What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-02 compared with 2021-11-09 · 202 added, 587 removed, 523 unchanged (60% of the section changed)

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

We are a long-standing leader in financial planning and advice with $1.2 trillion in assets under management and administration as of September 30, 2021.

We are a long-standing leader in financial planning and advice with $1.3 trillion in assets under management and administration as of March 31, 2022.

We offer a broad range of products and services designed to achieve individual and institutional clients’ financial objectives.

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

In early 2020, we implemented a work-from-home protocol for virtually all of our employee population, restricted business travel, and provided resources for complying with the guidance from the World Health Organization, the U.S.

Centers for Disease Control and governments.

We are thoughtfully returning to our office locations, where it is reasonable to do so, while complying with applicable health agencies’ guidelines and governmental orders.

The coronavirus disease 2019 (‘‘COVID-19’’) pandemic has presented ongoing significant economic and societal disruption and market unpredictability, which has affected our business and operating environment driven by what has been a low interest rate environment and volatility and changes in the equity markets and the potential associated implications to client behavior.

COVID-19 continues its ongoing impact and has been occurring in multiple waves, so there are still no reliable estimates of how long the implications from the pandemic will last, the effects current and other new variants will ultimately have, how many people are likely to be affected by it, or its impact on the overall economy.

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

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

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

For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of our 2021 10-K.

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

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

Earnings, as well as adjusted operating earnings after tax, may be impacted by the ongoing low interest rate environment.

Although interest rates could rise in the future, we continue to operate within a comparatively low interest rate environment.

In addition to continuing spread compression in our interest sensitive product lines, a sustained low interest rate environment may result in increases to our reserves and changes in various rate assumptions we use to amortize DAC and DSIC, which may negatively impact our adjusted operating earnings after tax.

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“Quantitative and Qualitative Disclosures About Market Risk” and the information set forth in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk.”

In the third quarter, we updated our market-related assumptions and implemented model changes related to our living benefit valuation.

In addition, we conducted our annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes.

These aforementioned changes are collectively referred to as unlocking.

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

See our Consolidated and Segment Results of Operations sections for the pretax impacts on our revenues and expenses attributable to unlocking and LTC loss recognition.

AMERIPRISE FINANCIAL, INC.

On June 2, 2021, we filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.

We also filed an application to transition the FSB’s personal trust services business to a new limited purpose national trust bank regulated by the Office of the Comptroller of the Currency.

If the applications are approved, the proposed changes are not expected to impact our long-term strategy for the bank and should enable us to continue our strong lineup of banking solutions, including deposits, credit cards, mortgages and securities-based lending to our wealth management clients without interruption.

During the third quarter of 2021, RiverSource Life Insurance Company (“RiverSource Life”), one of our life insurance subsidiaries, closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $7.0 billion of fixed deferred and immediate annuity policies.

As part of the transaction, RiverSource Life transferred $7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash.

The transaction resulted in a net realized gain of approximately $532 million on investments sold.

A similar previously announced transaction with RiverSource Life Co.

of New York did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties.

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

At close, the consideration transferred consisted of £615 million (or $829 million) for initial price, plus an additional £103 million (or $138 million) largely associated with a customary adjustment for excess capital surplus that will be accessible over time.

The overall purchase price will continue to be subject to further customary post-close adjustments.

The all-cash transaction will add approximately $131 billion of assets under management (“AUM”) in EMEA.

If the applications are approved, the proposed changes are not expected to impact our long-term strategy for the bank and

AMERIPRISE FINANCIAL, INC.

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

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

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GAAP measures.

Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures.

Prior periods presented were not impacted.

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

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

AMERIPRISE FINANCIAL, INC.

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

Per Diluted Share

Three Months Ended September 30,

(in millions, except per share amounts)

Net income (loss)

$ 1,031 $ (140) $ 8.65 $ (1.14) (3)

Basic to diluted share conversion — — — 0.02 (4)

Net realized investment gains (losses) (1)

12 4 0.10 0.03

Market impact on non-traditional long-duration products (1)

94 431 0.79 3.45

Mean reversion related impacts (1)

(9) (17) (0.08) (0.14)

Market impact of hedges on investments (1)

Block transfer reinsurance transaction impacts (1)

(521) — (4.37) —

Integration/restructuring charges (1)

7 1 0.06 0.01

Net income (loss) attributable to CIEs 2 — 0.02 —

Tax effect of adjustments (2)

88 (87) 0.74 (0.70)

Adjusted operating earnings

$ 699 $ 184 $ 5.86 $ 1.47

Weighted average common shares outstanding:

Basic 116.4 123.0

Diluted 119.2 124.9

Per Diluted Share

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions, except per share amounts)

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59 (56) 0.51 (0.46)

Market impact of hedges on investments (1)

Block transfer reinsurance transaction impacts (1)

(521) — (4.31) —

Integration/restructuring charges (1)

14 4 0.12 0.03

Net income (loss) attributable to CIEs 2 (1) 0.02 (0.01)

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

(3) Diluted shares used in this calculation represent basic shares due to the net loss.

Using actual diluted shares would result in anti-dilution.

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

AMERIPRISE FINANCIAL, INC.

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

Twelve Months Ended September 30,

Twelve Months Ended March 31,

(in millions)

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The following table presents relevant market indices:

Three months ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Daily average 4,467 3,861 16%

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

For further information regarding the impact of the economic environment, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of our 2020 10-K.

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 our 2021 10-K.

AMERIPRISE FINANCIAL, INC.

Assets Under Management and Administration

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.

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

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

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The following table presents detail regarding our AUM and AUA:

September 30,

(in billions)

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Total AUM and AUA $ 1,339.1 $ 1,144.0 $ 195.1 17 %

Total AUM increased $172.4 billion, or 22%, to $973.3 billion as of September 30, 2021 compared to $800.9 billion as of September 30, 2020 due to a $94.8 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a $85.4 billion increase in Asset Management AUM driven by market appreciation and net inflows, partially offset by retail fund distributions.

Total AUM increased $179.1 billion, or 19%, to $1.1 trillion as of March 31, 2022 compared to $921.1 billion as of March 31, 2021 due to a $47.0 billion increase in Advice & Wealth Management AUM driven by wrap account net inflows and market appreciation and a $134.5 billion increase in Asset Management AUM driven by the acquisition of the BMO Global Asset Management (EMEA) business and net inflows, partially offset by retail fund distributions.

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

AMERIPRISE FINANCIAL, INC.

Consolidated Results of Operations for the Three Months Ended September 30, 2021 and 2020

Consolidated Results of Operations for the Three Months Ended March 31, 2022 and 2021

The following table presents our consolidated results of operations:

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

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Distribution fees 446 458 (12) (3)

Net investment income 773 300 473 NM

Premiums, policy and contract charges (805) 352 (1,157) NM

Net investment income 261 377 (116) (31)

Premiums, policy and contract charges 368 347 21 6

Other revenues 123 71 52 73

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Interest credited to fixed accounts 141 159 (18) (11)

Benefits, claims, losses and settlement expenses (719) 1,104 (1,823) NM

Amortization of deferred acquisition costs 9 85 (76) (89)

Benefits, claims, losses and settlement expenses 211 653 (442) (68)

Amortization of deferred acquisition costs 96 5 91 NM

Interest and debt expense 40 42 (2) (5)

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Pretax income (loss)

1,270 (184) 1,454 NM

923 493 430 87

Income tax provision 162 56 106 NM

Net income (loss) $ 1,031 $ (140) $ 1,171 NM

Net income (loss) $ 761 $ 437 $ 324 74%

NM Not Meaningful.

Pretax income increased $1.5 billion to $1.3 billion for the three months ended September 30, 2021 compared to pretax loss of $184 million for the prior year period.

Pretax income increased $430 million, or 87%, for the three months ended March 31, 2022 compared to the prior year period.

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

• The favorable impact of the block transfer reinsurance transaction was $521 million for the three months ended September 30, 2021 primarily reflecting the net realized gains on the investments sold to the reinsurer.

• The favorable impact of unlocking and LTC loss recognition was $17 million for the three months ended September 30, 2021 compared to an unfavorable impact of $454 million for the prior year period.

• The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $94 million for the three months ended September 30, 2021 compared to an expense of $431 million for the prior year period.

• A favorable impact from higher average equity markets for the three months ended September 30, 2021 compared to the prior year period.

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

AMERIPRISE FINANCIAL, INC.

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

Pretax Increase (Decrease) 2021 2020

(in millions)

Distribution fees $ 2 $ —

Premiums, policy and contract charges 17 (1)

Total revenues 19 (1)

Benefits, claims, losses and settlement expenses:

LTC unlocking and loss recognition 3 141

Unlocking impact, excluding LTC 59 212

Total benefits, claims, losses and settlement expenses 62 353

Amortization of DAC (60) 100

Total expenses 2 453

Pretax income (1)

(1) Includes a $25 million net benefit and $12 million net expense related to the market impact on variable annuity guaranteed benefits for the three months ended September 30, 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 year-over-year unlocking impact excluding LTC include the following items:

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

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

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

Net revenues decreased $100 million, or 3%, to $2.9 billion for the three months ended September 30, 2021 compared to $3.0 billion for the prior year period.

Management and financial advice fees increased $474 million, or 25%, to $2.4 billion for the three months ended September 30, 2021 compared to $1.9 billion for the prior year period reflecting higher average equity markets and higher wrap account net inflows.

Distribution fees increased $58 million, or 15%, to $458 million for the three months ended September 30, 2021 compared to $400 million for the prior year period due to higher average equity markets and increased transactional activity.

Net investment income increased $473 million to $773 million for the three months ended September 30, 2021 compared to $300 million for the prior year period primarily reflecting the following items:

• Net realized investment gains of $546 million, for the three months ended September 30, 2021 compared to net realized investment gains of $4 million for the prior year period.

Net realized investment gains for the three months ended September 30, 2021 included net realized gains of $502 million on Available-for-Sale securities and a $42 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.

• A $22 million increase in net investment income of CIEs.

• A $23 million unfavorable change in the market impact of hedges to offset interest rate and currency changes on certain investments.

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

• The unfavorable impact of 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.

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

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

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

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

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

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

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

Distribution fees decreased $12 million, or 3%, for the three months ended March 31, 2022 compared to the prior year period due to decreased transactional activity, partially offset by higher average equity markets.

AMERIPRISE FINANCIAL, INC.

Premiums, policy and contract charges decreased $1.2 billion to $(805) million for the three months ended September 30, 2021 compared to $352 million for the prior year primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance for life contingent immediate annuity policies.

Other revenues increased $45 million, or 66%, to $113 million for the three months ended September 30, 2021 compared to $68 million for the prior year period primarily reflecting the yield on deposit receivables.

Banking and deposit interest expense decreased $7 million, or 70%, to $3 million for the three months ended September 30, 2021 compared to $10 million due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses decreased $1.6 billion, or 49%, to $1.6 billion for the three months ended September 30, 2021 compared to $3.2 billion for the prior year period.

Distribution expenses increased $257 million, or 25%, to $1.3 billion for the three months ended September 30, 2021 compared to $1.0 billion for the prior year period reflecting higher advisor compensation due to an increase in average wrap account balances and increased transactional activity.

Interest credited to fixed accounts increased $2 million, or 1%, to $172 million for the three months ended September 30, 2021 compared to $170 million for the prior year period primarily reflecting the following items:

Net investment income decreased $116 million, or 31%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the following items:

• Net realized investment gains of $20 million for the three months ended March 31, 2022 compared to net realized investment gains of $69 million for the prior year period.

Net realized investment gains included a $15 million gain on a strategic investment in the prior year period.

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

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

• The unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificate products.

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

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

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

Distribution expenses increased $122 million, or 10%, for the three months ended March 31, 2022 compared to the prior year period reflecting higher advisor compensation primarily due to an increase in average wrap account balances, partially offset by decreased transactional activity.

Interest credited to fixed accounts decreased $18 million, or 11%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the following items:

• A $29 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The unfavorable impact of the nonperformance credit spread was $2 million for the three months ended September 30, 2021 compared to an unfavorable impact of $18 million for the prior year period.

• A $21 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $7 million for the three months ended September 30, 2021 compared to a benefit of $14 million for the prior year period.

The increase in expense was primarily due to a decrease in the IUL embedded derivative in the prior year period, which reflected lower option costs due to lower credit spreads.

Benefits, claims, losses and settlement expenses decreased $1.8 billion to a benefit of $719 million for the three months ended September 30, 2021 compared to an expense of $1.1 billion for the prior year period primarily reflecting the following items:

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

The favorable impact of the nonperformance credit spread was $28 million for the three months ended March 31, 2022 compared to an unfavorable impact of $1 million for the prior year period.

• A $14 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $12 million for the three months ended March 31, 2022 compared to a benefit of $2 million for the prior year period.

The increase in expense was primarily due to an increase in the IUL embedded derivative in the current period, which reflected higher option costs due to a higher new money rate.

Benefits, claims, losses and settlement expenses decreased $442 million, or 68%, the three months ended March 31, 2022 compared to the prior year period primarily reflecting the following items:

• A $207 million decrease in expense primarily reflecting the impact of year-over-year changes in the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits.

The favorable impact of $4 million for the three months ended September 30, 2021 was driven by changes in the undiscounted embedded derivative liability compared to an unfavorable impact of $103 million for the prior year period.

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

The unfavorable impact of the nonperformance credit spread was $18 million for the three months ended March 31, 2022 compared to an unfavorable impact of $225 million for the prior year period.

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

• A $339 million decrease in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization.

This increase was the result of a favorable $707 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by an unfavorable $400 million change in the market impact on variable annuity guaranteed living benefits reserves.

This decrease was the result of a favorable $1.3 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by an unfavorable $950 million change in the market impact on variable annuity guaranteed living benefits reserves.

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

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

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

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

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

• The impact of unlocking excluding LTC was an expense of $59 million for the three months ended September 30, 2021 compared to an expense of $212 million for the prior year period.

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

• The mean reversion related impact was a benefit of $6 million for the three months ended September 30, 2021 compared to a benefit of $8 million for the prior year period.

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

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

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

AMERIPRISE FINANCIAL, INC.

Amortization of DAC decreased $76 million, or 89%, to $9 million for the three months ended September 30, 2021 compared to a benefit of $85 million for the prior year period primarily reflecting the following items:

• The impact of unlocking in the third quarter of 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 $2 million for the three months ended September 30, 2021 compared to a benefit of $64 million for the prior year period.

• The mean reversion related impact was a benefit of $3 million for the three months ended September 30, 2021 compared to a benefit of $9 million for the prior year period.

• 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 $27 million, or 73%, to $64 million or the three months ended September 30, 2021 compared to $37 million for the prior year period primarily due to an increase in interest expense of CIEs.

General and administrative expense increased $59 million, or 8%, to $822 million for the three months ended September 30, 2021 compared to $763 million for the prior year period primarily reflecting higher volume related expenses, an unfavorable foreign exchange impact and higher performance-based compensation.

Our effective tax rate was 18.8% for the three months ended September 30, 2021 compared to 23.5% for the prior year period.

The lower effective tax rate for the three months ended September 30, 2021 compared to the prior year period is primarily the result of a pretax loss in the prior year relative to income expected for the full 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 behavioral items, were a net expense for the three months ended March 31, 2022 compared to a net benefit for the prior year period.

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

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

Amortization of DAC increased $91 million, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the following items:

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

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

• A decrease in amortization reflecting lower than expected client exit rates.

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

Our effective tax rate was 17.6% for the three months ended March 31, 2022 compared to 11.3% for the prior year period.

The higher effective tax rate for the three months ended March 31, 2022 compared to March 31, 2021 is primarily the result of higher pretax income and a decrease in low income housing tax credits, partially offset by an increase in incentive compensation in the current period compared to the prior period.

See Note 15 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment for the Three Months Ended September 30, 2021 and 2020

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

Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance.

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See Note 18 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.

AMERIPRISE FINANCIAL, INC.

The following table presents summary financial information by segment:

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

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Adjusted operating loss $ (76) $ (21)

The following table presents the segment pretax adjusted operating impacts on our revenues and expenses attributable to unlocking and LTC loss recognition for the three months ended September 30:

Segment Pretax Operating Increase (Decrease) 2021 2020

Retirement & Protection Solutions Corporate Retirement & Protection Solutions Corporate

(in millions)

Distribution fees $ 2 $ — $ — $ —

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

Total revenues

Benefits, claims, losses and settlement expenses

LTC unlocking and loss recognition — 3 — 141

Unlocking impact, excluding LTC 89 — 189 7

Total benefits, claims, losses and settlement expenses

Amortization of DAC

(65) — 108 (4)

Total expenses

Pretax income

$ (5) $ (3) $ (295) $ (147)

AMERIPRISE FINANCIAL, INC.

Advice & Wealth Management

The following table presents the changes in wrap account assets and average balances for the three months ended September 30:

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

(in billions)

7 unchanged sentences

$ 445.7 $ 379.3

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

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

Prior periods have been restated.

(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.

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

Wrap account assets increased $5.4 billion, or 1%, during the three months ended September 30, 2021 due to net inflows of $9.4 billion, partially offset by market depreciation of $4.0 billion.

Average advisory wrap account assets increased $105.5 billion, or 32%, compared to the prior year period reflecting market appreciation and net inflows.

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

Wrap account assets decreased $17.7 billion, or 4%, during the three months ended March 31, 2022 due to market depreciation of $26.4 billion, partially offset by net inflows of $8.7 billion.

Average advisory wrap account assets increased $66.4 billion, or 18%, compared to the prior year period primarily reflecting net inflows, along with market appreciation.

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

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

11 unchanged sentences

Adjusted operating earnings $ 440 $ 389 $ 51 13 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $139 million, or 43%, to $459 million for the three months ended September 30, 2021 compared to $320 million for the prior year period reflecting higher average wrap account balances due to net inflows and market appreciation and improved transactional activity.

Pretax adjusted operating margin was 22.4% for the three months ended September 30, 2021 compared to 19.2% for the prior year period.

Ameriprise Bank, FSB has continued to add deposits, with $9.8 billion of cash sweep balances as of September 30, 2021.

In the fourth quarter of 2020, we acquired $224 million in an existing portfolio of brokerage client pledged asset lines of credit which has grown to over $408 million as of September 30, 2021.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $51 million, or 13%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting higher average wrap account balances due to net inflows, market appreciation, and increased bank profitability.

Pretax adjusted operating margin was 21.5% for the three months ended March 31, 2022 compared to 20.7% for the prior year period.

Cash balances increased $5.3 billion to $45.7 billion contrary to normal seasonal patterns in the first quarter.

Ameriprise Bank, FSB is continuing its deposit growth trend, with cash sweep balances increasing $5.2 billion from the prior year period to $13.2 billion and brokerage client pledged asset lines of credit increasing to $520 million as of March 31, 2022.

Management and financial advice fees increased $175 million, or 15%, for the three months ended March 31, 2022 compared to the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $66.4 billion, or 18%, compared to the prior year period reflecting net inflows and market appreciation.

Distribution fees decreased $30 million, or 5%, for the three months ended March 31, 2022 compared to the prior year period reflecting decreased transactional activity, partially offset by higher average equity markets.

AMERIPRISE FINANCIAL, INC.

Net revenues exclude net realized investment gains or losses.

Net revenues increased $381 million, or 23%, to $2.0 billion for the three months ended September 30, 2021 compared to $1.7 billion for the prior year period.

Adjusted operating net revenue per advisor increased to $203,000 for the three months ended September 30, 2021, up 21%, compared to $168,000 for the prior year period.

Management and financial advice fees increased $297 million, or 28%, to $1.4 billion for the three months ended September 30, 2021 compared to $1.1 billion for the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $105.5 billion, or 32%, compared to the prior year period reflecting market appreciation and net inflows.

Distribution fees increased $82 million, or 17%, to $561 million for the three months ended September 30, 2021 compared to $479 million for the prior year period reflecting increased transactional activity and higher average equity markets.

Net investment income, which excludes net realized investment gains or losses, decreased $8 million, or 11%, to $62 million for the three months ended September 30, 2021 compared to $70 million for the prior year period primarily due to lower certificate balances and the unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificate and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $7 million, or 70%, to $3 million for the three months ended September 30, 2021 compared to $10 million for the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses increased $242 million, or 18%, to $1.6 billion for the three months ended September 30, 2021 compared to $1.3 billion for the prior year period.

Distribution expenses increased $240 million, or 24%, to $1.2 billion for the three months ended September 30, 2021 compared to $998 million for the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets and increased transactional activity.

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

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

Distribution expenses increased $97 million, or 9%, for the three months ended March 31, 2022 compared to the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets, partially offset by decreased transactional activity.

General and administrative expense increased $16 million, or 5%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting higher volume related expenses.

Asset Management

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

Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted 1 year 3 year 5 year 10 year

The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds, including recently acquired BMO branded funds, as of March 31, 2022:

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

1 year 3 year 5 year 10 year

Equity 28% 81% 85% 88%

1 unchanged sentence

Asset Allocation 45% 80% 86% 91%

4- or 5-star Morningstar rated funds Overall 3 year 5 year 10 year

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

Overall 3 year 5 year 10 year

Number of rated funds 129 108 104 104

6 unchanged sentences

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

AMERIPRISE FINANCIAL, INC.

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

Out of 95 Columbia funds (Institutional shares) rated, 13 received a 5-star Overall Rating and 39 received a 4-star Overall Rating.

Out of 92 Threadneedle funds (highest rated share class) rated, 18 received a 5-star Overall Rating and 32 received a 4-star Overall Rating.

Out of 63 BMO branded funds (highest rated share class) rated, 6 received a 5-star Overall Rating and 21 received a 4-star Overall Rating.

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

The following table presents global managed assets by type:

As of September 30,

Change Three Months Ended September 30,

As of March 31,

Change Three Months Ended March 31,

(in billions)

1 unchanged sentence

Fixed income 256.5 194.3 62.2 32 267.2 195.2 72.0 37

Money market 5.8 5.1 0.7 14 5.9 5.1 0.8 16

Money market 12.9 5.8 7.1 NM 11.8 5.9 5.9 NM

Alternative 40.2 22.9 17.3 76 40.1 22.7 17.4 77

1 unchanged sentence

Total managed assets (2)

$ 698.6 $ 564.1 $ 134.5 24 % $ 721.2 $ 553.5 $ 167.7 30 %

NM Not Meaningful.

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

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

Prior periods have been restated to reflect this change.

AMERIPRISE FINANCIAL, INC.

The following table presents the changes in global managed assets:

Three Months Ended September 30,

Three Months Ended March 31,

(in billions)

21 unchanged sentences

$ (0.7) $ (1.3)

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

Total AUM as of January 1, 2022 remained unchanged.

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

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

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

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

(4) Global Institutional inflows and outflows include net flows from our RiverSource Structured Annuity product and Ameriprise Bank, FSB.

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

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

AMERIPRISE FINANCIAL, INC.

Total segment AUM decreased $10.0 billion, or 2%, during the three months ended September 30, 2021.

Net inflows were $3.9 billion in the third quarter of 2021, a $5.5 billion increase compared to the prior year period.

Global retail net inflows were $1.8 billion.

Total segment AUM decreased $55.5 billion, or 7%, during the three months ended March 31, 2022.

Net outflows were $0.7 billion in the first quarter of 2022, a $5.6 billion decrease compared to the prior year period.

Global retail net outflows were $1.9 billion.

Global institutional net inflows were $1.2 billion and included $0.7 billion of outflows from legacy insurance partners assets.

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

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

13 unchanged sentences

NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $87 million, or 44%, to $285 million for the three months ended September 30, 2021 compared to $198 million for the prior year period primarily due to a higher level of average AUM from market appreciation and net inflows, as well as higher performance fees.

Net revenues, which exclude net realized investment gains or losses, increased $176 million, or 24%, to $915 million for the three months ended September 30, 2021 compared to $739 million for the prior year period.

Management and financial advice fees increased $153 million, or 24%, to $794 million for the three months ended September 30, 2021 compared to $641 million for the prior year period primarily due to higher average equity markets, the impact from net inflows and $13 million of performance fees.

Distribution fees increased $16 million, or 15%, to $120 million for the three months ended September 30, 2021 compared to $104 million for the prior year period primarily due to higher average equity markets.

Net investment income, which excludes net realized investment gains or losses, increased $7 million to $1 million for the three months ended September 30, 2021 compared to a loss of $6 million for the prior year period primarily reflecting an impairment of an investment in the year ago period.

Total expenses increased $89 million, or 16%, to $630 million for the three months ended September 30, 2021 compared to $541 million for the prior year period.

Distribution expenses increased $48 million, or 20%, to $288 million for the three months ended September 30, 2021 compared to $240 million for the prior year period reflecting higher average equity markets.

General and administrative expense increased $41 million, or 14%, to $338 million for the three months ended September 30, 2021 compared to $297 million for the prior year period primarily reflecting higher performance-based compensation expenses related to stronger business performance and the impact of foreign exchange rates.

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

Management and financial advice fees increased $185 million, or 26%, for the three months ended March 31, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business, $53 million of higher performance fees, higher average equity markets, and the cumulative impact from net inflows.

Distribution expenses increased $9 million, or 3%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting higher average equity markets.

General and administrative expense increased $123 million, or 38%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business and higher performance fee related compensation expenses.

AMERIPRISE FINANCIAL, INC.

1 unchanged sentence

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

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

14 unchanged sentences

Total expenses 581 604 (23) (4)

Adjusted operating earnings $ 187 $ (89) $ 276 NM

NM Not Meaningful.

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on non-traditional long-duration products (including variable annuity contracts and IUL contracts, net of hedges and the related DSIC and DAC amortization, unearned amortization and the reinsurance accrual), mean reversion related impacts, and block transfer reinsurance transaction impacts increased $276 million to $187 million for the three months ended September 30, 2021 compared to a loss of $89 million for the prior year period.

Variable annuity account balances increased 12% to $89.6 billion as of September 30, 2021 compared to the prior year period due to market appreciation, partially offset by net outflows of $1.8 billion.

Variable annuity sales increased 28% compared to the prior year period reflecting an increase in sales of structured variable annuities.

Sales of variable annuities without living benefit guarantees comprised 72% of total variable annuity sales for the three months ended September 30, 2021 compared to 56% for the prior year period.

Adjusted operating earnings $ 191 $ 183 $ 8 4 %

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

Variable annuity account balances decreased 1% to $85.8 billion as of March 31, 2022 compared to the prior year period due to net outflows of $1.9 billion, partially offset by market appreciation.

Variable annuity sales decreased 27% compared to the prior year period reflecting a decrease in sales of variable annuities with living benefit guarantees.

The risk profile of our in force block continues to improve, with account values with living benefit riders down to 60% as of March 31, 2022 compared to 63% a year ago.

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

Management and financial advice fees increased $26 million, or 12%, to $239 million for the three months ended September 30, 2021 compared to $213 million for the prior year period primarily due to market appreciation, partially offset by variable annuity net outflows.

Distribution fees increased $14 million, or 13%, to $125 million for the three months ended September 30, 2021 compared to $111 million for the prior year period due to higher average equity markets.

Distribution expenses increased $24 million, or 22%, to $134 million for the three months ended September 30, 2021 compared to $110 million for the prior year period primarily reflecting higher average equity markets and increased variable annuity and insurance sales.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, decreased $98 million, or 23%, to $323 million for the three months ended September 30, 2021 compared to $421 million for the prior year period primarily reflecting the impact of unlocking.

The unlocking impact for the third quarter of 2021 was an expense of $89 million

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

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

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

Net investment income, which excludes net realized investment gains or losses, decreased $12 million, or 10%, for the three months ended March 31, 2022 compared to the prior year period primarily due to lower yields on the investment portfolio.

Distribution expenses decreased $10 million, or 8%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting decreased variable annuity sales.

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 $10 million for the three months ended March 31, 2022 compared to the prior year period primarily reflecting lower than expected client exit rates.

AMERIPRISE FINANCIAL, INC.

primarily reflecting continued lower surrender rates compared to an expense of $189 million in the prior year period 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 $152 million to $5 million for the three months ended September 30, 2021 compared to $157 million for the prior year period reflecting the impact of unlocking primarily due to lower surrender rates, partially offset by a higher level of normalized amortization.

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

Corporate & Other

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

Three Months Ended September 30,

Three Months Ended March 31,

(in millions)

7 unchanged sentences

Interest credited to fixed accounts 61 61 — —

Benefits, claims, losses and settlement expenses 59 204 (145) (71)

Amortization of deferred acquisition costs 1 (2) 3 NM

Benefits, claims, losses and settlement expenses 54 13 41 NM

Amortization of deferred acquisition costs 3 4 (1) (25)

Interest and debt expense 16 15 1 7

1 unchanged sentence

Total expenses 192 160 32 20

Adjusted operating loss $ (81) $ (202) $ 121 60 %

Adjusted operating loss $ (76) $ (21) $ (55) NM

NM Not Meaningful.

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

Our Corporate & Other segment 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 $121 million, or 60%, to $81 million for the three months ended September 30, 2021 compared to $202 million for the prior year period primarily reflecting the impact of unlocking and loss recognition.

LTC insurance had a pretax adjusted operating loss of $1 million for the three months ended September 30, 2021 compared to a pretax adjusted operating loss of $135 million for the prior year period reflecting the return to more normalized results compared to the COVID-19 related impacts in the year ago period, the $141 million unfavorable impact from unlocking and loss recognition in the prior year period and a net favorable out-of-period correction of $8 million.

FA business had a pretax adjusted operating loss of $7 million for the three months ended September 30, 2021 compared to a pretax adjusted operating loss of $9 million.

Fixed deferred annuity account balances declined 4% to $7.7 billion as of September 30, 2021 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities and fixed index annuities due to the low interest rate environment.

Our Corporate & Other segment pretax adjusted operating loss increased $55 million, for the three months ended March 31, 2022 compared to the prior year period.

LTC insurance had a pretax adjusted operating earnings of $1 million for the three months ended March 31, 2022 compared to pretax adjusted operating earnings of $46 million for the prior year period reflecting the return to more normalized results compared to the COVID-19 related impacts in the year ago period.

FA business had a pretax adjusted operating loss of $5 million for the three months ended March 31, 2022 compared to a pretax adjusted operating loss of $4 million.

Fixed deferred annuity account balances declined 4% to $7.5 billion as of March 31, 2022 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities.

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

See Note 1 for more information on the reinsurance transaction.

AMERIPRISE FINANCIAL, INC.

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, block transfer reinsurance transaction impacts, integration and restructuring charges, and the impact of consolidating CIEs, decreased $62 million, or 67%, to $31 million for the three months ended September 30, 2021 compared to $93 million for the prior year period 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.

Other revenues increased $43 million to $56 million for the three months ended September 30, 2021 compared to $13 million for the prior year period 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 $145 million, or 71%, to $59 million for the three months ended September 30, 2021 compared to $204 million for the prior year period primarily reflecting the impacts from unlocking and loss recognition.

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

Consolidated Results of Operations for the Nine Months Ended September 30, 2021 and 2020

The following table presents our consolidated results of operations:

Nine Months Ended September 30,

(in millions)

Management and financial advice fees $ 6,720 $ 5,365 $ 1,355 25 %

Distribution fees 1,368 1,239 129 10

Net investment income 1,428 933 495 53

Premiums, policy and contract charges (94) 1,019 (1,113) NM

Other revenues 259 213 46 22

Total revenues 9,681 8,769 912 10

Banking and deposit interest expense 10 53 (43) (81)

Total net revenues 9,671 8,716 955 11

Distribution expenses 3,693 2,963 730 25

Interest credited to fixed accounts 455 523 (68) (13)

Benefits, claims, losses and settlement expenses 338 824 (486) (59)

Amortization of deferred acquisition costs 77 349 (272) (78)

Interest and debt expense 149 124 25 20

General and administrative expense 2,475 2,292 183 8

Total expenses 7,187 7,075 112 2

Pretax income

2,484 1,641 843 51

Income tax provision 425 284 141 50

Net income $ 2,059 $ 1,357 $ 702 52 %

NM Not Meaningful.

Pretax income increased $843 million, or 51%, to $2.5 billion for the nine months ended September 30, 2021 compared to $1.6 billion for the prior year period.

• The favorable impact of the block transfer reinsurance transaction was $521 million for the nine months ended September 30, 2021 primarily reflecting the net realized gains on the investments sold to the reinsurer.

• The favorable impact of unlocking and LTC loss recognition was $17 million for the nine months ended September 30, 2021 compared to an unfavorable impact of $454 million for the prior year period.

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

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

AMERIPRISE FINANCIAL, INC.

• The mean reversion related impact was a benefit of $107 million for the nine months ended September 30, 2021 compared to an expense of $30 million for the prior year period.

• The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was an expense of $577 million for the nine months ended September 30, 2021 compared to a benefit of $239 million for the prior year period.

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

See our Consolidated Results of Operations for the three months ended September 30, 2021 and 2020 for a table and discussion of total pretax impacts on our revenues and expenses attributable to unlocking and LTC loss recognition.

Net revenues increased $1.0 billion, or 11%, to $9.7 billion for the nine months ended September 30, 2021 compared to $8.7 billion for the prior year period.

Management and financial advice fees increased $1.4 billion, or 25%, to $6.7 billion for the nine months ended September 30, 2021 compared to $5.4 billion for the prior year period reflecting higher average equity markets and higher wrap account net inflows, an increase in performance fees of $16 million and an unfavorable $19 million performance fee correction in the prior year period.

Distribution fees increased $129 million, or 10%, to $1.4 billion for the nine months ended September 30, 2021 compared to $1.2 billion for the prior year period due to higher average equity markets and increased transactional activity, partially offset by $55 million of lower fees on off-balance sheet brokerage cash primarily due to a decrease in short-term interest rates.

Net investment income increased $495 million, or 53%, to $1.4 billion for the nine months ended September 30, 2021 compared to $933 million for the prior year period primarily reflecting:

• Net realized investment gains of $627 million for the nine months ended September 30, 2021 compared to net realized investment losses of $18 million for the prior year period.

Net realized investment gains for the nine months ended September 30, 2021 included net realized gains of $553 million on Available-for-Sale securities and a $55 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 $42 million in net investment income of CIEs

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

• A $40 million unfavorable change in the market impact of hedges to offset interest rate and currency changes on certain investments.

• 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.

Premiums, policy and contract charges decreased $1.1 billion, to an expense of $94 million for the nine months ended September 30, 2021 compared to $1.0 billion for the prior year period primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance transaction for life contingent immediate annuity policies.

Other revenues increased $46 million, or 22%, to $259 million for the nine months ended September 30, 2021 compared to $213 million for the prior year period primarily reflecting the yield on deposit receivables.

Banking and deposit interest expense decreased $43 million, or 81%, to $10 million for the nine months ended September 30, 2021 compared to $53 million for the prior year period due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses increased $112 million, or 2%, to $7.2 billion for the nine months ended September 30, 2021 compared to $7.1 billion for the prior year period.

Distribution expenses increased $730 million, or 25%, to $3.7 billion for the nine months ended September 30, 2021 compared to $3.0 billion for the prior year period reflecting higher advisor compensation due to an increase in average wrap account balances and increased transactional activity.

AMERIPRISE FINANCIAL, INC.

Interest credited to fixed accounts decreased $68 million, or 13%, to $455 million for the nine months ended September 30, 2021 compared to $523 million for the prior year period primarily reflecting the following items:

• A $39 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The unfavorable impact of the nonperformance credit spread was $16 million for the nine months ended September 30, 2021 compared to a favorable impact of $23 million for the prior year period.

• A $98 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $45 million for the nine months ended September 30, 2021 compared to an expense of $53 million for the prior year period.

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

Benefits, claims, losses and settlement expenses decreased $486 million to $338 million for the nine months ended September 30, 2021 compared to $824 million for the prior year period primarily reflecting the following items:

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

• A $687 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 $157 million for the nine months ended September 30, 2021 and was driven by changes in the undiscounted embedded derivative liability compared to a favorable impact of $530 million for the prior year period.

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

• A $342 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 $3.9 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits, partially offset by a favorable $3.5 billion change in the market impact on variable annuity guaranteed living benefits reserves.

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

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

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

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

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

• The impact of unlocking excluding LTC was an expense of $59 million for the nine months ended September 30, 2021 compared to an expense of $212 million for the prior year period.

• The mean reversion related impact was a benefit of $65 million for the nine months ended September 30, 2021 compared to an expense of $21 million for the prior year period.

Amortization of DAC decreased $272 million, or 78%, to $77 million for the nine months ended September 30, 2021 compared to $349 million for the prior year period primarily reflecting the following items:

• The impact of unlocking in the third quarter of 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 $42 million for the nine months ended September 30, 2021 compared to an expense of $89 million for the prior year period.

• The mean reversion related impact was a benefit of $41 million for the nine months ended September 30, 2021 compared to an expense of $9 million for the prior year period.

• 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 $25 million, or 20%, to $149 million for the nine months ended September 30, 2021 compared to $124 million for the prior year period primarily due to an increase in interest expense of CIEs.

AMERIPRISE FINANCIAL, INC.

General and administrative expense increased $183 million, or 8%, to $2.5 billion for the nine months ended September 30, 2021 compared to $2.3 billion for the prior year period primarily reflecting higher performance related compensation, higher expenses from CIEs, an unfavorable foreign exchange impact, and higher volume related expenses, partially offset by disciplined expense management and reengineering.

Our effective tax rate was 17.1% for the nine months ended September 30, 2021 compared to 17.4% for the prior year period.

See Note 16 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment for the Nine Months Ended September 30, 2021 and 2020

The following table presents summary financial information by segment:

Nine Months Ended September 30,

(in millions)

Advice & Wealth Management

Net revenues $ 5,907 $ 4,899

Expenses 4,636 3,930

Adjusted operating earnings $ 1,271 $ 969

Asset Management

Net revenues $ 2,622 $ 2,093

Expenses 1,856 1,597

Adjusted operating earnings $ 766 $ 496

Retirement & Protection Solutions

Net revenues $ 2,429 $ 2,295

Expenses 1,877 1,995

Adjusted operating earnings $ 552 $ 300

Corporate & Other

Net revenues $ 371 $ 412

Expenses 550 721

Adjusted operating loss $ (179) $ (309)

Advice & Wealth Management

The following table presents the changes in wrap account assets and average balances for the nine months ended September 30:

(in billions)

Beginning balance $ 380.0 $ 317.5

Net flows (1)

Market appreciation (depreciation) and other (1)

Ending balance $ 435.4 $ 340.0

Advisory wrap account assets ending balance (2)

$ 430.5 $ 336.0

Average advisory wrap account assets (3)

$ 406.6 $ 309.8

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

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

Prior periods have been restated.

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

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

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

Wrap account assets increased $55.4 billion, or 15%, during the nine months ended September 30, 2021 due to net inflows of $29.9 billion and market appreciation and other of $25.5 billion.

Average advisory wrap account assets increased $96.8 billion, or 31%, compared to the prior year period primarily reflecting market appreciation and net inflows.

AMERIPRISE FINANCIAL, INC.

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

Nine Months Ended September 30,

(in millions)

Management and financial advice fees $ 3,878 $ 3,070 $ 808 26 %

Distribution fees 1,682 1,480 202 14

Net investment income 189 247 (58) (23)

Other revenues 168 155 13 8

Total revenues 5,917 4,952 965 19

Banking and deposit interest expense 10 53 (43) (81)

Total net revenues 5,907 4,899 1,008 21

Distribution expenses 3,567 2,881 686 24

Interest and debt expense 8 8 — —

General and administrative expense 1,061 1,041 20 2

Total expenses 4,636 3,930 706 18

Adjusted operating earnings $ 1,271 $ 969 $ 302 31 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $302 million, or 31%, to $1.3 billion for the nine months ended September 30, 2021 compared to $969 million for the prior year period due to higher average wrap account balances and increased transactional activity, partially offset by lower earnings on brokerage cash as a result of low interest rates.

Pretax adjusted operating margin was 21.5% for the for the nine months ended September 30, 2021 compared to 19.8% for the prior year period.

Net revenues exclude net realized investment gains or losses.

Net revenues increased $1.0 billion, or 21%, to $5.9 billion for the nine months ended September 30, 2021 compared to $4.9 billion for the prior year period.

Management and financial advice fees increased $808 million, or 26%, to $3.9 billion for the nine months ended September 30, 2021 compared to $3.1 billion for the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $96.8 billion, or 31%, compared to the prior year period primarily reflecting market appreciation and net inflows.

Distribution fees increased $202 million, or 14%, to $1.7 billion for the nine months ended September 30, 2021 compared to $1.5 billion for the prior year period reflecting increased transactional activity and higher average equity markets, partially offset by $55 million of lower fees on off-balance sheet brokerage cash due to a decrease in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, decreased $58 million, or 23%, to $189 million for the nine months ended September 30, 2021 compared to $247 million for the prior year period primarily due to lower certificate balances and the unfavorable impact of continued low interest rates, including lower investment yields on the investment portfolio supporting the certificates and on-balance sheet brokerage cash products, partially offset by higher average invested assets due to increased bank deposits.

Banking and deposit interest expense decreased $43 million, or 81%, to $10 million for the nine months ended September 30, 2021 compared to $53 million for the prior year period primarily due to lower average crediting rates on certificates and lower average certificate balances.

Total expenses increased $706 million, or 18%, to $4.6 billion for the nine months ended September 30, 2021 compared to $3.9 billion for the prior year period.

Distribution expenses increased $686 million, to $3.6 billion for the nine months ended September 30, 2021 compared to $2.9 billion for the prior year period reflecting higher asset-based advisor compensation from higher wrap account assets and increased transactional activity, as well as increased investments in recruiting experienced advisors.

General and administrative expense increased $20 million, or 2%, to $1.1 billion for the nine months ended September 30, 2021 compared to $1.0 billion for the prior year period primarily due to higher volume related expenses and higher performance-based compensation expenses.

AMERIPRISE FINANCIAL, INC.

Asset Management

The following table presents global managed assets by type:

As of September 30,

Change Nine Months Ended September 30,

(in billions)

Equity $ 332.7 $ 264.8 $ 67.9 26 % $ 326.3 $ 252.5 $ 73.8 29 %

Fixed income 199.3 188.8 10.5 6 198.9 183.2 15.7 9

Money market 5.8 5.1 0.7 14 5.9 5.0 0.9 18

Alternative 3.8 3.5 0.3 9 3.8 3.1 0.7 23

Hybrid and other 41.8 35.8 6.0 17 40.8 35.0 5.8 17

Total managed assets $ 583.4 $ 498.0 $ 85.4 17 % $ 575.7 $ 478.8 $ 96.9 20 %

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

The following table presents the changes in global managed assets:

Nine Months Ended September 30,

(in billions)

Global Retail Funds

Beginning assets $ 323.5 $ 287.5

Inflows 58.4 47.8

Outflows (50.2) (47.5)

Net VP/VIT fund flows (3.1) (2.0)

Net new flows 5.1 (1.7)

Reinvested dividends 5.5 3.9

Net flows 10.6 2.2

Distributions (6.4) (4.5)

Market appreciation (depreciation) and other 29.0 4.6

Foreign currency translation (1)

Total ending assets 355.7 289.9

Global Institutional

Beginning assets 223.1 206.8

(21.6) (25.5)

Net flows 4.9 (3.5)

Market appreciation (depreciation) and other (3)

Foreign currency translation (1)

Total ending assets 227.7 208.1

Total managed assets $ 583.4 $ 498.0

Total net flows $ 15.5 $ (1.3)

Legacy insurance partners net flows (4)

$ (4.0) $ (3.4)

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

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

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

AMERIPRISE FINANCIAL, INC.

Total segment AUM increased $36.8 billion, or 7%, during the nine months ended September 30, 2021.

Net flows were $15.5 billion for the nine months ended September 30, 2021, a $16.8 billion improvement compared to the prior year period.

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

Nine Months Ended September 30,

(in millions)

Management and financial advice fees $ 2,265 $ 1,794 $ 471 26 %

Distribution fees 352 303 49 16

Net investment income 4 (5) 9 NM

Other revenues 1 1 — —

Total revenues 2,622 2,093 529 25

Banking and deposit interest expense — — — —

Total net revenues 2,622 2,093 529 25

Distribution expenses 838 691 147 21

Amortization of deferred acquisition costs 9 8 1 13

Interest and debt expense 3 4 (1) (25)

General and administrative expense 1,006 894 112 13

Total expenses 1,856 1,597 259 16

Adjusted operating earnings $ 766 $ 496 $ 270 54 %

NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $270 million, or 54%, to $766 million for the nine months ended September 30, 2021 compared to $496 million for the prior year period primarily due to market appreciation and disciplined expense management.

Net revenues, which exclude net realized investment gains or losses, increased $529 million, or 25%, to $2.6 billion for the nine months ended September 30, 2021 compared to $2.1 billion for the prior year period.

Management and financial advice fees increased $471 million, or 26%, to $2.3 billion for the nine months ended September 30, 2021 compared to $1.8 billion for the prior year period primarily due to higher average equity markets, an increase in performance fees of $16 million, an unfavorable $19 million performance fee correction in the prior year period, and a favorable impact of foreign exchange rates.

Distribution fees increased $49 million, or 16%, to $352 million for the nine months ended September 30, 2021 compared to $303 million for the prior year period primarily due to higher average equity markets.

Net investment income, which excludes net realized investment gains or losses, increased $9 million to $4 million for the nine months ended September 30, 2021 compared to a loss of $5 million for the prior year period primarily reflecting an impairment of an investment in the year ago period.

Total expenses increased $259 million, or 16%, to $1.9 billion for the nine months ended September 30, 2021 compared to $1.6 billion for the prior year period.

Distribution expenses increased $147 million, or 21%, to $838 million for the nine months ended September 30, 2021 compared to $691 million for the prior year period reflecting higher average equity markets.

General and administrative expense increased $112 million, or 13%, to $1.0 billion for the nine months ended September 30, 2021 compared to $894 million for the prior year period primarily reflecting higher compensation expenses related to stronger business performance, higher volume related expenses, and the negative impact of foreign exchange rates.

AMERIPRISE FINANCIAL, INC.

Retirement & Protection Solutions

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

Nine Months Ended September 30,

(in millions)

Management and financial advice fees $ 695 $ 612 $ 83 14 %

Distribution fees 363 322 41 13

Net investment income 367 380 (13) (3)

Premiums, policy and contract charges 1,001 978 23 2

Other revenues 3 3 — —

Total revenues 2,429 2,295 134 6

Banking and deposit interest expense — — — —

Total net revenues 2,429 2,295 134 6

Distribution expenses 397 331 66 20

Interest credited to fixed accounts 293 297 (4) (1)

Benefits, claims, losses and settlement expenses 798 878 (80) (9)

Amortization of deferred acquisition costs 138 241 (103) (43)

Interest and debt expense 28 29 (1) (3)

General and administrative expense 223 219 4 2

Total expenses 1,877 1,995 (118) (6)

Adjusted operating earnings $ 552 $ 300 $ 252 84 %

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the related DAC amortization, unearned revenue amortization and the reinsurance accrual), the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization), the market impact on IUL benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual), mean reversion related impacts, and block transfer reinsurance transaction impacts increased $252 million, or 84%, to $552 million for the nine months ended September 30, 2021 compared to $300 million for the prior year period.

Management and financial advice fees increased $83 million, or 14%, to $695 million for the nine months ended September 30, 2021 compared to $612 million for the prior year period primarily due to market appreciation, partially offset by variable annuity net outflows.

Distribution fees increased $41 million, or 13%, to $363 million for the nine months ended September 30, 2021 compared to $322 million for the prior year period due to higher average equity markets.

Distribution expenses increased $66 million, or 20%, to $397 million for the nine months ended September 30, 2021 compared to $331 million for the prior year period primarily reflecting market appreciation and higher variable annuity and insurance sales.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC amortization) and mean reversion related impacts, decreased $80 million, or 9%, to $798 million for the nine months ended September 30, 2021 compared to $878 million for the prior year period primarily reflecting the impact of unlocking, partially offset by higher reserve funding as surrenders and withdrawals returned to more normalized levels versus the historically low levels experienced in the prior year period.

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

Amortization of DAC, which excludes mean reversion related impacts and the DAC offset to the market impact on variable annuity guaranteed benefits, decreased $103 million, or 43%, to $138 million for the nine months ended September 30, 2021 compared to $241 million for the prior year period reflecting the impact of unlocking due to lower surrender rates, partially offset by a higher level of normalized amortization.

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

AMERIPRISE FINANCIAL, INC.

Corporate & Other

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

Nine Months Ended September 30,

(in millions)

Net investment income $ 210 $ 285 $ (75) (26) %

Premiums, policy and contract charges 75 76 (1) (1)

Other revenues 87 53 34 64

Total revenues 372 414 (42) (10)

Banking and deposit interest expense 1 2 (1) (50)

Total net revenues 371 412 (41) (10)

Distribution expenses (6) (5) (1) (20)

Interest credited to fixed accounts 187 196 (9) (5)

Benefits, claims, losses and settlement expenses 126 305 (179) (59)

Amortization of deferred acquisition costs 7 3 4 NM

Interest and debt expense 48 50 (2) (4)

General and administrative expense 188 172 16 9

Total expenses 550 721 (171) (24)

Adjusted operating loss $ (179) $ (309) $ 130 42 %

NM Not Meaningful.

Our Corporate & Other segment pretax adjusted operating loss excludes net realized investment gains or losses, the market impact on fixed index annuity benefits (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 impact, 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 $130 million, or 42%, to $179 million for the nine months ended September 30, 2021 compared to $309 million for the prior year period.

LTC insurance had a pretax adjusted operating earnings of $48 million for the nine months ended September 30, 2021 compared to a pretax adjusted operating loss of $116 million for the prior year period primarily reflecting the impact from unlocking and loss recognition in the prior year period.

FA business had a pretax adjusted operating loss of $17 million for the nine months ended September 30, 2021 compared to a pretax adjusted operating loss of $6 million for the prior year period reflecting fixed annuity net outflows and the impact of low interest rates.

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 $75 million, or 26%, to $210 million for the nine months ended September 30, 2021 compared to $285 million for the prior year period 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, and a $7 million impairment in our affordable housing partnerships, partially offset by a $15 million gain on a strategic investment.

Other revenues increased $34 million to $87 million for the nine months ended September 30, 2021 compared to $53 million for the prior year period 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 $179 million, or 59%, to $126 million for the nine months ended September 30, 2021 compared to $305 million for the prior year period primarily reflecting the impacts from unlocking and loss recognition and lower LTC insurance claims.

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

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, block transfer reinsurance transaction impacts, integration and restructuring charges, and the impact of consolidating CIEs, decreased $67 million, or 67%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting lower average invested assets due to the sale of investments to a reinsurer as a result of the fixed deferred and immediate annuity reinsurance transaction and a $15 million gain on a strategic investment in the prior year period.

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

AMERIPRISE FINANCIAL, INC.

General and administrative expense, which excludes integration and restructuring charges, increased $16 million, or 9%, to $188 million for the nine months ended September 30, 2021 compared to $172 million for the prior year period primarily due to an unfavorable change in the mark-to-market impact on share-based compensation expense due to share price appreciation.

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

General and administrative expense decreased $10 million, or 14%, for the three months ended March 31, 2022 compared to the prior year period primarily reflecting the unfavorable mark-to-market impact on share-based compensation expense in the prior year period.

Our primary market risk exposures are interest rate, equity price, foreign currency exchange rate and credit risk.

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

Our earnings from fixed insurance, fixed portion of variable annuities and variable insurance contracts, and the fixed deferred annuities are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts.

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

Our earnings from fixed insurance, the fixed portion of variable annuities and variable insurance contracts, and fixed deferred annuities are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts.

We primarily invest in fixed rate securities to fund the rate credited to clients.

6 unchanged sentences

This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business.

As a result of the low interest rate environment, our current reinvestment yields are generally lower than the current portfolio yield.

We expect our portfolio income yields to continue to decline in future periods if interest rates remain low.

The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through September 30, 2023 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $2.5 billion and 1.8%, respectively, as of September 30, 2021.

In addition, residential mortgage backed securities, which are subject to prepayment risk as a result of the low interest rate environment, totaled $9.7 billion and had a weighted average yield of 1.4% as of September 30, 2021.

As a result of the current interest rate environment, our reinvestment yields are generally lower than the current portfolio yield.

We expect our portfolio income yields to continue to decline in future periods should interest rates remain comparatively low.

The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through March 31, 2024 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $2.5 billion and 1.9%, respectively, as of March 31, 2022.

In addition, residential mortgage backed securities, which could be subject to prepayment risk if the low interest rate environment continues, totaled $11.7 billion and had a weighted average yield of 1.8% as of March 31, 2022.

While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields.

1 unchanged sentence

Furthermore, reinvestment activities and the associated investment yield may also be impacted by corporate strategies implemented at management’s discretion.

The average yield for investment purchases during the nine months ended September 30, 2021 was approximately 1.3%.

The average yield for investment purchases during the three months ended March 31, 2022 was approximately 2.4%.

The reinvestment of proceeds from maturities, calls and prepayments at rates below the current portfolio yield, which may be below the level of some liability GMIRs, will have a negative impact to future operating results.

12 unchanged sentences

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

We assess the residual risk under a range of scenarios in creating and executing the macro hedge program.

We assess the residual risk under

AMERIPRISE FINANCIAL, INC.

a range of scenarios in creating and executing the macro hedge program.

As a means of economically hedging these risks, we may use a combination of futures, options, swaps and swaptions.

1 unchanged sentence

the remaining are interest rate contracts or equity contracts.

The macro hedge program

AMERIPRISE FINANCIAL, INC.

could result in additional earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory capital volatility, may not be closely aligned to changes in the variable annuity guarantee embedded derivatives.

The macro hedge program could result in additional earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory capital volatility, may not be closely aligned to changes in the variable annuity guarantee embedded derivatives.

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

1 unchanged sentence

The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months.

In estimating the values of variable annuities, fixed deferred indexed annuities, stock market certificates, IUL insurance and the associated hedge assets, we assume no change in implied market volatility despite the 10% drop in equity prices.

The following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of September 30, 2021:

In estimating the values of variable annuities, indexed annuities, stock market certificates, indexed universal life (“IUL”) insurance and the associated hedge assets, we assume no change in implied market volatility despite the 10% drop in equity prices.

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

Equity Price Decline 10% Equity Price Exposure to Pretax Income

6 unchanged sentences

GMDB and GMIB (3)

(391) 318 (73)

GMAB (27) 28 1

28 unchanged sentences

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

AMERIPRISE FINANCIAL, INC.

(3) In estimating the impact to pretax income on DAC and DSIC amortization and additional insurance benefit reserves, our assumed equity asset growth rates reflect what management would follow in its mean reversion guidelines.

(4) Market impact on DAC and DSIC amortization related to variable annuity riders is modeled net of hedge impact.

AMERIPRISE FINANCIAL, INC.

(5) The market impact of the macro hedge program is modeled net of any related impact to DAC and DSIC amortization.

2 unchanged sentences

The above results compare to an estimated negative net impact to pretax income of $190 million related to a 10% equity price decline and an estimated positive net impact to pretax income of $80 million related to a 100 basis point increase in interest rates as of December 31, 2021.

The change in interest rate exposure as of September 30, 2021 compared to December 31, 2020 was driven by variable annuity riders, specifically GMWB, primarily due to changes in market rates.

The change in interest rate exposure as of March 31, 2022 compared to December 31, 2021 was driven by variable annuity riders, specifically GMWB, primarily due to changes in market rates.

Net impacts shown in the above table from GMWB riders result largely from differences between the liability valuation basis and the hedging basis.

1 unchanged sentence

Our hedging is based on our determination of economic risk, which excludes certain items in the liability valuation including the nonperformance spread risk.

Actual results could differ materially from those illustrated above as they are based on a number of estimates and assumptions.

Actual results will differ materially from those illustrated above as they are based on a number of estimates and assumptions.

These include assuming that implied market volatility does not change when equity prices fall by 10% and that the 100 basis point increase in interest rates is a parallel shift of the yield curve.

14 unchanged sentences

Since there is not a market for our obligations of our variable annuity riders, fixed deferred indexed annuities, structured variable annuities, and IUL insurance, we consider the assumptions participants in a hypothetical market would make to reflect an exit price.

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

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

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

Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of September 30, 2021.

Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of March 31, 2022.

As our estimate of this spread widens or tightens, the liability will decrease or increase.

If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to future net income would be approximately $365 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on September 30, 2021 credit spreads.

If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to future net income would be approximately $420 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on March 31, 2022 credit spreads.

Liquidity and Capital Resources

We maintained substantial liquidity during the nine months ended September 30, 2021.

At September 30, 2021 and December 31, 2020, we had $7.7 billion and $6.8 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At September 30, 2021 and December 31, 2020, the parent company had $2.2 billion and $1.1 billion, respectively, in cash, cash equivalents, and unencumbered liquid securities.

We maintained substantial liquidity during the three months ended March 31, 2022.

At March 31, 2022 and December 31, 2021, we had $6.6 billion and $7.1 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At March 31, 2022 and December 31, 2021, the parent company had $316 million and $841 million, respectively, in cash, cash equivalents, and unencumbered liquid securities.

Liquid securities predominantly include U.S.

government agency mortgage back securities.

Additional sources of liquidity include a line of credit with an affiliate up to $1.0 billion 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 September 30, 2021 was $3.7 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

Additional sources of liquidity include a line of credit with an affiliate up to $729 million and an unsecured revolving committed credit facility for up to $1.0 billion that expires in June 2026.

Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of March 31, 2022 was $1.5 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

AMERIPRISE FINANCIAL, INC.

Under the terms of the committed credit facility, we can increase the availability to $1.25 billion upon satisfaction of certain approval requirements.

Available borrowings under this facility are reduced by any outstanding letters of credit.

At September 30, 2021, we had

AMERIPRISE FINANCIAL, INC.

no outstanding borrowings under this credit facility and had $1.1 million of outstanding letters of credit.

At March 31, 2022, we had no outstanding borrowings under this credit facility and had $1 million of outstanding letters of credit.

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

We remain in compliance with all such covenants at September 30, 2021.

We remain in compliance with all such covenants at March 31, 2022.

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

Our subsidiaries, RiverSource Life, and Ameriprise Bank, FSB are members of the FHLB of Des Moines, which provides access to collateralized borrowings.

We had $200 million of borrowings from the FHLB, which is collateralized with commercial mortgage backed securities and residential mortgage backed securities for both September 30, 2021 and December 31, 2020.

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.

As of March 31, 2022 and December 31, 2021, we had $8.2 billion and $8.1 billion, respectively, under the FHLB facilities, of which $200 million was outstanding as of both March 31, 2022 and December 31, 2021, 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.

There have been no material changes to our contractual obligations disclosed in our 2021 10-K.

We repaid $500 million principal amount of its 3.0% senior notes at maturity on March 22, 2022.

See Note 10 to our Consolidated Financial Statements for further information about our long-term debt maturities.

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

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

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

We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the nine months ended September 30, 2021.

We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the three months ended March 31, 2022.

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 TAM UK International Holdings Ltd, which includes Threadneedle Asset Management Holdings Sàrl within its organizational structure.

(“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.

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Actual Capital Regulatory Capital Requirements

September 30, 2021

March 31, 2022

December 31, 2021

September 30, 2021

March 31, 2022

December 31, 2021

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TAM UK International Holdings Ltd (6)

577 N/A 208 N/A

Threadneedle Asset Management Holdings Sàrl (7)

N/A 445 N/A 204

321 330 241 248

Ameriprise Bank, FSB (4) (7)

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Columbia Management Investment Distributors, Inc.

Columbia Threadneedle Investments UK International Ltd.

337 348 165 170

N/A Not applicable as only required to be calculated annually.

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(1) Actual capital is determined on a statutory basis.

AMERIPRISE FINANCIAL, INC.

(2) Regulatory capital requirement is the company action level and is based on the statutory risk-based capital filing.

(3) Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of September 30, 2021 and December 31, 2020.

(3) Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of March 31, 2022 and December 31, 2021.

(4) Actual capital is determined on an adjusted GAAP basis.

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regulatory legislation.

The regulatory capital requirements at September 30, 2021 represent calculations at December 31, 2020 of the rule based requirements, as specified by FCA regulations for Threadneedle Asset Management Sàrl, which is used as a proxy for TAM UK International Holdings Ltd.

(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”).

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

regulatory legislation.

AMERIPRISE FINANCIAL, INC.

(8) 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.

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 nine months ended September 30, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of $3.0 billion (including $1.7 billion from RiverSource Life) and contributed cash to its subsidiaries of $158 million (including $42 million to Ameriprise Bank, FSB).

During the nine months ended September 30, 2020, the parent holding company received cash dividends or a return of capital from its subsidiaries of $1.5 billion (including $650 million from RiverSource Life) and contributed cash to its subsidiaries of $284 million (including $210 million to Ameriprise Bank, FSB).

During the three months ended March 31, 2022, the parent holding company received cash dividends or a return of capital from its subsidiaries of $777 million (including $300 million from RiverSource Life) and contributed cash to its subsidiaries of $129 million (including $95 million to Ameriprise Bank, FSB).

During the three months ended March 31, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of $621 million (including $250 million from RiverSource Life) and contributed cash to its subsidiaries of $34 million.

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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Dividends Paid to Shareholders and Share Repurchases

We paid regular quarterly dividends to our shareholders totaling $396 million and $386 million for the nine months ended September 30, 2021 and 2020, respectively.

On October 26, 2021, we announced a quarterly dividend of $1.13 per common share.

The dividend will be paid on November 19, 2021 to our shareholders of record at the close of business on November 8, 2021.

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

As of September 30, 2021, we had $932 million remaining under this share repurchase authorizations.

We paid regular quarterly dividends to our shareholders totaling $133 million and $129 million for the three months ended March 31, 2022 and 2021, respectively.

On April 25, 2022, we announced a quarterly dividend of $1.25 per common share.

The dividend will be paid on May 20, 2022 to our shareholders of record at the close of business on May 9, 2022.

In August 2020, the Company’s Board of Directors authorized us to repurchase up to $2.5 billion of our common stock through September 30, 2022.

In January 2022, the Company’s Board of Directors authorized an additional $3.0 billion for the repurchase of the Company’s common stock through March 31, 2024.

As of March 31, 2022, we had $3.0 billion remaining under these share repurchase authorizations.

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

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Acquisitions under the share repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means.

During the nine months ended September 30, 2021, we repurchased a total of 5.5 million shares of our common stock at an average price of $246.78 per share.

During the three months ended March 31, 2022, we repurchased a total of 1.4 million shares of our common stock at an average price of $299.14 per share.

Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities.

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Operating Activities

Net cash provided by operating activities decreased $3.9 billion to $1.8 billion for the nine months ended September 30, 2021 compared to $5.6 billion for the prior year period primarily reflecting a $2.1 billion decrease in policyholder account balances, future policy benefits and claims, net, a $613 million increase in net realized investment gains and a $555 million decrease in derivatives, net of collateral, partially offset by a $702 million increase in net income.

Net cash provided by operating activities increased $1.4 billion to $409 million for the three months ended March 31, 2022 compared to net cash used in operating activities of $1.0 billion for the prior year period primarily reflecting a $882 million increase in policyholder account balances, future policy benefits and claims, net, a $324 million increase in net income and a $222 million increase in cash related to brokerage deposits.

AMERIPRISE FINANCIAL, INC.

Investing Activities

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

Net cash used in investing activities decreased $1.0 billion to $1.4 billion for the nine months ended September 30, 2021 compared to $2.4 billion for the prior year period primarily reflecting a $2.4 billion increase in proceeds from maturities, sinking fund payments

AMERIPRISE FINANCIAL, INC.

and calls of Available-for-Sale securities, partially offset by a $1.1 billion decrease in proceeds from sales of Available-for-Sale securities and a $386 million increase in net cash flows related to investments of consolidated investment entities.

Net cash used in investing activities increased $856 million to $1.7 billion for the three months ended March 31, 2022 compared to $809 million for the prior year period primarily reflecting a $755 million decrease in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities, a $727 million increase in cash used for purchases of Available-for-Sale securities, partially offset by a $490 million decrease in net cash flows used related to investments of consolidated investment entities.

Financing Activities

Net cash provided by financing activities decreased $534 million to $259 million for the nine months ended September 30, 2021 compared to $793 million for the prior year period primarily reflecting a $964 million decrease in net cash flows from investment certificates, a $702 million increase in repayments of debt by consolidated investment entities, a $490 million decrease in issuance of long-term debt and a $431 million increase in repurchase of common shares, partially offset by a $993 million increase in borrowings by consolidated investment entities, a $754 million increase in repayments of long-term debt and a $623 million decrease in net cash flows related to purchased options with deferred premiums.

Contractual Commitments

There have been no material changes to our contractual obligations disclosed in our 2020 10-K.

Off-Balance Sheet Arrangements

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

We consolidate certain CLOs.

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

Our maximum exposure to loss with respect to our investment in these non-consolidated entities is limited to our carrying value.

We have no obligation to provide further financial or other support to these investment entities nor have we provided any support to these investment entities.

See Note 4 to our Consolidated Financial Statements for additional information on our arrangements with these investment entities.

Net cash provided by financing activities increased $85 million to $518 million for the three months ended March 31, 2022 compared to $433 million for the prior year period primarily reflecting a $1.2 billion increase in banking deposits, a $399 million reduction in net cash outflows from investment certificates, partially offset by a $797 million decrease in borrowings by CIEs and a $500 million increase in repayments of long-term debt.

Forward-Looking Statements

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• 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 retirement product sales business to lower risk products over time, such as products without living benefit guarantees;

• statements about the Company’s announced acquisition of BMO’s European-based asset management business, including the expected AUM of the acquired business;

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

• 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 outcomes from the application to convert Ameriprise Bank, FSB to a state-chartered bank and national trust bank or the anticipated deposit growth or impacts from possible future interest rate increases;

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

• statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case”, “appear”, “expand” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements.

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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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• the ability to maintain our unaffiliated third-party distribution channels and the impacts of sales of unaffiliated products;

AMERIPRISE FINANCIAL, INC.

• changes in valuation of securities and investments included in our assets;

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• inadequate reserves for future policy benefits and claims or for future redemptions and maturities;

AMERIPRISE FINANCIAL, INC.

• deviations from our assumptions regarding morbidity, mortality and persistency affecting our insurance profitability;

• 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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• changes in and the adoption of new accounting standards.

• changes that could give rise to our ability to recognize the expected benefits from the transaction with BMO Financial Group;

• regulatory, political, or business changes that could reduce our desire to convert Ameriprise Bank FSB to a state industrial bank and a national trust bank.

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-Q

Item 2. Management’s Discussion and Analysis