What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-02 compared with 2022-08-01 · 323 added, 244 removed, 757 unchanged (43% of the section changed)

5 unchanged sentences

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 June 30, 2022.

We are a long-standing leader in financial planning and advice with $1.1 trillion in assets under management and administration as of September 30, 2022.

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

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

We have been operating in a historically low interest rate environment and though short term rates have risen, remain in a low interest rate environment today with uncertainty about where rates will go in the future.

A lower 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.

We have been operating in a historically low interest rate environment but have recently experienced a substantial increase in rates with uncertainty about where rates will go in the future.

A higher (lower) interest rate environment may result in decreases (increases) to our reserves and changes in various rate assumptions we use to amortize DAC and DSIC, which may impact our adjusted operating earnings after tax.

For additional discussion on our interest rate risk, see Item 3.

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

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

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

These aforementioned changes are collectively referred to as unlocking.

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

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

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.

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For further information on CIEs, see Note 4 to our Consolidated Financial Statements.

The results of operations of the CIEs are reflected in the Corporate & Other segment.

The results of operations of the CIEs are reflected in the Corporate & Other

AMERIPRISE FINANCIAL, INC.

On a consolidated basis, the management fees we earn for the services we provide to the CIEs and the related general and administrative expenses are eliminated and the changes in the fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in net investment income.

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While our consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the related DSIC

AMERIPRISE FINANCIAL, INC.

and DAC amortization, unearned revenue amortization and the reinsurance accrual;

generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual;

the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and universal life (“UL”) insurance contracts, net of hedges and the related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual;

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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;

block transfer reinsurance transaction impacts;

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

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Per Diluted Share

Three Months Ended June 30,

Three Months Ended September 30,

(in millions, except per share amounts)

8 unchanged sentences

Market impact of hedges on investments (1)

Block transfer reinsurance transaction impacts (1)

Integration/restructuring charges (1)

9 unchanged sentences

Per Diluted Share

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions, except per share amounts)

7 unchanged sentences

Market impact of hedges on investments (1)

Block transfer reinsurance transaction impacts (1)

Integration/restructuring charges (1)

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

Twelve Months Ended June 30,

Twelve Months Ended September 30,

(in millions)

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mean reversion related impacts;

block transfer reinsurance transaction impacts;

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

block transfer reinsurance transaction impacts;

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

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Economic Environment

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

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

The following table presents relevant market indices:

Three months ended June 30,

Six Months Ended June 30,

Three months ended September 30,

Nine Months Ended September 30,

Daily average 3,983 4,425 (10)% 4,185 4,158 1%

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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 on our financial condition and results of operations, and potentially material effects, see Part 1 - Item 1A “Risk Factors” of our 2021 10-K.

For further information regarding the impact of the economic environment on our results of operations and financial condition, and potentially material effects, see Part 1 - Item 1A “Risk Factors” of our 2021 10-K.

AMERIPRISE FINANCIAL, INC.

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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 $ 1,101.5 $ 1,206.3 $ (104.8) (9) %

Total AUM decreased $20.8 billion, or 2%, to $957.2 billion as of June 30, 2022 compared to $978.0 billion as of June 30, 2021 due to a $30.2 billion decrease in Advice & Wealth Management AUM driven by equity market depreciation, partially offset by wrap account net inflows, and a $4.8 billion increase in Asset Management AUM driven by the acquisition of the BMO Global Asset Management (EMEA) business, partially offset by equity market depreciation.

NM Not Meaningful.

Total AUM decreased $79.8 billion, or 8%, to $893.5 billion as of September 30, 2022 compared to $973.3 billion as of September 30, 2021 due to a $49.4 billion decrease in Advice & Wealth Management AUM driven by equity market depreciation, partially offset by wrap account net inflows, and a $36.9 billion decrease in Asset Management AUM driven by equity and bond market depreciation and an unfavorable foreign currency translation, partially offset by the acquisition of the BMO Global Asset Management (EMEA) business.

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 June 30, 2022 and 2021

Consolidated Results of Operations for the Three Months Ended September 30, 2022 and 2021

The following table presents our consolidated results of operations:

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

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Net investment income 349 773 (424) (55)

Premiums, policy and contract charges 365 364 1 —

Premiums, policy and contract charges 361 (805) 1,166 NM

Other revenues 118 113 5 4

Total revenues 3,506 2,906 600 21

Banking and deposit interest expense 3 2 1 50

Banking and deposit interest expense 15 3 12 NM

Total net revenues 3,491 2,903 588 20

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Interest credited to fixed accounts 157 172 (15) (9)

Benefits, claims, losses and settlement expenses 82 404 (322) (80)

Benefits, claims, losses and settlement expenses 370 (719) 1,089 NM

Amortization of deferred acquisition costs 107 9 98 NM

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Pretax income increased $234 million, or 32%, for the three months ended June 30, 2022 compared to the prior year period.

Pretax income decreased $585 million, or 46%, for the three months ended September 30, 2022 compared to the prior year period.

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

• The market impact on non-traditional long duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and related DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual was a benefit of $305 million for the three months ended June 30, 2022 compared to an expense of $87 million for the prior year period.

• A favorable impact from higher short-term interest rates.

• An unfavorable impact from lower average equity markets for the three months ended June 30, 2022 compared to the prior year period.

• The mean reversion related impact was an expense of $161 million for the three months ended June 30, 2022 compared to a benefit of $42 million for the prior year period.

Management and financial advice fees increased $26 million, or 1%, for the three months ended June 30, 2022 compared to the prior year period reflecting revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business and continued wrap account net inflows, partially offset by lower average equity markets and an unfavorable foreign exchange impact.

Distribution fees increased $6 million, or 1%, for the three months ended June 30, 2022 compared to the prior year period due to higher fees on off-balance sheet brokerage cash due to an increase in short-term interest rates, partially offset by decreased transactional activity and lower average equity markets.

Net investment income increased $9 million, or 3%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the following items:

• Net realized investment losses of $15 million for the three months ended June 30, 2022 compared to net realized investment gains of $11 million for the prior year period.

Net realized investment losses for three months ended June 30, 2022 were driven by the sale of specific Available-for-Sale securities and impairments on securities we intend to sell as we repositioned a portion of our fixed maturity bond portfolio in response to recent market conditions.

• The prior year impact of the block transfer reinsurance transaction resulted in $521 million of pretax income for the three months ended September 30, 2021 primarily reflecting the net realized gains on the investments sold to the reinsurer.

• The unfavorable impact of unlocking was $161 million for the three months ended September 30, 2022 compared to a favorable impact of $17 million for the prior year period.

• An unfavorable impact from lower average equity markets for the three months ended September 30, 2022 compared to the prior year period.

• Net realized investment losses of $87 million for the three months ended September 30, 2022 compared to net realized gains of $12 million for the prior year period primarily due to the repositioning of a portion of our fixed maturity bond portfolio in response to recent market conditions.

• The mean reversion related impact was an expense of $79 million for the three months ended September 30, 2022 compared to a benefit of $9 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 a benefit of $132 million for the three months ended September 30, 2022 compared to an expense of $94 million for the prior year period.

• A favorable impact from the continued increase in short-term interest rates.

AMERIPRISE FINANCIAL, INC.

• The favorable impact of rising interest rates on the investment portfolio yield.

• 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.

Other revenues increased $49 million, or 65%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Interest credited to fixed accounts increased $21 million, or 17%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the following items:

• A $45 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The favorable impact of the nonperformance credit spread was $32 million for the three months ended June 30, 2022 compared to an unfavorable impact of $13 million for the prior year period.

• A $73 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $23 million for the three months ended June 30, 2022 compared to a benefit of $50 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 $322 million, or 80%, the three months ended June 30, 2022 compared to the prior year period primarily reflecting the following items:

• A $67 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 the nonperformance credit spread was $130 million for the three months ended June 30, 2022 primarily as a result of the nonperformance credit spread increasing compared to a favorable impact of $63 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 on benefits expenses is favorable (unfavorable).

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

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

Pretax Increase (Decrease) 2022 2021

(in millions)

Distribution fees $ — $ 2

Premiums, policy and contract charges 1 17

Total revenues 1 19

Benefits, claims, losses and settlement expenses:

LTC unlocking — 3

Unlocking impact, excluding LTC 170 59

Total benefits, claims, losses and settlement expenses 170 62

Amortization of DAC (8) (60)

Total expenses 162 2

Pretax income (1)

(1) Includes an $8 million net benefit and $25 million net benefit related to the market impact on variable annuity guaranteed benefits for the three months ended September 30, 2022 and 2021, 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:

• Mortality assumption on variable annuities with living benefit guarantees resulted in a higher expense in the third quarter of 2022 compared to the prior year period.

• Equity market volatility and correlation assumptions on variable annuities resulted in an unfavorable impact in the third quarter of 2022 compared to a favorable impact in the prior year period.

Management and financial advice fees decreased $195 million, or 8%, for the three months ended September 30, 2022 compared to the prior year period reflecting lower average equity markets and an unfavorable foreign exchange impact, partially offset by revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business and continued wrap account net inflows.

Distribution fees increased $48 million, or 10%, for the three months ended September 30, 2022 compared to the prior year period due to higher fees on off-balance sheet brokerage cash due to an increase in short-term interest rates, partially offset by lower average equity markets and continued decreasing transactional activity.

Net investment income decreased $424 million, or 55%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the following items:

• Net realized investment losses of $87 million for the three months ended September 30, 2022 compared to net realized investment gains of $546 million for the prior year period.

Net realized investment losses for three months ended September 30, 2022 were primarily driven by impairments on securities we intend to sell as we repositioned a portion of our fixed maturity bond portfolio in response to recent market conditions and credit losses on corporate debt securities.

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.

• The favorable impact of the recent trend in rising interest rates on the investment portfolio yield.

• The favorable impact of higher average invested assets.

Premiums, policy and contract charges increased $1.2 billion for the three months ended September 30, 2022 compared to the prior year period primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance transaction for the life contingent immediate annuity policies in the year ago period.

Distribution expenses decreased $90 million, or 7%, for the three months ended September 30, 2022 compared to the prior year period primarily due to lower average equity markets and decreased transactional activity.

Interest credited to fixed accounts decreased $15 million, or 9%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the following items:

• A $4 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The unfavorable impact of the nonperformance credit spread was $6 million for the three months ended September 30, 2022 compared to an unfavorable impact of $2 million for the prior year period.

AMERIPRISE FINANCIAL, INC.

• A $13 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was a benefit of $6 million for the three months ended September 30, 2022 compared to an expense of $7 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 a higher discount rate.

Benefits, claims, losses and settlement expenses increased $1.1 billion for the three months ended September 30, 2022 compared to 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 in the prior year period.

• A $62 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.

• A $298 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 decrease was the result of a favorable $1.1 billion change in the market impact on variable annuity guaranteed living benefits reserves, partially offset by an unfavorable $800 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits.

This decrease was the result of a favorable $339 million change in the market impact on variable annuity guaranteed living benefits reserves, partially offset by an unfavorable $41 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits.

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

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

• The mean reversion related impact was an expense of $90 million for the three months ended June 30, 2022 compared to a benefit of $25 million for the prior year period.

Amortization of DAC increased $89 million, for the three months ended June 30, 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 $26 million for the three months ended June 30, 2022 compared to an expense of $5 million for the prior year period.

• The mean reversion related impact was an expense of $70 million for the three months ended June 30, 2022 compared to a benefit of $16 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 September 30, 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 an expense for the three months ended September 30, 2022 compared to a benefit for the prior year period.

• Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in an expense for the three months ended September 30, 2022 compared to a benefit 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 net benefit for the three months ended September 30, 2022 compared to a net expense for the prior year period.

• The impact of unlocking excluding LTC was an expense of $170 million for the three months ended September 30, 2022 compared to an expense of $59 million for the prior year period.

• The annual review of LTC future policy benefit reserve in the third quarter of 2022 resulted in unlocking of nil compared to unlocking of $3 million in the prior year period.

• The mean reversion related impact was an expense of $50 million for the three months ended September 30, 2022 compared to a benefit of $6 million for the prior year period.

Amortization of DAC increased $98 million, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the following items:

• The impact of unlocking in the third quarter of 2022 was a benefit of $8 million compared to a benefit of $60 million in the prior year period.

• The DAC offset to the market impact on non-traditional long-duration products was an expense of $37 million for the three months ended September 30, 2022 compared to a benefit of $2 million for the prior year period.

• The mean reversion related impact was an expense of $29 million for the three months ended September 30, 2022 compared to a benefit of $3 million for the prior year period.

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

General and administrative expense increased $64 million, or 8%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, and $14 million of integration related expenses, partially offset by a favorable change in the mark-to-market impact on share-based compensation.

AMERIPRISE FINANCIAL, INC.

Our effective tax rate was 20.8% for the three months ended June 30, 2022 compared to 18.1% for the prior year period.

The higher effective tax rate for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was primarily the result of higher pretax income and a decrease in low income housing tax credits compared to the prior year period.

Interest and debt expense decreased $12 million, or 19%, for the three months ended September 30, 2022 compared to the prior year period primarily due to a decrease in interest expense of CIEs.

General and administrative expense increased $103 million, or 13%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, partially offset by a favorable foreign exchange impact on expenses.

Our effective tax rate was 20.0% for the three months ended September 30, 2022 compared to 18.8% for the prior year period.

The higher effective tax rate for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily the result of an increase in state taxes, net of federal benefit.

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

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

AMERIPRISE FINANCIAL, INC.

Results of Operations by Segment for the Three Months Ended September 30, 2022 and 2021

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

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The following table presents summary financial information by segment:

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

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Adjusted operating loss $ (79) $ (81)

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

Segment Pretax Operating Increase (Decrease) 2022 2021

Retirement & Protection Solutions Corporate Retirement & Protection Solutions Corporate

(in millions)

Distribution fees $ — $ — $ 2 $ —

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

Total revenues

Benefits, claims, losses and settlement expenses

LTC unlocking and loss recognition — — — 3

Unlocking impact, excluding LTC 180 (1) 89 —

Total benefits, claims, losses and settlement expenses

Amortization of DAC

(5) (4) (65) —

Total expenses

Pretax income

$ (172) $ 3 $ (5) $ (3)

AMERIPRISE FINANCIAL, INC.

Advice & Wealth Management

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

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

(in billions)

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

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

Ending wrap account assets decreased $47.7 billion, or 11%, to $399.3 billion during the three months ended June 30, 2022 due to market depreciation of $53.9 billion, partially offset by net inflows of $6.2 billion.

Average advisory wrap account assets increased $17.9 billion, or 4%, compared to the prior year period primarily reflecting net inflows, partially offset by market depreciation.

AMERIPRISE FINANCIAL, INC.

Ending wrap account assets decreased $14.1 billion, or 4%, to $385.2 billion during the three months ended September 30, 2022 due to market depreciation of $20.5 billion, partially offset by net inflows of $6.4 billion.

Average advisory wrap account assets decreased $25.1 billion, or 6%, compared to the prior year period primarily reflecting market depreciation, partially offset by net inflows.

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

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

1 unchanged sentence

Distribution fees 579 561 18 3

Net investment income 120 63 57 90

Net investment income 219 62 157 NM

Other revenues 57 54 3 6

Total revenues 2,152 2,051 101 5

Banking and deposit interest expense 3 2 1 50

Banking and deposit interest expense 15 3 12 NM

Total net revenues 2,137 2,048 89 4

4 unchanged sentences

Adjusted operating earnings $ 595 $ 459 $ 136 30 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $69 million, or 16%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting higher average wrap account balances due to net inflows and a benefit from higher short-term interest rates.

Pretax adjusted operating margin increased to 23.9% for the three months ended June 30, 2022 compared to 21.4% for the prior year period, reflecting the benefit of higher short-term interest rates.

Client brokerage cash balances continued to increase to $47.4 billion given the market volatility.

Ameriprise Bank, FSB is continuing its deposit growth trend, with cash sweep balances increasing $6.8 billion from the prior year period to $15.5 billion and brokerage client pledged asset lines of credit increasing $251 million from the prior year period to $601 million as of June 30, 2022.

Profitability at the bank increased compared to the prior year period reflecting deposit growth and increased interest rates.

Management and financial advice fees increased $41 million, or 3%, for the three months ended June 30, 2022 compared to the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $17.9 billion, or 4%, compared to the prior year period reflecting net inflows, partially offset by market depreciation.

Distribution fees decreased $20 million, or 4%, for the three months ended June 30, 2022 compared to the prior year period reflecting decreased transactional activity, partially offset by higher fees on off-balance sheet brokerage cash due to an increase in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, increased $57 million, or 90%, for the three months ended June 30, 2022 compared to the prior year period primarily due to higher average invested assets due to increased bank deposits and the favorable impact of increasing short-term interest rates, including higher investment yields on the investment portfolio supporting the certificate products.

Distribution expenses decreased $9 million, or 1%, for the three months ended June 30, 2022 compared to the prior year period reflecting decreased transactional activity, partially offset by higher asset-based advisor compensation from higher average wrap account assets.

General and administrative expense increased $15 million, or 4%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting higher volume related expenses.

NM Not Meaningful.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $136 million, or 30%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the benefit from higher short-term interest rates and wrap account net inflows, partially offset by market depreciation.

Pretax adjusted operating margin increased to 27.8% for the three months ended September 30, 2022 compared to 22.4% for the prior year period, reflecting the benefit of higher short-term interest rates.

Client brokerage cash balances increased to $46.3 billion given the market volatility.

Ameriprise Bank, FSB is continuing its deposit growth trend, with cash sweep balances increasing $8.8 billion from the prior year period to $18.6 billion and brokerage client pledged asset lines of credit increasing $204 million from the prior year period to $612 million as of September 30, 2022.

Profitability at the bank increased compared to the prior year period reflecting trend in deposit growth and increased interest rates.

Management and financial advice fees decreased $77 million, or 6%, for the three months ended September 30, 2022 compared to the prior year period primarily due to the decrease in average wrap account assets.

Average advisory wrap account assets decreased $25.1 billion, or 6%, compared to the prior year period reflecting market depreciation, partially offset by net inflows.

AMERIPRISE FINANCIAL, INC.

Distribution fees increased $18 million, or 3%, for the three months ended September 30, 2022 compared to the prior year period reflecting $95 million of higher fees on off-balance sheet brokerage cash primarily due to an increase in short-term interest rates, partially offset by continued decreasing transactional activity.

Net investment income, which excludes net realized investment gains or losses, increased $157 million for the three months ended September 30, 2022 compared to the prior year period primarily due to higher average invested assets due to increased bank deposits and the favorable impact of increasing short-term interest rates, including higher investment yields on the investment portfolio supporting the bank and certificate products.

Banking and deposit interest expense increased $12 million for the three months ended September 30, 2022 compared to the prior year period primarily due to increased average crediting rates on certificates.

Distribution expenses decreased $89 million, or 7%, for the three months ended September 30, 2022 compared to the prior year period reflecting market depreciation and decreased transactional activity.

General and administrative expense increased $42 million, or 12%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting higher volume related expenses in the current year period and lower staffing levels and limited travel and entertainment expenses in the prior year period.

Asset Management

The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds, including funds recently acquired through the BMO Global Asset Management (EMEA) acquisition, as of June 30, 2022:

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

10 unchanged sentences

Institutional if available, otherwise Advisor or Instl3 share class), net of fees.

Peer groupings of Threadneedle and legacy BMO funds are defined by either IA or Morningstar index, and are based on the highest-rated share class.

Comparisons to Index are measured Gross of Fees.

Peer groupings of Threadneedle funds are defined by either IA or Morningstar index and are measured gross of fees.

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

4 unchanged sentences

Out of 155 Threadneedle funds rated (based on highest-rated share class), 24 received a 5-star Overall Rating and 57 received a 4-star Overall Rating.

Out of 63 BMO funds rated (based on highest-rated share class), 6 received a 5-star Overall Rating and 27 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.

AMERIPRISE FINANCIAL, INC.

The following table presents global managed assets by type:

As of June 30,

Change Three Months Ended June 30,

As of September 30,

Change Three Months Ended September 30,

(in billions)

10 unchanged sentences

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 June 30,

Three Months Ended September 30,

(in billions)

25 unchanged sentences

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

Total segment AUM decreased $100.4 billion, or 14%, during the three months ended June 30, 2022 primarily due to equity market depreciation.

Net outflows were $3.1 billion in the second quarter of 2022, a $9.8 billion decrease compared to the prior year period.

AMERIPRISE FINANCIAL, INC.

Total segment AUM decreased $51.7 billion, or 9%, during the three months ended September 30, 2022 primarily due to equity and bond market depreciation and the negative impact of foreign currency translation.

Net outflows were $2.4 billion in the third quarter of 2022, a $6.3 billion decrease compared to the prior year period.

Global retail net outflows were $5.3 billion.

Global institutional net inflows were $2.9 billion and included $1.0 billion of outflows from legacy insurance partners assets.

AMERIPRISE FINANCIAL, INC.

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

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

2 unchanged sentences

Net investment income 2 1 1 NM

Other revenues 4 1 3 NM

Other revenues 2 — 2 —

Total revenues 823 915 (92) (10)

8 unchanged sentences

NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $31 million, or 12%, for the three months ended June 30, 2022 compared to the prior year period primarily due to equity market depreciation and net outflows, partially offset by AUM from the acquisition of the BMO Global Asset Management (EMEA) business.

Management and financial advice fees increased $19 million, or 3%, for the three months ended June 30, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business, partially offset by lower average equity markets, the cumulative impact from net outflows and the impact of foreign exchange rates.

Distribution fees decreased $18 million, or 15%, for the three months ended June 30, 2022 compared to the prior year period reflecting lower average equity markets and the cumulative impact from net outflows.

Distribution expenses decreased $30 million, or 11%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting lower average equity markets and the cumulative impact from net outflows.

General and administrative expense increased $63 million, or 19%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, partially offset by the cumulative impact from net outflows and the impact of foreign exchange rates.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $94 million, or 33%, for the three months ended September 30, 2022 compared to the prior year period primarily due to equity market depreciation, net outflows and an unfavorable foreign exchange impact, partially offset by the acquisition of the BMO Global Asset Management (EMEA) business.

Management and financial advice fees decreased $71 million, or 9%, for the three months ended September 30, 2022 compared to the prior year period primarily due to lower average equity markets, the cumulative impact from net outflows and the impact of foreign exchange rates, partially offset by the acquired BMO Global Asset Management (EMEA) business.

Distribution fees decreased $24 million, or 20%, for the three months ended September 30, 2022 compared to the prior year period reflecting lower average equity markets and the cumulative impact from net outflows.

Distribution expenses decreased $50 million, or 17%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting lower average equity markets and the cumulative impact from net outflows.

General and administrative expense increased $53 million, or 16%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, partially offset by the cumulative impact from net outflows and the impact of foreign exchange rates.

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 June 30,

Three Months Ended September 30,

(in millions)

10 unchanged sentences

Benefits, claims, losses and settlement expenses 414 323 91 28

Amortization of deferred acquisition costs 54 70 (16) (23)

Amortization of deferred acquisition costs 49 5 44 NM

Interest and debt expense 10 9 1 11

2 unchanged sentences

Adjusted operating earnings $ 31 $ 187 $ (156) (83) %

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 decreased $3 million, or 2%, for the three months ended June 30, 2022 compared to prior year period.

Variable annuity account balances decreased 16% to $75.7 billion as of June 30, 2022 compared to the prior year period due to market depreciation and net outflows of $2.0 billion.

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 decreased $156 million, or 83%, for the three months ended September 30, 2022 compared to prior year period, primarily reflecting the impact of unlocking.

Variable annuity account balances decreased 20% to $71.3 billion as of September 30, 2022 compared to the prior year period due to market depreciation and net outflows of $2.0 billion.

Variable annuity sales decreased 35% 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 59% as of June 30, 2022 compared to 62% a year ago.

The risk profile of our in force block continues to improve, with account values with living benefit riders down to 58% as of September 30, 2022 compared to 62% 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.

2 unchanged sentences

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

Management and financial advice fees decreased $37 million, or 16%, for the three months ended June 30, 2022 compared to the prior year period primarily due to lower average equity markets and the cumulative impact from net outflows.

Distribution fees decreased $16 million, or 13%, for the three months ended June 30, 2022 compared to the prior year period reflecting lower average equity markets and the cumulative impact from net outflows.

Distribution expenses decreased $19 million, or 14%, for the three months ended June 30, 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 $16 million, or 23%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting lower than expected client exit rates.

Management and financial advice fees decreased $50 million, or 21%, for the three months ended September 30, 2022 compared to the prior year period primarily due to lower average equity markets and the cumulative impact from net outflows.

Distribution fees decreased $24 million, or 19%, for the three months ended September 30, 2022 compared to the prior year period reflecting lower average equity markets and the cumulative impact from net outflows.

Net investment income, which excludes net realized investment gains or losses, increased $37 million, or 32%, for the three months ended September 30, 2022 compared to the prior year period primarily due to higher average invested assets as well has higher interest rates.

Distribution expenses decreased $31 million, or 23%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting decreased variable annuity sales and market depreciation.

AMERIPRISE FINANCIAL, INC.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity contracts (net of hedges and the related DSIC amortization), mean reversion related impacts and the DSIC offset to net realized investment gains or losses, increased $91 million, or 28%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the impact of unlocking.

The unlocking impact for the third quarter of 2022 was an expense of $180 million primarily reflecting continued lower surrender rates and updated mortality assumptions for variable annuities with living benefits compared to an expense of $89 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, increased $44 million for the three months ended September 30, 2022 compared to the prior year period primarily reflecting the impact of unlocking due to lower surrender rates, partially offset by a lower level of normalized amortization.

The unlocking impact for the third quarter of 2022 was a benefit of $5 million compared to a benefit of $65 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 June 30,

Three Months Ended September 30,

(in millions)

1 unchanged sentence

Premiums, policy and contract charges 25 26 (1) (4)

Other revenues 56 16 40 NM

Other revenues 57 56 1 2

Total revenues 117 113 4 4

Banking and deposit interest expense — 1 (1) NM

Banking and deposit interest expense 2 — 2 —

Total net revenues 115 113 2 2

10 unchanged sentences

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 $24 million, for the three months ended June 30, 2022 compared to the prior year period.

LTC insurance had a pretax adjusted operating loss of $1 million for the three months ended June 30, 2022 compared to pretax adjusted operating earnings of $3 million for the prior year period.

FA business had a pretax adjusted operating loss of $4 million for the three months ended June 30, 2022 compared to a pretax adjusted operating loss of $6 million.

Fixed deferred annuity account balances declined 5% to $7.4 billion as of June 30, 2022 compared to the prior year period as policies continue to lapse and the discontinuance of new sales of fixed deferred annuities.

Our Corporate & Other segment pretax adjusted operating loss decreased $2 million for the three months ended September 30, 2022 compared to the prior year period.

LTC insurance had a pretax adjusted operating loss of $3 million for the three months ended September 30, 2022 compared to pretax adjusted operating loss of $1 million for the prior year period.

FA business had a pretax adjusted operating loss of $3 million for the three months ended September 30, 2022 compared to a pretax adjusted operating loss of $7 million.

Fixed deferred annuity account balances declined 5% to $7.3 billion as of September 30, 2022 compared to the prior year period as surrender trends continue.

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

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 $40 million, or 51%, for the three months ended June 30, 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 $7 million impairment in our affordable housing partnerships in the prior year period.

Other revenues increased $40 million to $56 million for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

AMERIPRISE FINANCIAL, INC.

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, increased $5 million, or 9%, for the three months ended June 30, 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 $22 million, or 35%, for the three months ended June 30, 2022 compared to the prior year period primarily reflecting the favorable mark-to-market impact on share-based compensation expense.

Consolidated Results of Operations for the Six Months Ended June 30, 2022 and 2021

restructuring charges, and the impact of consolidating CIEs, increased $4 million, or 13%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting lower amortization in our affordable housing partnerships and a higher portfolio yield from increasing interest rates.

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, increased $5 million, or 8%, for the three months ended September 30, 2022 compared to the prior year period primarily reflecting a net favorable out-of-period correction in the prior year period.

The unlocking impact for the third quarter of 2022 was a benefit of $1 million compared to an unlocking expense of $3 million in the prior year period.

Consolidated Results of Operations for the Nine Months Ended September 30, 2022 and 2021

The following table presents our consolidated results of operations:

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

2 unchanged sentences

Net investment income 897 1,428 (531) (37)

Premiums, policy and contract charges 733 711 22 3

Premiums, policy and contract charges 1,094 (94) 1,188 NM

Other revenues 365 259 106 41

Total revenues 10,674 9,681 993 10

Banking and deposit interest expense 5 7 (2) (29)

Banking and deposit interest expense 20 10 10 NM

Total net revenues 10,654 9,671 983 10

11 unchanged sentences

NM Not Meaningful.

Pretax income increased $664 million, or 55%, for the six months ended June 30, 2022 compared to 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 a benefit of $439 million for the six months ended June 30, 2022 compared to an expense of $483 million for the prior year period.

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

• The mean reversion related impact was an expense of $220 million for the six months ended June 30, 2022 compared to a benefit of $98 million for the prior year period.

Management and financial advice fees increased $383 million, or 9%, for the six months ended June 30, 2022 compared to the prior year period reflecting revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business and continued wrap account net inflows, and an increase in performance fees of $55 million.

Distribution fees decreased $6 million, or 1%, for the six months ended June 30, 2022 compared to the prior year period due to lower transactional activity, partially offset by higher fees on off-balance sheet brokerage cash primarily due to an increase in short-term interest rates.

Pretax income increased $79 million, or 3%, for the nine months ended September 30, 2022 compared to 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 a benefit of $571 million for the nine months ended September 30, 2022 compared to an expense of $577 million for the prior year period.

• A favorable impact from the continued increase in short-term interest rates.

• The prior year impact of the block transfer reinsurance transaction resulted in $521 million of pretax income for the nine months ended September 30, 2021 primarily reflecting the net realized gains on the investments sold to the reinsurer.

• The mean reversion related impact was an expense of $299 million for the nine months ended September 30, 2022 compared to a benefit of $107 million for the prior year period.

• The unfavorable impact of unlocking was $161 million for the nine months ended September 30, 2022 compared to a favorable impact of $17 million for the prior year period.

• An unfavorable impact from lower average equity markets for the nine months ended September 30, 2022 compared to the prior year period.

AMERIPRISE FINANCIAL, INC.

Net investment income decreased $107 million, or 16%, for the six months ended June 30, 2022 compared the prior year period primarily reflecting:

• Net realized investment gains of $5 million for the six months ended June 30, 2022 compared to net realized investment gains of $65 million for the prior year period.

Net realized investment gains for the six months ended June 30, 2021 included a $15 million gain on strategic investment.

See our Consolidated Results of Operations for the three months ended September 30, 2022 and 2021 for a table and discussion of total pretax impacts on our revenues and expenses attributable to unlocking.

Management and financial advice fees increased $188 million, or 3%, for the nine months ended September 30, 2022 compared to the prior year period reflecting revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business, continued wrap account net inflows, and an increase in performance fees of $43 million, partially offset by market depreciation and an unfavorable foreign exchange impact.

Distribution fees increased $42 million, or 3%, for the nine months ended September 30, 2022 compared to the prior year period due to higher fees on off-balance sheet brokerage cash primarily due to an increase in short-term interest rates, partially offset by lower transactional activity and market depreciation.

Net investment income decreased $531 million, or 37%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting:

• Net realized investment losses of $82 million for the nine months ended September 30, 2022 compared to net realized investment gains of $627 million for the prior year period.

Net realized investment losses for the nine months ended September 30, 2022 were primarily driven by impairments on securities we intend to sell as we repositioned a portion of our fixed maturity bond portfolio in response to recent market conditions and credit losses on corporate debt securities.

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.

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

• The favorable impact of increased bank deposits and rising short-term interest rates.

Other revenues increased $101 million, or 69%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Distribution expenses increased $125 million, or 5%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting higher advisor compensation due to an increase in average wrap account balances.

Interest credited to fixed accounts increased $3 million, or 1%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the following items:

Premiums, policy and contract charges increased $1.2 billion for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance transaction for the life contingent immediate annuity policies in the year ago period.

Other revenues increased $106 million, or 41%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Interest credited to fixed accounts decreased $12 million, or 3%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the following items:

• A $70 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits.

The favorable impact of the nonperformance credit spread was $60 million for the six months ended June 30, 2022 compared to an unfavorable impact of $14 million for the prior year period.

• An $87 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $35 million for the six months ended June 30, 2022 compared to a benefit of $52 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 $764 million, or 72%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the following items:

The favorable impact of the nonperformance credit spread was $54 million for the nine months ended September 30, 2022 compared to an unfavorable impact of $16 million for the prior year period.

• A $74 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $29 million for the nine months ended September 30, 2022 compared to a benefit of $45 million for the prior year period.

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

Benefits, claims, losses and settlement expenses increased $325 million, or 96%, for the nine months ended September 30, 2022 compared to 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 in the prior year period.

• A $211 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 the nonperformance credit spread was $112 million for the six months ended June 30, 2022 primarily as a result of the nonperformance credit spread increasing compared to an unfavorable impact of $162 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 $986 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.

1 unchanged sentence

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 benefit for the six months ended June 30, 2022 compared to an expense in the prior year period.

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

• The mean reversion related impact was an expense of $124 million for the six months ended June 30, 2022 compared to a benefit of $59 million for the prior year period.

• A $46 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 $180 million, for the six months ended June 30, 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 $37 million for the six months ended June 30, 2022 compared to a benefit of $40 million for the prior year period.

AMERIPRISE FINANCIAL, INC.

• The mean reversion related impact was an expense of $95 million for the six months ended June 30, 2022 compared to a benefit of $38 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 nine months ended September 30, 2022 compared to an expense in the prior year period.

• Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the nine months ended September 30, 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 nine months ended September 30, 2022 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 expense for the nine months ended September 30, 2022 compared to a net benefit for the prior year period.

• The impact of unlocking excluding LTC was an expense of $170 million for the nine months ended September 30, 2022 compared to an expense of $59 million for the prior year period.

• The annual review of LTC future policy benefit reserve in the third quarter of 2022 resulted in unlocking of nil compared to unlocking of $3 million in the prior year period.

• The mean reversion related impact was an expense of $174 million for the nine months ended September 30, 2022 compared to a benefit of $65 million for the prior year period.

• A $50 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 $278 million for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the following items:

• The impact of unlocking in the third quarter of 2022 was a benefit of $8 million compared to a benefit of $60 million in the prior year period.

• The DAC offset to the market impact on non-traditional long-duration products was an expense of $74 million for the nine months ended September 30, 2022 compared to a benefit of $42 million for the prior year period.

• The mean reversion related impact was an expense of $124 million for the nine months ended September 30, 2022 compared to a benefit of $41 million for the prior year period.

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

General and administrative expense increased $188 million, or 11%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, and $24 million of integration related expenses, partially offset by a favorable change in the mark-to-market impact on share-based compensation.

Our effective tax rate was 19.2% for the six months ended June 30, 2022 compared to 15.4% for the prior year period.

The higher effective tax rate for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily the result of higher pretax income, a decrease in low income housing tax credits and an increase in state income taxes, net of federal benefit, compared to the prior year period.

General and administrative expense increased $291 million, or 12%, for the nine months ended September 30, 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 $35 million of integration related expenses, partially offset by a favorable change in the mark-to-market impact on share-based compensation and a favorable foreign exchange impact.

Our effective tax rate was 19.4% for the nine months ended September 30, 2022 compared to 17.1% for the prior year period.

The higher effective tax rate for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily the result of a decrease in low income housing tax credits and foreign taxes, and an increase in state income taxes net of federal benefit.

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

Results of Operations by Segment for the Six Months Ended June 30, 2022 and 2021

AMERIPRISE FINANCIAL, INC.

Results of Operations by Segment for the Nine Months Ended September 30, 2022 and 2021

The following table presents summary financial information by segment:

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

15 unchanged sentences

Adjusted operating loss $ (208) $ (179)

See our Results of Operations by Segment for the three months ended September 30, 2022 and 2021 for a table of segment pretax adjusted operating impacts on our revenues and expenses attributable to unlocking and LTC loss recognition.

Advice & Wealth Management

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

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

(in billions)

12 unchanged sentences

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

AMERIPRISE FINANCIAL, INC.

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

Ending wrap account assets decreased $65.4 billion, or 14%, to $399.3 billion during the six months ended June 30, 2022 due to market depreciation and other of $80.2 billion, partially offset by net inflows of $14.8 billion.

(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 nine months ended September 30, 2022 and 2021.

Ending wrap account assets decreased $79.5 billion, or 17%, to $385.2 billion during the nine months ended September 30, 2022 due to market depreciation and other of $100.8 billion, partially offset by net inflows of $21.3 billion.

Average advisory wrap account assets increased $19.8 billion, or 5%, compared to the prior year period primarily reflecting net inflows, partially offset by market depreciation.

AMERIPRISE FINANCIAL, INC.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

1 unchanged sentence

Distribution fees 1,650 1,682 (32) (2)

Net investment income 198 127 71 56

Net investment income 417 189 228 NM

Other revenues 171 168 3 2

Total revenues 6,255 5,917 338 6

Banking and deposit interest expense 5 7 (2) (29)

Banking and deposit interest expense 20 10 10 NM

Total net revenues 6,235 5,907 328 6

4 unchanged sentences

Adjusted operating earnings $ 1,527 $ 1,271 $ 256 20 %

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $120 million, or 15%, for the six months ended June 30, 2022 compared to the prior year period due to higher average wrap account balances and higher earnings on brokerage cash as a result of increasing short-term interest rates.

Pretax adjusted operating margin was 22.7% for the for the six months ended June 30, 2022 compared to 21.0% for the prior year period.

Management and financial advice fees increased $216 million, or 9%, for the six months ended June 30, 2022 compared to the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $42.2 billion, or 11%, compared to the prior year period primarily reflecting net inflows.

Distribution fees decreased $50 million, or 4%, for the six months ended June 30, 2022 compared to the prior year period reflecting decreased transactional activity, partially offset by higher fees on off-balance sheet brokerage cash due to an increase in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, increased $71 million, or 56%, for the six months ended June 30, 2022 compared to the prior year period primarily due to higher average invested assets due to increased bank deposits and the favorable impact of increased short-term interest rates.

Distribution expenses increased $88 million, or 4%, for the six months ended June 30, 2022 compared to the prior year period reflecting higher asset-based advisor compensation from higher average wrap account assets and increased investments in recruiting experienced advisors, partially offset by decreased transactional activity.

General and administrative expense increased $31 million, or 4%, for the six months ended June 30, 2022 compared to the prior year period primarily due to higher volume related expenses and investments for business growth.

NM Not Meaningful.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $256 million, or 20%, for the nine months ended September 30, 2022 compared to the prior year period due to higher average wrap account balances and higher earnings on bank and brokerage cash as a result of increasing short-term interest rates.

Pretax adjusted operating margin was 24.5% for the for the nine months ended September 30, 2022 compared to 21.5% for the prior year period.

Management and financial advice fees increased $139 million, or 4%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to growth in average wrap account assets.

Average advisory wrap account assets increased $19.8 billion, or 5%, compared to the prior year period primarily reflecting net inflows, partially offset by market depreciation.

Distribution fees decreased $32 million, or 2%, for the nine months ended September 30, 2022 compared to the prior year period reflecting decreased transactional activity, partially offset by $134 million of higher fees on off-balance sheet brokerage cash primarily due to an increase in short-term interest rates.

Net investment income, which excludes net realized investment gains or losses, increased $228 million for the nine months ended September 30, 2022 compared to the prior year period primarily due to higher average invested assets due to increased bank deposits and the favorable impact of increased short-term interest rates.

General and administrative expense increased $73 million, or 7%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to higher volume related expenses and investments for business growth.

AMERIPRISE FINANCIAL, INC.

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The following table presents global managed assets by type:

As of June 30,

Change Six Months Ended June 30,

As of September 30,

Change Nine Months Ended September 30,

(in billions)

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$ 546.5 $ 583.4 $ (36.9) (6) % $ 655.2 $ 575.7 $ 79.5 14 %

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.

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Prior periods have been restated to reflect this change.

AMERIPRISE FINANCIAL, INC.

The following table presents the changes in global managed assets:

Six Months Ended June 30,

Nine Months Ended September 30,

(in billions)

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(2) First quarter 2022 net flows included $2.5 billion of retail and $0.1 billion of institutional net flows from the US asset transfer in connection with our acquisition of the BMO Global Asset Management (EMEA) business.

AMERIPRISE FINANCIAL, INC.

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

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

Total segment AUM decreased $155.9 billion, or 21%, during the six months ended June 30, 2022 primarily due to equity market depreciation.

Net outflows were $3.8 billion for the six months ended June 30, 2022, a decrease of $15.4 billion compared to the prior year period.

Total segment AUM decreased $207.6 billion, or 28%, during the nine months ended September 30, 2022 primarily due to equity and bond market depreciation.

Net outflows were $6.1 billion for the nine months ended September 30, 2022, a decrease of $21.6 billion compared to the prior year period.

AMERIPRISE FINANCIAL, INC.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

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NM Not Meaningful.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $26 million, or 5%, for the six months ended June 30, 2022 compared to the prior year period primarily due to market appreciation and disciplined expense management.

Management and financial advice fees increased $204 million, or 14%, for the six months ended June 30, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business and an increase in performance fees of $55 million, partially offset by the cumulative impact from net outflows and the impact of foreign exchange rates.

Distribution fees decreased $21 million, or 9%, for the six months ended June 30, 2022 compared to the prior year period primarily due to the cumulative impact from net outflows.

Other revenues increased $7 million for the six months ended June 30, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business.

Distribution expenses decreased $21 million, or 4%, for the six months ended June 30, 2022 compared to the prior year period primarily due to the cumulative impact from net outflows.

General and administrative expense increased $186 million, or 28%, for the six months ended June 30, 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, partially offset by the cumulative impact from net outflows and the impact of foreign exchange rates.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $68 million, or 9%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to market depreciation, an unfavorable foreign exchange impact and net outflows.

Management and financial advice fees increased $133 million, or 6%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business and an increase in performance fees of $43 million, partially offset by market depreciation, the cumulative impact from net outflows and the impact of foreign exchange rates.

Distribution fees decreased $45 million, or 13%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to market depreciation and the cumulative impact from net outflows.

Other revenues increased $9 million for the nine months ended September 30, 2022 compared to the prior year period primarily due to the acquired BMO Global Asset Management (EMEA) business.

Distribution expenses decreased $71 million, or 8%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to market depreciation and the cumulative impact from net outflows.

General and administrative expense increased $239 million, or 24%, for the nine months ended September 30, 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, partially offset by the cumulative impact from net outflows and the impact of foreign exchange rates.

AMERIPRISE FINANCIAL, INC.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

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Premiums, policy and contract charges 996 1,001 (5) —

Other revenues 7 — 7 —

Other revenues 10 3 7 NM

Total revenues 2,318 2,429 (111) (5)

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Adjusted operating earnings $ 401 $ 552 $ (151) (27) %

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 $5 million, or 1%, for the six months ended June 30, 2022 compared to the prior year period.

Management and financial advice fees decreased $41 million, or 9%, for the six months ended June 30, 2022 compared to the prior year period primarily due to variable annuity net outflows and market depreciation.

Distribution fees decreased $20 million, or 8%, for the six months ended June 30, 2022 compared to the prior year period due to market depreciation.

Distribution expenses decreased $29 million, or 11%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting lower variable annuity sales and market depreciation.

Amortization of DAC, which excludes mean reversion related impacts and the DAC offset to the market impact on variable annuity guaranteed benefits, decreased $26 million, or 20%, for the six months ended June 30, 2022 compared to the prior year period reflecting lower than expected client exit rates.

NM Not Meaningful.

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 decreased $151 million, or 27%, for the nine months ended September 30, 2022 compared to the prior year period.

Management and financial advice fees decreased $91 million, or 13%, for the nine months ended September 30, 2022 compared to the prior year period primarily due to market depreciation and variable annuity net outflows.

Distribution fees decreased $44 million, or 12%, for the nine months ended September 30, 2022 compared to the prior year period due to market depreciation.

Distribution expenses decreased $60 million, or 15%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting lower variable annuity sales and market depreciation.

Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC amortization) and mean reversion related impacts, increased $79 million, or 10%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the impact of unlocking.

Amortization of DAC, which excludes mean reversion related impacts and the DAC offset to the market impact on variable annuity guaranteed benefits, increased $18 million, or 13%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the impact of unlocking due to lower surrender rates, partially offset by a lower level of normalized amortization and lower than expected client exit rates.

The unlocking impact for the third quarter of 2022 was a benefit of $5 million compared to a benefit of $65 million in the prior year period.

AMERIPRISE FINANCIAL, INC.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

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Premiums, policy and contract charges 73 75 (2) (3)

Other revenues 115 31 84 NM

Other revenues 172 87 85 98

Total revenues 352 372 (20) (5)

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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 increased $31 million, or 32%, for the six months ended June 30, 2022 compared to the prior year period.

LTC insurance had a pretax adjusted operating earnings of nil for the six months ended June 30, 2022 compared to a pretax adjusted operating earnings of $49 million for the prior year period primarily reflecting the return to more normalized results compared to the COVID-19 related impacts in the prior year period.

FA business had a pretax adjusted operating loss of $9 million for the six months ended June 30, 2022 compared to a pretax adjusted operating loss of $10 million for 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, integration and restructuring charges, and the impact of consolidating CIEs, decreased $107 million, or 60%, for the six months ended June 30, 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 $84 million for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, increased $46 million, or 69%, for the six months ended June 30, 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, which excludes integration and restructuring charges, decreased $32 million, or 24%, for the six months ended June 30, 2022 compared to the prior year period primarily reflecting the favorable mark-to-market impact on share-based compensation expense.

Our Corporate & Other segment pretax adjusted operating loss increased $29 million, or 16%, for the nine months ended September 30, 2022 compared to the prior year period.

LTC insurance had a pretax adjusted operating loss of $3 million for the nine months ended September 30, 2022 compared to a pretax adjusted operating earnings of $48 million for the prior year period primarily reflecting the return to more normalized results compared to the COVID-19 related impacts in the prior year period.

FA business had a pretax adjusted operating loss of $12 million for the nine months ended September 30, 2022 compared to a pretax adjusted operating loss of $17 million for 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, integration and restructuring charges, and the impact of consolidating CIEs, decreased $103 million, or 49%, for the nine months ended September 30, 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 $85 million, or 98%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Benefits, claims, losses and settlement expenses, which excludes DSIC offset to net realized investment gains or losses, increased $51 million, or 40%, for the nine months ended September 30, 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, and the impacts from unlocking.

The unlocking impact for the third quarter of 2022 was a benefit of $1 million compared to an unlocking expense of $3 million in the prior year period.

General and administrative expense, which excludes integration and restructuring charges, decreased $32 million, or 17%, for the nine months ended September 30, 2022 compared to the prior year period primarily reflecting the favorable mark-to-market impact on share-based compensation expense.

AMERIPRISE FINANCIAL, INC.

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We would expect the recent decline in our portfolio income yields to slow and begin to stabilize in future periods under the current environment.

The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through June 30, 2024 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $2.6 billion and 2.5%, respectively, as of June 30, 2022.

In addition, residential mortgage backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $13.3 billion and had a weighted average yield of 2.5% as of June 30, 2022.

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, 2024 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $2.7 billion and 3.2%, respectively, as of September 30, 2022.

In addition, residential mortgage backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $14.4 billion and had a weighted average yield of 3.0% as of September 30, 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.

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

The average yield for investment purchases during the six months ended June 30, 2022 was approximately 3.3%.

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

To mitigate the unfavorable impact that a low interest rate environment could have on our spread income, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework.

In addition, we may reduce the crediting rates on our fixed products when warranted, subject to guaranteed minimums.

The average yield for investment purchases during the nine months ended September 30, 2022 was approximately 3.8%.

The reinvestment of proceeds from maturities, calls and prepayments at rates near the current portfolio yield will have limited impact to future operating results.

In this volatile rate environment, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework.

In addition, we may update the crediting rates on our fixed products when warranted, subject to guaranteed minimums.

In addition to the fixed rate exposures noted above, RiverSource Life has the following variable annuity guarantee benefits:

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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%

The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then

AMERIPRISE FINANCIAL, INC.

decline in equity prices.

The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then staying at those levels for the next 12 months.

staying at those levels for the next 12 months.

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

In estimating the values of variable annuities, 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 June 30, 2022:

The following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of September 30, 2022:

Equity Price Decline 10% Equity Price Exposure to Pretax Income

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The estimated net impact to pretax adjusted operating income is approximately $(265) million.

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

The change in interest rate exposure as of September 30, 2022 compared to December 31, 2021 was driven by additional downside rate protection added in the macro hedge program.

AMERIPRISE FINANCIAL, INC.

December 31, 2021.

The change in interest rate exposure as of June 30, 2022 compared to December 31, 2021 was driven by additional downside rate protection added in the macro hedge program.

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

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

Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of June 30, 2022.

Consistent with general market conditions, this estimate resulted in a spread over the U.S.

Treasury curve as of September 30, 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 $577 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on June 30, 2022 credit spreads.

If this nonperformance credit spread moves to a zero spread over the U.S.

Treasury curve, the reduction to future net income would be approximately $548 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, 2022 credit spreads.

Liquidity and Capital Resources

We maintained substantial liquidity during the six months ended June 30, 2022.

At June 30, 2022 and December 31, 2021, we had $7.5 billion and $7.1 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At June 30, 2022 and December 31, 2021, the parent company had $759 million and $841 million, respectively, in cash, cash equivalents, and unencumbered liquid securities.

We maintained substantial liquidity during the nine months ended September 30, 2022.

At September 30, 2022 and December 31, 2021, we had $7.8 billion and $7.1 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At September 30, 2022 and December 31, 2021, the parent company had $760 million and $841 million, respectively, in cash, cash equivalents, and unencumbered liquid securities.

Liquid securities predominantly include U.S.

government agency mortgage back securities.

government agency mortgage backed securities.

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 June 30, 2022 was $1.9 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of September 30, 2022 was $2.0 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

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

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

At June 30, 2022, we had no outstanding borrowings under this credit facility and had $1 million of letters of credit issued against the facility.

At September 30, 2022, we had no outstanding borrowings under this credit facility and had $1 million of letters of credit issued against the facility.

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

We remain in compliance with all such covenants at June 30, 2022.

AMERIPRISE FINANCIAL, INC.

We remain in compliance with all such covenants at September 30, 2022.

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

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

As of June 30, 2022 and December 31, 2021, we had $9.0 billion and $8.1 billion, respectively, under the FHLB facilities, of which $200 million was outstanding as of both June 30, 2022 and December 31, 2021, and is collateralized with commercial mortgage backed securities and residential mortgage backed securities.

As of September 30, 2022 and

AMERIPRISE FINANCIAL, INC.

December 31, 2021, we had $8.5 billion and $8.1 billion, respectively, under the FHLB facilities, of which $201 million and $200 million was outstanding as of September 30, 2022 and December 31, 2021, respectively, and is collateralized with commercial mortgage backed securities and residential mortgage backed securities.

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

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

We believe our process is working as intended, and our liquidity and capital resources have remained a source of balance sheet strength during the six months ended June 30, 2022.

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, 2022.

On August 16, 2022, federal legislation commonly referred to as the Inflation Reduction Act of 2022 (“IRA”) was enacted.

We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax (“CAMT”) and the share repurchase excise tax.

Both the CAMT and share repurchase tax provisions are effective beginning in 2023.

We expect to be an applicable corporation required to compute CAMT;

however, we have not determined if we will be liable for the CAMT in 2023.

We will be a covered corporation subject to the share repurchase excise tax.

We do not expect the IRA legislation to have a material impact on our consolidated financial statements.

As the Internal Revenue Service issues additional guidance related to the IRA, we will continue to evaluate any impact to our consolidated financial statements.

Dividends from Subsidiaries

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Actual Capital Regulatory Capital Requirements

June 30, 2022

September 30, 2022

December 31, 2021

June 30, 2022

September 30, 2022

December 31, 2021

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$ 2,998 $ 3,419 N/A $ 502

RiverSource Life of NY (1)(2)

RiverSource Life of New York (1)(2)

168 310 N/A 42

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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 June 30, 2022 and December 31, 2021.

(3) Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of September 30, 2022 and December 31, 2021.

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

(5) ACC is required to hold capital in compliance with the Minnesota Department of Commerce and SEC capital requirements.

AMERIPRISE FINANCIAL, INC.

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

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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 six months ended June 30, 2022, the parent holding company received cash dividends or a return of capital from its subsidiaries of $1.4 billion (including $500 million from RiverSource Life) and contributed cash to its subsidiaries of $294 million (including $245 million to Ameriprise Bank, FSB).

During the six months ended June 30, 2021, the parent holding company received cash dividends or a return of capital from its subsidiaries of $1.6 billion (including $750 million from RiverSource Life) and contributed cash to its subsidiaries of $71 million (including $7 million to Ameriprise Bank, FSB).

During the nine months ended September 30, 2022, the parent holding company received cash dividends or a return of capital from its subsidiaries of $2.2 billion (including $600 million from RiverSource Life) and contributed cash to its subsidiaries of $512 million (including $375 million to Ameriprise Bank, FSB).

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).

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 $275 million and $263 million for the six months ended June 30, 2022 and 2021, respectively.

On July 26, 2022, we announced a quarterly dividend of $1.25 per common share.

The dividend will be paid on August 19, 2022 to our shareholders of record at the close of business on August 8, 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, which was exhausted in the second quarter of 2022.

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

As of June 30, 2022, we had $2.5 billion remaining under the share repurchase authorization.

We paid regular quarterly dividends to our shareholders totaling $416 million and $396 million for the nine months ended September 30, 2022 and 2021, respectively.

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

The dividend will be paid on November 18, 2022 to our shareholders of record at the close of business on November 7, 2022.

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

As of September 30, 2022, we had $2.1 billion remaining under the share repurchase authorization.

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 six months ended June 30, 2022, we repurchased a total of 3.2 million shares of our common stock at an average price of $279.74 per share.

During the nine months ended September 30, 2022, we repurchased a total of 5.0 million shares of our common stock at an average price of $274.55 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 increased $887 million to $1.8 billion for the six months ended June 30, 2022 compared to $931 million for the prior year period primarily reflecting a $489 million increase in net income, a $327 million increase in current income tax, net and a $318 million increase in deferred taxes, net, partially offset by a $224 million decrease in policyholder account balances, future policy benefits and claims, net.

Net cash provided by operating activities increased $1.4 billion to $3.2 billion for the nine months ended September 30, 2022 compared to $1.8 billion for the prior year period primarily reflecting a $755 million increase in derivatives, net of collateral, a $500 million decrease in income taxes paid, and a $332 million increase in deferred acquisition costs, partially offset by a $560 million decrease in accounts payable and accrued expenses.

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.

AMERIPRISE FINANCIAL, INC.

Net cash used in investing activities increased $3.7 billion to $4.6 billion for the six months ended June 30, 2022 compared to $909 million for the prior year period primarily reflecting a $2.7 billion increase in cash used for purchases of Available-for-Sale securities and a $1.7 billion decrease in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities, partially offset by a $567 million decrease in net cash flows used related to investments of consolidated investment entities.

Net cash used in investing activities increased $7.9 billion to $9.2 billion for the nine months ended September 30, 2022 compared to $1.4 billion for the prior year period primarily reflecting a $5.4 billion increase in cash used for purchases of Available-for-Sale securities, and a $3.1 billion decrease in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities.

Financing Activities

Net cash provided by financing activities increased $2.7 billion to $2.6 billion for the six months ended June 30, 2022 compared to net cash used in financing activities of $101 million for the prior year period primarily reflecting a $2.8 billion increase in banking deposits, a $995 million reduction in net cash outflows from investment certificates and $491 million increase in issuance of long-term debt, partially offset by a $1.4 billion decrease in borrowings by CIEs and a $501 million increase in repayments of long-term debt.

Net cash provided by financing activities increased $6.0 billion to $6.2 billion for the nine months ended September 30, 2022 compared to $259 million for the prior year period primarily reflecting a $4.8 billion increase in banking deposits, a $2.2 billion increase in net cash flows from investment certificates and $491 million increase in issuance of long-term debt, partially offset by a $1 billion decrease in borrowings by CIEs and a $501 million increase in repayments of long-term debt.

Forward-Looking Statements

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• 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;

AMERIPRISE FINANCIAL, INC.

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

• interruptions or other errors in our telecommunications or data processing systems;

20 unchanged sentences

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