)
Settlements(73)— (2)(75)(1)
Transfers into Level 3168 — 170 — 
Transfers out of Level 3(416)(87)(24)(527)— 
Balance, September 30, 2021$520 $— $$527 $56 
Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2021$— $— $(1)$(1)(1)$— 
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021$(4)$— $— $(4)$— 
37

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Policyholder Account Balances, Future Policy Benefits and ClaimsOther Liabilities
Fixed Deferred Indexed Annuity Embedded DerivativesIUL Embedded DerivativesGMWB and GMAB Embedded DerivativesStructured Variable Annuity Embedded DerivativesTotal
(in millions)
Balance, January 1, 2021$49 $935 $2,316 $70 $3,370 $43 
Total (gains) losses included in:
Net income(2)51 (2)(1,273)(3)192 (3)(1,023)(4)(4)
Issues— 274 (22)256 11 
Settlements(2)(73)119 (23)21 (10)
Balance, September 30, 2021$54 $917 $1,436 $217 $2,624 $40 
Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021$— $51 (2)$(1,236)(3)$— $(1,185)$— 
Available-for-Sale Securities
Corporate Debt SecuritiesResidential Mortgage Backed SecuritiesAsset Backed SecuritiesTotal
(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)13 (1)13 
Purchases12 220 — 232 
Settlements(32)— — (32)
Transfers into Level 3— — 13 13 
Transfers out of Level 3— (188)— (188)
Balance, September 30, 2020$742 $50 $30 $822 
Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020$(1)$— $(1)$(2)(1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020$13 $$(1)$13 
Policyholder Account Balances, Future Policy Benefits and ClaimsOther Liabilities
Fixed Deferred Indexed Annuity Embedded DerivativesIUL Embedded DerivativesGMWB and GMAB Embedded DerivativesStructured Annuity Embedded DerivativesTotal
(in millions)
Balance, January 1, 2020$43 $881 $763 $— $1,687 $44 
Total (gains) losses included in:
Net income(2)(2)53 (2)1,900 (3)16 (3)1,967 (12)(4)
Issues53 267 (7)316 15 
Settlements— (61)13 — (48)(7)
Balance, September 30, 2020$44 $926 $2,943 $$3,922 $40 
Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020$— $53 (2)$1,936 (3)$— $1,989 $— 
(1) Included in net investment income in the Consolidated Statements of Operations.
(2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations.
(3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.
(4) Included in general and administrative expense in the Consolidated Statements of Operations.
38

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
(5) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction.
The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $1 million and $(123) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the three months ended September 30, 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 $(138) million and $446 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the nine months ended September 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.
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:
 September 30, 2021
Fair ValueValuation TechniqueUnobservable InputRange Weighted Average
(in millions)
Corporate debt securities (private placements)$520 Discounted cash flow
Yield/spread to U.S. Treasuries (1)
0.8 %2.4%1.2%
Asset backed securities$Discounted cash flow
Annual short-term default rate (2)
1.4%1.4%
Annual long-term default rate (2)
3.5% 3.5 %
Discount rate 12.0 % 12.0 %
Constant prepayment rate 10.0 % 10.0 %
Loss recovery 63.6 % 63.6 %
Fixed deferred indexed annuity ceded embedded derivatives$56 Discounted cash flow
Surrender rate (4)
0.0 %66.8%1.4%
IUL embedded derivatives$917 Discounted cash flow
Nonperformance risk (3)
60 bps60 bps
Fixed deferred indexed annuity embedded derivatives$54 Discounted cash flow
Surrender rate (4)
0.0 %66.8%1.4%
   
Nonperformance risk (3)
60 bps60 bps
GMWB and GMAB embedded derivatives$1,436 Discounted cash flow
Utilization of guaranteed withdrawals (5) (6)
0.0 %48.0%10.6%
   
Surrender rate (4)
0.1 %63.4%3.6%
   
Market volatility (7) (8)
4.4 %17.6%11.3%
   
Nonperformance risk (3)
60 bps60 bps
Structured variable annuity embedded derivatives$217 Discounted cash flow
Surrender rate (4)
0.8 %40.0%0.9%
Nonperformance risk (3)
60 bps60 bps
Contingent consideration liabilities$40 Discounted cash flow
Discount rate (9)
0.0 %9.0%2.4%

39

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
 December 31, 2020
Fair ValueValuation TechniqueUnobservable InputRangeWeighted Average
(in millions)
Corporate debt securities (private placements)$772 Discounted cash flow
Yield/spread to U.S. Treasuries (1)
1.0 %3.3%1.5%
Asset backed securities$Discounted cash flow
Annual short-term default rate (2)
2.9 %3.0%2.9%
Annual long-term default rate (2)
3.5 %4.5%3.8%
Discount rate13.0%13.0%
Constant prepayment rate10.0%10.0%
Loss recovery63.6%63.6%
IUL embedded derivatives$935 Discounted cash flow
Nonperformance risk (3)
65 bps65 bps
Fixed deferred indexed annuity embedded derivatives$49 Discounted cash flow
Surrender rate (4)
0.0 %50.0%1.2%
 
Nonperformance risk (3)
65 bps65 bps
GMWB and GMAB embedded derivatives$2,316 Discounted cash flow
Utilization of guaranteed withdrawals (5) (6)
0.0 %48.0%10.6%
Surrender rate (4)
0.1 %73.5%3.8%
   
Market volatility (7) (8)
4.3 %17.1%11.0%
   
Nonperformance risk (3)
65 bps65 bps
Structured variable annuity embedded derivatives$70 Discounted cash flow
Surrender rate (4)
0.8 %40.0%0.9%
Nonperformance risk (3)
65 bps65 bps
Contingent consideration liabilities$43 Discounted cash flow
Discount rate (9)
0.0 %9.0%3.1%
(1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.
(2) The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.
(3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.
(4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula.
(5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year.
(6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals.
(7) Market volatility is implied volatility of fund of funds and managed volatility funds.
(8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit.
(9) The weighted average discount rate represents the average discount rate across all contingent consideration liabilities, weighted based on the size of the contingent consideration liability.
Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company.
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 the 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.
40

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
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 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 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. 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 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.
41

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
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 including Black-Scholes calculations 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. See Note 1 for more information on the reinsurance transaction.
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 September 30, 2021 and December 31, 2020. See Note 13 and Note 14 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 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 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 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 estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.
The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims.
Customer Deposits
The Company uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates (“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
42

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
forwards and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both September 30, 2021 and December 31, 2020. See Note 13 and Note 14 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 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 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 $99 million and $101 million as of September 30, 2021 and December 31, 2020, respectively, and is classified as Level 3 in the fair value hierarchy.
Asset and Liabilities Not Reported at Fair Value
The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value:
 September 30, 2021
Carrying ValueFair Value
Level 1Level 2Level 3Total
(in millions)
Financial Assets
Mortgage loans, net$1,911 $— $24 $1,988 $2,012 
Policy loans836 — 836 — 836 
Receivables10,405 63 1,598 9,551 11,212 
Restricted and segregated cash1,701 1,701 — — 1,701 
Other investments and assets291 — 251 42 293 
Financial Liabilities
Policyholder account balances, future policy benefits and claims$11,767 $— $— $12,845 $12,845 
Investment certificate reserves5,437 — — 5,434 5,434 
Banking and brokerage deposits13,257 13,257 — — 13,257 
Separate account liabilities — investment contracts5,481 — 5,481 — 5,481 
Debt and other liabilities3,118 111 3,174 3,294 
43

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
 December 31, 2020
Carrying ValueFair Value
Level 1Level 2Level 3Total
(in millions)
Financial Assets
Mortgage loans, net$2,718 $— $22 $2,852 $2,874 
Policy loans846 — 846 — 846 
Receivables3,563 147 1,258 2,398 3,803 
Restricted and segregated cash1,958 1,958 — — 1,958 
Other investments and assets732 — 672 62 734 
Financial Liabilities
Policyholder account balances, future policy benefits and claims$9,990 $— $— $11,686 $11,686 
Investment certificate reserves6,752 — — 6,752 6,752 
Banking and brokerage deposits10,891 10,891 — — 10,891 
Separate account liabilities — investment contracts5,406 — 5,406 — 5,406 
Debt and other liabilities3,214 205 3,253 11 3,469 
Receivables include deposit 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.
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 10 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 11 for further information on the Company’s long-term debt and short-term borrowings.
44

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
13.  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:
 September 30, 2021
Gross Amounts of Recognized AssetsGross Amounts Offset in the Consolidated Balance SheetsAmounts of Assets Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the
Consolidated Balance Sheets
Net Amount
Financial Instruments (1)
Cash CollateralSecurities Collateral
(in millions)
Derivatives:
OTC$5,310 $— $5,310 $(3,479)$(1,369)$(404)$58 
OTC cleared25 — 25 (15)— — 10 
Exchange-traded352 — 352 (110)(213)— 29 
Total derivatives5,687 — 5,687 (3,604)(1,582)(404)97 
Securities borrowed63 — 63 (16)— (45)
Total$5,750 $— $5,750 $(3,620)$(1,582)$(449)$99 
 December 31, 2020
Gross Amounts of Recognized AssetsGross Amounts Offset in the Consolidated Balance SheetsAmounts of Assets Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the
Consolidated Balance Sheets
Net Amount
Financial Instruments (1)
Cash CollateralSecurities Collateral
(in millions)
Derivatives:
OTC$5,501$$5,501$(3,862)$(1,287)$(315)$37
OTC cleared5858(25)33
Exchange-traded311311(91)(165)55
Total derivatives5,8705,870(3,978)(1,452)(315)125
Securities borrowed147147(43)(103)1
Total$6,017$$6,017$(4,021)$(1,452)$(418)$126
(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.
45

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:
 September 30, 2021
Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the
Consolidated Balance Sheets
Amounts of Liabilities Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the
Consolidated Balance Sheets
Net Amount
Financial Instruments (1)
Cash CollateralSecurities Collateral
(in millions)
Derivatives:
OTC$3,987$$3,987$(3,479)$(195)$(293)$20
OTC cleared1515(15)
Exchange-traded112112(110)2
Total derivatives4,1144,114(3,604)(195)(293)22
Securities loaned111111(16)(91)4
Total$4,225$$4,225$(3,620)$(195)$(384)$26
 December 31, 2020
Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the
Consolidated Balance Sheets
Amounts of Liabilities Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the
Consolidated Balance Sheets
Net Amount
Financial Instruments (1)
Cash CollateralSecurities Collateral
(in millions)
Derivatives:
OTC$4,192$$4,192$(3,862)$(1)$(327)$2
OTC cleared2525(25)
Exchange-traded9595(91)4
Total derivatives4,3124,312(3,978)(1)(327)6
Securities loaned205205(43)(157)5
Total$4,517$$4,517$(4,021)$(1)$(484)$11
(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 assets and other liabilities. Cash collateral pledged by the Company is reflected in other assets and cash collateral accepted by the Company is reflected in other liabilities. Securities borrowing and lending agreements are reflected in receivables and other liabilities, respectively. See Note 14 for additional disclosures related to the Company’s derivative instruments and Note 4 for information related to derivatives held by consolidated investment entities.
46

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
14.  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 13 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:
September 30, 2021December 31, 2020
NotionalGross Fair ValueNotionalGross Fair Value
Assets (1)
Liabilities (2)(3)
Assets (1)
Liabilities (2)(3)
(in millions)
Derivatives designated as hedging instruments
Foreign exchange contracts – net investment hedges$58 $$— $32 $— $
Total qualifying hedges58 — 32 — 
Derivatives not designated as hedging instruments
Interest rate contracts79,350 1,185 476 77,951 1,755 734 
Equity contracts59,856 4,465 3,619 57,254 4,090 3,571 
Credit contracts1,758 18 — 2,297 
Foreign exchange contracts3,234 18 19 3,423 23 
Total non-designated hedges144,198 5,686 4,114 140,925 5,870 4,310 
Embedded derivatives
GMWB and GMAB (4)
N/A— 1,436 N/A— 2,316 
IULN/A— 917 N/A— 935 
Fixed deferred indexed annuities and deposit receivablesN/A56 58 N/A— 52 
Structured variable annuitiesN/A— 217 N/A— 70 
SMCN/A— N/A— 
Total embedded derivativesN/A56 2,633 N/A— 3,381 
Total derivatives$144,256 $5,743 $6,747 $140,957 $5,870 $7,693 
N/A  Not applicable.
(1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets.
(2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets.
(3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral.
(4) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position.
See Note 12 for additional information regarding the Company’s fair value measurement of derivative instruments.
47

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $448 million and $325 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $448 million and $325 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both September 30, 2021 and December 31, 2020, the Company had sold, pledged or rehypothecated none of these securities. In addition, as of both September 30, 2021 and December 31, 2020, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.
Derivatives Not Designated as Hedges
The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations:
Net Investment IncomeBanking and Deposit Interest ExpenseDistribution ExpensesInterest Credited to Fixed AccountsBenefits, Claims, Losses and Settlement ExpensesGeneral and Administrative Expense
(in millions)
Three Months Ended September 30, 2021
Interest rate contracts$— $— $— $— $(171)$— 
Equity contracts— — (13)— (1)
Credit contracts— — — — — 
Foreign exchange contracts(23)— — — — — 
GMWB and GMAB embedded derivatives— — — — (64)— 
IUL embedded derivatives— — — 11 — — 
Fixed deferred indexed annuity and deposit receivables embedded derivatives— — — — — 
Structured variable annuity embedded derivatives— — — — (17)— 
SMC embedded derivatives— — — — — — 
Total gain (loss)$(23)$— $(13)$12 $(249)$(1)
Nine Months Ended September 30, 2021
Interest rate contracts$(23)$— $(1)$— $(1,125)$— 
Equity contracts— 67 55 (613)11 
Credit contracts— — — 41 — 
Foreign exchange contracts(17)— — — (2)
GMWB and GMAB embedded derivatives— — — — 879 — 
IUL embedded derivatives— — — 22 — — 
Fixed deferred indexed annuity and deposit receivables embedded derivatives— — — (7)— — 
Structured variable annuity embedded derivatives— — — — (192)— 
SMC embedded derivatives— (1)— — — — 
Total gain (loss)$(40)$— $67 $70 $(1,004)$
48

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Net Investment IncomeBanking and Deposit Interest ExpenseDistribution ExpensesInterest Credited to Fixed AccountsBenefits, Claims, Losses and Settlement ExpensesGeneral and Administrative Expense
(in millions)
Three Months Ended September 30, 2020
Interest rate contracts$— $— $— $— $(371)$— 
Equity contracts— 41 42 (468)
Credit contracts— — — — (12)— 
Foreign exchange contracts— — — — (23)
GMWB and GMAB embedded derivatives— — — — 186 — 
IUL embedded derivatives— — — (29)— — 
Fixed deferred indexed annuity embedded derivatives— — — (3)— — 
Structured variable annuity embedded derivatives— — — — (3)— 
SMC embedded derivatives— (2)— — — — 
Total gain (loss)$— $— $41 $10 $(691)$11 
Nine Months Ended September 30, 2020
Interest rate contracts$(1)$— $$— $2,204 $— 
Equity contracts(1)— 12 (7)58 
Credit contracts— — — — (91)— 
Foreign exchange contracts— — — — 26 
GMWB and GMAB embedded derivatives— — — — (2,180)— 
IUL embedded derivatives— — — — — 
Fixed deferred indexed annuity embedded derivatives— — — — — 
Structured variable annuity embedded derivatives— — — — (16)— 
SMC embedded derivatives— — — — — — 
Total gain (loss)$(2)$— $14 $$$
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.
The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2021:
 Premiums PayablePremiums Receivable
(in millions)
2021 (1)
$60 $45 
2022204 205 
202351 43 
2024138 25 
2025125 22 
2026 - 2028262 88 
Total$840 $428 
(1) 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021.
49

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.
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 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 structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts.
The Company enters into futures, credit default swaps and commodity swaps to manage its exposure to price risk arising from seed money investments in proprietary investment products. The Company enters into foreign currency forward contracts to economically hedge its exposure to certain foreign transactions. The Company enters into futures contracts and total return swaps to economically hedge its exposure related to compensation plans. 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 of 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 and nine months ended September 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 September 30, 2021 that the Company expects to reclassify to earnings as a reduction to interest and debt expense within the next twelve months is $0.5 million. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 15 years and relates to forecasted debt interest payments. See Note 15 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 hedges on the Consolidated Statements of Operations:
Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
(in millions)
Total interest and debt expense per Consolidated Statements of Operations$37 $124 
Gain (loss) on interest rate contracts designated as fair value hedges:
Hedged items$— $
Derivatives designated as fair value hedges— (1)
Gain (loss) on interest rate contracts designated as cash flow hedges:
Amount of gain (loss) reclassified from AOCI into income$$
50

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 September 30, 2021 and 2020, the Company recognized a gain of $0.7 million and a loss of $2.5 million, respectively, in OCI. For the nine months ended September 30, 2021 and 2020, the Company recognized a loss of $0.2 million and a gain of $3 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 13 for additional information on the Company’s credit exposure related to derivative assets.
Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s debt rating (or based on the financial strength of the Company’s life insurance subsidiaries for contracts in which those subsidiaries are the counterparty). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company’s debt does not maintain a specific credit rating (generally an investment grade rating) or the Company’s life insurance subsidiary does not maintain a specific financial strength rating. If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of September 30, 2021 and December 31, 2020, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $382 million and $326 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of September 30, 2021 and December 31, 2020 was $378 million and $324 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of September 30, 2021 and December 31, 2020 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $4 million and $2 million, respectively. 
15.  Shareholders’ Equity
The following tables provide the amounts related to each component of OCI:
Three Months Ended September 30,
20212020
PretaxIncome Tax Benefit (Expense)Net of TaxPretaxIncome 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)
$(79)$21 $(58)$225 $(53)$172 
Reclassification of net (gains) losses on securities included in net income (2)
(502)105 (397)(4)(3)
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables147 (31)116 (94)20 (74)
Net unrealized gains (losses) on securities(434)95 (339)127 (32)95 
Foreign currency translation(28)(22)27 — 27 
Total other comprehensive income (loss)$(462)$101 $(361)$154 $(32)$122 
51

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Nine Months Ended September 30,
20212020
PretaxIncome Tax Benefit (Expense)Net of TaxPretaxIncome 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)
$(433)$108 $(325)$562 $(118)$444 
Reclassification of net (gains) losses on securities included in net income (2)
(553)116 (437)— — — 
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables284 (60)224 (223)47 (176)
Net unrealized gains (losses) on securities(702)164 (538)339 (71)268 
Defined benefit plans37 (8)29 — — — 
Foreign currency translation(27)(21)(15)(14)
Total other comprehensive income (loss)$(692)$162 $(530)$324 $(70)$254 
(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 investment income.
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 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 to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.
The following tables present the changes in the balances of each component of AOCI, net of tax:
Net Unrealized Gains (Losses)
on Securities
Net Unrealized Gains (Losses)
on Derivatives
Defined
Benefit Plans
Foreign Currency TranslationOtherTotal
(in millions)
Balance, July 1, 2021$784$5$(175)$(153)$(1)$460
OCI before reclassifications58(22)36
Amounts reclassified from AOCI(397)(397)
Total OCI(339)(22)(361)
Balance, September 30, 2021$445$5$(175)$(175)$(1)$99
Balance, January 1, 2021$983$5$(204)$(154)$(1)$629
OCI before reclassifications(101)29(21)(93)
Amounts reclassified from AOCI(437)(437)
Total OCI(538)29(21)(530)
Balance, September 30, 2021$445$5$(175)$(175)$(1)$99
52

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 TranslationOtherTotal
(in millions)
Balance, July 1, 2020$749$6$(138)$(222)$(1)$394
OCI before reclassifications9827125
Amounts reclassified from AOCI(3)(3)
Total OCI9527122
Balance, September 30, 2020$844$6$(138)$(195)$(1)$516
Balance, January 1, 2020$576$6$(138)$(181)$(1)$262
OCI before reclassifications268(14)254
Total OCI268(14)254
Balance, September 30, 2020$844$6$(138)$(195)$(1)$516
For the nine months ended September 30, 2021 and 2020, the Company repurchased a total of 5.5 million shares and 6.3 million shares, respectively, of its common stock for an aggregate cost of $1.3 billion and $956 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. As of September 30, 2021, the Company had $932 million 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 nine months ended September 30, 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 $69 million and $51 million, respectively, related to the holders’ income tax obligations on the vesting date. Option holders may elect to net settle their vested awards resulting in the surrender of the number of shares required to cover the strike price and tax obligation of the options exercised. These shares are reacquired by the Company and recorded as treasury shares. For the nine months ended September 30, 2021 and 2020, the Company reacquired 0.9 million shares and 0.7 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of $209 million and $128 million, respectively.
During the nine months ended September 30, 2021 and 2020, the Company reissued 0.4 million and 0.5 million, respectively, treasury shares for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans.
16.  Income Taxes
The Company’s effective tax rate was 18.8% and 23.5% for the three months ended September 30, 2021 and 2020, respectively. The Company’s effective tax rate was 17.1% and 17.4% for the nine months ended September 30, 2021 and 2020, respectively.
The effective tax rate for the three months ended September 30, 2021 is lower than the statutory tax 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 effective tax rate for the nine months ended September 30, 2021 is lower than the statutory tax rate as a result of tax preferred items including low income housing tax credits, incentive compensation, and the dividends received deduction, partially offset by state income taxes, net of federal benefit.

The Company recorded a pretax loss for the three months ended September 30, 2020. Tax benefits applied to a pretax loss increase the effective tax rate. The effective tax rate for the three months ended September 30, 2020 is higher than the statutory tax rate due to tax benefits including low income housing tax credits and dividends received deduction. The effective tax rate for the nine months ended September 30, 2020 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits and dividends received deduction, partially offset by state income taxes, net of federal benefit.

The lower effective tax rate for the three months ended September 30, 2021 is the result of current period pretax income compared to the prior period pretax loss and a decrease in tax preferred items including low income housing tax credits and the dividends received deduction, increases in incentive compensation partially offset by state income taxes, net of federal benefit.

53

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $16 million, net of federal benefit, which will expire beginning December 31, 2021.
The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $12 million, state deferred tax assets of $2 million and foreign deferred tax assets of $1 million; therefore, a valuation allowance has been established. The valuation allowance was $15 million as of both September 30, 2021 and December 31, 2020.
As of September 30, 2021 and December 31, 2020, the Company had $126 million and $110 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $95 million and $80 million, net of federal tax benefits, of unrecognized tax benefits as of September 30, 2021 and December 31, 2020, respectively, would affect the effective tax rate.
It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by $40 million to $50 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 nil and a net decrease of $1 million in interest and penalties for the three and nine months ended September 30, 2021, respectively. The Company recognized a net increase of $1 million and $2 million in interest and penalties for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021 and December 31, 2020, the Company had a payable of $9 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. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2015 through 2019.
17.  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 and supervision of such activity; and transaction monitoring systems and controls. The Company has cooperated and will continue to cooperate with the applicable regulators.
54

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 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 September 30, 2021 and December 31, 2020, the estimated liability was $12 million. As of both September 30, 2021 and December 31, 2020, 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.
18.  Earnings per Share
The computations of basic and diluted earnings per share is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions, except per share amounts)
Numerator:
Net income$1,031 $(140)$2,059 $1,357 
Denominator:
Basic: Weighted-average common shares outstanding116.4 123.0 118.2 124.8 
Effect of potentially dilutive nonqualified stock options and other share-based awards2.8 1.9 2.7 1.7 
Diluted: Weighted-average common shares outstanding119.2 124.9 120.9 126.5 
Earnings per share:
Basic$8.86 $(1.14)$17.42 $10.87 
Diluted$8.65 $(1.14)(1)$17.03 $10.73 
(1) Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution.
The calculation of diluted earnings per share excludes the incremental effect of 1.5 million options as of September 30, 2020 due to their anti-dilutive effect.
55

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
19.  Segment Information
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 presented were not impacted.
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 segment totals to those reported on the consolidated financial statements:
 September 30, 2021December 31, 2020
(in millions)
Advice & Wealth Management$22,849 $21,266 
Asset Management9,213 8,406 
Retirement & Protection Solutions116,986 114,850 
Corporate & Other21,678 21,361 
Total assets$170,726 $165,883 
56

AMERIPRISE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
 Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions)
Adjusted operating net revenues:
Advice & Wealth Management$2,048 $1,667 $5,907 $4,899 
Asset Management915 739 2,622 2,093 
Retirement & Protection Solutions834 781 2,429 2,295 
Corporate & Other113 132 371 412 
Eliminations (1)(2)
(395)(342)(1,173)(1,006)
Total segment adjusted operating net revenues3,515 2,977 10,156 8,693 
Net realized gains (losses)14 81 (19)
Revenue attributable to consolidated investment entities42 21 92 52 
Market impact on non-traditional long-duration products, net(1)25 (10)
Mean reversion related impacts— — — 
Market impact of hedges on investments(23)— (40)— 
Block transfer reinsurance transaction impacts(644)— (644)— 
Total net revenues per Consolidated Statements of Operations$2,903 $3,003 $9,671 $8,716 
(1) Represents the elimination of intersegment revenues recognized for the three months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($261 million and $219 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($122 million and $110 million, respectively); and Corporate & Other (nil and nil, respectively).
(2) Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($777 million and $649 million, respectively); Asset Management ($39 million and $39 million, respectively); Retirement & Protection Solutions ($356 million and $319 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively).
 Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions)
Adjusted operating earnings:
Advice & Wealth Management$459 $320 $1,271 $969 
Asset Management285 198 766 496 
Retirement & Protection Solutions187 (89)552 300 
Corporate & Other(81)(202)(179)(309)
Total segment adjusted operating earnings850 227 2,410 1,456 
Net realized gains (losses)12 78 (18)
Net income (loss) attributable to consolidated investment entities— (1)(2)
Market impact on non-traditional long-duration products, net(94)(431)(577)239 
Mean reversion related impacts17 107 (30)
Market impact of hedges on investments(23)— (40)— 
Block transfer reinsurance transaction impacts521 — 521 — 
Integration and restructuring charges(7)(1)(14)(4)
Pretax income per Consolidated Statements of Operations$1,270 $(184)$2,484 $1,641 
57


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, filed with the Securities and Exchange Commission (“SEC”) on February 24, 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 trillion in assets under management and administration as of September 30, 2021. 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 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 returning to our office locations, where it is reasonable to do so, while complying with applicable health agencies’ guidelines and governmental orders. COVID-19 continues its ongoing impact 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. Given the 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 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 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 be negatively impacted by the ongoing low interest rate environment should it continue. In addition to continuing spread compression in our interest sensitive product lines, a sustained low interest rate environment may result in increases to our reserves and changes in various rate assumptions we use to amortize DAC and DSIC, which may negatively impact our adjusted operating earnings 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.”
In the third quarter, we updated our market-related assumptions and implemented model changes related to our living benefit valuation. In addition, we conducted our annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. We also reviewed our future policy benefit reserve adequacy for our long term care (“LTC”) business in the third quarter. See our Consolidated and Segment Results of Operations sections for the pretax impacts on our revenues and expenses attributable to unlocking and LTC loss recognition.
58


AMERIPRISE FINANCIAL, INC. 
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 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.
During the third quarter of 2021, RiverSource Life Insurance Company (“RiverSource Life”), one of our life insurance subsidiaries, closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $7.0 billion of fixed deferred and immediate annuity policies. As part of the transaction, RiverSource Life transferred $7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash. The transaction resulted in a net realized gain of approximately $532 million on investments sold. A similar previously announced transaction with RiverSource Life Co. of New York did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties.
On November 8, 2021, we completed our previously announced acquisition of the European-based asset management business of BMO Financial Group. At close, the consideration transferred consisted of £615 million (or $829 million) for initial price, plus an additional £103 million (or $138 million) largely associated with a customary adjustment for excess capital surplus that will be accessible over time. The overall purchase price will continue to be subject to further customary post-close adjustments. The all-cash transaction will add approximately $131 billion of assets under management (“AUM”) in EMEA.
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. Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures. Prior periods presented were not impacted.
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%.
59


AMERIPRISE FINANCIAL, INC. 
The following tables reconcile our GAAP measures to adjusted operating measures:
Per Diluted Share
Three Months Ended September 30,Three Months Ended September 30,
2021202020212020
(in millions, except per share amounts)
Net income (loss)$1,031 $(140)$8.65 $(1.14)(3)
Add: Basic to diluted share conversion— — — 0.02 (4)
Less: Net realized investment gains (losses) (1)
12 0.10 0.03 
Add: Market impact on non-traditional long-duration products (1)
94 431 0.79 3.45 
Add: Mean reversion related impacts (1)
(9)(17)(0.08)(0.14)
Add: Market impact of hedges on investments (1)
23 — 0.19 — 
Add: Block transfer reinsurance transaction impacts (1)
(521)— (4.37)— 
Add: Integration/restructuring charges (1)
0.06 0.01 
Less: Net income (loss) attributable to CIEs— 0.02 — 
Tax effect of adjustments (2)
88 (87)0.74 (0.70)
Adjusted operating earnings$699 $184 $5.86 $1.47 
Weighted average common shares outstanding:    
Basic116.4 123.0   
Diluted119.2 124.9   
 Per Diluted Share
Nine Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions, except per share amounts)
Net income (loss)$2,059 $1,357 $17.03 $10.73 
Less: Net realized investment gains (losses) (1)
78 (18)0.65 (0.14)
Add: Market impact on non-traditional long-duration products (1)
577 (239)4.78 (1.89)
Add: Mean reversion related impacts (1)
(107)30 (0.89)0.24 
Add: Market impact of hedges on investments (1)
40 — 0.33 — 
Add: Block transfer reinsurance transaction impacts (1)
(521)— (4.31)— 
Add: Integration/restructuring charges (1)
14 0.12 0.03 
Less: Net income (loss) attributable to CIEs(1)(2)(0.01)(0.01)
Tax effect of adjustments (2)
16 39 0.13 0.31 
Adjusted operating earnings$2,001 $1,211 $16.55 $9.57 
Weighted average common shares outstanding:    
Basic118.2 124.8   
Diluted120.9 126.5   
(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.
60


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 September 30,
20212020
(in millions)
Net income$2,236 $1,820 
Less: Adjustments (1)
(324)58 
Adjusted operating earnings2,560 1,762 
Total Ameriprise Financial, Inc. shareholders’ equity5,766 6,197 
Less: AOCI, net of tax404 243 
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI5,362 5,954 
Less: Equity impacts attributable to CIEs— 
Adjusted operating equity$5,359 $5,954 
Return on equity, excluding AOC