What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-25 compared with 2021-02-24 · 271 added, 709 removed, 657 unchanged (60% of the section changed)

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exclusively, to our entire family of companies, or to one or more of our subsidiaries.

Ameriprise is a diversified financial services company with a 125-year history of providing financial solutions.

Ameriprise 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 $1.4 trillion in assets under management and administration as of December 31, 2021.

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For additional discussion of our businesses, see Part I, Item 1 of this Annual Report on Form 10-K.

The coronavirus disease 2019 (‘‘COVID-19’’) pandemic presents ongoing significant economic and societal disruption and market volatility, which has had and will continue to have ongoing impacts to our business and operating environment driven by a low interest rate environment, significant volatility in the equity markets and the potential associated implications to client behavior.

There are no reliable estimates of how long the pandemic will last, how many people are likely to be affected by it, or its impact on the overall economy.

We continue to implement comprehensive strategies to navigate the operating environment spurred by the pandemic.

During the first quarter, 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 have begun a thoughtful phased reopening of our office locations while complying with applicable health agencies’ guidelines and governmental orders.

We continue to operate successfully and satisfy elevated customer service volumes in this unique time - client service and the health and safety of our clients, advisors and employees remain our priorities while our employees and advisors have various work arrangements.

The pandemic strategy we have employed is flexible and scalable, recognizing this pandemic is widespread and occurs in multiple waves, affecting different communities at different times with varying levels of severity.

There was significant economic volatility during 2020 and our results of operations continue to be affected by the COVID-19 pandemic.

There is still uncertainty surrounding the magnitude, duration, speed and reach of the ongoing global pandemic, success of worldwide vaccination efforts, as well as the impact of actions that have been or could be taken by governmental authorities, clients or other third parties.

While we have successfully adapted to a virtual work environment and deployed numerous adaptive business strategies so far this year, we believe the pandemic and its accompanying impact on the global financial markets and on our operations and financial results may cause results not to be comparable to previous years.

The results presented in this report are not necessarily indicative of future operating results.

For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Item 1A of this Annual Report on Form 10-K - “Risk Factors”.

The 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.

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.

There is still significant uncertainty around the extent to which the COVID-19 pandemic will continue to impact our business, results of operations, and financial condition, which depends on current and future developments, including the ultimate scope, duration and severity of the pandemic, success of worldwide vaccination efforts, multiple mutations of COVID-19 or similar diseases, the effectiveness of our office reopenings, the additional measures that may be taken by various governmental authorities in response to the outbreak, the actions of third parties in response to the pandemic, and the possible further impacts on the global economy.

Given the ongoing impact of the pandemic, financial results may not be comparable to previous years and the results presented in this report may not necessarily be indicative of future operating results.

For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” in this report.

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.

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The success of these and other strategies may be affected by the factors discussed in Item 1A of this Annual Report on Form 10-K - “Risk Factors” - 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, fixed portion of variable annuities and variable insurance contracts and deposit products.

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 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, fixed portion of variable annuities and variable insurance contracts and deposit products.

Earnings, as well as adjusted operating earnings, will be negatively impacted by the ongoing low interest rate environment should it continue.

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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.

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 active life future policy benefit reserve adequacy for our long term care (“LTC”) business in the third quarter.

We also reviewed our active life future policy benefit reserve adequacy for our 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.

During the third quarter of 2020, as we continue to reposition the business and implement strategies focusing on product features and sales, the composition of our reportable segments changed from five to four segments.

The Chief Operating Decision Maker (“CODM”) now manages the Annuities and Protection business as one operating segment, referred to as Retirement & Protection Solutions.

The Retirement & Protection Solutions segment will include Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance).

In addition, we moved the Fixed Annuities and Fixed Indexed Annuities (collectively “FA”) business to the Corporate & Other segment as a closed block.

These segment reporting changes align with the way our CODM began assessing the performance of our reportable segments and other business activities effective in the third quarter of 2020.

Certain prior period amounts have been revised to conform to the current presentation.

These changes have no impact on previously reported consolidated balance sheets or statements of operations, comprehensive income, stockholders equity, or cash flows.

On October 1, 2019, we completed the sale of our Ameriprise Auto & Home Insurance business (“AAH”) to American Family Insurance Mutual Holding Company (American Family Insurance).

See Note 19 to our Consolidated Financial Statements for additional information on the sale of AAH.

This sale is consistent with our focus on our core growth areas of Advice & Wealth Management and Asset Management.

In 2018, we made the strategic decision to expand the banking products and services we can provide directly to our clients, and commenced the process to convert Ameriprise National Trust Bank into a federal savings bank with the capabilities to offer FDIC insured deposits and a range of lending products.

We completed that process, received regulatory approvals and converted Ameriprise National Trust Bank to a federal savings bank in May 2019.

The following discussion includes a comparison of our 2021 and 2020 results.

For a discussion of our 2019 results and for a comparison of results for 2020 and 2019, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 24, 2021.

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 these pending 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 the Company’s life insurance subsidiaries, closed on a transaction with Commonwealth, 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, 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 added $136 billion of assets under management (“AUM”) in EMEA.

We consolidate certain variable interest entities for which we provide asset management services.

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mean reversion related impacts (the impact on variable annuity and variable universal life (“VUL”) products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves);

the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments;

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;

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Market impact of hedges on investments (1)

Gain on disposal of business (1)

Block transfer reinsurance transaction impacts (1)

Integration/restructuring charges (1)

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mean reversion related impacts;

the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments;

block transfer reinsurance transaction impacts;

the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments;

gain or loss on disposal of a business that is not considered discontinued operations;

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Financial markets are subject to significant movements in valuation and liquidity, which can impact our ability to liquidate and the selling price that can be realized for our securities and increases the use of judgment in determining the estimated fair value of certain investments.

We are unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on our aggregate Available-for-Sale portfolio.

Changes to these assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

Deferred Acquisition Costs

See Note 2 to our Consolidated Financial Statements for discussion of our DAC accounting policy.

See Note 3 to our Consolidated Financial Statements for discussion of changes to the measurement of DAC amortization effective for interim and annual periods beginning after December 15, 2022.

Non-Traditional Long-Duration Products

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EGPs vary based on persistency rates (assumptions at which contractholders and policyholders are expected to surrender, make withdrawals from and make deposits to their contracts), mortality levels, client asset value growth rates (based on equity and bond market performance), variable annuity benefit utilization and interest margins (the spread between earned rates on invested assets and rates credited to contractholder and policyholder accounts).

Changes in these assumptions can be offsetting and we are unable to predict their movement or offsetting impact over time.

Changes in these assumptions can be offsetting and we are unable to predict their movement, sensitivities in reported amounts, offsetting impacts or future impacts to the Consolidated Financial Statements over time or in any given future period.

When assumptions are changed, the percentage of EGPs used to amortize DAC might also change.

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(1) An increase in the above assumptions by 100 basis points would result in an increase to pretax income for approximately the same amount.

An assessment of sensitivity associated with changes in any single assumption would not necessarily be an indicator of future results.

An assessment of sensitivity associated with isolated changes of any single assumption is not an indicator of future results.

Traditional Long-Duration Products

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These assumptions include interest rates, persistency rates and mortality and morbidity rates and are not modified (unlocked) unless recoverability testing determines that reserves are inadequate.

Changes in these assumptions can be offsetting and we are unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

Projection periods used for our traditional life insurance are up to 30 years.

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Future Policy Benefits and Claims

See Note 3 to our Consolidated Financial Statements for discussion of changes to the measurement of DAC amortization effective for interim and annual periods beginning after December 15, 2022.

We establish reserves to cover the benefits associated with non-traditional and traditional long-duration products.

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cost of insurance charges, contractual administrative charges, similar fees and investment margin).

Significant assumptions made in projecting future benefits and assessments relate to client asset value growth rates, mortality, persistency and investment margins and are consistent with those used for DAC valuation for the same contracts.

Significant assumptions made in projecting future benefits and assessments relate to client asset

value growth rates, mortality, persistency and investment margins and are consistent with those used for DAC valuation for the same contracts.

See Note 12 to our Consolidated Financial Statements for information regarding the liability for contracts with secondary guarantees.

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Changes in assumptions are governed by a review and approval process to ensure an appropriate measurement of all impacted financial statement balances.

See the table in the previous discussion of “Deferred Acquisition Costs” for the estimated impact to benefits and claims expense related to variable annuity and VUL insurance contracts resulting from a decrease of 100 basis points in separate account fund growth rate assumptions.

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The fair value of embedded derivatives related to structured variable annuities, indexed annuities and IUL fluctuate based on equity markets and interest rates and is a liability.

In addition, embedded derivatives are impacted by an estimate of our nonperformance risk adjustment.

In addition, the valuation of embedded derivatives is impacted by an estimate of our nonperformance risk adjustment.

This estimate includes a spread over the LIBOR swap curve as of the balance sheet date.

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The fair value of our derivative instruments is determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market observable inputs to the extent available.

We are unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on our aggregate derivative portfolio.

Changes to assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

For further details on the types of derivatives we use and how we account for them, see Note 2, Note 15 and Note 17 to our Consolidated Financial Statements.

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Premiums, policy and contract charges

Premiums include premiums on traditional life, DI and LTC insurance and immediate annuities with a life contingent feature and are net of reinsurance premiums.

Additionally, prior to the sale of AAH on October 1, 2019, premiums included earned premiums from auto and home insurance products.

Premiums include premiums on traditional life, DI and LTC insurance and life contingent immediate annuities and are net of reinsurance premiums.

Policy and contract charges include variable annuity rider charges and UL and VUL insurance charges, which consist of cost of insurance charges (net of reinsurance premiums and cost of reinsurance for UL and VUL insurance products) and administrative charges.

Other Revenues

Other revenues primarily include the accretion on the fixed annuities reinsurance deposit receivable and other miscellaneous revenues.

Other revenues primarily include the accretion on the fixed annuities reinsurance deposit receivables and other miscellaneous revenues.

For discussion of our accounting policies on revenue recognition, see Note 2 to our Consolidated Financial Statements.

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General and administrative expense includes compensation, share-based awards and other benefits for employees (other than employees directly related to distribution, such as financial advisors), professional and consultant fees, information technology, facilities and equipment, advertising and promotion, legal and regulatory and corporate related expenses.

Economic Environment

Global equity market conditions and fluctuations could materially affect our financial condition and results of operations.

The following table presents relevant market indices:

Years Ended December 31,

2021 2020 Change

Daily average 4,270 3,218 33%

Period end 4,766 3,756 27%

Weighted Equity Index (“WEI”) (1)

Daily average 2,894 2,184 33%

Period end 3,152 2,573 23%

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

See our segment results of operations discussion below for additional information on how changes in the economic environment have and may continue to impact our results.

For further information regarding the impact of the economic environment on our financial condition and results of operations, and potentially material effects, see Part 1 - Item 1A “Risk Factors” of this Annual Report on Form 10-K.

Assets Under Management and Administration

Assets under management (“AUM”) include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us.

AUM include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us.

AUM also includes certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees in our Asset Management segment, such as the assets of the general account and the variable product funds held in the separate accounts of our life insurance subsidiaries and CIEs.

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Asset Management AUM 754.1 546.6 207.5 38

Corporate AUM 0.1 — 0.1 —

Eliminations (44.1) (37.4) (6.7) (18)

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Total AUM and AUA $ 1,417.9 $ 1,102.1 $ 315.8 29 %

Total AUM increased $107.9 billion, or 14%, to $886.0 billion as of December 31, 2020 compared to $778.1 billion as of December 31, 2019 due to a $61.6 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a $52.4 billion increase in Asset Management AUM driven by market appreciation and continued improvement in net flows, partially offset by retail fund distributions.

Total AUM increased $285.0 billion, or 32%, to $1.2 trillion as of December 31, 2021 compared to $886.0 billion as of December 31, 2020 due to a $84.1 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a $207.5 billion increase in Asset Management AUM driven by the acquisition of the BMO Global Asset Management (EMEA) business, market appreciation and net inflows, partially offset by retail fund distributions.

See our segment results of operations discussion for additional information on changes in our AUM.

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Other revenues 382 283 99 35

Gain on disposal of business — 213 (213) NM

Total revenues 13,443 11,958 1,485 12

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Net income $ 2,760 $ 1,534 $ 1,226 80 %

NM Not Meaningful.

Pretax income decreased $401 million, or 18%, to $1.8 billion for the year ended December 31, 2020 compared to $2.2 billion for the prior year.

Pretax income increased $1.5 billion, or 83%, for 2021 compared to the prior year.

The following impacts were significant drivers of the year-over-year change in pretax income:

• The unfavorable impact of unlocking and LTC loss recognition was $454 million for the year ended December 31, 2020 compared to $16 million for the prior year.

• A negative impact of $384 million in the Advice & Wealth Management segment from lower short-term interest rates.

• A gain of $213 million recognized on the sale of AAH in the prior year.

• The market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $375 million for the year ended December 31, 2020 compared to an expense of $591 million for the prior year.

• The favorable impact of the block transfer reinsurance transaction was $521 million for 2021 primarily reflecting the net realized gains on investments sold to the reinsurer.

• The favorable impact of unlocking was $17 million for 2021 compared to an unfavorable impact of unlocking and LTC loss recognition of $454 million for the prior year.

• A positive impact from higher average equity markets compared to the prior year.

Our average weighted equity index (“WEI”), which is a proxy for equity movements on AUM, increased 7% for the year ended December 31, 2020 compared to the prior year.

The average S&P 500 index was 10% higher for the year ended December 31, 2020 compared to the prior year.

The disconnect between the increase in the WEI and S&P 500 was larger than usual, primarily due to the outperformance of the S&P 500 compared to international and small cap indices.

• The market impact of hedges on investments was nil for the year ended December 31, 2020 compared to an expense of $35 million for the prior year.

• A decrease in impairments of our investment in affordable housing partnerships, which was $2 million for the year ended December 31, 2020 compared to $35 million for the prior year.

• The mean reversion related impact was a benefit of $87 million for the year ended December 31, 2020 compared to a benefit of $57 million for the prior year.

Our average WEI, which is a proxy for equity movements on AUM, increased 33% in 2021 compared to the prior year.

The average S&P 500 index was 33% higher for 2021 compared to the prior year.

• A positive impact from higher client net inflows and higher transactional activity during 2021 compared to the prior year.

• The mean reversion related impact was a benefit of $152 million for 2021 compared to a benefit of $87 million for the prior year.

• The market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $656 million for 2021 compared to an expense of $375 million for the prior year.

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

The following table presents the total pretax impacts on our revenues and expenses attributable to unlocking and LTC loss recognition for the years ended December 31:

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(in millions)

Distribution fees $ 2 $ —

Premiums, policy and contract charges 17 (1)

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Pretax income (1)

$ (454) $ (16)

(1) Includes a $12 million net expense and $4 million net benefit related to the market impact on non-traditional long-duration products for the years ended December 31, 2020 and 2019, respectively, which is excluded from adjusted operating earnings.

(1) Includes a $25 million net benefit and a $12 million net expense related to the market impact on non-traditional long-duration products for 2021 and 2020, respectively, which is excluded from adjusted operating earnings.

Refer to Results of Operations by Segment for the impact to pretax adjusted operating earnings attributable to unlocking and LTC loss recognition.

The primary drivers of the unfavorable unlocking impact excluding LTC in 2020 were consistent with the prior year and include the following items:

• Updates to our interest rate assumptions resulted in a higher expense in 2020 compared to the prior year.

• Lower surrenders assumptions on variable annuities with living benefit guarantees resulted in a higher expense in 2020 compared to the prior year.

• Changes in equity market volatility and correlation assumptions on variable annuities resulted in a lower benefit in 2020 compared to the prior year.

The primary drivers of the unfavorable LTC unlocking and loss recognition in 2020 were consistent to the prior year and include the following items:

• Updates to our interest rates assumptions resulted in a higher expense in 2020 compared to the prior year.

• Assumptions regarding morbidity, mortality and persistency were more in line with experience and resulted in a lower expense in 2020 compared to the prior year.

• Approved and expected premium rate increases and benefit reductions resulted in a lower benefit in 2020 compared to the prior year.

The total unfavorable impact of updates to our interest rate assumptions noted above for unlocking and LTC loss recognition was $405 million.

This non-cash unfavorable impact was primarily driven by the reduction of our ultimate 10-year Treasury rate assumption from 5% to 3.5% due to recent interest rate trends and extending the grading period from three years to 6.5 years with no grading in 2020.

Net revenues decreased $1.1 billion, or 8%, to $11.9 billion for the year ended December 31, 2020 compared to $13.0 billion for the prior year.

Management and financial advice fees increased $353 million, or 5%, to $7.4 billion for the year ended December 31, 2020 compared to $7.0 billion for the prior year primarily due to higher wrap account net inflows and higher average equity markets, partially offset by lower performance fees.

Distribution fees decreased $258 million, or 13%, to $1.7 billion for the year ended December 31, 2020 compared to $1.9 billion for the prior year primarily due to $317 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates, partially offset by higher average equity markets.

Net investment income decreased $212 million, or 14% to $1.3 billion for the year ended December 31, 2020 compared to $1.5 billion for the prior year primarily due to the following impacts:

The primary drivers of the year-over-year unlocking impact excluding LTC include the following items:

• Interest rate assumptions resulted in a lower expense in 2021 compared to the prior year period.

Our 10-year Treasury rate assumption remained unchanged in 2021 at 3.5% with a grading period ending December 31, 2026.

• Equity market volatility and correlation assumptions on variable annuities resulted in a higher benefit in 2021 compared to the prior year.

• Surrenders assumptions on variable annuities with living benefit guarantees resulted in a lower expense in 2021 compared to the prior year.

The unfavorable LTC unlocking impact of $3 million in 2021 compared to the unfavorable LTC unlocking and loss recognition impact of $141 million in the prior year is primarily due to prior year updates to our interest rate assumptions.

Management and financial advice fees increased $1.9 billion, or 26%, for 2021 compared to the prior year primarily due to higher average equity markets, higher wrap account net inflows, an increase in performance fees of $89 million, $59 million of revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business, and an unfavorable $19 million performance fee correction in the prior year period.

Distribution fees increased $169 million, or 10%, for 2021 compared to the prior year due to higher average equity markets and increased transactional activity, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates.

Net investment income increased $432 million, or 35%, for 2021 compared to the prior year primarily due to the following impacts:

• Net realized investment gains of $636 million for 2021 compared to net realized investment losses of $10 million for the prior year period.

Net realized gains for 2021 included net realized gains of $561 million on Available-for-Sale securities and a $58 million net gain related to commercial mortgage loans primarily due to the sale of securities and loans to the reinsurer as a result of the fixed deferred and immediate annuity reinsurance transaction that closed in the third quarter 2021, as well as a $15 million gain on a strategic investment.

• An increase of $38 million in net investment income of CIEs.

• The favorable impact of higher average invested assets related to the bank, partially offset by lower average certificate balances.

• The unfavorable impact of lower average invested assets due to the sale of investments as a result of the fixed deferred and immediate annuity reinsurance transaction.

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

• The unfavorable impact of fixed annuity net outflows and the fixed annuities reinsurance transaction.

• A decrease of $45 million due to the prior year sale of AAH.

• The favorable market impact of hedges on investments of $35 million in the prior year.

• A decrease of $17 million in net investment income of CIEs.

• The favorable impact of higher average invested assets related to the bank, offset by lower average certificate balances.

• Lower impairments of our investment in affordable housing partnerships.

Premiums, policy and contract charges decreased $829 million, or 37%, to $1.4 billion for the year ended December 31, 2020 compared to $2.2 billion for the prior year primarily reflecting the sale of AAH.

Premiums in the prior year included $827 million from AAH.

Gain on disposal of business of $213 million for the prior year was recognized on the sale of AAH, net of an affinity partner payment of $100 million.

Banking and deposit interest expense decreased $77 million, or 57%, to $59 million for the year ended December 31, 2020 compared to $136 million for the prior year due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses decreased $667 million, or 6%, to $10.1 billion for the year ended December 31, 2020 compared to $10.7 billion for the prior year.

Distribution expenses increased $249 million, or 7%, to $4.1 billion for the year ended December 31, 2020 compared to $3.8 billion for the prior year reflecting higher advisor compensation primarily due to an increase in wrap account balances driven by higher net inflows and higher average equity markets.

Interest credited to fixed accounts decreased $25 million, or 4%, to $644 million for the year ended December 31, 2020 compared to $669 million for the prior year primarily reflecting the following items:

• A $49 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The unfavorable impact of the nonperformance credit spread was $18 million for the year ended December 31, 2020 compared to an unfavorable impact of $67 million for the prior year.

• A $22 million increase in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $32 million for the year ended December 31, 2020 compared to a benefit of $54 million for the prior year.

The increase in expense was primarily due to an increase in the IUL embedded derivative, which is reflecting higher option costs.

Benefits, claims, losses and settlement expenses decreased $770 million, or 30%, to $1.8 billion for the year ended December 31, 2020 compared to $2.6 billion for the prior year primarily reflecting the following items:

• A $517 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits driven by an increase in the undiscounted embedded derivative liability.

The favorable impact of the nonperformance credit spread was $342 million for the year ended December 31, 2020 compared to an unfavorable impact of $175 million for the prior year.

As the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease.

As the embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense.

• A $254 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization.

This increase was the result of an unfavorable $1.6 billion change in the market impact on variable annuity guaranteed living benefits reserves, partially offset by a favorable $1.3 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits and a favorable $2 million change in the DSIC offset.

• The $22 million unfavorable market impact of hedges to offset interest rate and currency changes on certain investments in the year.

Premiums, policy and contract charges decreased $1.1 billion, or 80%, for 2021 compared to the prior year primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance transaction for life contingent immediate annuity policies.

Other revenues increased $99 million, or 35%, for 2021 compared to the prior year primarily reflecting the yield on deposit receivables.

Banking and deposit interest expense decreased $47 million, or 80%, for 2021 compared to the prior year due to lower average crediting rates on certificates and lower average certificate balances.

Distribution expenses increased $956 million, or 24%, for 2021 compared to the prior year primarily reflecting higher advisor compensation due to an increase in average wrap account balances and increased transactional activity.

Interest credited to fixed accounts decreased $44 million, or 7%, for 2021 compared to the prior year primarily reflecting the following items:

• An $8 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The unfavorable impact of the nonperformance credit spread was $10 million for 2021 compared to an unfavorable impact of $18 million for the prior year.

• A $22 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $54 million for 2021 compared to a benefit of $32 million for the prior year.

The decrease in expense was primarily due to a decrease in the IUL embedded derivative in the current period, which reflected lower option costs due to higher discount rates compared to an increase in the IUL embedded derivative in the prior year period, which reflected higher option costs due to lower discount rates.

Benefits, claims, losses and settlement expenses decreased $1.1 billion, or 60%, for 2021 compared to the prior year primarily reflecting the following items:

• A $1.2 billion decrease in expense associated with the reinsurance transaction for life contingent immediate annuity policies.

• A $450 million increase in expense primarily reflecting the impact of year-over-year changes in the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits.

The unfavorable impact of the nonperformance credit spread was $108 million for 2021 compared to a favorable impact of $342 million for the prior year.

As the undiscounted embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread on benefits expenses is favorable (unfavorable).

Additionally, as the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease.

• An $80 million decrease in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization.

This increase was the result of a favorable $2.5 billion change in the market impact on variable annuity guaranteed living benefits reserves, partially offset by an unfavorable $2.4 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits.

The main market drivers contributing to these changes are summarized below:

• Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the year ended December 31, 2020 compared to the prior year.

• Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the year ended December 31, 2020 compared to the prior year.

• Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for the year ended December 31, 2020 compared to an expense in the prior year.

• Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various contractholder behavioral items, were a net unfavorable impact compared to the prior year.

• The impact of unlocking excluding LTC was an expense of $212 million for the year ended December 31, 2020 compared to a benefit of $1 million for the prior year.

The unlocking impact for 2020 primarily reflected a higher unfavorable impact from updates to our interest rate assumptions and lower surrenders on variable annuities with living benefit guarantees partially offset by a lower benefit from changes in equity market volatility and correlation assumptions on variable annuities compared to the prior year.

• Our annual review of LTC active life future policy benefit reserve adequacy in 2020 resulted in unlocking and loss recognition of $141 million compared to $8 million in the prior year.

The unlocking and loss recognition in 2020 was primarily due to a higher unfavorable impact from updates to our interest rates assumptions, a lower unfavorable impact from lesser changes to

assumptions regarding morbidity, mortality and persistency and a lower benefit from approved and expected premium rate increases and benefit reductions compared to the prior year.

• A $719 million decrease in auto and home expenses reflecting the prior year sale of AAH.

• The mean reversion related impact was a benefit of $53 million for the year ended December 31, 2020 compared to a benefit of $26 million for the prior year.

• A $49 million decrease in reserves for immediate annuities with a life contingent feature primarily due to lower sales.

This impact is offset by a decrease in premiums.

Amortization of DAC increased $98 million, or 55%, to $277 million for the year ended December 31, 2020 compared to $179 million for the prior year primarily reflecting the following items:

• The impact of unlocking in 2020 was an expense of $100 million compared to an expense of $14 million in the prior year period.

The unlocking impact in 2020 primarily reflected a higher unfavorable impact from updates to our interest rate assumptions and lower surrenders on variable annuities with living benefit guarantees compared to the prior year.

• The DAC offset to the market impact on non-traditional long-duration products was a benefit of $5 million for the year ended December 31, 2020 compared to a benefit of $82 million for the prior year.

• A $43 million decrease in auto and home expenses reflecting the prior year sale of AAH.

Interest and debt expense decreased $52 million, or 24%, to $162 million for the year ended December 31, 2020 compared to $214 million for the prior year primarily due to a decrease in interest expense of CIEs, as well as lower levels of corporate debt and lower interest rates.

General and administrative expense decreased $167 million, or 5%, to $3.1 billion for the year ended December 31, 2020 compared to $3.3 billion for the prior year primarily reflecting a $90 million decrease in auto and home expenses reflecting the prior year sale of AAH, lower performance fee compensation, disciplined expense management and reengineering.

Our effective tax rate was 16.2% for the year ended December 31, 2020 compared to 15.2% for the prior year.

• Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for 2021 compared to the prior year.

• Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in an expense for 2021 compared to a benefit in the prior year.

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

• The impact of unlocking excluding LTC was an expense of $59 million for 2021 compared to an expense of $212 million for the prior year.

• The annual review of LTC future policy benefit reserve in 2021 resulted in unlocking of $3 million compared to unlocking and loss recognition of $141 million in the prior year.

• The mean reversion related impact was a benefit of $91 million for 2021 compared to a benefit of $53 million for the prior year.

Amortization of DAC decreased $153 million, or 55%, for 2021 compared to the prior year primarily reflecting the following items:

• The impact of unlocking in 2021 was a benefit of $60 million compared to an expense of $100 million in the prior year period.

• The DAC offset to the market impact on non-traditional long-duration products was a benefit of $51 million for 2021 compared to a benefit of $5 million for the prior year.

• The mean reversion related impact was a benefit of $60 million for 2021 compared to a benefit of $34 million for the prior year.

• A higher level of normalized amortization due to the growth of variable annuities and unlocked market and policyholder assumptions in the prior year.

Interest and debt expense increased $29 million, or 18%, for 2021 compared to the prior year primarily due to an increase in interest expense of CIEs.

General and administrative expense increased $315 million, or 10%, for 2021 compared to the prior year primarily reflecting higher performance related compensation, $52 million related to the operating expenses of the acquired BMO Global Asset Management (EMEA) business, an unfavorable foreign exchange impact, and $32 million of integration related expenses, partially offset by disciplined expense management and reengineering.

Our effective tax rate was 17.6% for 2021 compared to 16.2% for the prior year.

See Note 24 to our Consolidated Financial Statements for additional discussion on income taxes.

28 unchanged sentences

(in millions)

Distribution fees $ 2 $ — $ — $ —

Premiums, policy and contract charges 17 — 2 (3)

19 unchanged sentences

$ 415.3 $ 318.3

(1) Beginning in the first quarter of 2021, wrap net flows is calculated including dividends and interest less fees which were previously recorded in Market appreciation (depreciation) and other.

Net flows excludes short-term and long-term capital gain distributions.

Prior periods have been restated.

(2) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts.

Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

Beginning in the fourth quarter of 2019, all advisory fee billing is calculated in advance on a monthly basis using point-in-time assets.

Prior to the fourth quarter of 2019, some advisory accounts billed in arrears on a quarterly or monthly basis using average daily assets.

(3) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the twelve months ended December 31, 2021 and 2020 .

Wrap account assets increased $62.5 billion, or 20%, during the year ended December 31, 2020 due to net inflows of $24.1 billion and market appreciation and other of $38.4 billion.

Wrap account assets increased $84.7 billion, or 22%, during 2021 due to net inflows of $40.4 billion and market appreciation and other of $44.3 billion.

Average advisory wrap account assets increased $97.0 billion, or 30%, compared to the prior year reflecting net inflows and market appreciation.

Fourth quarter 2021 represented the fifth consecutive quarter wrap net flows at or above $9.0 billion.

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

13 unchanged sentences

Adjusted operating earnings $ 1,743 $ 1,321 $ 422 32 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $188 million, or 12%, to $1.3 billion for the year ended December 31, 2020 compared to $1.5 billion for the prior year due to lower interest rates, partially offset by higher average wrap account balances reflecting wrap account net inflows and equity market appreciation.

Pretax adjusted operating margin was 19.8% for the year ended December 31, 2020 compared to 22.9% for the prior year.

We launched Ameriprise Bank, FSB in the second quarter of 2019.

Since then, we have continued to add deposits, with $7.4 billion of cash sweep balances as of December 31, 2020.

In the third quarter of 2019, we purchased the existing Ameriprise portfolio of credit card accounts from a third party bank, and in the fourth quarter of 2020, we acquired $224 million in an existing portfolio of brokerage client pledged asset lines of credit that are a 50% participation interest with a third party bank.

Net revenues exclude net realized investment gains or losses.

Net revenues increased $76 million or 1%, to $6.7 billion for the year ended December 31, 2020 compared to $6.6 billion for the prior year.

Adjusted operating net revenue per advisor increased to $674,000 for the year ended December 31, 2020, up 2%, from $664,000 for the prior year.

Management and financial fees increased $370 million, or 10%, to $4.2 billion for the year ended December 31, 2020 compared to $3.8 billion for the prior year primarily due to growth in wrap account assets.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $422 million, or 32%, for 2021 compared to the prior year due to higher average wrap account balances reflecting wrap account net inflows and equity market appreciation and increased transactional activity, partially offset by lower earnings on brokerage cash as a result of low interest rates.

Pretax adjusted operating margin was 21.7% for 2021 compared to 19.8% for the prior year.

Adjusted operating net revenue per advisor increased to $796,000 for 2021, up 18%, from $674,000 for the prior year.

Ameriprise Bank, FSB has continued its growth trend, with $11.4 billion of cash sweep balances and $468 million of brokerage client pledged asset lines of credit as of December 31, 2021.

Management and financial fees increased $1.1 billion, or 26%, for 2021 compared to the prior year primarily due to growth in wrap account assets.

Average advisory wrap account assets increased $97.0 billion, or 30%, compared to the prior year reflecting net inflows and market appreciation.

Distribution fees decreased $279 million, or 12%, to $2.0 billion for the year ended December 31, 2020 compared to $2.3 billion for the prior year reflecting $317 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates, partially offset by higher average equity markets.

Net investment income decreased $98 million, or 24%, to $313 million for the year ended December 31, 2020 compared to $411 million for the prior year primarily due to the unfavorable impact of lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, as well as lower certificate balances, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $77 million, or 57%, to $59 million for the year ended December 31, 2020 compared to $136 million for the prior year primarily due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses increased $264 million, or 5%, to $5.4 billion for the year ended December 31, 2020 compared to $5.1 billion for the prior year.

Distribution expenses increased $232 million, or 6%, to $3.9 billion for the year ended December 31, 2020 compared to $3.7 billion for the prior year reflecting higher advisor compensation due to wrap account net inflows and market appreciation, as well as investments in recruiting experienced advisors.

General and administrative expense increased $33 million, or 2%, for the year ended December 31, 2020 compared to the prior year primarily due to bank-related expenses and investments in the business for future growth, partially offset by reengineering.

Distribution fees increased $251 million, or 13%, for 2021 compared to the prior year reflecting higher average equity markets and increased transactional activity, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates.

Net investment income decreased $56 million, or 18%, for 2021 compared to the prior year primarily due to the unfavorable impact of lower short-term interest rates on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, as well as the continued decline in certificate balances, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $47 million, or 80%, for 2021 compared to the prior year primarily due to lower average crediting rates on certificates and the continued decline in average certificate balances.

Distribution expenses increased $896 million, or 23%, for 2021 compared to the prior year reflecting higher asset-based advisor compensation due to higher wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors.

General and administrative expense increased $28 million, or 2%, for 2021 compared to the prior year primarily due to higher volume related expenses and higher performance-based compensation expenses.

Asset Management

The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds as of December 31:

Mutual Fund Rankings in top 2 Lipper Quartiles 2020 2019

Domestic Equity Equal weighted 1 year 68 % 59 %

3 year 61 % 55 %

5 year 57 % 48 %

Asset weighted 1 year 73 % 75 %

3 year 77 % 66 %

5 year 78 % 69 %

International Equity Equal weighted 1 year 71 % 100 %

3 year 92 % 80 %

5 year 92 % 65 %

Asset weighted 1 year 61 % 100 %

3 year 88 % 86 %

5 year 88 % 69 %

Taxable Fixed Income Equal weighted 1 year 76 % 83 %

3 year 81 % 81 %

5 year 73 % 88 %

Asset weighted 1 year 88 % 90 %

3 year 91 % 89 %

5 year 77 % 90 %

Tax Exempt Fixed Income Equal weighted 1 year 68 % 89 %

3 year 74 % 89 %

5 year 89 % 94 %

Asset weighted 1 year 54 % 93 %

3 year 60 % 92 %

5 year 67 % 98 %

Asset Allocation Funds Equal weighted 1 year 71 % 64 %

3 year 64 % 58 %

5 year 75 % 80 %

Asset weighted 1 year 94 % 86 %

3 year 83 % 88 %

5 year 94 % 96 %

Number of funds with 4 or 5 Morningstar star ratings Overall 53 56

Percent of funds with 4 or 5 Morningstar star ratings Overall 58 % 54 %

3 year 41 % 49 %

5 year 54 % 53 %

Percent of assets with 4 or 5 Morningstar star ratings Overall 65 % 66 %

3 year 47 % 50 %

5 year 54 % 59 %

Mutual fund performance rankings are based on the performance of the Institutional Class for Columbia branded mutual funds.

Only funds with Institutional Class shares are included.

Prior period rankings have been adjusted to reflect the change in a fund’s investment category to more accurately reflect its investment strategy.

Equal Weighted Rankings in Top 2 Quartiles:

Counts the number of funds with above median ranking divided by the total number of funds.

Asset size is not a factor.

Asset Weighted Rankings in Top 2 Quartiles:

Sums the total assets of the funds with above median ranking divided by total assets of all funds.

The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds, including BMO branded funds, as of December 31, 2021:

Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted (1)

1 year 3 year 5 year 10 year

Equity 61% 86% 82% 88%

Fixed Income 77% 96% 96% 92%

Asset Allocation 60% 83% 86% 90%

4- or 5-star Morningstar rated funds (2)

Overall 3 year 5 year 10 year

Number of rated funds 133 114 111 102

Percent of rated assets 70% 64% 60% 71%

(1) Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index.

Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees.

Comparisons to Index are measured Gross of Fees.

To calculate asset weighted performance, the sum of the total assets of the funds with above median ranking are divided by total assets of all funds.

Funds with more assets will receive a greater share of the total percentage above or below median.

Retail Fund Rankings in Top 2 Morningstar Quartiles or Above Index Benchmark 2020 2019

Equity Equal weighted 1 year 80 % 87 %

3 year 83 % 77 %

5 year 75 % 70 %

Asset weighted 1 year 86 % 91 %

3 year 88 % 79 %

5 year 85 % 82 %

Fixed Income Equal weighted 1 year 96 % 78 %

3 year 96 % 88 %

5 year 92 % 96 %

Asset weighted 1 year 99 % 75 %

3 year 99 % 93 %

5 year 96 % 97 %

Allocation (Managed) Funds Equal weighted 1 year 89 % 100 %

3 year 88 % 75 %

5 year 88 % 88 %

Asset weighted 1 year 99 % 100 %

3 year 99 % 94 %

5 year 99 % 98 %

The performance of each fund is measured on a consistent basis against the most appropriate benchmark — a peer group of similar funds or an index.

Equal weighted:

Counts the number of funds with above median ranking (if measured against peer group) or above index performance (if measured against an index) divided by the total number of funds.

Asset size is not a factor.

Asset weighted:

Sums the assets of the funds with above median ranking (if measured against peer group) or above index performance (if measured against an index) divided by the total sum of assets in the funds.

Funds with more assets will receive a greater share of the total percentage above or below median or index.

Aggregated Allocation (Managed) Funds include funds that invest in other funds of the Threadneedle range including those funds that invest in both equity and fixed income.

Aggregated Threadneedle data includes funds on the Threadneedle platform sub-advised by Columbia Management as well as advisors not affiliated with Ameriprise Financial, Inc.

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

(2) Columbia funds are available for purchase by U.S.

Out of 91 Columbia funds (Institutional shares) rated, 16 received a 5-star Overall Rating and 37 received a 4-star Overall Rating.

Out of 92 Threadneedle funds (highest rated share class) rated, 19 received a 5-star Overall Rating and 35 received a 4-star Overall Rating.

Out of 62 BMO funds (highest rated share class) rated, 8 received a 5-star Overall Rating and 18 received a 4-star Over Rating.

The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

The following table presents managed assets by type:

8 unchanged sentences

Total managed assets (2)

$ 754.1 $ 546.6 $ 207.5 38 % $ 605.0 $ 489.1 $ 115.9 24 %

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

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

Prior periods have been restated to reflect this change.

The following tables present the changes in global managed assets:

10 unchanged sentences

Distributions (21.5) (11.6)

Acquired assets (1)

Market appreciation (depreciation) and other 47.7 35.5

3 unchanged sentences

Beginning assets 223.1 206.7

Outflows (31.6) (29.9)

(32.0) (31.6)

Net flows 18.7 (4.2)

Acquired assets (1)

Market appreciation (depreciation) and other (4)

3 unchanged sentences

Total net flows $ 42.9 $ 5.7

Former Parent Company Related (4)

Retail net new flows $ 0.5 $ (0.9)

Institutional net new flows (3.4) (3.4)

Total net new flows $ (2.9) $ (4.3)

Legacy insurance partners net flows (5)

$ (4.9) $ (4.8)

(1) Reflects the acquisition of the BMO Global Asset Management (EMEA) business that closed on November 8, 2021.

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

(2) Includes $1.3 billion of net flows from our recently launched structured variable annuity product.

(3) Includes $3.0 billion and $4.6 billion for the total change in Affiliated General Account Assets, excluding net flows related to our recently launched structured variable annuity product, during the years ended December 31, 2020 and 2019, respectively.

(4) Former parent company related assets and net new flows are included in the rollforwards above.

The United Kingdom’s (“U.K.”) and the European Union’s (“EU”) trade and cooperation agreement did not include cross-border financial services.

As a result, our U.K.

asset management business is no longer able to market its services into the EU on a passporting basis and must now comply with local EU and country requirements as a non-EU firm, which includes leveraging our Luxembourg-based management company affiliate to provide services and marketing to EU clients and investors.

As a result the full impact of Brexit remains uncertain.

Total segment AUM increased $52.4 billion, or 11%, during the year ended December 31, 2020 driven by market appreciation and net inflows.

Net inflows were $5.7 billion for the year ended December 31, 2020, a $12.8 billion improvement compared to the prior year.

(3) Global Institutional inflows and outflows include net flows from our RiverSource Structured Annuity product beginning in the first quarter of 2020 and Ameriprise Bank, FSB beginning in the first quarter of 2021.

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

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

On November 8, 2021, we completed our acquisition of the European-based asset management business of BMO Financial Group.

This acquisition added $136 billion in assets under management.

See Note 9 for more information on this acquisition.

Total segment AUM increased $207.5 billion, or 38%, during 2021 driven by the acquisition of the BMO Global Asset Management (EMEA) business, market appreciation and net inflows.

Net inflows were $42.9 billion for 2021, a $37.2 billion improvement compared to the prior year and included the transfer of $16.9 billion of retail and institutional assets from U.S.

BMO asset management clients that elected to move their assets to us during the fourth quarter of 2021 resulting from the transition of investment advisory services as part of an arrangement with BMO Financial Group for their U.S.

Overall, the $16.9 billion represents the vast majority of the transfer expected under this arrangement, with any additional transfers of U.S.

BMO asset management clients to be completed in the first quarter of 2022.

Beyond this arrangement, the acquisition established a strategic relationship with BMO Wealth Management giving its North American Wealth Management clients opportunities to access a range of Columbia Threadneedle investment management solutions.

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

14 unchanged sentences

Adjusted operating earnings $ 1,096 $ 697 $ 399 57 %

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $36 million, or 5%, to $697 million for the year ended December 31, 2020 compared to $661 million for the prior year primarily due to equity market appreciation and disciplined expense management, partially offset by a $38 million decrease in net performance fees.

Net revenues, which exclude net realized investment gains or losses, decreased $22 million, or 1%, for the year ended December 31, 2020 compared to the prior year.

Management and financial advice fees decreased $13 million, or 1%, for the year ended December 31, 2020 compared to the prior year primarily driven by a $74 million decrease in performance fees, partially offset by higher average equity markets.

Net investment income, which excludes net realized investment gains or losses, decreased $12 million, or 80%, to $3 million for the year ended December 31, 2020 compared to $15 million for the prior year primarily reflecting an impairment of an investment and lower interest income.

Total expenses decreased $58 million, or 3%, to $2.2 billion for the year ended December 31, 2020 compared to $2.3 billion for the prior year.

General and administrative expense decreased $57 million, or 4%, to $1.2 billion for the year ended December 31, 2020 compared to $1.3 billion for the prior year primarily reflecting disciplined expense management and reengineering and elevated performance fee related compensation in the prior year.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $399 million, or 57%, for 2021 compared to the prior year primarily due to equity market appreciation, the cumulative impact of net inflows, and a $38 million increase in net performance fees.

Management and financial advice fees increased $727 million, or 29%, for 2021 compared to the prior year primarily driven by higher average equity markets and net inflows, an $89 million increase in performance fees, and $59 million of revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business.

Distribution fees increased $60 million, or 15%, for 2021 compared to the prior year primarily due to higher average equity markets.

Distribution expenses increased $187 million, or 20%, for 2021 compared to the prior year primarily due to higher average equity markets.

General and administrative expense increased $204 million, or 17%, for 2021 compared to the prior year primarily reflecting $52 million related to the operating expenses of the acquired BMO Global Asset Management (EMEA) business, $51 million in higher performance fee related compensation, higher performance-based compensation expenses related to stronger business performance and an unfavorable foreign exchange impact.

Retirement & Protection Solutions

6 unchanged sentences

Premiums, policy and contract charges 1,338 1,315 23 2

Other revenues 3 — 3 —

Other revenues 7 3 4 NM

Total revenues 3,244 3,094 150 5

9 unchanged sentences

Adjusted operating earnings $ 735 $ 480 $ 255 53 %

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual) and mean reversion related impacts, decreased $244 million, or 34%, to $480 million for the year ended December 31, 2020 compared to $724 million for the prior year.

RiverSource variable annuity account balances increased 7% to $85.8 billion as of December 31, 2020 compared to the prior year due to market appreciation, partially offset by net outflows of $2.1 billion.

Variable annuity sales increased 7% to $4.4 billion for the year ended December 31, 2020 compared to the prior year reflecting a decrease in sales of variable annuities with living benefit guarantees that was more than offset by sales of structured variable annuities launched earlier in 2020.

NM Not Meaningful.

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual) and mean reversion related impacts, and block transfer reinsurance transaction impacts increased $255 million, or 53%, for 2021 compared to the prior year.

Variable annuity account balances increased 8% to $92.3 billion as of December 31, 2021 compared to the prior year due to market appreciation, partially offset by net outflows of $1.9 billion.

Variable annuity sales increased 37% to $6.0 billion for 2021 compared to the prior year reflecting an increase in sales of structured variable annuities that was partially offset by a decrease in sales of variable annuities with living benefit guarantees.

Sales of variable annuities without living benefit guarantees comprised 67% of total variable annuity sales in 2021 compared to 49% in 2020.

The risk profile of our in force block continues to improve, with account values with living benefit riders down to 61% as of December 31, 2021 compared to 64% a year ago.

This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

Net revenues, which exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual) and the unearned revenue amortization and reinsurance accrual offset to the market impact on IUL contracts, decreased $29 million, or 1%, for the year ended December 31, 2020 compared to the prior year.

Net investment income, which excludes net realized investment gains or losses, decreased $20 million, or 4%, to $508 million for the year ended December 31, 2020 compared to $528 million for the prior year reflecting lower fixed maturity investment yields.

Premiums, policy and contract charges, which exclude the unearned revenue amortization and reinsurance accrual offset to net realized investment gains or losses and the market impact on IUL contracts, decreased $15 million, or 1%, for the year ended December 31, 2020 compared to the prior year primarily due to lower sales of immediate annuities with a life contingent feature, partially offset by higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date and higher average fee rates.

Total expenses, which exclude the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts), (net of hedges and the related DSIC and DAC amortization), mean reversion related impacts and the DAC and DSIC offset to net realized investment gains or losses, increased $215 million, or 9%, to $2.6 billion for the year ended December 31, 2020 compared to $2.4 billion for the prior year.

Distribution expenses decreased $14 million, or 3%, to $455 million for the year ended December 31, 2020 compared to $469 million for the prior year primarily reflecting lower insurance sales and annuity product mix.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, increased $143 million, or 14%, to $1.1 billion for the year ended December 31, 2020 compared to $988 million for the prior year primarily due to the impact of unlocking, partially offset by lower sales of immediate annuities with a life contingent feature.

The unlocking impact for 2020 was an expense of $189 million compared to an expense of $6 million for the prior year and primarily reflected a higher unfavorable impact from updates to our interest rate assumptions and lower surrenders on variable annuities with living benefit guarantees, partially offset by a lower benefit from changes in equity market volatility and correlation assumptions on variable annuities with living benefit guarantees compared to the prior year.

Amortization of DAC, which excludes mean reversion related impacts, the DAC offset to the market impact on variable annuity contracts and IUL contracts and the DAC offset to net realized investment gains or losses, increased $70 million, or 30%, to $300 million for the year ended December 31, 2020 compared to $230 million for the prior year primarily reflecting the impact of unlocking, partially offset by a lower DAC amortization rate which is the result of lower surrenders on variable annuities.

The impact of unlocking for 2020 was an expense of $108 million compared to an expense of $15 million in the prior year.

We continue to optimize our risk profile and shift our business mix to lower risk offerings.

During the fourth quarter of 2021, we made the decision to discontinue new sales of substantially all of our variable annuities with living benefit guarantees at the end of 2021, with a full exit by mid-2022.

In addition, we discontinued new sales of our universal life insurance with secondary guarantees and our single-pay fixed universal life with a long term care rider products at the end of 2021.

Management and financial advice fees increased $101 million, or 12%, for 2021 compared to the prior year reflecting higher average equity markets, partially offset by variable annuity net outflows.

Distribution fees increased $50 million, or 11%, for 2021 compared to the prior year reflecting higher average equity markets, partially offset by net outflows.

Net investment income, which excludes net realized investment gains or losses, decreased $28 million, or 6%, for 2021 compared to the prior year reflecting lower fixed maturity investment yields.

Distribution expenses increased $76 million, or 17%, for 2021 compared to the prior year primarily reflecting higher average equity markets and increased variable annuity and insurance sales.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, decreased $89 million, or 8%, for 2021 compared to the prior year primarily due to the impact of unlocking, as well as lower sales of immediate annuities with a life contingent feature.

The unlocking impact for 2021 was an expense of $89 million primarily reflecting continued lower surrender rates compared to an expense of $189 million for the prior year which was also driven by lower surrender rates.

Amortization of DAC, which excludes mean reversion related impacts, the DAC offset to the market impact on variable annuity contracts and IUL contracts and the DAC offset to net realized investment gains or losses, decreased $92 million, or 31%, for 2021 compared to the prior year reflecting the impact of unlocking primarily due to lower surrender rates, partially offset by a higher level of normalized amortization.

The impact of unlocking for 2021 was a benefit of $65 million compared to an expense of $108 million in the prior year.

Corporate & Other

2 unchanged sentences

(in millions)

Management and financial advice fees $ — $ 4 $ (4) NM

Distribution fees — 6 (6) NM

Management and financial advice fees $ — $ — $ — — %

Distribution fees 1 — 1 —

Net investment income 242 377 (135) (36)

Premiums, policy and contract charges 100 102 (2) (2)

Other revenues 70 65 5 8

Other revenues 146 70 76 NM

Total revenues 489 549 (60) (11)

1 unchanged sentence

Total net revenues 487 546 (59) (11)

Distribution expenses (7) 4 (11) NM

Distribution expenses (9) (7) (2) 29

Interest credited to fixed accounts 250 261 (11) (4)

6 unchanged sentences

NM Not Meaningful.

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs.

Our Corporate & Other segment pretax adjusted operating loss increased $83 million, or 29%, to $369 million for the year ended December 31, 2020 compared to $286 million for the prior year primarily reflecting the unfavorable impact from unlocking and loss recognition, partially offset by disciplined expense management and the favorable impacts from COVID-19 on LTC insurance.

Our Corporate & Other segment includes our closed blocks of LTC insurance and FA business.

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

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, block transfer reinsurance transaction impacts, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs.

Our Corporate & Other segment pretax adjusted operating loss decreased $99 million, or 27%, for 2021 compared to the prior year.

LTC insurance had pretax adjusted operating earnings of $52 million for 2021 compared to a pretax adjusted operating loss of $95 million for the prior year period primarily reflecting the $141 million unfavorable impact from unlocking and loss recognition in the prior year period.

LTC insurance mortality and terminations activity have returned to pre-COVID levels in the fourth quarter of 2021.

See below for more details on our closed block of LTC insurance.

Auto and Home pretax adjusted operating earnings were $13 million for the year ended December 31, 2019.

We sold AAH on October 1, 2019.

Net revenues, which exclude net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, gain on disposal of business that is not considered discontinued operations, integration and restructuring charges and revenues attributable to CIEs, decreased $931 million, or 63%, to $546 million for the year ended December 31, 2020 compared to $1.5 billion for the prior year.

Net revenues for the year ended December 31, 2019 included $881 million from Auto and Home, which was sold in 2019.

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments and net investment income attributable to CIEs, decreased $102 million, or 21%, to $377 million for the year ended December 31, 2020 compared to $479 million for the prior year primarily reflecting the sale of AAH and lower average invested assets due to fixed annuity net outflows and lower asset earned rates, partially offset by lower impairments of our investments in affordable housing partnerships.

Premiums, policy and contract charges decreased $829 million, or 89%, to $102 million for the year ended December 31, 2020 compared to $931 million for the prior year primarily due to the sale of AAH.

Total expenses, which exclude the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), integration and restructuring charges and expenses attributable to CIEs, decreased $848 million, or 48%, to $915 million for the year ended December 31, 2020 compared to $1.8 billion for the prior year.

Total expenses for the year ended December 31, 2019 included $868 million from Auto and Home reflecting the prior year sale of AAH.

Distribution expenses decreased $11 million to a benefit of $7 million for the year ended December 31, 2020 compared to an expense of $4 million for the prior year reflecting the prior year sale of AAH.

Interest credited to fixed accounts, which exclude the market impact on fixed deferred annuity contracts (net of hedges), decreased $9 million, or 3%, to $261 million for the year ended December 31, 2020 compared to $270 million for the prior year due to lower average fixed deferred annuity account balances.

Benefits, claims, losses and settlement expenses decreased $621 million, or 64%, to $344 million for the year ended December 31, 2020 compared to $965 million for the prior year primarily reflecting the sale of AAH and the impact of COVID-19 on LTC insurance, partially offset by the impact of LTC unlocking and loss recognition and the FA unlocking impact.

The impact of COVID-19 resulted in fewer LTC clients entering nursing homes as well as increased mortality-related client terminations.

Our annual review of LTC active life future policy benefit reserve adequacy resulted in unlocking and loss recognition of $141 million in 2020 compared to $8 million in the prior year.

The unlocking and loss recognition in 2020 was primarily due to a higher unfavorable impact from updates to our interest rates assumptions, a lower unfavorable impact from lesser changes to assumptions regarding morbidity, mortality and persistency and a lower benefit from approved and expected premium rate increases and benefit reductions compared to the prior year.

Amortization of DAC, which excludes the DAC offset to the market impact on fixed deferred annuity contracts, decreased $49 million, or 89%, to $6 million for the year ended December 31, 2020 compared to $55 million for the prior year reflecting the prior year sale of AAH.

General and administrative expense, which excludes integration and restructuring charges and expenses attributable to CIEs, decreased $146 million, or 37%, to $245 million for the year ended December 31, 2020 compared to $391 million for the prior year primarily due to the prior year sale of AAH and lower project expenses.

FA business had a pretax adjusted operating loss of $24 million for 2021 compared to a pretax adjusted operating loss of $8 million for the prior year reflecting fixed annuity net outflows and the impact of low interest rates.

Fixed deferred annuity account balances declined 5% to $7.6 billion as of December 31, 2021 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities and fixed index annuities due to the low interest rate environment.

During the third quarter of 2021, we closed on a transaction to reinsure RiverSource Life’s fixed deferred and immediate annuity policies.

See Note 1 for more information on the reinsurance transaction.

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, integration and restructuring charges, and the impact of consolidating CIEs, decreased $135 million, or 36%, for 2021 compared to the prior year primarily reflecting lower average invested assets due to the sale of investments to the reinsurer as a result of the fixed deferred and immediate annuity reinsurance transaction, lower asset earned rates, partially offset by a $15 million gain on a strategic investment.

Other revenues increased $76 million for 2021 compared to the prior year primarily reflecting the yield on deposit receivables.

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, decreased $165 million, or 48%, for 2021 compared to the prior year primarily reflecting the impacts from unlocking and loss recognition and lower LTC insurance claims.

The unlocking impact for 2021 was an expense of $3 million compared to an unlocking and loss recognition expense of $148 million in the prior year.

General and administrative expense, which excludes integration and restructuring charges and expenses attributable to CIEs, increased $20 million, or 8%, for 2021 compared to the prior year primarily due to an unfavorable change in the mark-to-market impact on share-based compensation expense due to share price appreciation.

Closed Block LTC Insurance

5 unchanged sentences

The average attained age is 78 and the average attained age of policyholders on claim is 85.

Thirty-six percent of daily benefits in force in this block come from policies that have a lifetime benefit period.

Thirty-five percent of daily benefits in force in this block come from policies that have a lifetime benefit period.

We utilize three primary levers to manage our LTC business.

2 unchanged sentences

As of December 31, 2021, we had 38,000 policies that were closed with claim activity, as well as 8,000 open claims.

We apply this experience to our in force policies, which were 97,000 as of December 31, 2020, at a very granular

level by issue year, attained age and benefit features.

We apply this experience to our in force policies, which were 91,000 as of December 31, 2021, at a very granular level by issue year, attained age and benefit features.

Our statutory reserves are $381 million higher than our GAAP reserves and include margins on key assumptions for morbidity and mortality, as well as $363 million in asset adequacy reserves as of December 31, 2021.

2 unchanged sentences

Our annual review process includes an analysis of our key reserve assumptions, including those for morbidity, terminations (mortality and lapses), premium rate increases and investment yields.

Consolidated Results of Operations

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

The following table presents our consolidated results of operations:

Years Ended December 31, Change

(in millions)

Management and financial advice fees $ 7,015 $ 6,776 $ 239 4 %

Distribution fees 1,919 1,877 42 2

Net investment income 1,463 1,596 (133) (8)

Premiums, policy and contract charges 2,224 2,467 (243) (10)

Other revenues 269 208 61 29

Gain on disposal of business 213 — 213 NM

Total revenues 13,103 12,924 179 1

Banking and deposit interest expense 136 89 47 53

Total net revenues 12,967 12,835 132 1

Distribution expenses 3,810 3,637 173 5

Interest credited to fixed accounts 669 674 (5) (1)

Benefits, claims, losses and settlement expenses 2,576 2,302 274 12

Amortization of deferred acquisition costs 179 322 (143) (44)

Interest and debt expense 214 245 (31) (13)

General and administrative expense 3,287 3,171 116 4

Total expenses 10,735 10,351 384 4

Pretax income

2,232 2,484 (252) (10)

Income tax provision 339 386 (47) (12)

Net income $ 1,893 $ 2,098 $ (205) (10) %

NM Not Meaningful.

Pretax income decreased $252 million, or 10%, to $2.2 billion for the year ended December 31, 2019 compared to $2.5 billion for the prior year.

The following impacts were significant drivers of the year-over-year change in pretax income:

• The market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization) was an expense of $579 million for the year ended December 31, 2019 compared to an expense of $31 million for the prior year.

• The market impact of hedges on investments was an expense of $35 million for the year ended December 31, 2019 compared to a benefit of $11 million for the prior year.

• A $49 million unfavorable change in the mark-to-market impact on share-based compensation expenses.

• Higher mark-to-market impact on advisor deferred compensation expense and investments in recruiting experienced advisors.

• An increase in general and administrative expenses for our Advice & Wealth Management segment related to investments in business growth.

• An increase in impairments of our investment in affordable housing partnerships, which was $35 million for the year ended December 31, 2019 compared to $7 million for the prior year.

• The cumulative impact of asset management net outflows, partially offset by wrap account net inflows.

• A gain of $213 million recognized on the sale of AAH on October 1, 2019.

• A positive impact from higher average equity markets and higher average short-term interest rates.

• The mean reversion related impact was a benefit of $57 million for the year ended December 31, 2019 compared to an expense of $33 million for the prior year.

• The unfavorable impact of unlocking and LTC loss recognition was $16 million for the year ended December 31, 2019 compared to $53 million for the prior year.

The following table presents the total pretax impacts on our revenues and expenses attributable to unlocking and LTC loss recognition for the years ended December 31:

Pretax Increase (Decrease) 2019 2018

(in millions)

Premiums, policy and contract charges $ 5 $ 78

Total revenues 5 78

Benefits, claims, losses and settlement expenses:

LTC unlocking and loss recognition 8 52

Unlocking impact, excluding LTC (1) 112

Total benefits, claims, losses and settlement expenses 7 164

Amortization of DAC 14 (33)

Total expenses 21 131

Pretax income (1)

$ (16) $ (53)

(1) Includes a $4 million and $5 million net benefit related to the market impact on variable annuity guaranteed benefits for the years ended December 31, 2019 and 2018, respectively, which is excluded from adjusted operating earnings.

Refer to Results of Operations by Segment for the impact to pretax adjusted operating earnings attributable to unlocking and LTC loss recognition.

The unfavorable unlocking impact in 2019 primarily reflected the impact from updates to our interest rate assumptions and lower surrenders on annuity contracts with a withdrawal benefit partially offset by a benefit from changes in equity market volatility and correlation assumptions on variable annuities.

The unfavorable unlocking impact in the prior year primarily reflected unfavorable mortality experience on UL and VUL insurance products and lower surrender rate assumptions on variable annuities partially offset by the impact from updates to assumptions on utilization of guaranteed withdrawal benefits.

The unfavorable LTC unlocking and loss recognition in 2019 was primarily due to the impact from updates to our interest rates assumptions and changes in morbidity experience partially offset by higher approved and expected premium rate increases and benefit reductions.

The unfavorable LTC unlocking and loss recognition in the prior year was primarily due to changes in morbidity experience partially offset by approved, pending and future expected premium rate increases.

The unfavorable impact of updates to our interest rate assumptions noted above for unlocking and LTC loss recognition was $118 million.

Based on the significant interest rate dislocation, we extended the grading period one year to reach our ultimate 10-year treasury rate of 5% by assuming rates remain flat for six months and then grade to our long-term rate over the next three years.

Net revenues increased $132 million, or 1%, to $13.0 billion for the year ended December 31, 2019 compared to $12.8 billion for the prior year.

Management and financial advice fees increased $239 million, or 4%, to $7.0 billion for the year ended December 31, 2019 compared to $6.8 billion for the prior year primarily due to higher average equity markets, wrap account net inflows and a $57 million increase in performance fees, partially offset by asset management net outflows and a $27 million negative foreign currency translation impact.

Distribution fees increased $42 million, or 2%, to $1.9 billion for the year ended December 31, 2019 compared to the prior year reflecting higher average equity markets and higher earnings on brokerage cash due to an increase in average short-term interest rates, partially offset by asset management net outflows.

Net investment income decreased $133 million, or 8%, to $1.5 billion for the year ended December 31, 2019 compared to $1.6 billion for the prior year primarily due to the following impacts:

• A $46 million unfavorable change in the market impact of hedges on investments.

• A $43 million decrease in net investment income of CIEs.

• Net realized investment losses of $3 million for the year ended December 31, 2019 compared to net realized investment gains of $10 million for the prior year.

• Impairments of our investment in affordable housing partnerships of $35 million for the year ended December 31, 2019 compared to $7 million for the prior year.

• The unfavorable impact of fixed annuity net outflows and the fixed annuities reinsurance transaction.

• The favorable impact of higher average invested assets related to the bank and certificates and higher average investment yields related to certificates.

Premiums, policy and contract charges decreased $243 million, or 10%, to $2.2 billion for the year ended December 31, 2019 compared to $2.5 billion for the prior year primarily due to the sale of AAH and unlocking, partially offset by an increase in variable annuity guaranteed benefit rider charges and a $7 million expense in the prior year related to a modification of costs within a reinsurance contract.

Premiums for the year ended December 31, 2019 included $827 million from Auto and Home for the nine months prior to sale on October 1, 2019 compared to $1.0 billion for the prior year.

The impact from unlocking was a $5 million favorable impact compared to a $78 million favorable impact in the prior year.

The unlocking impact for 2019 reflected updates to our interest rate assumptions.

The primary driver of the unlocking impact for the prior year was higher projected gains on reinsurance contracts resulting from unfavorable mortality experience on UL and VUL insurance products.

Other revenues increased $61 million, or 29%, to $269 million for the year ended December 31, 2019 compared to $208 million for the prior year primarily due to accretion on our fixed annuities reinsurance deposit receivable and a $7 million gain on the sale of real estate in the third quarter of 2019.

Gain on disposal of business of $213 million for the year ended December 31, 2019 was recognized on the sale of AAH, net of an affinity partner payment of $100 million.

Banking and deposit interest expense increased $47 million, or 53%, to $136 million for the year ended December 31, 2019 compared to $89 million for the prior year due to interest expense on banking deposits, higher average certificate balances and higher average crediting rates on certificates.

Total expenses increased $384 million, or 4%, to $10.7 billion for the year ended December 31, 2019 compared to $10.4 billion for the prior year.

Distribution expenses increased $173 million, or 5%, to $3.8 billion for the year ended December 31, 2019 compared to $3.6 billion for the prior year reflecting higher advisor compensation due to wrap account net inflows, higher average markets, higher mark-to-market impact on advisor deferred compensation expense and investments in recruiting experienced advisors, partially offset by the impact of asset management net outflows.

Benefits, claims, losses and settlement expenses increased $274 million, or 12%, to $2.6 billion for the year ended December 31, 2019 compared to $2.3 billion for the prior year primarily reflecting the following items:

• A $425 million increase in expense from the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits.

The unfavorable impact of the nonperformance credit spread was $175 million for the year ended December 31, 2019 compared to a favorable impact of $250 million for the prior year.

As the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease.

As the embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense.

• A $228 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization.

This increase was the result of a favorable $315 million change in the market impact on variable annuity guaranteed living benefits reserves, an unfavorable $549 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits and a favorable $6 million change in the DSIC offset.

The main market drivers contributing to these changes are summarized below:

• Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the year ended December 31, 2019 compared to the prior year.

• The impact of unlocking excluding LTC was a benefit of $1 million for the year ended December 31, 2019 compared to an expense of $112 million for the prior year.

The unlocking impact for 2019 primarily reflected a benefit from changes in equity market volatility and correlation assumptions on variable annuities, partially offset by updates to our interest rate assumptions and lower surrenders on annuity contracts with a withdrawal benefit.

The unlocking impact for the prior year primarily reflected unfavorable mortality experience on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by a favorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits.

• Our annual review of LTC active life future policy benefit reserve adequacy in 2019 resulted in unlocking and loss recognition of $8 million compared to $52 million in the prior year.

The unlocking and loss recognition in 2019 was primarily due to the impact from updates to our interest rates assumptions and changes in morbidity experience, partially offset by higher approved and expected premium rate increases and benefit reductions.

The unlocking and loss recognition in the prior year was primarily due to changes in morbidity experience, partially offset by approved, pending and future expected premium rate increases.

• A $204 million decrease in auto and home expenses primarily reflecting the sale of AAH.

• The mean reversion related impact was a benefit of $26 million for the year ended December 31, 2019 compared to an expense of $12 million for the prior year.

Amortization of DAC decreased $143 million, or 44%, to $179 million for the year ended December 31, 2019 compared to $322 million for the prior year primarily reflecting the following items:

• The DAC offset to the market impact on variable annuity guaranteed benefits was a benefit of $82 million for the year ended December 31, 2019 compared to an expense of $23 million for the prior year.

• The mean reversion related impact was a benefit of $31 million for the year ended December 31, 2019 compared to an expense of $21 million for the prior year.

• A $10 million decrease in auto and home expenses primarily reflecting the sale of AAH.

• A favorable impact from normal year over year experience differences for variable annuities.

• The impact of unlocking in 2019 was an expense of $14 million and reflected updates to our interest rate assumptions, partially offset by a favorable impact from lower surrenders on annuity contracts with a withdrawal benefit.

The impact of unlocking in the prior year was a benefit of $33 million and primarily reflected updated mortality assumptions on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by an unfavorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits.

Interest and debt expense decreased $31 million, or 13%, to $214 million for the year ended December 31, 2019 compared to $245 million for the prior year primarily due to a decrease in interest expense of CIEs.

General and administrative expense increased $116 million, or 4%, to $3.3 billion for the year ended December 31, 2019 compared to $3.2 billion for the prior year primarily due to a $49 million unfavorable change in the mark-to-market impact on share-based compensation expenses, a $28 million increase in compensation related to higher performance fees, bank-related expenses, investments in business growth and a $13 million increase in severance, partially offset by a $15 million positive foreign currency translation impact and a $25 million decrease in auto and home expenses primarily reflecting the sale of AAH.

Our effective tax rate was 15.2% for the year ended December 31, 2019 compared to 15.5% for the prior year.

Net excess tax benefits related to employee share-based payments was a benefit of $15 million for the year ended December 31, 2019 compared to $25 million for the prior year.

See Note 24 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

The following table presents summary financial information by segment:

Years Ended December 31,

(in millions)

Advice & Wealth Management

Net revenues $ 6,599 $ 6,189

Expenses 5,090 4,800

Adjusted operating earnings $ 1,509 $ 1,389

Asset Management

Net revenues $ 2,913 $ 3,011

Expenses 2,252 2,283

Adjusted operating earnings $ 661 $ 728

Retirement & Protection Solutions

Net revenues $ 3,123 $ 3,166

Expenses 2,399 2,445

Adjusted operating earnings $ 724 $ 721

Corporate & Other

Net revenues $ 1,477 $ 1,742

Expenses 1,763 2,016

Adjusted operating loss $ (286) $ (274)

The following table presents the segment pretax adjusted operating impacts on our revenues and expenses attributable to unlocking and LTC loss recognition for the years ended December 31:

Segment Pretax Adjusted Operating Increase (Decrease) 2019 2018

Retirement & Protection Solutions Corporate Retirement & Protection Solutions Corporate

(in millions)

Premiums, policy and contract charges $ 5 $ — $ 78 $ —

Total revenues 5 — 78 —

Benefits, claims, losses and settlement expenses

LTC unlocking and loss recognition — 8 — 52

Unlocking impact, excluding LTC 6 (2) 118 1

Total benefits, claims, losses and settlement expenses 6 6 118 53

Amortization of DAC 15 (2) (40) 5

Total expenses 21 4 78 58

Pretax income (loss) $ (16) $ (4) $ — $ (58)

Advice & Wealth Management

The following table presents the changes in wrap account assets and average balances for the years ended December 31:

(in billions)

Beginning balance $ 251.5 $ 248.2

Net flows 17.6 21.1

Market appreciation (depreciation) and other 48.4 (17.8)

Ending balance $ 317.5 $ 251.5

Advisory wrap account assets ending balance (1)

$ 314.3 $ 249.1

Average advisory wrap account assets (2)

$ 282.9 $ 255.5

(1) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts.

Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

Beginning in the fourth quarter of 2019, all advisory fee billing is calculated in advance on a monthly basis using point-in-time assets.

Prior to the fourth quarter of 2019, some advisory accounts billed in arrears on a quarterly or monthly basis using average daily assets.

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

Wrap account assets increased $66.0 billion, or 26%, during the year ended December 31, 2019 due to net inflows of $17.6 billion and market appreciation and other of $48.4 billion.

Average advisory wrap account assets increased $27.4 billion, or 11%, compared to the prior year reflecting net inflows and market appreciation.

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

Years Ended December 31, Change

(in millions)

Management and financial advice fees $ 3,841 $ 3,538 $ 303 9 %

Distribution fees 2,281 2,241 40 2

Net investment income 411 316 95 30

Other revenues 202 183 19 10

Total revenues 6,735 6,278 457 7

Banking and deposit interest expense 136 89 47 53

Total net revenues 6,599 6,189 410 7

Distribution expenses 3,714 3,521 193 5

Interest and debt expense 11 10 1 10

General and administrative expense 1,365 1,269 96 8

Total expenses 5,090 4,800 290 6

Adjusted operating earnings $ 1,509 $ 1,389 $ 120 9 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $120 million, or 9%, to $1.5 billion for the year ended December 31, 2019 compared to $1.4 billion for the prior year reflecting wrap account net inflows, average equity market appreciation and higher earnings on brokerage cash, partially offset by higher expenses from continued investments for growth and higher mark-to-market impact on advisor deferred compensation expenses.

Pretax adjusted operating margin was 22.9% for the year ended December 31, 2019 compared to 22.4% for the prior year.

We launched Ameriprise Bank, FSB in the second quarter of 2019 and continued to add deposits during the year, with $3.8 billion of cash sweep balances as of December 31, 2019.

In the third quarter of 2019, we purchased the existing Ameriprise portfolio of credit card accounts from a third party bank.

Net revenues exclude net realized investment gains or losses.

Net revenues increased $410 million, or 7%, to $6.6 billion for the year ended December 31, 2019 compared to $6.2 billion for the prior year.

Adjusted operating net revenue per advisor increased to $664,000 for the year ended December 31, 2019, up 6%, from $624,000 for the prior year.

Management and financial fees increased $303 million, or 9%, to $3.8 billion for the year ended December 31, 2019 compared to $3.5 billion for the prior year primarily due to growth in wrap account assets.

Average advisory wrap account assets increased $29.8 billion, or 12%, compared to the prior year reflecting net inflows and market appreciation.

Distribution fees increased $40 million, or 2%, to $2.3 billion for the year ended December 31, 2019 compared to $2.2 billion for the prior year reflecting higher earnings on brokerage cash due to an increase in average short-term interest rates, partially offset by decreased transactional activity and lower sales of variable annuities.

We earned 198 basis points on brokerage cash balances for the year ended December 31, 2019 compared to 164 basis points for the prior year.

Net investment income increased $95 million, or 30%, to $411 million for the year ended December 31, 2019 compared to $316 million for the prior year primarily due to higher average invested assets due to the bank and certificates and higher average investment yields.

Total expenses increased $290 million, or 6%, to $5.1 billion for the year ended December 31, 2019 compared to $4.8 billion for the prior year.

Distribution expenses increased $193 million, or 5%, to $3.7 billion for the year ended December 31, 2019 compared to $3.5 billion for the prior year reflecting higher advisor compensation due to wrap account net inflows and market appreciation, higher mark-to-market impact on advisor deferred compensation expense and investments in recruiting experienced advisors, partially offset by decreased transactional activity.

General and administrative expense increased $96 million, or 8%, to $1.4 billion for the year ended December 31, 2019 compared to $1.3 billion for the prior year primarily due to bank-related expenses and investments in business growth.

Asset Management

The following table presents managed assets by type:

December 31, Change Average (1)

2019 2018 2019 2018

(in billions)

Equity $ 271.1 $ 229.0 $ 42.1 18 % $ 251.5 $ 266.4 $ (14.9) (6) %

Fixed income 179.2 160.9 18.3 11 171.2 168.9 2.3 1

Money market 5.6 5.1 0.5 10 5.1 5.7 (0.6) (11)

Alternative 3.1 3.1 — — 3.1 4.4 (1.3) (30)

Hybrid and other 35.2 32.6 2.6 8 33.9 34.2 (0.3) (1)

Total managed assets $ 494.2 $ 430.7 $ 63.5 15 % $ 464.8 $ 479.6 $ (14.8) (3) %

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

The following tables present the changes in global managed assets:

Years Ended December 31,

(in billions)

Global Retail Funds

Beginning assets $ 247.9 $ 287.8

Inflows 46.9 53.0

Outflows (53.8) (67.2)

Net VP/VIT fund flows (2.7) (3.0)

Net new flows (9.6) (17.2)

Reinvested dividends 9.7 11.6

Net flows 0.1 (5.6)

Distributions (11.3) (13.8)

Market appreciation (depreciation) and other

Foreign currency translation (1)

Total ending assets 287.5 247.9

Global Institutional

Beginning assets 182.8 206.8

Inflows 22.7 21.6

Outflows (29.9) (37.2)

Net flows (7.2) (15.6)

Market appreciation (depreciation) and other (2)

Foreign currency translation (1)

Total ending assets 206.7 182.8

Total managed assets $ 494.2 $ 430.7

Total net flows $ (7.1) $ (21.2)

Former Parent Company Related (3)

Retail net new flows $ (0.9) $ (2.8)

Institutional net new flows (3.4) (5.2)

Total net new flows $ (4.3) $ (8.0)

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

(2) Includes $4.6 billion and $0.6 billion for the total change in Affiliated General Account Assets during the years ended December 31, 2019 and 2018, respectively.

(3) Former parent company related assets and net new flows are included in the rollforwards above.

Total segment AUM increased $63.5 billion, or 15%, during the year ended December 31, 2019 driven by market appreciation, partially offset by net outflows and retail fund distributions.

Europe, Middle East and Africa (“EMEA”) retail net outflows were $3.1 billion for the year ended December 31, 2019 reflecting negative consumer sentiment associated with Brexit and geopolitical concerns in Europe.

North America retail net inflows, which include reinvested dividends, were $3.2 billion for the year ended December 31, 2019, a $5.8 billion improvement compared to the prior year.

Global institutional net outflows of $7.2 billion included $3.4 billion of outflows from former parent-related assets.

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

Years Ended December 31, Change

(in millions)

Management and financial advice fees $ 2,488 $ 2,540 $ (52) (2) %

Distribution fees 408 433 (25) (6)

Net investment income 15 19 (4) (21)

Other revenues 2 19 (17) (89)

Total revenues 2,913 3,011 (98) (3)

Banking and deposit interest expense — — — —

Total net revenues 2,913 3,011 (98) (3)

Distribution expenses 928 961 (33) (3)

Amortization of deferred acquisition costs 9 13 (4) (31)

Interest and debt expense 25 24 1 4

General and administrative expense 1,290 1,285 5 —

Total expenses 2,252 2,283 (31) (1)

Adjusted operating earnings $ 661 $ 728 $ (67) (9) %

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $67 million, or 9%, to $661 million for the year ended December 31, 2019 compared to $728 million for the prior year primarily due to the cumulative impact of net outflows and a vendor credit of $14 million in the prior year, partially offset by higher average markets and a $29 million increase in net performance fees.

Net revenues, which exclude net realized investment gains or losses, decreased $98 million, or 3%, to $2.9 billion for the year ended December 31, 2019 compared to $3.0 billion for the prior year.

Management and financial advice fees decreased $52 million, or 2%, to $2.5 billion for the year ended December 31, 2019 compared to the prior year driven by cumulative net outflows and a $27 million negative foreign currency translation impact, partially offset by a $57 million increase in performance fees and higher average markets.

Our average weighted equity index, which is a proxy for equity movements on AUM, increased 4% for the year ended December 31, 2019 compared to the prior year.

Distribution fees decreased $25 million, or 6%, to $408 million for the year ended December 31, 2019 compared to $433 million for the prior year due to the cumulative impact of net outflows, partially offset by higher average markets.

Other revenues decreased $17 million, or 89%, to $2 million for the year ended December 31, 2019 compared to $19 million for the prior year due to a $14 million vendor credit in the prior year related to the completion of our front, middle and back-office integration.

Total expenses decreased $31 million, or 1%, to $2.3 billion for the year ended December 31, 2019 compared to the prior year.

Distribution expenses decreased $33 million, or 3%, to $928 million for the year ended December 31, 2019 compared to $961 million for the prior year primarily due to the cumulative impact of net outflows, partially offset by higher average markets.

Retirement & Protection Solutions

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

Years Ended December 31, Change

(in millions)

Management and financial advice fees $ 827 $ 839 $ (12) (1) %

Distribution fees 438 439 (1) —

Net investment income 528 528 — —

Premiums, policy and contract charges 1,330 1,360 (30) (2)

Other revenues — — — —

Total revenues 3,123 3,166 (43) (1)

Banking and deposit interest expense — — — —

Total net revenues 3,123 3,166 (43) (1)

Distribution expenses 469 476 (7) (1)

Interest credited to fixed accounts 387 379 8 2

Benefits, claims, losses and settlement expenses 988 1,060 (72) (7)

Amortization of deferred acquisition costs 230 196 34 17

Interest and debt expense 31 29 2 7

General and administrative expense 294 305 (11) (4)

Total expenses 2,399 2,445 (46) (2)

Adjusted operating earnings $ 724 $ 721 $ 3 — %

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, 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 annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual) and mean reversion related impacts, increased $3 million to $724 million for the year ended December 31, 2019 compared to $721 million for the prior year.

RiverSource variable annuity account balances increased 11% to $80.1 billion as of December 31, 2019 compared to the prior year due to equity market appreciation, partially offset by net outflows of $3.2 billion.

Variable annuity sales decreased 8% compared to the prior year.

Net revenues, which exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual) and the unearned revenue amortization and reinsurance accrual offset to the market impact on IUL contracts, decreased $43 million, or 1%, to $3.1 billion for the year ended December 31, 2019 compared to $3.2 billion for the prior year.

Premiums, policy and contract charges, which exclude the unearned revenue amortization and reinsurance accrual offset to net realized investment gains or losses and the market impact on IUL contracts, decreased $30 million, or 2% to $1.3 billion for the year ended December 31, 2019 compared to $1.4 billion for the prior year due to the impact of unlocking, partially offset by higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date, higher average fee rates and a $7 million expense in the prior year related to a modification of costs within a reinsurance contract.

Total expenses, which exclude the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization), mean reversion related impacts and the DAC and DSIC offset to net realized investment gains or losses, decreased $46 million, or 2%, for the year ended December 31, 2019 compared to the prior year.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, decreased $72 million, or 7%, to $988 million for the year ended December 31, 2019 compared to $1.1 billion for the prior year primarily due to the impact of unlocking, partially offset by higher reserve funding driven by the impact of higher variable annuity guaranteed benefit rider charges.

The unlocking impact for 2019 was an expense of $6 million and primarily reflected updates to our interest rate assumptions and lower surrenders on annuity contracts with a withdrawal benefit, partially offset by a benefit from changes in equity market volatility and correlation assumptions on variable annuities.

The unlocking impact for the prior year was an expense of

$118 million and primarily reflected unfavorable mortality experience on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by a favorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits.

Amortization of DAC, which excludes mean reversion related impacts, the DAC offset to the market impact on variable annuity contracts and IUL contracts and the DAC offset to net realized investment gains or losses, increased $34 million, or 17%, to $230 million for the year ended December 31, 2019 compared to $196 million for the prior year primarily reflecting the impact of unlocking, partially offset by a favorable impact from normal year over year experience differences for variable annuities.

The impact of unlocking for 2019 was an expense of $15 million and reflected updates to our interest rate assumptions, partially offset by a favorable impact from lower surrenders on annuity contracts with a withdrawal benefit.

The impact of unlocking in the prior year was a benefit of $40 million and primarily reflected updated mortality assumptions on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by an unfavorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits.

Corporate & Other

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

Years Ended December 31, Change

(in millions)

Management and financial advice fees $ 4 $ 5 $ (1) (20) %

Distribution fees 6 7 (1) (14)

Net investment income 479 582 (103) (18)

Premiums, policy and contract charges 931 1,148 (217) (19)

Other revenues 65 6 59 NM

Total revenues 1,485 1,748 (263) (15)

Banking and deposit interest expense 8 6 2 33

Total net revenues 1,477 1,742 (265) (15)

Distribution expenses 4 14 (10) (71)

Interest credited to fixed accounts 270 282 (12) (4)

Benefits, claims, losses and settlement expenses 965 1,235 (270) (22)

Amortization of deferred acquisition costs 55 72 (17) (24)

Interest and debt expense 78 62 16 26

General and administrative expense 391 351 40 11

Total expenses 1,763 2,016 (253) (13)

Operating loss $ (286) $ (274) $ (12) (4) %

NM Not Meaningful.

Our Corporate & Other segment pretax adjusted operating loss increased $12 million, or 4%, to $286 million for the year ended December 31, 2019 compared to $274 million for the prior year.

Our LTC insurance pretax adjusted operating earnings were nil for the year ended December 31, 2019 compared to a pretax adjusted operating loss of $61 million for the prior year.

Our annual review of LTC active life future policy benefit reserve adequacy resulted in unlocking and loss recognition of $8 million for the year ended December 31, 2019 compared to $52 million in the prior year.

FA business had a pretax adjusted operating earnings of $34 million for the year ended December 31, 2019 compared to $30 million for the prior year.

RiverSource fixed deferred annuity account balances declined 5% to $8.3 billion as of December 31, 2019 compared to the prior year as older policies continue to lapse and new sales are limited due to low interest rates.

We reinsured approximately 20% of our fixed annuities block during the first quarter of 2019.

The reinsurance transaction generated $200 million of excess capital and had a marginal impact on fixed annuity adjusted pretax operating earnings.

Auto and Home pretax adjusted operating earnings were $13 million for the year ended December 31, 2019 compared to a pretax adjusted operating loss of $10 million for the prior year.

We sold AAH on October 1, 2019.

Net revenues, which exclude net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments, gain on disposal of business that is not considered discontinued operations, integration and restructuring charges and revenues attributable to CIEs, decreased $265 million, or 15%, to $1.5 billion for the year ended December 31, 2019 compared to $1.7 billion for the prior year.

Net revenues for the year ended December 31, 2019 included $881 million from Auto and Home compared to $1.1 billion for the prior year reflecting the sale of AAH.

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments and net investment income attributable to CIEs, decreased $103 million, or 18%, to $479 million for the year ended December 31, 2019 compared to $582 million for the prior year primarily due to a $47 million unfavorable impact related to the fixed annuities reinsurance transaction, approximately $30 million from lower average invested assets due to fixed annuity net outflows and impairments of our investment in affordable housing partnerships.

Impairments of our investment in affordable housing partnerships were $35 million for the year ended December 31, 2019 compared to $7 million for the prior year.

Premiums, policy and contract charges decreased $217 million, or 19%, to $931 million for the year ended December 31, 2019 compared to $1.1 billion for the prior year primarily due to the sale of AAH.

Other revenues increased $59 million to $65 million for the year ended December 31, 2019 compared to $6 million for the prior year primarily due to accretion on our fixed annuities reinsurance deposit receivable and a $7 million gain on the sale of real estate in the third quarter of 2019.

Total expenses, which exclude the market impact on fixed deferred annuity contracts (net of hedges and the related DAC amortization), integration and restructuring charges and expenses attributable to CIEs, decreased $253 million, or 13%, to $1.8 billion for the year ended December 31, 2019 compared to $2.0 billion for the prior year.

Total expenses for the year ended December 31, 2019 included $868 million from Auto and Home reflecting the sale of AAH.

Distribution expenses decreased $10 million, or 71%, to $4 million for the year ended December 31, 2019 compared to $14 million for the prior year reflecting the sale of AAH.

Interest credited to fixed accounts, which excludes the market impact on fixed deferred annuity contracts (net of hedges), decreased $12 million, or 4%, to $270 million for the year ended December 31, 2019 compared to $282 million for the prior year due to lower average fixed deferred annuity account balances.

Benefits, claims, losses and settlement expenses decreased $270 million, or 22%, to $965 million for the year ended December 31, 2019 compared to $1.2 billion for the prior year reflecting a decrease in LTC unlocking and loss recognition and the sale of AAH.

Amortization of DAC, which excludes the DAC offset to the market impact on fixed deferred annuity contracts, decreased $17 million, or 24%, to $55 million for the year ended December 31, 2019 compared to $72 million for the prior year primarily reflecting the sale of AAH and the impact of unlocking.

Interest and debt expense, which excludes interest expense attributable to CIEs, increased $16 million, or 26%, to $78 million for the year ended December 31, 2019 compared to $62 million for the prior year primarily due to interest expense on asset backed securities issued by one of our subsidiaries in the fourth quarter of 2018.

This interest expense is eliminated on a consolidated basis.

General and administrative expense, which excludes integration and restructuring charges and expenses attributable to CIEs, increased $40 million, or 11%, to $391 million for the year ended December 31, 2019 compared to $351 million for the prior year primarily due to a $33 million unfavorable change in the mark-to-market impact on share-based compensation expenses, investments in growth initiatives and a $13 million increase in severance, partially offset by a $25 million decrease in auto and home expenses primarily reflecting the sale of AAH.

Fair Value Measurements

11 unchanged sentences

As a result, we adjust the valuation of variable annuity riders, fixed deferred indexed annuities, structured variable annuities, and IUL insurance by updating certain contractholder assumptions, adding explicit margins to provide for risk, and adjusting the rates used to discount expected cash flows to reflect a market estimate of our nonperformance risk.

The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities.

The nonperformance

risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities.

Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of December 31, 2021.

4 unchanged sentences

At December 31, 2021 and 2020, we had $7.1 billion and $6.8 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At December 31, 2020 and 2019, the parent company had $1.1 billion and $1.8 billion, respectively, in cash, cash equivalents, and unencumbered liquid securities.

At December 31, 2021 and 2020, the parent company had $841 million and $1.1 billion, respectively, in cash, cash equivalents, and unencumbered liquid securities.

Liquid securities predominantly include U.S.

government agency mortgage back securities.

Additional sources of liquidity include a line of credit with an affiliate up to $867 million and an unsecured revolving committed credit facility for up to $750 million that expires in October 2022.

Additional sources of liquidity include a line of credit with an affiliate up to $1.0 billion and an unsecured revolving committed credit facility for up to $1.0 billion that expires in June 2026.

Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of December 31, 2021 was $2.4 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

3 unchanged sentences

Our credit facility contains various administrative, reporting, legal and financial covenants.

Compliance with these covenants is not currently impaired by the COVID-19 pandemic, and we remain in compliance with all such covenants at December 31, 2020.

On April 2, 2020, we issued $500 million of unsecured 3.0% senior notes due April 2, 2025 and incurred debt issuance costs of $4 million.

Interest payments are due semi-annually in arrears on April 2 and October 2, commencing on October 2, 2020.

The Company repaid $750 million principal amount of its 5.3% senior notes at maturity on March 16, 2020.

We remain in compliance with all such covenants at December 31, 2021.

In addition, we have access to collateralized borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances.

Our subsidiaries, RiverSource Life Insurance Company (“RiverSource Life”), and Ameriprise Bank, FSB are members of the FHLB of Des Moines, which provides access to collateralized borrowings.

We had $200 million and $201 million of borrowings from the FHLB, which is collateralized with commercial mortgage backed securities and residential mortgage backed securities, as of December 31, 2020 and 2019.

As of December 31, 2021 and 2020, we had an estimated maximum borrowing capacity of $8.1 billion and $7.7 billion, respectively, under the FHLB facilities, of which $200 million was outstanding as of both December 31, 2021 and 2020, and is collateralized with commercial mortgage backed securities and residential mortgage backed securities.

We believe cash flows from operating activities, available cash balances and our availability of revolver borrowings will be sufficient to fund our operating liquidity needs and stress requirements.

On November 3, 2020, S&P Global lowered our issuer credit and senior unsecured debt rating from A with a negative outlook to A-with a stable outlook due to gradual expansion in our non-insurance businesses driving a S&P ratings methodology change.

We do not believe this rating change will have a material impact on our access to or cost of capital or otherwise materially impact our liquidity.

Short-term contractual obligations for the year 2022 include investment certificate maturities of $5.1 billion and estimated insurance and annuity benefits of $1.6 billion in addition to operating liquidity needs.

Long-term contractual obligations for years after 2022 include estimated insurance and annuity benefits of $42.9 billion.

See Note 14 to our Consolidated Financial Statements for further information about our long-term debt maturities, including $500 million maturing within the 2022 calendar year.

We believe cash flows from operating activities, available cash balances, our availability of revolver borrowings and dividends from our subsidiaries will be sufficient to fund our short-term and long-term operating liquidity needs and stress requirements.

We continue to monitor and respond to the ongoing COVID-19 pandemic.

Our risk management strategy is designed to provide proactive protection during stress events such as the current pandemic.

We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the twelve months ended December 31, 2020.

We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the year ended December 31, 2021.

Dividends from Subsidiaries

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Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), AMPF Holding Corporation, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, LLC (“AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc.

(“AEIS”), our transfer agent subsidiary, Columbia Management Investment Services Corp., our investment advisory company, Columbia Management Investment Advisers, LLC, and Ameriprise International Holdings GmbH, which is the parent company of Threadneedle Asset Management Holdings Sàrl.

(“AEIS”), our transfer agent subsidiary, Columbia Management Investment Services Corp., our investment advisory company, Columbia Management Investment Advisers, LLC, TAM UK International Holdings Ltd, which includes Threadneedle Asset Management Holdings Sàrl and Ameriprise International Holdings GmbH within its organizational structure, and Columbia Threadneedle Investments UK International Ltd.

The payment of dividends by many of our subsidiaries is restricted and certain of our subsidiaries are subject to regulatory capital requirements.

10 unchanged sentences

304 387 283 362

TAM UK International Holdings Ltd.

330 N/A 248 N/A

Threadneedle Asset Management Holdings Sàrl (6)

445 287 204 183

N/A 445 N/A 204

Ameriprise Bank, FSB (4)(7)

5 unchanged sentences

Columbia Management Investment Distributors, Inc.

Columbia Threadneedle Investments UK International Ltd.

348 N/A 170 N/A

N/A Not applicable.

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regulatory legislation.

The regulatory capital requirements at December 31, 2020 represent calculations at September 30, 2020 of the rule based requirements, as specified by FCA regulations.

During 2021, an organizational restructure resulted in Threadneedle Asset Management Sàrl becoming a subsidiary of TAM UK International Holdings Ltd, which is responsible for appropriate capital management in accordance with U.K.

regulatory legislation.

(7) Regulatory capital requirement is based on minimum requirements for well capitalized banks in accordance with the Office of the Comptroller of the Currency (“OCC”).

Beginning in the first quarter of 2021, Ameriprise Bank transitioned to the Simplified Supervisory Formula Approach (“SSFA”) for risk-weighting non-agency securitized investments, resulting in a significant reduction in risk-weighted assets and an improvement in regulatory capital ratios that were already in a well-capitalized position.

(8) Actual capital and regulatory capital requirements are determined in accordance with U.K.

regulatory legislation.

In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, we take into account the overall health of the business, capital levels and risk management considerations in determining a strategy for payments to our parent holding company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries.

During the year ended December 31, 2020, the parent holding company received cash dividends or a return of capital from its subsidiaries of $2.1 billion and contributed cash to its subsidiaries of $416 million.

During the year ended December 31, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of $4.1 billion and contributed cash to its subsidiaries of $1.3 billion, which includes a $973 million contribution to Columbia Threadneedle Investments UK International Ltd.

and Ameriprise Asset Management Holdings Singapore Ltd.

for the acquisition of the BMO Global Asset Management (EMEA) business.

The table below presents the historical subsidiary capacity for dividends and other distributions to the parent holding company in each of the years ended December 31:

The table below presents the historical subsidiary capacity for dividends and return of capital to the parent holding company in each of the years ended December 31:

2021 2020 2019

3 unchanged sentences

Ameriprise Bank, FSB 78 74 20

CMIA 381 368 395

CMIS 14 48 39

Ameriprise International Holdings GmbH 254 231 446

TAM UK International Holdings Ltd.

Ameriprise International Holdings GmbH N/A 254 231

Ameriprise Trust Company 3 — 3

2 unchanged sentences

AMPF Holding Corporation 1,469 1,116 1,092

Columbia Threadneedle Investments UK International Ltd.

Total capacity $ 4,840 $ 3,501 $ 3,600

N/A Not applicable.

(1) For RiverSource Life payments in excess of statutory unassigned funds require advance notice to the Minnesota Department of Commerce, RiverSource Life’s primary regulator, and are subject to potential disapproval.

2 unchanged sentences

Total dividend capacity for RiverSource Life represents dividends paid during year ended December 31 along with any unpaid ordinary dividend capacity, subject to unassigned funds limitation.

(2) The dividend capacity for ACC is based on capital held in excess of regulatory requirements.

(2) The capacity for dividends and return of capital for ACC is based on capital held in excess of regulatory requirements.

(3) The dividend capacity for CMIA and CMIS is based on available tangible capital net of regulatory non-allowable assets and internal requirements backing Seed Capital.

(4) Dividend capacity is subject to regulatory approval.

The following table presents cash dividends paid or return of capital to the parent holding company, net of cash capital contributions made by the parent holding company for the following subsidiaries for the years ended December 31:

5 unchanged sentences

CMIA 510 324 286

TAM UK International Holdings Ltd.

Ameriprise International Holdings GmbH (1)

Ameriprise Advisor Capital, LLC (172) (102) (84)

(102) (84) 401

Ameriprise Captive Insurance Company 5 15 15

2 unchanged sentences

Ameriprise India 2 4 —

RiverSource Distributors, Inc.

Columbia Threadneedle Investments UK International Ltd.

Ameriprise Asset Management Holdings Singapore Ltd.

Total $ 2,776 $ 1,733 $ 2,452

(1) Includes forgiveness of parent holding company debt of $81 million and $195 million for the years ended December 31, 2019 and 2018, respectively.

(2) In 2018, the amount includes $351 million from a securitized portfolio of advisor loans which were previously held at Ameriprise Advisor Capital, LLC.

The securitization transaction eliminated in consolidation.

N/A Not applicable.

(1) Includes forgiveness of parent holding company debt of $81 million for the year ended December 31, 2019.

In 2009, RiverSource Life established an agreement to protect its exposure to Genworth Life Insurance Company (“GLIC”) for its reinsured LTC.

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Accordingly, while no credit protections are perfect, we believe the correct way to think about the risks represented by our counterparty credit exposure to GLIC is not the full amount of the gross liability that GLIC reinsures, but a much smaller net exposure to GLIC (if any that might exist after taking into account our credit protections).

Thus, management believes that our agreement and

offsetting non LTC legacy arrangements with Genworth will enable RiverSource Life to recover on all net exposure in all material respects in the event of a rehabilitation or insolvency of GLIC.

Thus, management believes that our agreement and offsetting non LTC legacy arrangements with Genworth will enable RiverSource Life to recover on all net exposure in all material respects in the event of a rehabilitation or insolvency of GLIC.

Dividends Paid to Shareholders and Share Repurchases

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The dividend will be paid on February 28, 2022 to our shareholders of record at the close of business on February 11, 2022.

In February 2019, our Board of Directors authorized us to repurchase up to $2.5 billion of our common stock through March 31, 2021, which was exhausted in the fourth quarter of 2020.

In August 2020, our Board of Directors authorized an additional repurchase up to $2.5 billion of our common stock through September 30, 2022.

As of December 31, 2020, we had $2.3 billion remaining under this share repurchase authorization.

As of December 31, 2021, we had $432 million remaining under this share repurchase authorization.

On January 26, 2022, our Board of Directors authorized an additional $3.0 billion for the repurchase of our common stock through March 31, 2024.

We intend to fund share repurchases through existing working capital, future earnings and other customary financing methods.

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Operating Activities

Net cash provided by operating activities increased $2.3 billion to $4.6 billion for the year ended December 31, 2020 compared to $2.3 billion for the prior year primarily reflecting a $865 million increase in cash from changes in brokerage deposits, a $373 million decrease in income taxes paid and an increase in cash collateral related to derivatives, partially offset $624 million decrease in cash from changes in restricted and segregated investments.

Net cash provided by operating activities decreased $256 million to $2.3 billion for the year ended December 31, 2019 compared to $2.6 billion for the prior year primarily reflecting a $375 million decrease in cash from changes in restricted and segregated investments, a $264 million decrease in cash from changes in brokerage deposits and a $100 million payment to an affinity partner in connection with the sale of AAH, partially offset by changes in receivables.

Net cash provided by operating activities decreased $1.3 billion to $3.3 billion for the year ended December 31, 2021 compared to $4.6 billion for the prior year primarily reflecting an increase in income taxes paid of $750 million and a decrease in brokerage deposits of $320 million.

Investing Activities

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This activity is significantly affected by the net flows of our investment certificate, banking, fixed annuity and universal life products reflected in financing activities.

Net cash used in investing activities decreased $340 million to $2.9 billion for the year ended December 31, 2020 compared to $3.2 billion for the prior year primarily reflecting a $1.5 billion increase in proceeds from sales of Available-for-Sale securities, a $1.4 billion increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities, a $391 million decrease in net cash flows related to investments of consolidated investment entities partially offset by a $1.6 billion increase in cash used for purchases of Available-for-Sale securities, $934 million in proceeds from the sale of AAH, net of cash and cash equivalents sold of $204 million, in 2019, a $340 million increase in net cash flows related to deposit receivable and a $134 million increase in net cash flows related to mortgage loans.

Net cash used in investing activities increased $2.6 billion to $3.2 billion for the year ended December 31, 2019 compared to $587 million for the prior year primarily due to a $3.6 billion increase in cash used for purchases of Available-for-Sale securities, a $193 million decrease in proceeds from sales of Available-for-Sale securities, a $635 million decrease in net cash flows related to investments of consolidated investment entities, a $251 million decrease in cash related to the fixed annuities reinsurance arrangement and a $138 million decrease to cash related to written options with deferred premiums, partially offset by a $1.5 billion increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities and $934 million in proceeds from the sale of AAH, net of cash and cash equivalents sold of $204 million.

See Note 19 to our Consolidated Financial Statements for additional information on the sale of AAH.

Net cash used in investing activities increased $1.5 billion to $4.4 billion for the year ended December 31, 2021 compared to $2.9 billion for the prior year primarily reflecting the acquisition of the BMO Global Asset Management (EMEA) business for $576 million, net of cash acquired, a $373 million increase in Cash paid for deposit receivables driven by the fixed annuity reinsurance transaction in the third quarter of 2021, an increase in net cash outflows related to Available-for-Sale securities of $398 million, and a $241 million decrease in options with deferred premiums.

Financing Activities

Net cash provided by financing activities decreased $262 million to $952 million for the year ended December 31, 2020 compared to $1.2 billion for the prior year primarily reflecting a $172 million decrease in net cash inflows from banking deposits, a $378 million decrease in cash related to investment certificates due to certificate net outflows, a $450 million increase in senior note repayments, partially offset by a $502 million decrease in share repurchases and a $382 million increase in borrowings by consolidated investment entities.

Net cash provided by financing activities was $1.2 billion for the year ended December 31, 2019 compared to net cash used in financing activities of $1.3 billion for the prior year primarily reflecting a $3.8 billion increase in net cash inflows from banking deposits, proceeds of $497 million from issuance of debt and a $508 million decrease in net cash outflows related to CIE debt, partially offset by a $1.9 billion decrease in cash related to investment certificates due to certificate net outflows, repayment of $300 million of our senior notes in June 2019 and a $313 million increase in share repurchases.

Contractual Commitments

The contractual obligations identified in the table below include both our on and off-balance sheet transactions that represent material expected or contractually committed future obligations.

The table excludes obligations of CIEs as they are not direct obligations of the Company and have recourse only to the assets of the CIEs.

Estimated cash payments due by period as of December 31, 2020 were as follows:

Total 2021 2022-2023 2024-2025 2026 and Thereafter

(in millions)

Balance Sheet

Senior notes (1)

$ 2,800 $ — $ 1,250 $ 1,050 $ 500

Insurance and annuities (2)

52,892 2,127 4,140 3,962 42,663

Investment certificates (3)

6,760 6,521 239 — —

Deferred premium options (4)

932 153 258 267 254

Lease obligations 298 66 104 73 55

Affordable housing and other real estate partnerships (5)

Off-Balance Sheet

Purchase obligations (6)

812 292 304 137 79

Interest on senior notes (7)

325 95 156 64 10

Interest on lease obligations 25 7 10 5 3

Total $ 64,856 $ 9,267 $ 6,463 $ 5,560 $ 43,566

(1) See Note 14 to our Consolidated Financial Statements for more information about our long-term debt.

(2) These scheduled payments are represented by reserves of app roximately $34.0 billion a t December 31, 2020 and are based on interest credited, mortality, morbidity, lapse, surrender and premium payment assumptions.

The estimated payments are presented gross before reinsurance.

The scheduled payments are undiscounted and exceed the corresponding liability at December 31, 2020.

Actual payment obligations may differ if experience varies from these assumptions.

As of December 31, 2020, the projected period for which cash payments will be made is 40 years.

Separate account liabilities have been excluded as associated contractual obligations would be met by separate account assets.

(3) The payments due by year are based on contractual term maturities.

However, contractholders have the right to redeem the investment certificates earlier and at their discretion subject to surrender charges, if any.

Redemptions are most likely to occur in periods of substantial increases in interest rates.

(4) The fair value of these commitments included on the Consolidated Balance Sheets was $900 million as of December 31, 2020.

See Note 17 to our Consolidated Financial Statements for more information about our deferred premium options.

(5) Call dates for the obligations presented are either date or event specific.

For date specific obligations, we are required to fund a specific amount on a stated date provided there are no defaults under the agreement.

For event specific obligations, we are required to fund a specific amount of its capital commitment when properties in a fund become fully stabilized.

For event specific obligations, the estimated call date of these commitments is used in the table above.

(6) Purchase obligations include the minimum contractual amounts by period under contracts that were in effect at December 31, 2020.

Many of the purchase agreements giving rise to these purchase obligations include termination clauses that may require payment of termination fees if the agreements are terminated by us without cause prior to their stated expiration;

however, the table reflects the amounts to be paid assuming the contracts are not terminated.

(7) Interest on senior notes was estimated based on rates in effect as of December 31, 2020.

In addition to the contractual commitments outlined in the table above, we periodically fund the employees’ defined benefit plans.

In 2021, we expect to contribute $15 million to our pension plans and $1 million to our defined benefit postretirement plans.

See Note 25 to our Consolidated Financial Statements for additional information.

Total funding commitments related to loans and private funds, which are not included in the table above due to uncertainty with respect to timing of future cash flows, were $18 million and $9 million, respectively, at December 31, 2020.

For additional information relating to these contractual commitments, see Note 26 to our Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We provide asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds, property funds and other private funds, which are sponsored by us.

We consolidate certain CLOs.

We have determined that consolidation is not required for hedge funds, property funds and other private funds, which are sponsored by us.

Our maximum exposure to loss with respect to our investment in these non-consolidated entities is limited to our carrying value and future funding commitments that are legally binding.

Other than future funding commitments that are legally binding, we have no obligation to provide further financial or other support to these investment entities nor have we provided any support to these investment entities.

See Note 5 and Note 26 to our Consolidated Financial Statements for additional information on our arrangements with these investment entities.

Net cash provided by financing activities increased $771 million to $1.7 billion for the year ended December 31, 2021 compared to $1.0 billion for the prior year primarily reflecting a $1.4 billion increase in borrowings by CIEs and a $1.4 billion increase in options with deferred premiums, partially offset by a $1.1 billion decrease in repayments of debt by CIEs, and a $700 million decrease in cash related to investment certificates due to certificate net outflows .

Forward-Looking Statements

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Examples of such forward-looking statements include:

• statements of the Company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth opportunities;

services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth opportunities;

• statements of the Company’s position, future performance and ability to pursue business strategy relative to the spread and impact of the COVID-19 pandemic and the related market, economic, client, governmental and healthcare system response;

• statements about the expected trend in the shift of the variable annuity sales business away from products with living benefit guarantees over time;

• statements about the expected trend in the shift to lower-risk products, including the exit from variable annuities with living benefit riders and the discontinuance of new sales of universal life insurance with secondary guarantees;

• statements about the benefit of and integration of the Company’s acquisition of the BMO Global Asset Management (EMEA) business;

• statements about the outcomes from the application to convert Ameriprise Bank, FSB to a state-chartered bank and national trust bank;

• other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets;

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• adverse capital and credit market conditions or any downgrade in our credit ratings;

• effects of competition and the economics of changes in our product revenue mix and distribution channels;

• effects of competition and our larger competitors’ economies of scale;

• declines in our investment management performance;

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• changes to our reputation arising from employee or advisor misconduct or otherwise;

• direct or indirect effects of or responses to climate change;

• interruptions or other failures in our operating systems and networks, including errors or failures caused by third-party service providers, interference or third-party attacks;

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• occurrence of natural or man-made disasters and catastrophes;

• risks in acquisition transactions, such as the integration of the BMO Global Asset Management (EMEA) business or other potential strategic acquisitions or divestitures;

• legal and regulatory actions brought against us;

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• protection of our intellectual property and claims we infringe the intellectual property of others;

• changes in and the adoption of new accounting standards.

Management cautions the reader that the foregoing list of factors is not exhaustive.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis