AMERIPRISE FINANCIAL INC 10-Q

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions, except per share amounts) Revenues Management and financial advice fees $ 2,456 $ 2,199 $ 4,855 $ 4,336 Distribution fees 505 482 1,011 999 Net investment income 921 811 1,822 1,509 Premiums, policy and contract charges 381 383 771 745 Other revenues 129 132 258 263 Total revenues 4,392 4,007 8,717 7,852 Banking and deposit interest expense 172 131 351 234 Total net revenues 4,220 3,876 8,366 7,618 Benefits and expenses Distribution expenses 1,450 1,248 2,869 2,474 Interest credited to fixed accounts 185 161 317 325 Benefits, claims, losses and settlement expenses 331 327 626 628 Remeasurement (gains) losses of future policy benefit reserves ( 8 ) — ( 12 ) ( 5 ) Change in fair value of market risk benefits 110 ( 99 ) 92 390 Amortization of deferred acquisition costs 61 61 122 123 Interest and debt expense 83 84 165 156 General and administrative expense 957 967 1,917 1,904 Total benefits and expenses 3,169 2,749 6,096 5,995 Pretax income 1,051 1,127 2,270 1,623 Income tax provision 222 237 451 316 Net income $ 829 $ 890 $ 1,819 $ 1,307 Earnings per share Basic $ 8.16 $ 8.36 $ 17.80 $ 12.20 Diluted $ 8.02 $ 8.21 $ 17.49 $ 11.97 See Notes to Consolidated Financial Statements. 3 Index AMERIPRISE FINANCIAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) Net income $ 829 $ 890 $ 1,819 $ 1,307 Other comprehensive income (loss), net of tax: Net unrealized gains (losses) on securities ( 135 ) ( 338 ) ( 313 ) 92 Net unrealized gains (losses) on derivatives — — — 2 Effect of changes in discount rate assumptions on certain long-duration contracts 62 59 131 ( 6 ) Effect of changes in instrument-specific credit risk on market risk benefits 9 ( 126 ) ( 28 ) 35 Foreign currency translation adjustment 1 41 ( 17 ) 74 Total other comprehensive income (loss), net of tax ( 63 ) ( 364 ) ( 227 ) 197 Total comprehensive income (loss) $ 766 $ 526 $ 1,592 $ 1,504 See Notes to Consolidated Financial Statements. 4 Index AMERIPRISE FINANCIAL, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2024 December 31, 2023 (in millions, except share amounts) Assets Cash and cash equivalents $ 7,517 $ 7,477 Cash of consolidated investment entities 351 87 Investments (allowance for credit losses: 2024, $ 25 ; 2023, $ 22 ) 55,865 55,489 Investments of consolidated investment entities, at fair value 2,275 2,099 Market risk benefits 2,082 1,427 Separate account assets 79,098 77,457 Receivables (allowance for credit losses: 2024, $ 76 ; 2023, $ 81 ) 14,823 15,078 Receivables of consolidated investment entities, at fair value 30 28 Deferred acquisition costs 2,694 2,713 Restricted and segregated cash, cash equivalents and investments 1,373 1,635 Other assets 13,592 11,700 Other assets of consolidated investment entities, at fair value — 1 Total assets $ 179,700 $ 175,191 Liabilities and Equity Liabilities: Policyholder account balances, future policy benefits and claims $ 39,742 $ 37,545 Market risk benefits 1,252 1,762 Separate account liabilities 79,098 77,457 Customer deposits 36,237 37,321 Short-term borrowings 201 201 Long-term debt 3,396 3,399 Debt of consolidated investment entities, at fair value 2,386 2,155 Accounts payable and accrued expenses 2,386 2,603 Other liabilities 9,768 7,974 Other liabilities of consolidated investment entities, at fair value 241 45 Total liabilities 174,707 170,462 Equity: Common shares ($ 0.01 par value; shares authorized, 1,250,000,000 ; shares issued, 337,396,479 and 336,780,893 , respectively) 3 3 Additional paid-in capital 9,987 9,824 Retained earnings 23,430 21,905 Treasury shares, at cost ( 238,961,000 and 236,607,681 shares, respectively) ( 26,434 ) ( 25,237 ) Accumulated other comprehensive income (loss), net of tax ( 1,993 ) ( 1,766 ) Total equity 4,993 4,729 Total liabilities and equity $ 179,700 $ 175,191 See Notes to Consolidated Financial Statements. 5 Index AMERIPRISE FINANCIAL, INC. CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) Number of Outstanding Shares Common Shares Additional Paid-In Capital Retained Earnings Treasury Shares Accumulated Other Comprehensive Income (Loss) Total (in millions, except per share data) Balances at April 1, 2024 99,644,365 $ 3 $ 9,924 $ 22,752 $ ( 25,870 ) $ ( 1,930 ) $ 4,879 Net income — — — 829 — — 829 Other comprehensive income (loss), net of tax — — — — — ( 63 ) ( 63 ) Dividends to shareholders — — — ( 151 ) — — ( 151 ) Repurchase of common shares ( 1,314,274 ) — — — ( 566 ) — ( 566 ) Share-based compensation plans 105,388 — 63 — 2 — 65 Balances at June 30, 2024 98,435,479 $ 3 $ 9,987 $ 23,430 $ ( 26,434 ) $ ( 1,993 ) $ 4,993 Balances at April 1, 2023 104,356,434 $ 3 $ 9,612 $ 20,197 $ ( 23,683 ) $ ( 1,985 ) $ 4,144 Net income — — — 890 — — 890 Other comprehensive income (loss), net of tax — — — — — ( 364 ) ( 364 ) Dividends to shareholders — — — ( 146 ) — — ( 146 ) Repurchase of common shares ( 1,620,098 ) — — — ( 502 ) — ( 502 ) Share-based compensation plans 57,023 — 58 — — — 58 Balances at June 30, 2023 102,793,359 $ 3 $ 9,670 $ 20,941 $ ( 24,185 ) $ ( 2,349 ) $ 4,080 Balances at January 1, 2024 100,173,212 $ 3 $ 9,824 $ 21,905 $ ( 25,237 ) $ ( 1,766 ) $ 4,729 Net income — — — 1,819 — — 1,819 Other comprehensive income (loss), net of tax — — — — — ( 227 ) ( 227 ) Dividends to shareholders — — — ( 294 ) — — ( 294 ) Repurchase of common shares ( 3,055,646 ) — — — ( 1,272 ) — ( 1,272 ) Share-based compensation plans 1,317,913 — 163 — 75 — 238 Balances at June 30, 2024 98,435,479 $ 3 $ 9,987 $ 23,430 $ ( 26,434 ) $ ( 1,993 ) $ 4,993 Balances at January 1, 2023 105,278,990 $ 3 $ 9,517 $ 19,918 $ ( 23,089 ) $ ( 2,546 ) $ 3,803 Net income — — — 1,307 — — 1,307 Other comprehensive income (loss), net of tax — — — — — 197 197 Dividends to shareholders — — — ( 284 ) — — ( 284 ) Repurchase of common shares ( 3,631,451 ) — — — ( 1,159 ) — ( 1,159 ) Share-based compensation plans 1,145,820 — 153 — 63 — 216 Balances at June 30, 2023 102,793,359 $ 3 $ 9,670 $ 20,941 $ ( 24,185 ) $ ( 2,349 ) $ 4,080 See Notes to Consolidated Financial Statements. 6 Index AMERIPRISE FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2024 2023 (in millions) Cash Flows from Operating Activities Net income $ 1,819 $ 1,307 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation, amortization and accretion, net ( 89 ) ( 70 ) Deferred income tax expense (benefit) 258 60 Share-based compensation 90 92 Net realized investment (gains) losses ( 2 ) 2 Net trading (gains) losses ( 4 ) ( 19 ) Loss from equity method investments 15 17 Impairments and provision for loan and credit losses — ( 9 ) Net (gains) losses of consolidated investment entities 2 13 Changes in operating assets and liabilities: Restricted and segregated investments 182 213 Deferred acquisition costs 19 40 Policyholder account balances, future policy benefits and claims, and market risk benefits, net 1,608 1,153 Derivatives, net of collateral ( 771 ) ( 507 ) Receivables ( 45 ) 479 Brokerage deposits ( 112 ) ( 564 ) Accounts payable and accrued expenses ( 216 ) ( 53 ) Current income tax, net 77 ( 405 ) Other operating assets and liabilities of consolidated investment entities, net ( 3 ) ( 8 ) Other, net 336 ( 124 ) Net cash provided by (used in) operating activities 3,164 1,617 Cash Flows from Investing Activities Available-for-Sale securities: Proceeds from sales 31 329 Maturities, sinking fund payments and calls 7,155 4,431 Purchases ( 7,619 ) ( 11,098 ) Proceeds from sales, maturities and repayments of mortgage loans 90 75 Funding of mortgage loans ( 205 ) ( 123 ) Proceeds from sales, maturities and collections of other investments 67 60 Purchase of other investments ( 132 ) ( 40 ) Purchase of investments by consolidated investment entities ( 446 ) ( 255 ) Proceeds from sales, maturities and repayments of investments by consolidated investment entities 486 348 Purchase of land, buildings, equipment and software ( 69 ) ( 84 ) Cash paid for written options with deferred premiums ( 57 ) ( 59 ) Cash received from written options with deferred premiums 22 31 Cash paid for deposit receivables ( 17 ) ( 20 ) Cash received for deposit receivables 327 407 Other, net ( 36 ) ( 22 ) Net cash provided by (used in) investing activities $ ( 403 ) $ ( 6,020 ) See Notes to Consolidated Financial Statements. 7 Index AMERIPRISE FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued) Six Months Ended June 30, 2024 2023 (in millions) Cash Flows from Financing Activities Investment certificates: Proceeds from additions $ 2,851 $ 6,395 Maturities, withdrawals and cash surrenders ( 3,793 ) ( 3,642 ) Policyholder account balances: Deposits and other additions 749 729 Net transfers from (to) separate accounts ( 71 ) ( 55 ) Surrenders and other benefits ( 960 ) ( 1,060 ) Change in banking deposits, net ( 32 ) 2,628 Cash paid for purchased options with deferred premiums ( 79 ) ( 44 ) Cash received for purchased options with deferred premiums 82 150 Issuance of long-term debt, net of issuance costs — 741 Repayments of long-term debt ( 5 ) ( 5 ) Dividends paid to shareholders ( 285 ) ( 275 ) Repurchase of common shares ( 1,201 ) ( 1,115 ) Borrowings of consolidated investment entities 554 — Repayments of debt by consolidated investment entities ( 344 ) ( 95 ) Net cash provided by (used in) financing activities ( 2,534 ) 4,352 Effect of exchange rate changes on cash ( 4 ) 28 Net increase (decrease) in cash and cash equivalents, including amounts restricted 223 ( 23 ) Cash and cash equivalents, including amounts restricted, at beginning of period 8,620 8,755 Cash and cash equivalents, including amounts restricted, at end of period $ 8,843 $ 8,732 Supplemental Disclosures: Interest paid excluding consolidated investment entities $ 439 $ 281 Interest paid by consolidated investment entities 86 87 Income taxes paid, net 107 684 Leased assets obtained in exchange for operating lease liabilities 15 10 June 30, 2024 December 31, 2023 (in millions) Reconciliation of cash and cash equivalents, including amounts restricted: Cash and cash equivalents $ 7,517 $ 7,477 Cash of consolidated investment entities 351 87 Restricted and segregated cash, cash equivalents and investments 1,373 1,635 Less: Restricted and segregated investments ( 398 ) ( 579 ) Total cash and cash equivalents including amounts restricted per consolidated statements of cash flows $ 8,843 $ 8,620 See Notes to Consolidated Financial Statements. 8 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. The foreign operations of Ameriprise Financial, Inc. (“Ameriprise Financial”) are conducted primarily through Columbia Threadneedle Investments UK International Limited, TAM UK International Holdings Ltd and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”). The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature. The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications of prior period amounts have been made to conform with the current presentation. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 22, 2024 (“2023 10-K”). The Company evaluated events or transactions that occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. No subsequent events or transactions requiring recognition or disclosure were identified. 2. Recent Accounting Pronouncements Future Adoption of New Accounting Standards Segment Reporting – Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures , updating reportable segment disclosure requirements in accordance with Topic 280, Segment Reporting (“Topic 280”), primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and contain other disclosure requirements. The amendments are effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted. The Company is assessing changes to the segment-related disclosures resulting from the standard. The adoption of the standard will not have an impact on the Company’s consolidated results of operations and financial condition as the standard is disclosure-related only. Income Taxes – Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , updating the accounting standards related to income tax disclosures, primarily focused on the disaggregation of income taxes paid and the rate reconciliation table. The standard is to be applied prospectively with an option for retrospective application and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is assessing changes to the income tax-related disclosures resulting from the standard. The adoption of the standard will not have an impact on the Company’s consolidated results of operations and financial condition as the standard is disclosure-related only. 9 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 3. Revenue from Contracts with Customers The following tables present revenue disaggregated by segment on an adjusted operating basis with a reconciliation of segment revenues to those reported on the Consolidated Statements of Operations: Three Months Ended June 30, 2024 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 522 $ — $ — $ 522 $ — $ 522 Institutional — 161 — — 161 — 161 Advisory fees 1,361 — — — 1,361 — 1,361 Financial planning fees 110 — — — 110 — 110 Transaction and other fees 100 52 16 — 168 — 168 Total management and financial advice fees 1,571 735 16 — 2,322 — 2,322 Distribution fees: Mutual funds 199 56 — — 255 — 255 Insurance and annuity 260 40 84 — 384 — 384 Off-balance sheet brokerage cash 40 — — — 40 — 40 Other products 109 — — — 109 — 109 Total distribution fees 608 96 84 — 788 — 788 Other revenues 66 — — 1 67 — 67 Total revenue from contracts with customers 2,245 831 100 1 3,177 — 3,177 Revenue from other sources (1) 571 17 828 117 1,533 51 1,584 Total segment gross revenues 2,816 848 928 118 4,710 51 4,761 Banking and deposit interest expense ( 172 ) — — ( 7 ) ( 179 ) — ( 179 ) Total segment net revenues 2,644 848 928 111 4,531 51 4,582 Elimination of intersegment revenues ( 236 ) ( 23 ) ( 108 ) 7 ( 360 ) ( 2 ) ( 362 ) Total net revenues $ 2,408 $ 825 $ 820 $ 118 $ 4,171 $ 49 $ 4,220 10 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Three Months Ended June 30, 2023 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 490 $ — $ — $ 490 $ — $ 490 Institutional — 157 — — 157 — 157 Advisory fees 1,154 — — — 1,154 — 1,154 Financial planning fees 104 — — — 104 — 104 Transaction and other fees 96 48 14 — 158 — 158 Total management and financial advice fees 1,354 695 14 — 2,063 — 2,063 Distribution fees: Mutual funds 179 51 — — 230 — 230 Insurance and annuity 222 39 82 — 343 — 343 Off-balance sheet brokerage cash 84 — — — 84 — 84 Other products 84 — — — 84 — 84 Total distribution fees 569 90 82 — 741 — 741 Other revenues 59 7 — — 66 — 66 Total revenue from contracts with customers 1,982 792 96 — 2,870 — 2,870 Revenue from other sources (1) 492 16 762 151 1,421 53 1,474 Total segment gross revenues 2,474 808 858 151 4,291 53 4,344 Banking and deposit interest expense ( 131 ) — — ( 3 ) ( 134 ) — ( 134 ) Total segment net revenues 2,343 808 858 148 4,157 53 4,210 Elimination of intersegment revenues ( 211 ) ( 19 ) ( 104 ) 3 ( 331 ) ( 3 ) ( 334 ) Total net revenues $ 2,132 $ 789 $ 754 $ 151 $ 3,826 $ 50 $ 3,876 11 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Six Months Ended June 30, 2024 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 1,052 $ — $ — $ 1,052 $ — $ 1,052 Institutional — 320 — — 320 — 320 Advisory fees 2,664 — — — 2,664 — 2,664 Financial planning fees 222 — — — 222 — 222 Transaction and other fees 194 102 30 — 326 — 326 Total management and financial advice fees 3,080 1,474 30 — 4,584 — 4,584 Distribution fees: Mutual funds 395 112 — — 507 — 507 Insurance and annuity 507 79 168 — 754 — 754 Off-balance sheet brokerage cash 90 — — — 90 — 90 Other products 214 — — — 214 — 214 Total distribution fees 1,206 191 168 — 1,565 — 1,565 Other revenues 126 5 — 1 132 — 132 Total revenue from contracts with customers 4,412 1,670 198 1 6,281 — 6,281 Revenue from other sources (1) 1,143 33 1,642 246 3,064 100 3,164 Total segment gross revenues 5,555 1,703 1,840 247 9,345 100 9,445 Banking and deposit interest expense ( 351 ) — — ( 15 ) ( 366 ) — ( 366 ) Total segment net revenues 5,204 1,703 1,840 232 8,979 100 9,079 Elimination of intersegment revenues ( 461 ) ( 47 ) ( 214 ) 14 ( 708 ) ( 5 ) ( 713 ) Total net revenues $ 4,743 $ 1,656 $ 1,626 $ 246 $ 8,271 $ 95 $ 8,366 12 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Six Months Ended June 30, 2023 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 981 $ — $ — $ 981 $ — $ 981 Institutional — 309 — — 309 — 309 Advisory fees 2,263 — — — 2,263 — 2,263 Financial planning fees 205 — — — 205 — 205 Transaction and other fees 185 96 28 — 309 — 309 Total management and financial advice fees 2,653 1,386 28 — 4,067 — 4,067 Distribution fees: Mutual funds 354 103 — — 457 — 457 Insurance and annuity 433 77 162 — 672 — 672 Off-balance sheet brokerage cash 210 — — — 210 — 210 Other products 165 — — — 165 — 165 Total distribution fees 1,162 180 162 — 1,504 — 1,504 Other revenues 117 12 — — 129 — 129 Total revenue from contracts with customers 3,932 1,578 190 — 5,700 — 5,700 Revenue from other sources (1) 910 29 1,492 281 2,712 100 2,812 Total segment gross revenues 4,842 1,607 1,682 281 8,412 100 8,512 Banking and deposit interest expense ( 234 ) — — ( 7 ) ( 241 ) — ( 241 ) Total segment net revenues 4,608 1,607 1,682 274 8,171 100 8,271 Elimination of intersegment revenues ( 412 ) ( 36 ) ( 206 ) 7 ( 647 ) ( 6 ) ( 653 ) Total net revenues $ 4,196 $ 1,571 $ 1,476 $ 281 $ 7,524 $ 94 $ 7,618 (1) Revenues not included in the scope of the revenue from contracts with customers standard. The amounts primarily consist of revenue associated with insurance and annuity products and investment income from financial instruments. The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers on a consolidated basis. Management and Financial Advice Fees Asset Management Fees The Company earns revenue for performing asset management services for retail and institutional clients. The revenue is earned based on a fixed or tiered rate applied, as a percentage, to assets under management. Assets under management vary with market fluctuations and client behavior. The asset management performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Asset management fees are accrued, invoiced and collected on a monthly or quarterly basis. The Company’s asset management contracts for Open Ended Investment Companies (“OEICs”) in the United Kingdom (“U.K.”) and Société d'Investissement à Capital Variable (“SICAVs”) in Europe include performance obligations for asset management and fund distribution services. The amounts received for these services are reported as Management and financial advice fees. The revenue recognition pattern is the same for both performance obligations as the fund distribution services revenue is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment) and not recognized until assets under management are known. The Company may also earn performance-based management fees on institutional accounts, hedge funds, collateralized loan obligations (“CLOs”), OEICs, SICAVs and property and other funds based on a percentage of account returns in excess of either a benchmark index or a contractually specified level. This revenue is variable and impacted primarily by the performance of the assets being managed compared to the benchmark index or contractually specified level. The revenue is not recognized until it is probable that a significant reversal will not occur. Performance-based management fees are invoiced on a quarterly or annual basis. Advisory Fees The Company earns revenue for performing investment advisory services for certain brokerage customer’s discretionary and non-discretionary managed accounts. The revenue is earned based on a contractual fixed rate applied, as a percentage, to the market value of assets held in the account. The investment advisory performance obligation is considered a series of distinct services that are 13 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) substantially the same and are satisfied each day over the contract term. Advisory fees are billed on a monthly basis on the prior month end assets. Financial Planning Fees The Company earns revenue for providing financial plans to its clients. The revenue earned for each financial plan is either a fixed fee (received monthly, quarterly or annually) or a variable fee (received monthly) based on a contractual fixed rate applied, as a percentage, to the prior month end assets held in a client’s investment advisory account. The financial planning fee is based on the complexity of a client’s financial and life situation and his or her advisor’s experience. The performance obligation is satisfied at the time the financial plan is delivered to the customer. The Company records a contract liability for the unearned revenue when cash is received before the plan is delivered. The financial plan contracts with clients are annual contracts. Amounts recorded as a contract liability are recognized as revenue when the financial plan is delivered, which occurs within the annual contract period. For fixed fee arrangements, revenue is recognized when the financial plan is delivered. The Company accrues revenue for any amounts that have not been received at the time the financial plan is delivered. For variable fee arrangements, revenue is recognized for cash that has been received when the financial plan is delivered. The amount received after the plan is delivered is variably constrained due to factors outside the Company’s control including market volatility and client behavior. The revenue is recognized when it is probable that a significant reversal will not occur and is generally each month end as the advisory account balance uncertainty is resolved. Contract liabilities for financial planning fees, which are included in Other liabilities, were $ 166 million and $ 168 million as of June 30, 2024 and December 31, 2023, respectively. The Company pays sales commissions to advisors when a new financial planning contract is obtained or when an existing contract is renewed. The sales commissions paid to the advisors prior to financial plan delivery are considered costs to obtain a contract with a customer and are initially capitalized. When the performance obligation to deliver the financial plan is satisfied, the commission is recognized as distribution expense. Capitalized costs to obtain these contracts are reported in Other assets and were $ 133 million and $ 135 million as of June 30, 2024 and December 31, 2023, respectively. Transaction and Other Fees The Company earns revenue for providing customer support, shareholder and administrative services (including transfer agent services) for affiliated mutual funds and networking, sub-accounting and administrative services for unaffiliated mutual funds. The Company also receives revenue for providing custodial services and account maintenance services on brokerage and retirement accounts that are not included in an advisory relationship. Transfer agent and administrative revenue is earned based on either a fixed rate applied, as a percentage, to assets under management or an annual fixed fee for each fund position. Networking and sub-accounting revenue is earned based on either an annual fixed fee for each account or an annual fixed fee for each fund position. Custodial and account maintenance revenue is generally earned based on a quarterly or annual fixed fee for each account. Each of the customer support and administrative services performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Transaction and other fees (other than custodial service fees) are invoiced or charged to brokerage accounts on a monthly or quarterly basis. Custodial service fees are invoiced or charged to brokerage accounts on an annual basis. Contract liabilities for custodial service fees, which are included in Other liabilities, were $ 26 million and nil as of June 30, 2024 and December 31, 2023, respectively. The Company earns revenue for providing trade execution services to franchise advisors. The trade execution performance obligation is satisfied at the time of each trade and the revenue is primarily earned based on a fixed fee per trade. These fees are invoiced and collected on a semi-monthly basis. Distribution Fees Mutual Funds and Insurance and Annuity Products The Company earns revenue for selling affiliated and unaffiliated mutual funds, fixed and variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). This ongoing revenue may be recognized for many years after the initial sale. The revenue will not be recognized until it is probable that a significant reversal will not occur. The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and 14 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis. Off-Balance Sheet Brokerage Cash The Company earns revenue for placing clients’ deposits in its brokerage sweep program with third-party banks. The amount received from the third-party banks is impacted by short-term interest rates. The performance obligation with the financial institutions that participate in the sweep program is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The revenue is earned daily and settled monthly based on a rate applied, as a percentage, to the deposits placed. Other Products The Company earns revenue for selling unaffiliated alternative products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment and is earned generally based on a fixed rate applied, as a percentage, to the market value of the investment. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment). The revenue will not be recognized until it is probable that a significant reversal will not occur. The Company earns revenue from brokerage clients for the execution of requested trades. The performance obligation is satisfied at the time of trade execution and amounts are received on the settlement date. The revenue varies for each trade based on various factors that include the type of investment, dollar amount of the trade and how the trade is executed (online or broker assisted). Other Revenues The Company earns revenue from fees charged to franchise advisors for providing various services the advisors need to manage and grow their practices. The primary services include: licensing of intellectual property and software, compliance supervision, insurance coverage, technology services and support, consulting and other services. The services are either provided by the Company or third- party providers. The Company controls the services provided by third parties as it has the right to direct the third parties to perform the services, is primarily responsible for performing the services and sets the prices the advisors are charged. The Company recognizes revenue for the gross amount of the fees received from the advisors. The fees are primarily collected monthly as a reduction of commission payments. Intellectual property and software licenses, along with compliance supervision, insurance coverage, and technology services and support are primarily earned based on a monthly fixed fee. These services are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested. Contract Costs Asset The Company has an asset of $ 20 million and $ 25 million as of June 30, 2024 and December 31, 2023, respectively, related to the transition of investment advisory services under an arrangement with BMO Financial Group for clients that elected to transfer U.S. retail and institutional assets to the Company. Receivables Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $ 514 million and $ 537 million as of June 30, 2024 and December 31, 2023, respectively. 15 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 4. Variable Interest Entities The Company provides asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds and other private funds, property funds and certain non-U.S. series funds (such as OEICs and SICAVs) (collectively, “investment entities”), which are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates certain investment entities (collectively, “consolidated investment entities”) if the Company is deemed to be the primary beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment and existing future funding commitments, and the Company has not provided any additional support to these entities. The Company has unfunded commitments related to consolidated CLOs of $ 12 million and $ 24 million as of June 30, 2024 and December 31, 2023, respectively. Structured Investments The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. Additionally, the Company invests in CLOs for which it is the sponsor. CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary. The Company’s maximum exposure to loss with respect to structured investments and non-consolidated CLOs is limited to its amortized cost. The Company classifies these investments as Available-for-Sale securities. See Note 5 for additional information on these investments. Other Non-Consolidated VIEs The Company’s investments in other non-consolidated VIEs are recorded in other investments. The Company’s maximum exposure to loss with respect to its investments in these non-consolidated VIEs is limited to its carrying value. The carrying value of other non-consolidated VIEs was $ 253 million and $ 168 million as of June 30, 2024 and December 31, 2023, respectively. The Company’s liability related to original purchase commitments not yet remitted to the VIEs was not material as of both June 30, 2024 and December 31, 2023, respectively. The Company has not provided any additional support to the VIEs beyond the funding commitments. Property Funds, Non-U.S. Series Funds, Hedge Funds and other Private Funds The Company provides investment advice and other related services to property funds, non-U.S. series funds, hedge funds and other private funds, some of which are considered VIEs. For investment management services, the Company generally earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangements are at market and commensurate with the level of effort required to provide those services. The Company does not have a significant economic interest and is not required to consolidate any of these funds. Affordable Housing Partnerships and Other Real Estate Partnerships The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships. A majority of the limited partnerships are VIEs. Fair Value of Assets and Liabilities The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 12 for the definition of the three levels of the fair value hierarchy. 16 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis: June 30, 2024 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 45 $ — $ 45 Common stocks — 5 2 7 Syndicated loans — 2,137 86 2,223 Total investments — 2,187 88 2,275 Receivables — 30 — 30 Total assets at fair value $ — $ 2,217 $ 88 $ 2,305 Liabilities Debt (1) $ — $ 2,386 $ — $ 2,386 Other liabilities — 241 — 241 Total liabilities at fair value $ — $ 2,627 $ — $ 2,627 December 31, 2023 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 40 $ — $ 40 Common stocks — 5 — 5 Syndicated loans — 1,991 63 2,054 Total investments — 2,036 63 2,099 Receivables — 28 — 28 Other assets — 1 — 1 Total assets at fair value $ — $ 2,065 $ 63 $ 2,128 Liabilities Debt (1) $ — $ 2,155 $ — $ 2,155 Other liabilities — 45 — 45 Total liabilities at fair value $ — $ 2,200 $ — $ 2,200 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $ 2.4 billion and $ 2.1 billion as of June 30, 2024 and December 31, 2023, respectively. 17 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables provide a summary of changes in Level 3 assets held by consolidated investment entities measured at fair value on a recurring basis: Common Stocks Syndicated Loans (in millions) Balance at April 1, 2024 $ 1 $ 65 Total gains (losses) included in: Net income — ( 5 ) (1) Purchases — 47 Transfers into Level 3 2 25 Transfers out of Level 3 ( 1 ) ( 46 ) Balance at June 30, 2024 $ 2 $ 86 Changes in unrealized gains (losses) included in net income relating to assets held at June 30, 2024 $ — $ ( 4 ) Syndicated Loans (in millions) Balance at April 1, 2023 $ 50 Total gains (losses) included in: Net income ( 2 ) (1) Purchases 10 Sales ( 3 ) Transfers into Level 3 39 Transfers out of Level 3 ( 27 ) Balance at June 30, 2023 $ 67 Changes in unrealized gains (losses) included in net income relating to assets held at June 30, 2023 $ ( 2 ) (1) Common Stocks Syndicated Loans (in millions) Balance at January 1, 2024 $ — $ 63 Total gains (losses) included in: Net income — ( 7 ) (1) Purchases — 84 Transfers into Level 3 3 40 Transfers out of Level 3 ( 1 ) ( 94 ) Balance at June 30, 2024 $ 2 $ 86 Changes in unrealized gains (losses) included in net income relating to assets held at June 30, 2024 $ — $ ( 6 ) (1) 18 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Syndicated Loans Other Assets (in millions) Balance at January 1, 2023 $ 125 $ 1 Total gains (losses) included in: Net income ( 3 ) (1) — Purchases 27 — Sales ( 10 ) — Settlements ( 15 ) — Transfers into Level 3 60 — Transfers out of Level 3 ( 117 ) ( 1 ) Balance at June 30, 2023 $ 67 $ — Changes in unrealized gains (losses) included in net income relating to assets held at June 30, 2023 $ ( 2 ) (1) $ — 1) Included in Net investment income. Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote. All Level 3 measurements as of June 30, 2024 and December 31, 2023 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Determination of Fair Value Assets Investments The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 12 for a description of the Company’s determination of the fair value of corporate debt securities, common stocks and other investments. Receivables For receivables of the consolidated CLOs, the carrying value approximates fair value as the nature of these assets has historically been short-term and the receivables have been collectible. The fair value of these receivables is classified as Level 2. Liabilities Debt The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets and is classified as Level 2. Other Liabilities Other liabilities consist primarily of securities purchased but not yet settled by consolidated CLOs. The carrying value approximates fair value as the nature of these liabilities has historically been short-term. The fair value of these liabilities is classified as Level 2. Other liabilities also include accrued interest on CLO debt. Fair Value Option The Company has elected the fair value option for the financial assets and liabilities of the consolidated CLOs. Management believes that the use of the fair value option better matches the changes in fair value of assets and liabilities related to the CLOs. 19 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected: June 30, 2024 December 31, 2023 (in millions) Syndicated loans Unpaid principal balance $ 2,307 $ 2,190 Excess unpaid principal over fair value ( 84 ) ( 136 ) Fair value $ 2,223 $ 2,054 Fair value of loans in nonaccrual status 5 13 Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 14 40 Debt Unpaid principal balance $ 2,573 $ 2,362 Excess unpaid principal over fair value ( 187 ) ( 207 ) Carrying value (1) $ 2,386 $ 2,155 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $ 2.4 billion and $ 2.1 billion as of June 30, 2024 and December 31, 2023, respectively. During the second quarter of 2024, the Company launched one new CLO. The new CLO issued debt of $ 407 million. Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in Net investment income. Gains and losses related to changes in the fair value of investments and gains and losses on sales of investments are also recorded in Net investment income. Interest expense on debt is recorded in Interest and debt expense with gains and losses related to changes in the fair value of debt recorded in Net investment income. Total net gains (losses) recognized in Net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for both the three and six months ended June 30, 2024 and 2023. Debt of the consolidated investment entities and the stated interest rates were as follows: Carrying Value Weighted Average Interest Rate June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 (in millions) Debt of consolidated CLOs due 2030-2037 $ 2,386 $ 2,155 6.6 % 6.6 % The debt of the consolidated CLOs has both fixed and floating interest rates, which range from nil to 14.8 %. The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates. 5. Investments The following is a summary of Ameriprise Financial investments: June 30, 2024 December 31, 2023 (in millions) Available-for-Sale securities, at fair value $ 51,695 $ 51,562 Mortgage loans (allowance for credit losses: 2024, $ 14 ; 2023, $ 14 ) 2,233 2,118 Policy loans 947 912 Other investments (allowance for credit losses: 2024, $ 6 ; 2023, $ 6 ) 990 897 Total $ 55,865 $ 55,489 Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, equity securities, seed money investments in proprietary funds, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days. 20 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following is a summary of Net investment income: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) Investment income on fixed maturities $ 768 $ 645 $ 1,522 $ 1,216 Net realized gains (losses) ( 4 ) 6 ( 3 ) 10 Consolidated investment entities 53 45 98 87 Other (1) 104 115 205 196 Total $ 921 $ 811 $ 1,822 $ 1,509 (1) Prior period amount associated with affordable housing partnerships has been reclassified to Other to conform to current year presentation. Available-for-Sale securities distributed by type were as follows: June 30, 2024 Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 13,376 $ 219 $ ( 663 ) $ — $ 12,932 Residential mortgage backed securities 22,921 65 ( 1,232 ) — 21,754 Commercial mortgage backed securities 5,961 10 ( 304 ) ( 4 ) 5,663 Asset backed securities 7,845 32 ( 47 ) — 7,830 State and municipal obligations 714 42 ( 19 ) ( 1 ) 736 U.S. government and agency obligations 2,762 — — — 2,762 Foreign government bonds and obligations 19 — ( 1 ) — 18 Total $ 53,598 $ 368 $ ( 2,266 ) $ ( 5 ) $ 51,695 Description of Securities December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 12,675 $ 409 $ ( 507 ) $ ( 1 ) $ 12,576 Residential mortgage backed securities 22,130 107 ( 1,171 ) — 21,066 Commercial mortgage backed securities 6,380 11 ( 341 ) — 6,050 Asset backed securities 8,353 25 ( 59 ) — 8,319 State and municipal obligations 719 62 ( 20 ) ( 1 ) 760 U.S. government and agency obligations 2,739 1 — — 2,740 Foreign government bonds and obligations 19 — ( 1 ) — 18 Other securities 33 — — — 33 Total $ 53,048 $ 615 $ ( 2,099 ) $ ( 2 ) $ 51,562 As of June 30, 2024 and December 31, 2023, accrued interest of $ 327 million and $ 319 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in Receivables. As of both June 30, 2024 and December 31, 2023, fixed maturity securities comprised approximately 93 % of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of June 30, 2024 and December 31, 2023, the Company’s internal analysts rated $ 367 million and $ 282 million, respectively, of securities using criteria similar to those used by NRSROs. 21 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) A summary of fixed maturity securities by rating was as follows: Ratings June 30, 2024 December 31, 2023 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 26,120 $ 25,303 49 % $ 25,235 $ 24,342 47 % AA 13,231 12,611 24 14,013 13,534 26 A 3,302 3,290 6 3,073 3,139 6 BBB 10,673 10,218 20 10,396 10,216 20 Below investment grade (1) 272 273 1 331 331 1 Total fixed maturities $ 53,598 $ 51,695 100 % $ 53,048 $ 51,562 100 % (1) The amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $ 1 million as of both June 30, 2024 and December 31, 2023. These securities are not rated but are included in below investment grade due to their risk characteristics. As of June 30, 2024 and December 31, 2023, approximately 85 % and 83 % of securities rated AA were GNMA, FNMA and FHLMC mortgage backed securities, respectively. No holdings of any issuer were greater than 10% of the Company’s total equity as of both June 30, 2024 and December 31, 2023. The following tables summarize the fair value and gross unrealized losses on Available-for-Sale securities, aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit losses has been recorded: Description of Securities June 30, 2024 Less than 12 Months 12 Months or More Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 211 $ 3,281 $ ( 54 ) 364 $ 5,514 $ ( 609 ) 575 $ 8,795 $ ( 663 ) Residential mortgage backed securities 125 4,126 ( 29 ) 757 11,450 ( 1,203 ) 882 15,576 ( 1,232 ) Commercial mortgage backed securities 19 498 ( 2 ) 272 4,120 ( 302 ) 291 4,618 ( 304 ) Asset backed securities 24 563 ( 1 ) 82 909 ( 46 ) 106 1,472 ( 47 ) State and municipal obligations 12 31 ( 1 ) 46 130 ( 18 ) 58 161 ( 19 ) U.S. government and agency obligations 20 1,783 — 1 — — 21 1,783 — Foreign government bonds and obligations 1 5 — 3 12 ( 1 ) 4 17 ( 1 ) Total 412 $ 10,287 $ ( 87 ) 1,525 $ 22,135 $ ( 2,179 ) 1,937 $ 32,422 $ ( 2,266 ) 22 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Description of Securities December 31, 2023 Less than 12 Months 12 Months or More Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 97 $ 1,276 $ ( 11 ) 376 $ 5,197 $ ( 496 ) 473 $ 6,473 $ ( 507 ) Residential mortgage backed securities 82 3,052 ( 25 ) 734 10,677 ( 1,146 ) 816 13,729 ( 1,171 ) Commercial mortgage backed securities 31 747 ( 9 ) 277 4,092 ( 332 ) 308 4,839 ( 341 ) Asset backed securities 49 885 ( 2 ) 116 2,840 ( 57 ) 165 3,725 ( 59 ) State and municipal obligations 5 29 ( 1 ) 49 138 ( 19 ) 54 167 ( 20 ) U.S. government and agency obligations 11 955 — 1 — — 12 955 — Foreign government bonds and obligations — — — 3 12 ( 1 ) 3 12 ( 1 ) Total 275 $ 6,944 $ ( 48 ) 1,556 $ 22,956 $ ( 2,051 ) 1,831 $ 29,900 $ ( 2,099 ) As part of the Company’s ongoing monitoring process, management determined that the increase in total gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the six months ended June 30, 2024 is primarily attributable to the impact of higher interest rates. As of June 30, 2024, the Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of June 30, 2024 and December 31, 2023, approximately 97 % and 96 %, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade. The following table presents rollforwards of the allowance for credit losses on Available-for-Sale securities: Corporate Debt Securities Commercial Mortgage Backed Securities State and Municipal Obligations Total (in millions) Balance at April 1, 2024 $ 1 $ — $ 1 $ 2 Additions for which credit losses were not previously recorded — 4 — 4 Reductions for securities sold during the period (realized) ( 1 ) — — ( 1 ) Balance at June 30, 2024 $ — $ 4 $ 1 $ 5 Balance at April 1, 2023 $ 23 $ — $ 2 $ 25 Reductions for securities sold during the period (realized) ( 13 ) — — ( 13 ) Additional increases (decreases) on securities that had an allowance recorded in a previous period ( 3 ) — — ( 3 ) Balance at June 30, 2023 $ 7 $ — $ 2 $ 9 Balance at January 1, 2024 $ 1 $ — $ 1 $ 2 Additions for which credit losses were not previously recorded — 4 — 4 Reductions for securities sold during the period (realized) ( 1 ) — — ( 1 ) Balance at June 30, 2024 $ — $ 4 $ 1 $ 5 Balance at January 1, 2023 $ 20 $ — $ 2 $ 22 Reductions for securities sold during the period (realized) ( 13 ) — — ( 13 ) Balance at June 30, 2023 $ 7 $ — $ 2 $ 9 23 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in Net investment income were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) Gross realized investment gains $ 4 $ — $ 4 $ 10 Gross realized investment losses ( 3 ) ( 10 ) ( 3 ) ( 12 ) Credit reversals (losses) ( 3 ) 16 ( 3 ) 13 Other impairments — — — ( 2 ) Total $ ( 2 ) $ 6 $ ( 2 ) $ 9 Credit losses for the three and six months ended June 30, 2024 primarily related to recording an allowance for credit losses on a commercial mortgage backed security with a recent downgrade. Previously recorded allowance for credit losses was reversed during the three and six months ended June 30, 2023 primarily due to the partial sale of a corporate debt security in the communications industry. See Note 15 for a rollforward of net unrealized investment gains (losses) included in accumulated other comprehensive income (loss) (“AOCI”). Available-for-Sale securities by contractual maturity as of June 30, 2024 were as follows: Amortized Cost Fair Value (in millions) Due within one year $ 4,332 $ 4,322 Due after one year through five years 2,361 2,297 Due after five years through 10 years 5,057 4,714 Due after 10 years 5,121 5,115 16,871 16,448 Residential mortgage backed securities 22,921 21,754 Commercial mortgage backed securities 5,961 5,663 Asset backed securities 7,845 7,830 Total $ 53,598 $ 51,695 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities were not included in the maturities distribution. 6. Financing Receivables Financing receivables are comprised of commercial loans, consumer loans and deposit receivables. Allowance for Credit Losses The following tables present a rollforward of the allowance for credit losses: Commercial Loans Consumer Loans Total (in millions) Balance at January 1, 2024 $ 54 $ 9 $ 63 Provisions ( 5 ) 2 ( 3 ) Charge-offs ( 2 ) ( 1 ) ( 3 ) Balance at June 30, 2024 $ 47 $ 10 $ 57 Balance at January 1, 2023 $ 54 $ 5 $ 59 Provisions 1 3 4 Charge-offs ( 1 ) ( 1 ) ( 2 ) Balance at June 30, 2023 $ 54 $ 7 $ 61 As of June 30, 2024 and December 31, 2023, accrued interest on commercial loans was $ 20 million and $ 19 million, respectively, and is recorded in Receivables and excluded from the amortized cost basis of commercial loans. 24 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Purchases and Sales During the three months ended June 30, 2024 and 2023, the Company purchased $ 7 million and nil , respectively, of syndicated loans, and sold $ 4 million and $ 2 million, respectively, of syndicated loans. During the six months ended June 30, 2024 and 2023, the Company purchased $ 7 million and $ 1 million, respectively, of syndicated loans, and sold $ 4 million and $ 3 million, respectively, of syndicated loans. During the three months ended June 30, 2024 and 2023, the Company purchased $ 74 million and $ 52 million, respectively, of residential mortgage loans. During the six months ended June 30, 2024 and 2023, the Company purchased $ 110 million and $ 95 million, respectively, of residential mortgage loans. The Company has not acquired any loans with deteriorated credit quality as of the acquisition date. Credit Quality Information Nonperforming loans were $ 12 million as of both June 30, 2024 and December 31, 2023. All other loans were considered to be performing. Commercial Loans Commercial Mortgage Loans The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1 % of total commercial mortgage loans as of both June 30, 2024 and December 31, 2023. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. There were no commercial mortgage loans past due as of both June 30, 2024 and December 31, 2023. The tables below present the amortized cost basis of commercial mortgage loans by year of origination and loan-to-value ratio: June 30, 2024 Loan-to-Value Ratio 2024 2023 2022 2021 2020 Prior Total (in millions) > 100% $ — $ — $ — $ — $ 10 $ 21 $ 31 80% - 100% 6 — — — — 49 55 60% - 80% 48 44 18 11 5 137 263 40% - 60% 28 22 45 72 44 368 579 < 40% 11 10 46 101 48 711 927 Total $ 93 $ 76 $ 109 $ 184 $ 107 $ 1,286 $ 1,855 December 31, 2023 Loan-to-Value Ratio 2023 2022 2021 2020 2019 Prior Total (in millions) > 100% $ — $ — $ — $ — $ 2 $ 22 $ 24 80% - 100% — 5 — 2 11 50 68 60% - 80% 59 26 6 14 40 106 251 40% - 60% 8 47 133 53 70 348 659 < 40% 10 32 49 40 80 619 830 Total $ 77 $ 110 $ 188 $ 109 $ 203 $ 1,145 $ 1,832 Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type. For the six months ended June 30, 2024, write-offs of commercial mortgage loans were not material. 25 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 (in millions) East North Central $ 188 $ 189 10 % 10 % East South Central 47 52 3 3 Middle Atlantic 117 112 6 6 Mountain 147 138 8 8 New England 26 28 2 2 Pacific 626 624 34 34 South Atlantic 472 465 25 25 West North Central 116 109 6 6 West South Central 116 115 6 6 Total $ 1,855 $ 1,832 100 % 100 % Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 (in millions) Apartments $ 495 $ 485 27 % 26 % Hotel 25 13 1 1 Industrial 333 317 18 17 Mixed use 63 64 3 4 Office 221 241 12 13 Retail 565 561 31 31 Other 153 151 8 8 Total $ 1,855 $ 1,832 100 % 100 % Syndicated Loans The investment in syndicated loans as of June 30, 2024 and December 31, 2023 was $ 125 million and $ 145 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. There were no syndicated loans past due as of June 30, 2024 and syndicated loans past due were not material as of December 31, 2023. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality. For the six months ended June 30, 2024, write-offs of syndicated loans were not material. The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating: June 30, 2024 Internal Risk Rating 2024 2023 2022 2021 2020 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ — $ — Risk 4 — — — — — 2 2 Risk 3 — 1 — 10 1 3 15 Risk 2 31 12 1 7 2 10 63 Risk 1 15 14 — 7 2 7 45 Total $ 46 $ 27 $ 1 $ 24 $ 5 $ 22 $ 125 26 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) December 31, 2023 Internal Risk Rating 2023 2022 2021 2020 2019 Prior Total (in millions) Risk 5 $ — $ 1 $ — $ — $ — $ — $ 1 Risk 4 — — — 1 2 — 3 Risk 3 2 — 12 2 2 10 28 Risk 2 26 3 17 5 11 2 64 Risk 1 14 5 15 3 10 2 49 Total $ 42 $ 9 $ 44 $ 11 $ 25 $ 14 $ 145 Financial Advisor Loans The Company offers loans to financial advisors for transitional cost assistance and practice operations. Repayment of the loan is highly dependent on the retention of the financial advisor. In the event a financial advisor is no longer affiliated with the Company, the unpaid balances generally become immediately due. Accordingly, the primary risk factor for advisor loans is termination status. The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was $ 8 million and $ 7 million as of June 30, 2024 and December 31, 2023, respectively. For the six months ended June 30, 2024, write-offs of advisor loans were not material. The tables below present the amortized cost basis of advisor loans by origination year and termination status: June 30, 2024 Termination Status 2024 2023 2022 2021 2020 Prior Total (in millions) Active $ 197 $ 377 $ 288 $ 136 $ 93 $ 191 $ 1,282 Terminated — — 2 3 3 9 17 Total $ 197 $ 377 $ 290 $ 139 $ 96 $ 200 $ 1,299 December 31, 2023 Termination Status 2023 2022 2021 2020 2019 Prior Total (in millions) Active $ 395 $ 310 $ 151 $ 107 $ 79 $ 157 $ 1,199 Terminated — 2 1 1 4 4 12 Total $ 395 $ 312 $ 152 $ 108 $ 83 $ 161 $ 1,211 Consumer Loans Residential Mortgage Loans The Company reviews the credit worthiness of the borrower in order to determine the risk of loss on residential mortgage loans. Geographic location and FICO scores are the primary credit quality indicators included in the model that projects the Company’s risk of credit loss over the life of the residential mortgage loan portfolio. Delinquency rates are measured based on the number of days past due. Residential mortgage loans over 30 days past due were $ 2 million as of both June 30, 2024 and December 31, 2023. For the six months ended June 30, 2024, write-offs of residential mortgage loans were not material. 27 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The tables below present the amortized cost basis of residential mortgage loans by year of origination and FICO score: FICO Score June 30, 2024 2024 2023 2022 2021 2020 Total (in millions) > 810 $ 2 $ 9 $ 3 $ 2 $ 1 $ 17 780 - 809 41 62 29 8 6 146 740 - 779 31 82 26 8 5 152 720 - 739 11 16 5 5 — 37 700 - 719 2 9 5 3 1 20 < 699 6 7 4 3 — 20 Total $ 93 $ 185 $ 72 $ 29 $ 13 $ 392 FICO Score December 31, 2023 2023 2022 2021 2020 Total (in millions) > 810 $ 9 $ 3 $ 2 $ — $ 14 780 - 809 65 29 8 6 108 740 - 779 80 26 8 6 120 720 - 739 15 6 4 1 26 700 - 719 8 5 4 1 18 < 699 7 4 3 — 14 Total $ 184 $ 73 $ 29 $ 14 $ 300 The table below presents the concentrations of credit risk of residential mortgage loans by U.S. region: Loans Percentage June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 (in millions) Minnesota $ 240 $ 178 61 % 59 % Other U.S. States 152 122 39 41 Total $ 392 $ 300 100 % 100 % Credit Card Receivables The credit cards are co-branded with Ameriprise Financial, Inc. and issued to the Company’s customers by a third party. FICO scores and delinquency rates are the primary credit quality indicators for the credit card portfolio. Delinquency rates are measured based on the number of days past due. Credit card receivables over 30 days past due were 2 % of total credit card receivables as of both June 30, 2024 and December 31, 2023. The table below presents the amortized cost basis of credit card receivables by FICO score: FICO Score June 30, 2024 December 31, 2023 (in millions) > 800 $ 32 $ 32 750 - 799 29 28 700 - 749 30 30 650 - 699 19 19 < 650 8 8 Total $ 118 $ 117 Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. 28 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Margin Loans The margin loans balance was $ 1.1 billion as of both June 30, 2024 and December 31, 2023. The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. As of both June 30, 2024 an d December 31, 2023, there was no allowance for credit losses on margin loans. Pledged Asset Lines of Credit The pledged asset lines of credit balance was $ 620 million and $ 537 million as of June 30, 2024 and December 31, 2023, respectively. The Company monitors collateral supporting pledged asset lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss. As of both June 30, 2024 and December 31, 2023 , there w as no allowance for credit losses on pledged asset lines of credit. Deposit Receivables Deposit receivables were $ 6.1 billion and $ 6.5 billion as of June 30, 2024 and December 31, 2023 , respectively. Deposit receivables are collateralized by the fair value of the assets held in trusts. Based on management’s evaluation of the collateral value relative to the deposit receivables, the allowance for credit losses for deposit receivables was not material as of both June 30, 2024 and December 31, 2023. Modifications with Borrowers Experiencing Financial Difficulty Modifications of financing receivables with borrowers experiencing financial difficulty by the Company were not material for the three and six months ended June 30, 2024 and 2023. 7. Deferred Acquisition Costs and Deferred Sales Inducement Costs The following tables summarize the balances of and changes in deferred acquisition costs (“DAC”): Variable Annuities Structured Variable Annuities Fixed Annuities Fixed Indexed Annuities Universal Life Insurance Variable Universal Life Insurance (in millions) Balance at January 1, 2024 $ 1,496 $ 208 $ 35 $ 5 $ 110 $ 534 Capitalization of acquisition costs 10 52 — — — 30 Amortization ( 60 ) ( 14 ) ( 4 ) ( 1 ) ( 4 ) ( 22 ) Balance at June 30, 2024 $ 1,446 $ 246 $ 31 $ 4 $ 106 $ 542 Indexed Universal Life Insurance Other Life Insurance Life Contingent Payout Annuities Term and Whole Life Insurance Disability Income Insurance Total, All Products (in millions) Balance at January 1, 2024 $ 223 $ 2 $ 6 $ 17 $ 75 $ 2,711 Capitalization of acquisition costs 2 — 2 1 2 99 Amortization ( 8 ) — — ( 1 ) ( 5 ) ( 119 ) Balance at June 30, 2024 $ 217 $ 2 $ 8 $ 17 $ 72 $ 2,691 Other broker dealer acquisition costs 3 Balance at June 30, 2024 including broker dealer acquisition costs $ 2,694 29 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Variable Annuities Structured Variable Annuities Fixed Annuities Fixed Indexed Annuities Universal Life Insurance Variable Universal Life Insurance (in millions) Balance at January 1, 2023 $ 1,598 $ 149 $ 45 $ 6 $ 118 $ 521 Capitalization of acquisition costs 23 83 — — — 57 Amortization ( 125 ) ( 24 ) ( 10 ) ( 1 ) ( 8 ) ( 44 ) Balance at December 31, 2023 $ 1,496 $ 208 $ 35 $ 5 $ 110 $ 534 Indexed Universal Life Insurance Other Life Insurance Life Contingent Payout Annuities Term and Whole Life Insurance Disability Income Insurance Total, All Products (in millions) Balance at January 1, 2023 $ 236 $ 3 $ 2 $ 18 $ 79 $ 2,775 Capitalization of acquisition costs 4 — 4 1 4 176 Amortization ( 17 ) ( 1 ) — ( 2 ) ( 8 ) ( 240 ) Balance at December 31, 2023 $ 223 $ 2 $ 6 $ 17 $ 75 $ 2,711 Other broker dealer acquisition costs 2 Balance at December 31, 2023 including broker dealer acquisition costs $ 2,713 The following tables summarize the balances of and changes in deferred sales inducement costs (“DSIC”): Variable Annuities Fixed Annuities Total, All Products (in millions) Balance at January 1, 2024 $ 136 $ 12 $ 148 Amortization ( 7 ) ( 1 ) ( 8 ) Balance at June 30, 2024 $ 129 $ 11 $ 140 Variable Annuities Fixed Annuities Total, All Products (in millions) Balance at January 1, 2023 $ 151 $ 16 $ 167 Amortization ( 15 ) ( 4 ) ( 19 ) Balance at December 31, 2023 $ 136 $ 12 $ 148 8. Policyholder Account Balances, Future Policy Benefits and Claims Policyholder account balances, future policy benefits and claims consisted of the following: June 30, 2024 December 31, 2023 (in millions) Policyholder account balances Policyholder account balances $ 30,373 $ 27,947 Future policy benefits Reserve for future policy benefits 7,468 7,763 Deferred profit liability 93 81 Additional liabilities for insurance guarantees 1,351 1,321 Other insurance and annuity liabilities 225 213 Total future policy benefits 9,137 9,378 Policy claims and other policyholders’ funds 232 220 Total policyholder account balances, future policy benefits and claims $ 39,742 $ 37,545 30 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Variable Annuities Purchasers of variable annuities can select from a variety of investment options and can elect to allocate a portion to a fixed account. A vast majority of the premiums received for variable annuity contracts are held in separate accounts where the assets are held for the exclusive benefit of those contractholders. Most of the variable annuity contracts issued by the Company contain a guaranteed minimum death benefit (“GMDB”). The Company previously offered contracts with guaranteed minimum accumulation benefit (“GMAB”), guaranteed minimum withdrawal benefit (“GMWB”), and guaranteed minimum income benefit (“GMIB”) provisions. See Note 10 for additional information regarding the Company’s variable annuity guarantees. See Note 12 and Note 14 for additional information regarding the Company’s derivative instruments used to hedge risks related to these guarantees. Structured Variable Annuities Structured variable annuities provide contractholders the option to allocate a portion of their account value to an indexed account held in a non-insulated separate account with the contractholder’s rate of return, which may be positive or negative, tied to selected indices. The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured at fair value. The Company hedges the equity and interest rate risk related to the indexed account with freestanding derivative instruments. Fixed Annuities Fixed annuities include deferred, payout and fixed deferred indexed annuity contracts. In 2020, the Company discontinued sales of fixed deferred and fixed deferred indexed annuities. Deferred contracts offer a guaranteed minimum rate of interest and security of the principal invested. Payout contracts guarantee a fixed income payment for life or the term of the contract. Liabilities for fixed annuities in a benefit or payout status are based on future estimated payments using established industry mortality tables and interest rates. The Company’s fixed index annuity product is a fixed annuity that includes an indexed account. The rate of interest credited above the minimum guarantee for funds allocated to the indexed account is linked to the performance of the specific index for the indexed account (subject to a cap). The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured at fair value. See Note 14 for additional information regarding the Company’s derivative instruments used to hedge the risk related to indexed accounts. Insurance Liabilities Universal life (“UL”) policies accumulate cash value that increases by a fixed interest rate. Purchasers of variable universal life (“VUL”) can select from a variety of investment options and can elect to allocate a portion of their account balance to a fixed account or a separate account. A vast majority of the premiums received for VUL policies are held in separate accounts where the assets are held for the exclusive benefit of those policyholders. Indexed universal life (“IUL”) is a UL policy that includes an indexed account. The rate of credited interest for funds allocated by a contractholder to the indexed account is linked to the performance of the specific index for the indexed account (subject to stated account parameters, which include a cap and floor, or a spread). The policyholder may allocate all or a portion of the policy value to a fixed or any available indexed account. The amount allocated by a contractholder to the indexed account creates an embedded derivative which is measured at fair value. The Company hedges the interest credited rate including equity and interest rate risk related to the indexed account with freestanding derivative instruments. See Note 14 for additional information regarding the Company’s derivative instruments used to hedge the risk related to IUL. The Company also offers term life insurance as well as disability income (“DI”) insurance products. The Company no longer offers standalone long term care (“LTC”) insurance products and whole life insurance but has in force policies from prior years. Insurance liabilities include accumulation values, incurred but not reported claims, obligations for anticipated future claims, unpaid reported claims and claim adjustment expenses. 31 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The balances of and changes in policyholder account balances were as follows: Variable Annuities Structured Variable Annuities Fixed Annuities Fixed Indexed Annuities Non-Life Contingent Payout Annuities (in millions, except percentages) Balance at January 1, 2024 $ 4,173 $ 10,742 $ 5,982 $ 307 $ 444 Contract deposits 19 2,088 20 — 55 Policy charges ( 7 ) ( 1 ) — — — Surrenders and other benefits ( 343 ) ( 164 ) ( 474 ) ( 8 ) ( 59 ) Net transfer from (to) separate account liabilities ( 16 ) — — — — Variable account index-linked adjustments — 1,086 — — — Interest credited 64 — 104 8 5 Balance at June 30, 2024 $ 3,890 $ 13,751 $ 5,632 $ 307 $ 445 Weighted-average crediting rate 3.3 % 1.8 % 3.7 % 2.0 % N/A Cash surrender value (1) $ 3,866 $ 13,008 $ 5,626 $ 279 N/A Universal Life Insurance Variable Universal Life Insurance Indexed Universal Life Insurance Other Life Insurance Total, All Products (in millions, except percentages) Balance at January 1, 2024 $ 1,474 $ 1,569 $ 2,755 $ 501 $ 27,947 Contract deposits 58 151 89 — 2,480 Policy charges ( 87 ) ( 46 ) ( 63 ) — ( 204 ) Surrenders and other benefits ( 31 ) ( 43 ) ( 40 ) ( 23 ) ( 1,185 ) Net transfer from (to) separate account liabilities — ( 55 ) — — ( 71 ) Variable account index-linked adjustments — — — — 1,086 Interest credited 25 30 76 8 320 Balance at June 30, 2024 $ 1,439 $ 1,606 $ 2,817 $ 486 $ 30,373 Weighted-average crediting rate 3.6 % 3.9 % 2.3 % 4.0 % Net amount at risk $ 8,530 $ 57,078 $ 13,970 $ 134 Cash surrender value (1) $ 1,305 $ 1,079 $ 2,352 $ 314 32 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Variable Annuities Structured Variable Annuities Fixed Annuities Fixed Indexed Annuities Non-Life Contingent Payout Annuities (in millions, except percentages) Balance at January 1, 2023 $ 4,752 $ 6,410 $ 6,799 $ 312 $ 471 Contract deposits 73 3,084 47 — 91 Policy charges ( 10 ) — — — — Surrenders and other benefits ( 759 ) ( 156 ) ( 1,086 ) ( 10 ) ( 127 ) Net transfer from (to) separate account liabilities ( 25 ) — — — — Variable account index-linked adjustments — 1,403 — — — Interest credited 142 1 222 5 9 Balance at December 31, 2023 $ 4,173 $ 10,742 $ 5,982 $ 307 $ 444 Weighted-average crediting rate 3.3 % 1.8 % 3.6 % 2.0 % N/A Cash surrender value (1) $ 4,146 $ 10,129 $ 5,974 $ 278 N/A Universal Life Insurance Variable Universal Life Insurance Indexed Universal Life Insurance Other Life Insurance Total, All Products (in millions, except percentages) Balance at January 1, 2023 $ 1,544 $ 1,520 $ 2,654 $ 524 $ 24,986 Contract deposits 123 272 193 1 3,884 Policy charges ( 176 ) ( 94 ) ( 121 ) — ( 401 ) Surrenders and other benefits ( 69 ) ( 78 ) ( 53 ) ( 44 ) ( 2,382 ) Net transfer from (to) separate account liabilities — ( 107 ) — — ( 132 ) Variable account index-linked adjustments — — — — 1,403 Interest credited 52 56 82 20 589 Balance at December 31, 2023 $ 1,474 $ 1,569 $ 2,755 $ 501 $ 27,947 Weighted-average crediting rate 3.6 % 3.9 % 2.0 % 4.0 % Net amount at risk $ 8,740 $ 57,291 $ 14,407 $ 141 Cash surrender value (1) $ 1,330 $ 1,065 $ 2,271 $ 326 (1) Cash surrender value represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. For variable annuities and VUL, the cash surrender value shown is the proportion of the total cash surrender value related to their fixed account liabilities. Refer to Note 10 for the net amount at risk for market risk benefits (“MRB”) associated with variable and structured variable annuities. Fixed, fixed indexed, and non-life contingent payout annuities do not have net amount at risk in excess of account value. Net amount at risk for insurance products is calculated as the death benefit amount in excess of applicable account values, host, embedded derivative, and separate account liabilities. 33 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables present the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of guaranteed minimum interest rates (“GMIRs”) and the range of the difference between rates credited to policyholders and contractholders as of June 30, 2024 and December 31, 2023 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated. Rates are reset at management’s discretion, subject to guaranteed minimums. June 30, 2024 Account Values with Crediting Rates Range of Guaranteed Minimum Crediting Rates At Guaranteed Minimum 1 - 49 bps above Guaranteed Minimum 50 - 99 bps above Guaranteed Minimum 100 - 150 bps above Guaranteed Minimum Greater than 150 bps above Guaranteed Minimum Total (in millions, except percentages) Fixed accounts of variable annuities 1 % – 1.99 % $ 29 $ 108 $ 64 $ 17 $ 2 $ 220 2 % – 2.99 % 125 — — — — 125 3 % – 3.99 % 2,030 4 — 1 — 2,035 4 % – 5.00 % 1,459 — — — — 1,459 Total $ 3,643 $ 112 $ 64 $ 18 $ 2 $ 3,839 Fixed accounts of structured variable annuities 1 % – 1.99 % $ 2 $ 23 $ 4 $ 2 $ — $ 31 2 % – 2.99 % 11 — — — — 11 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ 13 $ 23 $ 4 $ 2 $ — $ 42 Fixed annuities 1 % – 1.99 % $ 93 $ 280 $ 174 $ 113 $ — $ 660 2 % – 2.99 % 27 16 1 — — 44 3 % – 3.99 % 2,585 — — — — 2,585 4 % – 5.00 % 2,328 — — — — 2,328 Total $ 5,033 $ 296 $ 175 $ 113 $ — $ 5,617 Non-indexed accounts of fixed indexed annuities 1 % – 1.99 % $ — $ 2 $ 6 $ 13 $ — $ 21 2 % – 2.99 % — — — — — — 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ — $ 2 $ 6 $ 13 $ — $ 21 Universal life insurance 1 % – 1.99 % $ — $ — $ — $ — $ — $ — 2 % – 2.99 % 50 3 12 — 1 66 3 % – 3.99 % 839 — 4 5 — 848 4 % – 5.00 % 494 3 — — — 497 Total $ 1,383 $ 6 $ 16 $ 5 $ 1 $ 1,411 34 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Account Values with Crediting Rates Range of Guaranteed Minimum Crediting Rates At Guaranteed Minimum 1 - 49 bps above Guaranteed Minimum 50 - 99 bps above Guaranteed Minimum 100 - 150 bps above Guaranteed Minimum Greater than 150 bps above Guaranteed Minimum Total (in millions, except percentages) Fixed accounts of variable universal life insurance 1 % – 1.99 % $ — $ 1 $ 5 $ — $ 34 $ 40 2 % – 2.99 % 11 12 — 1 9 33 3 % – 3.99 % 115 2 2 9 — 128 4 % – 5.00 % 584 14 — — — 598 Total $ 710 $ 29 $ 7 $ 10 $ 43 $ 799 Non-indexed accounts of indexed universal life insurance 1 % – 1.99 % $ — $ — $ — $ 2 $ — $ 2 2 % – 2.99 % — 128 — — — 128 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ — $ 128 $ — $ 2 $ — $ 130 Other life insurance 1 % – 1.99 % $ — $ — $ — $ — $ — $ — 2 % – 2.99 % — — — — — — 3 % – 3.99 % 30 — — — — 30 4 % – 5.00 % 283 — — — — 283 Total $ 313 $ — $ — $ — $ — $ 313 Total 1 % – 1.99 % $ 124 $ 414 $ 253 $ 147 $ 36 $ 974 2 % – 2.99 % 224 159 13 1 10 407 3 % – 3.99 % 5,599 6 6 15 — 5,626 4 % – 5.00 % 5,148 17 — — — 5,165 Total $ 11,095 $ 596 $ 272 $ 163 $ 46 $ 12,172 Percentage of total account values that reset in: Next 12 months 100.0 % 100.0 % 99.9 % 100.0 % 100.0 % 100.0 % > 12 months to 24 months — — — — — — > 24 months — — 0.1 — — — Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % December 31, 2023 Account Values with Crediting Rates Range of Guaranteed Minimum Crediting Rates At Guaranteed Minimum 1 - 49 bps above Guaranteed Minimum 50 - 99 bps above Guaranteed Minimum 100 - 150 bps above Guaranteed Minimum Greater than 150 bps above Guaranteed Minimum Total (in millions, except percentages) Fixed accounts of variable annuities 1 % – 1.99 % $ 43 $ 131 $ 52 $ 15 $ 2 $ 243 2 % – 2.99 % 137 1 — — — 138 3 % – 3.99 % 2,214 — — 1 — 2,215 4 % – 5.00 % 1,514 — — — — 1,514 Total $ 3,908 $ 132 $ 52 $ 16 $ 2 $ 4,110 35 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Account Values with Crediting Rates Range of Guaranteed Minimum Crediting Rates At Guaranteed Minimum 1 - 49 bps above Guaranteed Minimum 50 - 99 bps above Guaranteed Minimum 100 - 150 bps above Guaranteed Minimum Greater than 150 bps above Guaranteed Minimum Total (in millions, except percentages) Fixed accounts of structured variable annuities 1 % – 1.99 % $ 1 $ 18 $ 7 $ 2 $ — $ 28 2 % – 2.99 % 11 — — — — 11 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ 12 $ 18 $ 7 $ 2 $ — $ 39 Fixed annuities 1 % – 1.99 % $ 107 $ 377 $ 183 $ 93 $ — $ 760 2 % – 2.99 % 36 14 1 — — 51 3 % – 3.99 % 2,816 1 — — — 2,817 4 % – 5.00 % 2,339 — — — — 2,339 Total $ 5,298 $ 392 $ 184 $ 93 $ — $ 5,967 Non-indexed accounts of fixed indexed annuities 1 % – 1.99 % $ — $ 2 $ 7 $ 13 $ — $ 22 2 % – 2.99 % — — — — — — 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ — $ 2 $ 7 $ 13 $ — $ 22 Universal life insurance 1 % – 1.99 % $ — $ — $ — $ — $ — $ — 2 % – 2.99 % 51 3 9 — — 63 3 % – 3.99 % 854 1 4 4 — 863 4 % – 5.00 % 518 1 — — — 519 Total $ 1,423 $ 5 $ 13 $ 4 $ — $ 1,445 Fixed accounts of variable universal life insurance 1 % – 1.99 % $ — $ 2 $ 4 $ — $ 24 $ 30 2 % – 2.99 % 13 12 — 1 8 34 3 % – 3.99 % 122 2 3 6 — 133 4 % – 5.00 % 607 6 — — — 613 Total $ 742 $ 22 $ 7 $ 7 $ 32 $ 810 Non-indexed accounts of indexed universal life insurance 1 % – 1.99 % $ — $ — $ 2 $ — $ — $ 2 2 % – 2.99 % 128 — — — — 128 3 % – 3.99 % — — — — — — 4 % – 5.00 % — — — — — — Total $ 128 $ — $ 2 $ — $ — $ 130 36 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Account Values with Crediting Rates Range of Guaranteed Minimum Crediting Rates At Guaranteed Minimum 1 - 49 bps above Guaranteed Minimum 50 - 99 bps above Guaranteed Minimum 100 - 150 bps above Guaranteed Minimum Greater than 150 bps above Guaranteed Minimum Total (in millions, except percentages) Other life insurance 1 % – 1.99 % $ — $ — $ — $ — $ — $ — 2 % – 2.99 % — — — — — — 3 % – 3.99 % 30 — — — — 30 4 % – 5.00 % 295 — — — — 295 Total $ 325 $ — $ — $ — $ — $ 325 Total 1 % – 1.99 % $ 151 $ 530 $ 255 $ 123 $ 26 $ 1,085 2 % – 2.99 % 376 30 10 1 8 425 3 % – 3.99 % 6,036 4 7 11 — 6,058 4 % – 5.00 % 5,273 7 — — — 5,280 Total $ 11,836 $ 571 $ 272 $ 135 $ 34 $ 12,848 Percentage of total account values that reset in: Next 12 months 99.9 % 99.5 % 99.3 % 100.0 % 100.0 % 99.9 % > 12 months to 24 months 0.1 0.5 0.6 — — 0.1 > 24 months — — 0.1 — — — Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 37 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables summarize the balances of and changes in the liability for future policy benefits: Life Contingent Payout Annuities Term and Whole Life Insurance Disability Income Insurance Long Term Care Insurance Total, All Products (in millions, except percentages) Present Value of Expected Net Premiums: Balance at January 1, 2024 $ — $ 703 $ 104 $ 1,146 $ 1,953 Beginning balance at original discount rate — 708 105 1,137 1,950 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience — — ( 11 ) ( 11 ) ( 22 ) Adjusted beginning of year balance $ — $ 708 $ 94 $ 1,126 $ 1,928 Issuances 105 30 4 — 139 Interest accrual — 18 3 28 49 Net premiums collected ( 105 ) ( 36 ) ( 5 ) ( 74 ) ( 220 ) Derecognition (lapses) — — — — — Ending balance at original discount rate $ — $ 720 $ 96 $ 1,080 $ 1,896 Effect of changes in discount rate assumptions — ( 30 ) ( 5 ) ( 17 ) ( 52 ) Balance at June 30, 2024 $ — $ 690 $ 91 $ 1,063 $ 1,844 Present Value of Future Policy Benefits: Balance at January 1, 2024 $ 1,164 $ 1,325 $ 661 $ 6,561 $ 9,711 Beginning balance at original discount rate 1,222 1,291 621 6,507 9,641 Effect of changes in cash flow assumptions — — — — — Effect of actual variances from expected experience ( 5 ) 1 ( 18 ) ( 19 ) ( 41 ) Adjusted beginning of year balance $ 1,217 $ 1,292 $ 603 $ 6,488 $ 9,600 Issuances 105 30 4 — 139 Interest accrual 28 36 18 162 244 Benefit payments ( 78 ) ( 69 ) ( 21 ) ( 213 ) ( 381 ) Derecognition (lapses) — — — — — Ending balance at original discount rate $ 1,272 $ 1,289 $ 604 $ 6,437 $ 9,602 Effect of changes in discount rate assumptions ( 91 ) ( 16 ) 14 ( 203 ) ( 296 ) Balance at June 30, 2024 $ 1,181 $ 1,273 $ 618 $ 6,234 $ 9,306 Adjustment due to reserve flooring $ — $ 6 $ — $ — $ 6 Net liability for future policy benefits $ 1,181 $ 589 $ 527 $ 5,171 $ 7,468 Less: reinsurance recoverable 813 416 21 2,614 3,864 Net liability for future policy benefits, after reinsurance recoverable $ 368 $ 173 $ 506 $ 2,557 $ 3,604 Discounted expected future gross premiums $ — $ 1,674 $ 857 $ 1,237 $ 3,768 Expected future gross premiums $ — $ 2,889 $ 1,233 $ 1,696 $ 5,818 Expected future benefit payments $ 1,817 $ 2,163 $ 1,035 $ 10,620 $ 15,635 Weighted average interest accretion rate 4.4 % 6.2 % 6.2 % 5.1 % Weighted average discount rate 5.4 % 5.6 % 5.6 % 5.6 % Weighted average duration of liability (in years) 6 7 8 8 38 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Life Contingent Payout Annuities Term and Whole Life Insurance Disability Income Insurance Long Term Care Insurance Total, All Products (in millions, except percentages) Present Value of Expected Net Premiums: Balance at January 1, 2023 $ — $ 686 $ 134 $ 1,207 $ 2,027 Beginning balance at original discount rate — 708 137 1,220 2,065 Effect of changes in cash flow assumptions — ( 19 ) ( 19 ) 19 ( 19 ) Effect of actual variances from expected experience — ( 2 ) ( 18 ) ( 3 ) ( 23 ) Adjusted beginning of year balance $ — $ 687 $ 100 $ 1,236 $ 2,023 Issuances 177 55 12 — 244 Interest accrual 1 36 5 59 101 Net premiums collected ( 178 ) ( 70 ) ( 12 ) ( 158 ) ( 418 ) Derecognition (lapses) — — — — — Ending balance at original discount rate $ — $ 708 $ 105 $ 1,137 $ 1,950 Effect of changes in discount rate assumptions — ( 5 ) ( 1 ) 9 3 Balance at December 31, 2023 $ — $ 703 $ 104 $ 1,146 $ 1,953 Present Value of Future Policy Benefits: Balance at January 1, 2023 $ 1,065 $ 1,319 $ 696 $ 6,439 $ 9,519 Beginning balance at original discount rate 1,155 1,313 669 6,569 9,706 Effect of changes in cash flow assumptions — ( 18 ) ( 25 ) 9 ( 34 ) Effect of actual variances from expected experience ( 10 ) ( 1 ) ( 29 ) 5 ( 35 ) Adjusted beginning of year balance $ 1,145 $ 1,294 $ 615 $ 6,583 $ 9,637 Issuances 177 56 11 — 244 Interest accrual 50 73 37 329 489 Benefit payments ( 150 ) ( 132 ) ( 42 ) ( 405 ) ( 729 ) Derecognition (lapses) — — — — — Ending balance at original discount rate $ 1,222 $ 1,291 $ 621 $ 6,507 $ 9,641 Effect of changes in discount rate assumptions ( 58 ) 34 40 54 70 Balance at December 31, 2023 $ 1,164 $ 1,325 $ 661 $ 6,561 $ 9,711 Adjustment due to reserve flooring $ — $ 5 $ — $ — $ 5 Net liability for future policy benefits $ 1,164 $ 627 $ 557 $ 5,415 $ 7,763 Less: reinsurance recoverable 880 440 22 2,738 4,080 Net liability for future policy benefits, after reinsurance recoverable $ 284 $ 187 $ 535 $ 2,677 $ 3,683 Discounted expected future gross premiums $ — $ 1,764 $ 904 $ 1,325 $ 3,993 Expected future gross premiums $ — $ 2,938 $ 1,269 $ 1,786 $ 5,993 Expected future benefit payments $ 1,726 $ 2,166 $ 1,068 $ 10,850 $ 15,810 Weighted average interest accretion rate 4.2 % 6.2 % 6.1 % 5.0 % Weighted average discount rate 4.9 % 5.1 % 5.1 % 5.1 % Weighted average duration of liability (in years) 7 7 8 8 39 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Impacts of the annual review of policy benefit reserves assumptions are reflected within the effect of changes in cash flow assumptions in the disaggregated rollforwards above. The annual review of policy benefit reserves assumptions in the third quarter of 2023 resulted in a net decrease in future policy benefit reserves, primarily due to updates to LTC premium rate increase assumptions. The balances of and changes in additional liabilities related to insurance guarantees were as follows: Universal Life Insurance Variable Universal Life Insurance Other Life Insurance Total, All Products (in millions, except percentages) Balance at January 1, 2024 $ 1,225 $ 81 $ 15 $ 1,321 Interest accrual 19 3 — 22 Benefit accrual 66 4 2 72 Benefit payments ( 27 ) ( 8 ) ( 2 ) ( 37 ) Effect of actual variances from expected experience ( 7 ) 1 — ( 6 ) Impact of change in net unrealized (gains) losses on securities ( 16 ) ( 1 ) ( 4 ) ( 21 ) Balance at June 30, 2024 $ 1,260 $ 80 $ 11 $ 1,351 Weighted average interest accretion rate 3.0 % 7.1 % 4.0 % Weighted average discount rate 3.2 % 7.1 % 4.0 % Weighted average duration of reserves (in years) 10 8 6 Universal Life Insurance Variable Universal Life Insurance Other Life Insurance Total, All Products (in millions, except percentages) Balance at January 1, 2023 $ 1,100 $ 74 $ 12 $ 1,186 Interest accrual 35 5 1 41 Benefit accrual 128 8 2 138 Benefit payments ( 50 ) ( 18 ) ( 4 ) ( 72 ) Effect of actual variances from expected experience ( 13 ) 11 ( 2 ) ( 4 ) Impact of change in net unrealized (gains) losses on securities 25 1 6 32 Balance at December 31, 2023 $ 1,225 $ 81 $ 15 $ 1,321 Weighted average interest accretion rate 3.0 % 6.9 % 4.0 % Weighted average discount rate 3.2 % 7.1 % 4.0 % Weighted average duration of reserves (in years) 10 8 6 The amount of revenue and interest recognized in the Statements of Operations was as follows: Six Months Ended June 30, 2024 Gross Premiums Interest Expense (in millions) Life contingent payout annuities $ 116 $ 28 Term and whole life insurance 86 18 Disability income insurance 60 15 Long term care insurance 87 134 Total $ 349 $ 195 40 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Year Ended December 31, 2023 Gross Premiums Interest Expense (in millions) Life contingent payout annuities $ 196 $ 49 Term and whole life insurance 169 37 Disability income insurance 124 32 Long term care insurance 185 270 Total $ 674 $ 388 The following tables summarize the balances of and changes in unearned revenue: Universal Life Insurance Variable Universal Life Insurance Indexed Universal Life Insurance Total, All Products (in millions) Balance at January 1, 2024 $ 27 $ 196 $ 266 $ 489 Deferral of revenue — 34 26 60 Amortization ( 1 ) ( 8 ) ( 11 ) ( 20 ) Balance at June 30, 2024 $ 26 $ 222 $ 281 $ 529 Balance at January 1, 2023 $ 27 $ 150 $ 233 $ 410 Deferral of revenue 1 59 52 112 Amortization ( 1 ) ( 13 ) ( 19 ) ( 33 ) Balance at December 31, 2023 $ 27 $ 196 $ 266 $ 489 9. Separate Account Assets and Liabilities Aggregate fair value of separate account assets, by major asset category, consisted of the following: June 30, 2024 December 31, 2023 (in millions) Variable annuities and variable universal life: Mutual funds $ 76,338 $ 74,634 Unitized pooled pension funds: Property/real estate 1,726 1,784 Equity securities 558 553 Debt securities 223 285 Cash and cash equivalents 202 147 Other 51 54 Total $ 79,098 $ 77,457 41 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The balances of and changes in separate account liabilities were as follows: Variable Annuities Variable Universal Life Unitized Pooled Pension Funds Total (in millions) Balance at January 1, 2024 $ 65,839 $ 8,795 $ 2,823 $ 77,457 Premiums and deposits 417 243 106 766 Policy charges ( 663 ) ( 151 ) ( 3 ) ( 817 ) Surrenders and other benefits ( 3,355 ) ( 203 ) ( 268 ) ( 3,826 ) Investment return 4,640 749 125 5,514 Net transfer from (to) general account 15 12 — 27 Other charges — — ( 23 ) ( 23 ) Balance at June 30, 2024 $ 66,893 $ 9,445 $ 2,760 $ 79,098 Cash surrender value $ 65,434 $ 8,869 $ 2,760 $ 77,063 Variable Annuities Variable Universal Life Unitized Pooled Pension Funds Total (in millions) Balance at January 1, 2023 $ 63,223 $ 7,653 $ 3,086 $ 73,962 Premiums and deposits 835 459 194 1,488 Policy charges ( 1,343 ) ( 292 ) ( 7 ) ( 1,642 ) Surrenders and other benefits ( 5,378 ) ( 317 ) ( 777 ) ( 6,472 ) Investment return 8,477 1,250 170 9,897 Net transfer from (to) general account 25 42 — 67 Other charges — — 157 157 Balance at December 31, 2023 $ 65,839 $ 8,795 $ 2,823 $ 77,457 Cash surrender value $ 64,280 $ 8,263 $ 2,823 $ 75,366 10. Market Risk Benefits Market risk benefits are contracts or contract features that both provide protection to the contractholder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Most of the variable annuity contracts issued by the Company contain a GMDB provision. The Company previously offered contracts containing GMWB, GMAB, or GMIB provisions. The GMDB provisions provide a specified minimum return upon death of the contractholder. The death benefit payable is the greater of (i) the contract value less any purchase payment credits subject to recapture less a pro-rata portion of any rider fees, or (ii) the GMDB provisions specified in the contract. The Company has the following primary GMDB provisions: • Return of premium — provides purchase payments minus adjusted partial surrenders. • Reset — provides that the value resets to the account value at specified contract anniversary intervals minus adjusted partial surrenders. This provision was often provided in combination with the return of premium provision and is no longer offered. • Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus subsequent purchase payments less adjusted partial surrenders. The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of mutual funds, the values of which fluctuate based on fund performance. At contract issue, the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision. 42 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The Company has GMWB riders in force, which contain one or more of the following provisions: • Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount. • Withdrawals at a specified rate per year for the life of the contractholder (“GMWB for life”). • Withdrawals at a specified rate per year for joint contractholders while either is alive. • Withdrawals based on performance of the contract. • Withdrawals based on the age withdrawals begin. • Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals have not been taken. Variable annuity contractholders age 79 or younger at contract issue could obtain a principal-back guarantee by purchasing the optional GMAB rider for an additional charge. The GMAB rider guarantees that, regardless of market performance at the end of the 10-year waiting period, the contract value will be no less than the original investment or a specified percentage of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the guarantee at the end of the 10-year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value. Individual variable annuity contracts may have both a death benefit and a living benefit. Net amount at risk is quantified for each benefit and a composite net amount at risk is calculated using the greater of the death benefit or living benefit for each individual contract. The net amount at risk for GMDB and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero. 43 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables summarize the balances of and changes in market risk benefits: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions, except age) Balance at beginning of period $ ( 629 ) $ 1,133 $ 335 $ 1,103 Issuances 7 4 12 8 Interest accrual and time decay ( 15 ) 5 ( 25 ) ( 21 ) Reserve increase from attributed fees collected 195 194 379 383 Reserve release for benefit payments and derecognition ( 3 ) ( 9 ) ( 7 ) ( 18 ) Effect of changes in interest rates and bond markets ( 245 ) ( 588 ) ( 772 ) ( 84 ) Effect of changes in equity markets and subaccount performance ( 152 ) ( 510 ) ( 882 ) ( 902 ) Effect of changes in equity index volatility 15 ( 27 ) 54 ( 70 ) Actual policyholder behavior different from expected behavior 10 ( 1 ) 41 6 Effect of changes in the instrument-specific credit risk on market risk benefits ( 13 ) 159 35 ( 45 ) Balance at end of period $ ( 830 ) $ 360 $ ( 830 ) $ 360 Reconciliation of the gross balances in an asset or liability position: Asset position $ 2,082 $ 1,346 $ 2,082 $ 1,346 Liability position ( 1,252 ) ( 1,706 ) ( 1,252 ) ( 1,706 ) Net asset (liability) position $ 830 $ ( 360 ) $ 830 $ ( 360 ) Guaranteed benefit amount in excess of current account balances (net amount at risk): Death benefits $ 530 $ 1,415 $ 530 $ 1,415 Living benefits $ 2,317 $ 2,725 $ 2,317 $ 2,725 Composite (greater of) $ 2,775 $ 3,977 $ 2,775 $ 3,977 Weighted average attained age of contractholders 69 68 69 68 Changes in unrealized (gains) losses in net income relating to liabilities held at end of period $ ( 402 ) $ ( 1,112 ) $ ( 1,588 ) $ ( 1,049 ) Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period $ ( 11 ) $ 158 $ 40 $ ( 44 ) 44 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Year Ended December 31, 2023 (in millions, except age) Balance at beginning of period $ 1,103 Issuances 17 Interest accrual and time decay ( 53 ) Reserve increase from attributed fees collected 788 Reserve release for benefit payments and derecognition ( 35 ) Effect of changes in interest rates and bond markets ( 367 ) Effect of changes in equity markets and subaccount performance ( 1,267 ) Effect of changes in equity index volatility ( 67 ) Actual policyholder behavior different from expected behavior 5 Effect of changes in other future expected assumptions 128 Effect of changes in the instrument-specific credit risk on market risk benefits 83 Balance at end of period $ 335 Reconciliation of the gross balances in an asset or liability position: Asset position $ 1,427 Liability position ( 1,762 ) Net asset (liability) position $ ( 335 ) Guaranteed benefit amount in excess of current account balances (net amount at risk): Death benefits $ 913 Living benefits $ 2,513 Composite (greater of) $ 3,308 Weighted average attained age of contractholders 69 Changes in unrealized (gains) losses in net income relating to liabilities held at end of period $ ( 1,551 ) Changes in unrealized (gains) losses in other comprehensive income relating to liabilities held at end of period $ 84 The following tables provide a summary of the significant inputs and assumptions used in the fair value measurements developed by the Company or reasonably available to the Company of market risk benefits: June 30, 2024 Fair Value Valuation Technique Significant Inputs and Assumptions Range Weighted Average (in millions) Market risk benefits $ ( 830 ) Discounted cash flow Utilization of guaranteed withdrawals (1) 0.0 % – 48.0 % 11.6 % Surrender rate (2) 0.3 % – 75.0 % 3.6 % Market volatility (3) 0.0 % – 25.0 % 10.3 % Nonperformance risk (4) 75 bps 75 bps Mortality rate (5) 0.0 % – 41.6 % 1.6 % 45 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) December 31, 2023 Fair Value Valuation Technique Significant Inputs and Assumptions Range Weighted Average (in millions) Market risk benefits $ 335 Discounted cash flow Utilization of guaranteed withdrawals (1) 0.0 % – 48.0 % 11.6 % Surrender rate (2) 0.3 % – 75.0 % 3.7 % Market volatility (3) 0.0 % – 25.2 % 10.6 % Nonperformance risk (4) 85 bps 85 bps Mortality rate (5) 0.0 % – 41.6 % 1.6 % (1) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. The weighted average utilization rate represents the average assumption, weighted based on the benefit base. The calculation excludes policies that have already started taking withdrawals. (2) The weighted average surrender rate represents the average assumption weighted based on the account value of each contract. (3) Market volatility represents the implied volatility of each contractholder’s mix of funds. The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. (4) The nonperformance risk is the spread added to the U.S. Treasury curve. (5) The weighted average mortality rate represents the average assumption weighted based on the account value of each contract. Changes to Significant Inputs and Assumptions: During the year ended December 31, 2023, the Company updated inputs and assumptions based on management’s review of experience studies. These updates resulted in the following notable changes in the fair value estimates of market risk benefits calculations: Year ended December 31, 2023 • Updates to utilization of guaranteed withdrawals assumptions resulted in a decrease to pre-tax income of $ 18 million. • Updates to surrender assumptions resulted in a decrease to pre-tax income of $ 110 million. Refer to the rollforward of market risk benefits for the impacts of changes to interest rate, equity market, volatility and nonperformance risk assumptions. Uncertainty of Fair Value Measurements Significant increases (decreases) in utilization and volatility used in the fair value measurement of market risk benefits in isolation would have resulted in a significantly higher (lower) liability value. Significant increases (decreases) in nonperformance risk and surrender assumptions used in the fair value measurement of market risk benefits in isolation would have resulted in a significantly lower (higher) liability value. Significant increases (decreases) in mortality assumptions used in the fair value measurement of the death benefit portion of market risk benefits in isolation would have resulted in a significantly higher (lower) liability value whereas significant increases (decreases) in mortality rates used in the fair value measurement of the life contingent portion of market risk benefits in isolation would have resulted in a significantly lower (higher) liability value. Surrender assumptions, utilization assumptions and mortality assumptions vary with the type of base product, type of rider, duration of the policy, age of the contractholder, calendar year of the projection, previous withdrawal history, and the relationship between the value of the guaranteed benefit and the contract accumulation value. Determination of Fair Value The Company values market risk benefits using internal valuation models. These models include observable capital market assumptions and significant unobservable inputs related to implied volatility, contractholder behavior assumptions that include margins for risk, and the Company’s nonperformance risk. These measurements are classified as Level 3. 46 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 11. Debt The balances and stated interest rates of outstanding debt of Ameriprise Financial were as follows: Outstanding Balance Stated Interest Rate June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 (in millions) Long-term debt: Senior notes due 2024 $ 550 $ 550 3.7 % 3.7 % Senior notes due 2025 500 500 3.0 3.0 Senior notes due 2026 500 500 2.9 2.9 Senior notes due 2028 600 600 5.7 5.7 Senior notes due 2032 500 500 4.5 4.5 Senior notes due 2033 750 750 5.2 5.2 Finance lease liabilities 15 20 N/A N/A Other (1) ( 19 ) ( 21 ) N/A N/A Total long-term debt 3,396 3,399 Short-term borrowings: Federal Home Loan Bank (“FHLB”) advances 201 201 5.5 % 5.6 % Total $ 3,597 $ 3,600 (1) Includes adjustments for net unamortized discounts, debt issuance costs and other lease obligations. N/A Not Applicable Long-Term Debt The Company’s senior notes may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest. Short-Term Borrowings The Company’s life insurance and bank subsidiaries are members of the FHLB of Des Moines which provides access to collateralized borrowings. The Company’s life insurance subsidiary has accessed collateralized borrowings from the FHLB and has pledged (granted a lien on) certain investments as collateral, primarily commercial mortgage backed securities, with an aggregate fair value of $ 1.1 billion as of both June 30, 2024 and December 31, 2023. The remaining maturity of outstanding FHLB advances was less than three months as of both June 30, 2024 and December 31, 2023. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on the outstanding borrowings as of the balance sheet date. The Company’s bank subsidiary had no outstanding obligations to the FHLB as of both June 30, 2024 and December 31, 2023. The Company’s bank subsidiary maintains access to collateralized borrowings from the Federal Reserve. As of both June 30, 2024 and December 31, 2023, there were no outstanding obligations to the Federal Reserve. In June 2021, the Company entered into an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $ 1.0 billion that expires in June 2026. Under the terms of the agreement for the facility, the Company may increase the amount of this facility up to $ 1.25 billion upon satisfaction of certain approval requirements. The interest rate for any borrowing under the agreement for U.S. dollars is a Spread Adjusted Term Secured Overnight Financing Rate (“SOFR”), which is defined as Term SOFR for an interest period selected by the Company plus a credit spread adjustment of 0.10 %, plus an applicable margin subject to adjustment based on debt ratings of the senior unsecured debt of the Company. In the event of default, an additional 2 % interest will accrue during such period of default. As of both June 30, 2024 and December 31, 2023, the Company had no borrowings outstanding and $ 1 million of letters of credit issued against the facility. The Company’s credit facility contains various administrative, reporting, legal and financial covenants. The Company was in compliance with all such covenants as of both June 30, 2024 and December 31, 2023. American Enterprise Investment Services, Inc. (“AEIS”), a subsidiary of the Company, has credit agreements for uncommitted lines of credit with third party financial institutions, having a combined credit limit of $ 500 million. As of both June 30, 2024 and December 31, 2023, AEIS had no borrowings outstanding. 47 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 12. Fair Values of Assets and Liabilities GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale. Valuation Hierarchy The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. 48 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables present the balances of assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis (See Note 4 for the balances of assets and liabilities for consolidated investment entities): June 30, 2024 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 1,176 $ 3,840 $ — $ 5,016 Available-for-Sale securities: Corporate debt securities — 12,388 544 12,932 Residential mortgage backed securities — 21,697 57 21,754 Commercial mortgage backed securities — 5,663 — 5,663 Asset backed securities — 7,806 24 7,830 State and municipal obligations — 736 — 736 U.S. government and agency obligations 2,762 — — 2,762 Foreign government bonds and obligations — 18 — 18 Total Available-for-Sale securities 2,762 48,308 625 51,695 Investments at net asset value (“NAV”) 11 (1) Trading and other securities 301 24 — 325 Separate account assets at NAV 79,098 (1) Investments and cash equivalents segregated for regulatory purposes 685 — — 685 Market risk benefits — — 2,082 2,082 (2) Receivables: Fixed deferred indexed annuity ceded embedded derivatives — — 55 55 Other assets: Interest rate derivative contracts — 218 — 218 Equity derivative contracts 114 7,048 — 7,162 Credit derivative contracts — 1 — 1 Foreign exchange derivative contracts — 36 — 36 Total other assets 114 7,303 — 7,417 Total assets at fair value $ 5,038 $ 59,475 $ 2,762 $ 146,384 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 4 $ 52 $ 56 IUL embedded derivatives — — 944 944 Structured variable annuity embedded derivatives — — 1,896 1,896 Total policyholder account balances, future policy benefits and claims — 4 2,892 2,896 (3) Market risk benefits — — 1,252 1,252 (2) Customer deposits — 9 — 9 Other liabilities: Interest rate derivative contracts 1 395 — 396 Equity derivative contracts 127 4,478 — 4,605 Credit derivative contracts — 18 — 18 Foreign exchange derivative contracts — 6 — 6 Other 290 3 69 362 Total other liabilities 418 4,900 69 5,387 Total liabilities at fair value $ 418 $ 4,913 $ 4,213 $ 9,544 49 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) December 31, 2023 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 704 $ 4,325 $ — $ 5,029 Available-for-Sale securities: Corporate debt securities — 12,107 469 12,576 Residential mortgage backed securities — 21,066 — 21,066 Commercial mortgage backed securities — 6,050 — 6,050 Asset backed securities — 8,318 1 8,319 State and municipal obligations — 760 — 760 U.S. government and agency obligations 2,740 — — 2,740 Foreign government bonds and obligations — 18 — 18 Other securities — 33 — 33 Total Available-for-Sale securities 2,740 48,352 470 51,562 Investments at NAV 10 (1) Trading and other securities 265 25 — 290 Separate account assets at NAV 77,457 (1) Investments and cash equivalents segregated for regulatory purposes 699 — — 699 Market risk benefits — — 1,427 1,427 (2) Receivables: Fixed deferred indexed annuity ceded embedded derivatives — — 51 51 Other assets: Interest rate derivative contracts 1 184 — 185 Equity derivative contracts 66 4,968 — 5,034 Credit derivative contracts — 4 — 4 Foreign exchange derivative contracts 1 21 — 22 Total other assets 68 5,177 — 5,245 Total assets at fair value $ 4,476 $ 57,879 $ 1,948 $ 141,770 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 49 $ 52 IUL embedded derivatives — — 873 873 Structured variable annuity embedded derivatives — — 1,011 1,011 Total policyholder account balances, future policy benefits and claims — 3 1,933 1,936 (4) Market risk benefits — — 1,762 1,762 (2) Customer deposits — 9 — 9 Other liabilities: Interest rate derivative contracts 1 304 — 305 Equity derivative contracts 96 3,368 — 3,464 Credit derivative contracts — 107 — 107 Foreign exchange derivative contracts 1 6 — 7 Other 259 3 76 338 Total other liabilities 357 3,788 76 4,221 Total liabilities at fair value $ 357 $ 3,800 $ 3,771 $ 7,928 (1) Amounts are comprised of financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) See Note 10 for additional information related to market risk benefits, including the balances of and changes in market risk benefits as well as the significant inputs and assumptions used in the fair value measurements of market risk benefits. 50 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) (3) The Company’s adjustment for nonperformance risk resulted in a $ 216 million cumulative decrease to the embedded derivatives as of June 30, 2024. (4) The Company’s adjustment for nonperformance risk resulted in a $ 195 million cumulative decrease to the embedded derivatives as of December 31, 2023. The following tables provide a summary of changes in Level 3 assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis: Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance at April 1, 2024 $ 505 $ 25 $ 1 $ 531 $ 54 Total gains (losses) included in: Net income — — — — (1) 2 Other comprehensive income (loss) 1 ( 1 ) — — — Purchases 50 60 23 133 — Settlements ( 12 ) ( 2 ) — ( 14 ) ( 1 ) Transfers out of Level 3 — ( 25 ) — ( 25 ) — Balance at June 30, 2024 $ 544 $ 57 $ 24 $ 625 $ 55 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance at April 1, 2024 $ 52 $ 888 $ 1,620 $ 2,560 $ 71 Total (gains) losses included in: Net income 1 (2) 91 (2) 325 (3) 417 1 (4) Issues — 8 39 47 6 Settlements ( 1 ) ( 43 ) ( 88 ) ( 132 ) ( 9 ) Balance at June 30, 2024 $ 52 $ 944 $ 1,896 $ 2,892 $ 69 Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2024 $ — $ 91 (2) $ 325 (3) $ 416 $ — Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance at April 1, 2023 $ 440 $ 5 $ 445 $ 48 Total gains (losses) included in: Net income — — — (1) 2 Other comprehensive income (loss) ( 7 ) — ( 7 ) — Purchases 23 — 23 — Settlements ( 10 ) ( 2 ) ( 12 ) ( 1 ) Balance at June 30, 2023 $ 446 $ 3 $ 449 $ 49 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2023 $ ( 7 ) $ — $ ( 7 ) $ — 51 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance at April 1, 2023 $ 44 $ 771 $ 142 $ 957 $ 70 Total (gains) losses included in: Net income 2 (2) 54 (2) 426 (3) 482 1 (4) Issues — 16 19 35 19 Settlements — ( 32 ) ( 30 ) ( 62 ) ( 12 ) Balance at June 30, 2023 $ 46 $ 809 $ 557 $ 1,412 $ 78 Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2023 $ — $ 54 (2) $ 426 (3) $ 480 $ — Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance at January 1, 2024 $ 469 $ — $ 1 $ 470 $ 51 Total gains (losses) included in: Net income — — — — (1) 6 Other comprehensive income (loss) ( 2 ) ( 1 ) — ( 3 ) — Purchases 102 85 23 210 — Settlements ( 25 ) ( 2 ) — ( 27 ) ( 2 ) Transfers out of Level 3 — ( 25 ) — ( 25 ) — Balance at June 30, 2024 $ 544 $ 57 $ 24 $ 625 $ 55 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2024 $ ( 3 ) $ — $ — $ ( 3 ) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance at January 1, 2024 $ 49 $ 873 $ 1,011 $ 1,933 $ 76 Total (gains) losses included in: Net income 5 (2) 133 (2) 953 (3) 1,091 1 (4) Issues — 14 76 90 9 Settlements ( 2 ) ( 76 ) ( 144 ) ( 222 ) ( 17 ) Balance at June 30, 2024 $ 52 $ 944 $ 1,896 $ 2,892 $ 69 Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2024 $ — $ 133 (2) $ 953 (3) $ 1,086 $ — 52 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance at January 1, 2023 $ 405 $ 6 $ 411 $ 48 Total gains (losses) included in: Net income — — — (1) 2 Other comprehensive income (loss) 1 — 1 — Purchases 78 — 78 — Settlements ( 38 ) ( 3 ) ( 41 ) ( 1 ) Balance at June 30, 2023 $ 446 $ 3 $ 449 $ 49 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2023 $ 1 $ — $ 1 $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance at January 1, 2023 $ 44 $ 739 $ ( 137 ) (5) $ 646 $ 62 Total (gains) losses included in: Net income 3 (2) 92 (2) 689 (3) 784 1 (4) Other comprehensive income (loss) — — — — 1 Issues — 40 31 71 33 Settlements ( 1 ) ( 62 ) ( 26 ) ( 89 ) ( 19 ) Balance at June 30, 2023 $ 46 $ 809 $ 557 $ 1,412 $ 78 Changes in unrealized (gains) losses in net income relating to liabilities held at June 30, 2023 $ — $ 92 (2) $ 689 (3) $ 781 $ — (1) Included in Net investment income. (2) Included in Interest credited to fixed accounts. (3) Included in Benefits, claims, losses and settlement expenses. (4) Included in General and administrative expense. (5) The fair value of the structured variable annuity embedded derivatives was a net asset as of January 1, 2023 and the amount is presented as a contra liability. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $ 19 million and $ 4 million, net of the reinsurance accrual, for the three months ended June 30, 2024 and 2023, respectively. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $ 19 million and $ 61 million, net of the reinsurance accrual, for the six months ended June 30, 2024 and 2023, respectively. Securities transferred from Level 3 primarily represent securities with fair values that are now obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant. Securities transferred to Level 3 represent securities with fair values that are now based on a single non-binding broker quote. 53 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities: June 30, 2024 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 544 Discounted cash flow Yield/spread to U.S. Treasuries (1) 0.9 % – 2.3 % 1.3 % Asset backed securities $ 1 Discounted cash flow Annual short-term default rate (2) 4.0 % 4.0 % Annual long-term default rate (2) 3.5 % 3.5 % Discount rate 27.0 % 27.0 % Constant prepayment rate 15.0 % 15.0 % Loss recovery 60.0 % 60.0 % Fixed deferred indexed annuity ceded embedded derivatives $ 55 Discounted cash flow Surrender rate (3) 0.0 % – 66.8 % 1.4 % Fixed deferred indexed annuity embedded derivatives $ 52 Discounted cash flow Surrender rate (3) 0.0 % – 66.8 % 1.4 % Nonperformance risk (4) 75 bps 75 bps IUL embedded derivatives $ 944 Discounted cash flow Nonperformance risk (4) 75 bps 75 bps Structured variable annuity embedded derivatives $ 1,896 Discounted cash flow Surrender rate (3) 0.5 % – 75.0 % 2.5 % Nonperformance risk (4) 75 bps 75 bps Contingent consideration liabilities $ 69 Discounted cash flow Discount rate (5) 0.0 % – 10.5 % 3.1 % December 31, 2023 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 469 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.0 % – 2.4 % 1.2 % Asset backed securities $ 1 Discounted cash flow Annual short-term default rate (2) 3.0 % 3.0 % Annual long-term default rate (2) 3.5 % 3.5 % Discount rate 29.0 % 29.0 % Constant prepayment rate 10.0 % 10.0 % Loss recovery 63.6 % 63.6 % Fixed deferred indexed annuity ceded embedded derivatives $ 51 Discounted cash flow Surrender rate (3) 0.0 % – 66.8 % 1.4 % Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (3) 0.0 % – 66.8 % 1.4 % Nonperformance risk (4) 85 bps 85 bps IUL embedded derivatives $ 873 Discounted cash flow Nonperformance risk (4) 85 bps 85 bps Structured variable annuity embedded derivatives $ 1,011 Discounted cash flow Surrender rate (3) 0.5 % – 75.0 % 2.6 % Nonperformance risk (4) 85 bps 85 bps Contingent consideration liabilities $ 76 Discounted cash flow Discount rate (5) 0.0 % – 10.5 % 2.9 % (1) The weighted average for the yield/spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (3) The weighted average surrender rate represents the average assumption weighted based on the account value of each contract. (4) The nonperformance risk is the spread added to the U.S. Treasury curve. (5) The weighted average discount rate represents the average discount rate across all contingent consideration liabilities, weighted based on the size of the contingent consideration liability. Level 3 measurements not included in the tables above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. 54 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Uncertainty of Fair Value Measurements Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the annual default rate and discount rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would have resulted in a significantly lower (higher) fair value measurement and significant increases (decreases) in loss recovery in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the constant prepayment rate in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the surrender assumption used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk and surrender assumption used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Significant increases (decreases) in the discount rate used in the fair value measurement of the contingent consideration liability in isolation would have resulted in a significantly lower (higher) fair value measurement. Determination of Fair Value The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Assets Cash Equivalents Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization. Investments (Available-for-Sale Securities, Equity Securities and Trading Securities) When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques. Level 1 securities primarily include trading securities and U.S. Treasuries. Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, state and municipal obligations, foreign government securities and other securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active. Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, and asset backed securities with fair value typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of certain asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in certain asset backed securities is classified as Level 3. 55 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise. Separate Account Assets The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy. Investments and Cash Equivalents Segregated for Regulatory Purposes Investments and cash equivalents segregated for regulatory purposes includes U.S. Treasuries that are classified as Level 1. Receivables The Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative. The Company uses discounted cash flow models to determine the fair value of these ceded embedded derivatives. The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates. Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3. Other Assets Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of both June 30, 2024 and December 31, 2023. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Liabilities Policyholder Account Balances, Future Policy Benefits and Claims There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of fixed deferred indexed annuity, structured variable annuity and IUL products. The Company uses a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2. The Company uses discounted cash flow models to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products. The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by a buffer or limited to a floor. The portion allocated to an indexed account is accounted for as an embedded derivative. The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates and the estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in Policyholder account balances, future policy benefits and claims. Customer Deposits The Company uses Black-Scholes models to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates (“SMC”). The inputs to these calculations are primarily market observable and include interest rates, volatilities and equity index levels. As a result, these measurements are classified as Level 2. 56 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Other Liabilities Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both June 30, 2024 and December 31, 2023. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Securities sold but not yet purchased represent obligations of the Company to deliver specified securities that it does not yet own, creating a liability to purchase the security in the market at prevailing prices. When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, or other model-based valuation techniques such as the present value of cash flows. Level 1 securities sold but not yet purchased primarily include trading securities and U.S. Treasuries traded in active markets. Level 2 securities sold but not yet purchased primarily include corporate bonds. Contingent consideration liabilities consist of earn-outs and/or deferred payments related to the Company’s acquisitions. Contingent consideration liabilities are recorded at fair value utilizing a discounted cash flow model using an unobservable input (discount rate). Given the use of a significant unobservable input, the fair value of contingent consideration liabilities is classified as Level 3 within the fair value hierarchy. Fair Value on a Nonrecurring Basis The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was $ 35 million and $ 41 million as of June 30, 2024 and December 31, 2023, respectively, and is classified as Level 3 in the fair value hierarchy. Assets and Liabilities Not Reported at Fair Value The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value: June 30, 2024 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,233 $ — $ 363 $ 1,719 $ 2,082 Policy loans 947 — 947 — 947 Receivables 9,540 441 1,702 6,156 8,299 Restricted and segregated cash 688 688 — — 688 Other investments and assets 301 — 246 56 302 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 18,370 $ — $ — $ 15,524 $ 15,524 Investment certificate reserves 12,517 — — 12,466 12,466 Banking and brokerage deposits 23,742 23,742 — — 23,742 Separate account liabilities — investment contracts 3,118 — 3,118 — 3,118 Debt and other liabilities 4,067 464 3,561 4 4,029 57 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) December 31, 2023 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,118 $ — $ 280 $ 1,692 $ 1,972 Policy loans 912 — 912 — 912 Receivables 9,453 146 1,621 6,577 8,344 Restricted and segregated cash 936 936 — — 936 Other investments and assets 338 — 283 55 338 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 16,641 $ — $ — $ 14,243 $ 14,243 Investment certificate reserves 13,461 — — 13,420 13,420 Banking and brokerage deposits 23,886 23,886 — — 23,886 Separate account liabilities — investment contracts 3,155 — 3,155 — 3,155 Debt and other liabilities 3,769 166 3,610 5 3,781 Receivables include deposit receivables, brokerage margin loans, securities borrowed, pledged asset lines of credit and loans to financial advisors. Restricted and segregated cash includes cash segregated under federal and other regulations held in special reserve bank accounts for the exclusive benefit of the Company’s brokerage customers. Other investments and assets primarily include syndicated loans, credit card receivables, certificate of deposits with original or remaining maturities at the time of purchase of more than 90 days, the Company’s membership in the FHLB and investments related to the Community Reinvestment Act. See Note 6 for additional information on mortgage loans, policy loans, syndicated loans, credit card receivables and deposit receivables. Policyholder account balances, future policy benefits and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts. See Note 8 for additional information on these liabilities. Investment certificate reserves represent customer deposits for fixed rate certificates and stock market certificates. Banking and brokerage deposits are amounts payable to customers related to free credit balances, funds deposited by customers and funds accruing to customers as a result of trades or contracts. Separate account liabilities are primarily investment contracts in pooled pension funds offered by Threadneedle. Debt and other liabilities include the Company’s long-term debt, short-term borrowings, securities loaned and future funding commitments to affordable housing partnerships and other real estate partnerships. See Note 11 for further information on the Company’s long-term debt and short-term borrowings. 13. Offsetting Assets and Liabilities Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments and securities borrowing and lending agreements are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Securities borrowed and securities loaned result from transactions between the Company’s broker dealer subsidiary and other financial institutions and are recorded at the amount of cash collateral advanced or received. Securities borrowed and securities loaned are primarily equity securities. The Company’s securities borrowed and securities loaned transactions generally do not have a fixed maturity date and may be terminated by either party under customary terms. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets. 58 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following tables present the gross and net information about the Company’s assets subject to master netting arrangements: June 30, 2024 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 7,281 $ — $ 7,281 $ ( 4,811 ) $ ( 1,198 ) $ ( 1,186 ) $ 86 OTC cleared 28 — 28 ( 28 ) — — — Exchange-traded 108 — 108 ( 25 ) — — 83 Total derivatives 7,417 — 7,417 ( 4,864 ) ( 1,198 ) ( 1,186 ) 169 Securities borrowed 441 — 441 ( 95 ) — ( 337 ) 9 Total $ 7,858 $ — $ 7,858 $ ( 4,959 ) $ ( 1,198 ) $ ( 1,523 ) $ 178 December 31, 2023 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,197 $ — $ 5,197 $ ( 3,707 ) $ ( 1,114 ) $ ( 357 ) $ 19 OTC cleared 9 — 9 ( 9 ) — — — Exchange-traded 39 — 39 ( 18 ) — — 21 Total derivatives 5,245 — 5,245 ( 3,734 ) ( 1,114 ) ( 357 ) 40 Securities borrowed 146 — 146 ( 32 ) — ( 111 ) 3 Total $ 5,391 $ — $ 5,391 $ ( 3,766 ) $ ( 1,114 ) $ ( 468 ) $ 43 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements: June 30, 2024 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,912 $ — $ 4,912 $ ( 4,811 ) $ ( 3 ) $ ( 87 ) $ 11 OTC cleared 86 — 86 ( 28 ) — — 58 Exchange-traded 27 — 27 ( 25 ) — — 2 Total derivatives 5,025 — 5,025 ( 4,864 ) ( 3 ) ( 87 ) 71 Securities loaned 464 — 464 ( 95 ) — ( 357 ) 12 Total $ 5,489 $ — $ 5,489 $ ( 4,959 ) $ ( 3 ) $ ( 444 ) $ 83 59 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) December 31, 2023 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,829 $ — $ 3,829 $ ( 3,707 ) $ ( 36 ) $ ( 78 ) $ 8 OTC cleared 35 — 35 ( 9 ) — — 26 Exchange-traded 19 — 19 ( 18 ) — — 1 Total derivatives 3,883 — 3,883 ( 3,734 ) ( 36 ) ( 78 ) 35 Securities loaned 163 — 163 ( 32 ) — ( 126 ) 5 Total $ 4,046 $ — $ 4,046 $ ( 3,766 ) $ ( 36 ) $ ( 204 ) $ 40 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. In the tables above, the amount of assets or liabilities presented are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables. When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral. Freestanding derivative instruments are reflected in Other assets and Other liabilities. Cash collateral pledged by the Company is reflected in Other assets and cash collateral accepted by the Company is reflected in Other liabilities. Securities borrowing and lending agreements are reflected in Receivables and Other liabilities, respectively. See Note 14 for additional disclosures related to the Company’s derivative instruments and Note 4 for information related to derivatives held by consolidated investment entities. 14. Derivatives and Hedging Activities Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity, foreign exchange and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations. Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 13 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral. 60 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Generally, the Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives: June 30, 2024 December 31, 2023 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2) Assets (1) Liabilities (2) (in millions) Derivatives designated as hedging instruments Foreign exchange contracts – net investment hedges $ 76 $ 1 $ — $ 61 $ — $ 3 Total qualifying hedges 76 1 — 61 — 3 Derivatives not designated as hedging instruments Interest rate contracts 39,821 218 396 42,523 185 305 Equity contracts 93,014 7,162 4,605 83,080 5,034 3,464 Credit contracts 3,118 1 18 3,436 4 107 Foreign exchange contracts 3,418 35 6 3,262 22 4 Total non-designated hedges 139,371 7,416 5,025 132,301 5,245 3,880 Embedded derivatives IUL N/A — 944 N/A — 873 Fixed deferred indexed annuities and deposit receivables N/A 55 56 N/A 51 52 Structured variable annuities (3) N/A — 1,896 N/A — 1,011 SMC N/A — 9 N/A — 9 Total embedded derivatives N/A 55 2,905 N/A 51 1,945 Total derivatives $ 139,447 $ 7,472 $ 7,930 $ 132,362 $ 5,296 $ 5,828 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables. (2) The fair value of freestanding derivative liabilities is included in Other liabilities. The fair value of IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims. The fair value of the SMC embedded derivative liability is included in Customer deposits. (3) The fair value of the structured variable annuity embedded derivatives as of June 30, 2024 included $ 1.9 billion of individual embedded derivatives in a liability position and $ 1 million of individual embedded derivatives in an asset position. The fair value of the structured variable annuity embedded derivatives as of December 31, 2023 included $ 1.0 billion of individual embedded derivatives in a liability position and $ 15 million of individual embedded derivatives in an asset position. See Note 12 for additional information regarding the Company’s fair value measurement of derivative instruments. As of June 30, 2024 and December 31, 2023, investment securities with a fair value of $ 1.6 billion and $ 1.5 billion, respectively, were pledged to meet contractual obligations under derivative contracts, of which $ 156 million and $ 145 million, respectively, may be sold, pledged or rehypothecated by the counterparty. As of June 30, 2024 and December 31, 2023, investment securities with a fair value of $ 1.3 billion and $ 376 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $ 1.1 billion and $ 314 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both June 30, 2024 and December 31, 2023, the Company had sold, pledged or rehypothecated none of these securities. In addition, as of both June 30, 2024 and December 31, 2023, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets. 61 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Derivatives Not Designated as Hedges The following table presents a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations: Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses Change in Fair Value of Market Risk Benefits General and Administrative Expense (in millions) Three Months Ended June 30, 2024 Interest rate contracts $ — $ — $ — $ — $ — $ ( 188 ) $ — Equity contracts ( 3 ) 1 15 15 252 ( 169 ) — Credit contracts — — ( 1 ) — — 34 — Foreign exchange contracts — — — — — 23 1 IUL embedded derivatives — — — ( 48 ) — — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — 11 — — — Structured variable annuity embedded derivatives — — — — ( 325 ) — — SMC embedded derivatives — ( 1 ) — — — — — Total gain (loss) $ ( 3 ) $ — $ 14 $ ( 22 ) $ ( 73 ) $ ( 300 ) $ 1 Three Months Ended June 30, 2023 Interest rate contracts $ — $ — $ — $ — $ ( 14 ) $ ( 481 ) $ — Equity contracts ( 1 ) 2 45 35 346 ( 438 ) 5 Credit contracts — — — — — 66 — Foreign exchange contracts — — — — — 20 3 IUL embedded derivatives — — — ( 22 ) — — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — ( 1 ) — — — Structured variable annuity embedded derivatives — — — — ( 426 ) — — SMC embedded derivatives — ( 2 ) — — — — — Total gain (loss) $ ( 1 ) $ — $ 45 $ 12 $ ( 94 ) $ ( 833 ) $ 8 62 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses Change in Fair Value of Market Risk Benefits General and Administrative Expense (in millions) Six Months Ended June 30, 2024 Interest rate contracts $ — $ — $ — $ — $ ( 8 ) $ ( 721 ) $ — Equity contracts ( 5 ) 2 81 47 850 ( 728 ) 6 Credit contracts — — ( 2 ) — — 99 — Foreign exchange contracts — — — — — 57 ( 2 ) IUL embedded derivatives — — — ( 57 ) — — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — 10 — — — Structured variable annuity embedded derivatives — — — — ( 953 ) — — SMC embedded derivatives — ( 2 ) — — — — — Total gain (loss) $ ( 5 ) $ — $ 79 $ — $ ( 111 ) $ ( 1,293 ) $ 4 Six Months Ended June 30, 2023 Interest rate contracts $ — $ — $ — $ — $ ( 8 ) $ ( 234 ) $ — Equity contracts ( 2 ) 3 88 54 510 ( 900 ) 8 Credit contracts — — 1 — — 33 — Foreign exchange contracts — — — — — 12 6 IUL embedded derivatives — — — ( 30 ) — — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — ( 2 ) — — — Structured variable annuity embedded derivatives — — — — ( 689 ) — — SMC embedded derivatives — ( 4 ) — — — — — Total gain (loss) $ ( 2 ) $ ( 1 ) $ 89 $ 22 $ ( 187 ) $ ( 1,089 ) $ 14 The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company. The deferred premium associated with certain of the above options is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options as of June 30, 2024: Premiums Payable Premiums Receivable (in millions) 2024 (1) $ 69 $ — 2025 119 20 2026 246 88 2027 20 — 2028 29 — 2029 - 2031 369 — Total $ 852 $ 108 (1) 2024 amounts represent the amounts payable and receivable for the period from July 1, 2024 to December 31, 2024. 63 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received. Structured variable annuity, IUL and stock market certificate products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to structured variable annuity, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products. The equity components of structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into interest rate swaps, index options and futures contracts. As discussed in Note 10, the Company issues variable annuity contracts that provide protection to contractholders from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. The Company economically hedges its obligations under these market risk benefits using options, swaptions, swaps and futures. The Company enters into futures, credit default swaps, commodity swaps, total return swaps and foreign currency forwards to manage its exposure to price risk arising from seed money investments in proprietary investment products. The Company enters into foreign currency forward contracts to economically hedge its exposure to certain foreign transactions. The Company enters into futures contracts, total return swaps and foreign currency forwards to economically hedge its exposure related to compensation plans. The Company enters into interest rate swaps to offset interest rate changes on unrealized gains or losses for certain investments. Cash Flow Hedges The Company has designated derivative instruments as a cash flow hedge for interest rate exposure on forecasted debt interest payments. For derivative instruments that qualify as cash flow hedges, the gains or losses on the derivative instruments are reported in AOCI and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented within the same line item as the earnings impact of the hedged item in Interest and debt expense. For both the six months ended June 30, 2024 and 2023, the amounts reclassified from AOCI to earnings related to cash flow hedges were immaterial. The estimated net amount recorded in AOCI as of June 30, 2024 that the Company expects to reclassify to earnings as a reduction to Interest and debt expense within the next twelve months is $ 0.8 million. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 11 years and relates to forecasted debt interest payments. See Note 15 for a rollforward of net unrealized gains (losses) on derivatives included in AOCI related to cash flow hedges. Net Investment Hedges The Company entered into, and designated as net investment hedges in foreign operations, forward contracts to hedge a portion of the Company’s foreign currency exchange rate risk associated with its investment in Threadneedle. As the Company determined that the forward contracts are effective, the change in fair value of the derivatives is recognized in AOCI as part of the foreign currency translation adjustment. For the three months ended June 30, 2024 and 2023, the Company recognized a gain of $ 1 million and a loss of $ 1 million, respectively, in other comprehensive income (loss) (“OCI”). For the six months ended June 30, 2024 and 2023, the Company recognized a gain of $ 1 million and a loss of $ 3 million, respectively, in OCI. Credit Risk Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 13 for additional information on the Company’s credit exposure related to derivative assets. Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s debt rating (or based on the financial strength of the Company’s life insurance subsidiaries for contracts in which those subsidiaries are the counterparty). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company’s debt does not maintain a specific credit rating (generally an investment grade rating) or the Company’s life insurance subsidiary does not maintain a specific financial strength rating. If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. As of June 30, 2024 and December 31, 2023, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $ 98 million and $ 65 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of June 30, 2024 and December 31, 2023 was $ 88 million and $ 58 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position as of June 30, 2024 and December 31, 2023 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $ 10 million and $ 7 million, respectively. 64 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 15. Shareholders’ Equity The following table presents the amounts related to each component of OCI: Three Months Ended June 30, 2024 2023 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ ( 180 ) $ 38 $ ( 142 ) $ ( 439 ) $ 101 $ ( 338 ) Reclassification of net (gains) losses on securities included in net income (2) 2 — 2 ( 6 ) 1 ( 5 ) Impact of benefit reserves and reinsurance recoverables 6 ( 1 ) 5 6 ( 1 ) 5 Net unrealized gains (losses) on securities ( 172 ) 37 ( 135 ) ( 439 ) 101 ( 338 ) Effect of changes in discount rate assumptions on certain long-duration contracts 79 ( 17 ) 62 75 ( 16 ) 59 Effect of changes in instrument-specific credit risk on MRBs 13 ( 4 ) 9 ( 159 ) 33 ( 126 ) Foreign currency translation 2 ( 1 ) 1 52 ( 11 ) 41 Total other comprehensive income (loss) $ ( 78 ) $ 15 $ ( 63 ) $ ( 471 ) $ 107 $ ( 364 ) Six Months Ended June 30, 2024 2023 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ ( 416 ) $ 90 $ ( 326 ) $ 127 $ ( 23 ) $ 104 Reclassification of net (gains) losses on securities included in net income (2) 2 — 2 ( 9 ) 2 ( 7 ) Impact of benefit reserves and reinsurance recoverables 14 ( 3 ) 11 ( 6 ) 1 ( 5 ) Net unrealized gains (losses) on securities ( 400 ) 87 ( 313 ) 112 ( 20 ) 92 Net unrealized gains (losses) on derivatives: Net unrealized gains (losses) on derivatives arising during the period — — — 3 ( 1 ) 2 Net unrealized gains (losses) on derivatives — — — 3 ( 1 ) 2 Effect of changes in discount rate assumptions on certain long-duration contracts 167 ( 36 ) 131 ( 8 ) 2 ( 6 ) Effect of changes in instrument-specific credit risk on MRBs ( 35 ) 7 ( 28 ) 45 ( 10 ) 35 Foreign currency translation ( 16 ) ( 1 ) ( 17 ) 94 ( 20 ) 74 Total other comprehensive income (loss) $ ( 284 ) $ 57 $ ( 227 ) $ 246 $ ( 49 ) $ 197 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in Net investment income. Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit losses to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates. 65 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following table presents the changes in the balances of each component of AOCI, net of tax: Net Unrealized Gains (Losses) on Securities Net Unrealized Gains (Losses) on Derivatives Effect of Changes in Discount Rate Assumptions on Certain Long-Duration Contracts Effect of Changes in Instrument-Specific Credit Risk on MRBs Defined Benefit Plans Foreign Currency Translation Other Total (in millions) Balance at April 1, 2024 $ ( 1,419 ) $ 5 $ ( 57 ) $ ( 122 ) $ ( 60 ) $ ( 276 ) $ ( 1 ) $ ( 1,930 ) OCI before reclassifications ( 137 ) — 62 9 — 1 — ( 65 ) Amounts reclassified from AOCI 2 — — — — — — 2 Total OCI ( 135 ) — 62 9 — 1 — ( 63 ) Balance at June 30, 2024 $ ( 1,554 ) $ 5 $ 5 $ ( 113 ) $ ( 60 ) $ ( 275 ) $ ( 1 ) $ ( 1,993 ) Balance at April 1, 2023 $ ( 1,613 ) $ 5 $ ( 137 ) $ 141 $ ( 75 ) $ ( 305 ) $ ( 1 ) $ ( 1,985 ) OCI before reclassifications ( 333 ) — 59 ( 126 ) — 41 — ( 359 ) Amounts reclassified from AOCI ( 5 ) — — — — — — ( 5 ) Total OCI ( 338 ) — 59 ( 126 ) — 41 — ( 364 ) Balance at June 30, 2023 $ ( 1,951 ) $ 5 $ ( 78 ) $ 15 $ ( 75 ) $ ( 264 ) $ ( 1 ) $ ( 2,349 ) Balance at January 1, 2024 $ ( 1,241 ) $ 5 $ ( 126 ) $ ( 85 ) $ ( 60 ) $ ( 258 ) $ ( 1 ) $ ( 1,766 ) OCI before reclassifications ( 315 ) — 131 ( 28 ) — ( 17 ) — ( 229 ) Amounts reclassified from AOCI 2 — — — — — — 2 Total OCI ( 313 ) — 131 ( 28 ) — ( 17 ) — ( 227 ) Balance at June 30, 2024 $ ( 1,554 ) $ 5 $ 5 $ ( 113 ) $ ( 60 ) $ ( 275 ) $ ( 1 ) $ ( 1,993 ) Balance at January 1, 2023 $ ( 2,043 ) $ 3 $ ( 72 ) $ ( 20 ) $ ( 75 ) $ ( 338 ) $ ( 1 ) $ ( 2,546 ) OCI before reclassifications 99 2 ( 6 ) 35 — 74 — 204 Amounts reclassified from AOCI ( 7 ) — — — — — — ( 7 ) Total OCI 92 2 ( 6 ) 35 — 74 — 197 Balance at June 30, 2023 $ ( 1,951 ) $ 5 $ ( 78 ) $ 15 $ ( 75 ) $ ( 264 ) $ ( 1 ) $ ( 2,349 ) For the six months ended June 30, 2024 and 2023, the Company repurchased a total of 2.5 million shares and 3.2 million shares, respectively, of its common stock for an aggregate cost of $ 1.0 billion and $ 998 million, respectively. On July 24, 2023, the Company’s Board of Directors authorized an additional $ 3.5 billion for the repurchase of the Company’s common stock through September 30, 2025. As of June 30, 2024, the Company had $ 2.1 billion remaining under this share repurchase authorization. The Company may also reacquire shares of its common stock under its share-based compensation plans related to restricted stock awards and certain option exercises. The holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligation. These vested restricted shares are reacquired by the Company and the Company’s payment of the holders’ income tax obligations are recorded as a treasury share purchase. For both the six months ended June 30, 2024 and 2023, the Company reacquired 0.3 million shares of its common stock through the surrender of shares upon vesting and paid in the aggregate $ 104 million and $ 88 million, respectively, related to the holders’ income tax obligations on the vesting date. Option holders may elect to net settle their vested awards resulting in the surrender of the number of shares required to cover the strike price and tax obligation of the options exercised. These shares are reacquired by the Company and recorded as treasury shares. For the six months ended June 30, 2024 and 2023, the Company reacquired 0.3 million shares and 0.2 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of $ 119 million and $ 73 million, respectively. 66 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) During the six months ended June 30, 2024 and 2023, the Company reissued 0.7 million and 0.6 million, respectively, treasury shares for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans. 16. Income Taxes The Company’s effective tax rate was 21.1 % for both the three months ended June 30, 2024 and 2023. The Company’s effective tax rate was 19.9 % and 19.5 % for the six months ended June 30, 2024 and 2023, respectively. The effective tax rate for the three months ended June 30, 2024 was higher than the statutory rate as a result of state income taxes, net of federal benefit. The effective tax rate for the six months ended June 30, 2024 was lower than the statutory rate as a result of tax preferred items including incentive compensation, partially offset by state income taxes, net of federal benefit. The effective tax rate for the three months ended June 30, 2023 was higher than the statutory rate as a result of state income taxes, net of federal benefit. The effective tax rate for the six months ended June 30, 2023 was lower than the statutory rate as a result of tax preferred items including incentive compensation and foreign tax credits, net of addback, partially offset by state income taxes, net of federal benefit. Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $ 32 million, net of federal benefit, which will expire beginning December 31, 2024 and foreign net operating losses of $ 43 million, which do not expire. The Company is required to establish a valuation allowance for any portion of its deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination: (i) future taxable income exclusive of reversing temporary differences and carryforwards; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. Based on analysis of the Company’s tax position as of June 30, 2024, management believes it is more likely than not that the Company will not realize certain state net operating losses of $ 31 million, state deferred tax assets of $ 2 million (both net of federal benefit), and foreign net operating losses of $ 33 million; therefore, a valuation allowance has been established. The valuation allowance was $ 66 million and $ 65 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, the Company had $ 154 million and $ 150 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $ 125 million and $ 120 million, net of federal tax benefits, of unrecognized tax benefits as of June 30, 2024 and December 31, 2023, respectively, would affect the effective tax rate. During the second quarter of 2023, the Company had additions to its gross unrecognized tax benefits for tax positions of prior years of $ 71 million and reductions to its gross unrecognized tax benefits of prior years of $ 80 million. It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately $ 8 million in the next 12 months primarily due to expected exam closures and state statutes of limitations expirations. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized a net increase of $ 1 million and $ 3 million in interest and penalties for the three and six months ended June 30, 2024, respectively. The Company recognized a net increase of $ 7 million and $ 8 million in interest and penalties for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, the Company had a payable of $ 29 million and $ 26 million, respectively, related to accrued interest and penalties. The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Internal Revenue Service (“IRS”) is currently auditing the Company’s U.S. income tax returns for 2019 and 2020. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2017 through 2021. The Company is an applicable corporation required to compute corporate alternative minimum tax (“CAMT”). As of June 30, 2024 and December 31, 2023, the Company recorded an estimate of $ 43 million and nil , respectively, for the provision of the Federal CAMT based on the Company’s interpretation of available guidance. This was offset with an increase to the deferred tax asset for the credit carryover, which does not expire, resulting in no impact to the total tax provision. The estimate is based on interpretations and assumptions the Company has made regarding the CAMT provisions of the Inflation Reduction Act of 2022. The U.S. Department of the Treasury is expected to issue additional regulatory guidance in 2024 that may materially change the estimated provision of the CAMT. In December 2021, the Organization for Economic Co-operation and Development published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises pay a minimum level of tax on profits from each jurisdiction in which they operate. Various jurisdictions that the Company operates in have enacted or substantively enacted legislation that became effective beginning January 1, 2024. The Company intends to rely on Pillar Two transitional safe harbors where available 67 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) and, based on its current estimate, has not recorded any Pillar Two tax liabilities. The Company continues to monitor the adoption and implementation of these rules and evaluate the potential impact on its consolidated financial statements. 17. Contingencies Contingencies The Company and its subsidiaries are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to legal proceedings arising out of its general business activities, such as its investments, contracts, leases and employment relationships. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally. As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. From time to time, the Company receives requests for information from, and/or has been subject to examination or claims by, the SEC, the Financial Industry Regulatory Authority, the OCC, the U.K. Financial Conduct Authority, the Federal Reserve Board, state insurance and securities regulators, state attorneys general and various other domestic and foreign governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Company’s business activities and practices, and the practices of the Company’s financial advisors. The Company typically has numerous pending matters which include information requests, exams or inquiries regarding certain subjects, including from time to time: sales and distribution of, and disclosure practices related to, mutual and other pooled funds, exchange traded funds, private funds, segregated accounts, annuities, equity and fixed income securities, real estate investment trusts, insurance products, banking products, brokerage offerings, including money settlement options, and financial advice offerings, including managed accounts; wholesaler activity; supervision of the Company’s financial advisors and other associated persons; administration of insurance and annuity claims; security of client information; trading activity and the Company’s monitoring and supervision of such activity; recordkeeping requirements; and transaction monitoring systems and controls. The Company is cooperating with the applicable regulators. In connection with one such matter, the Company has responded to SEC document and information requests regarding the preservation of certain business-related communications sent on electronic messaging platforms that have not been approved by the Company. During 2023, the Company recorded a $ 50 million accrual for this matter within our introducing broker dealer subsidiary. The Company has reached an agreement in principle with the Staff, subject to Commission approval, that it believes resolves this matter. As of June 30, 2024, the related liability was $ 50 million. These pending matters are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss that may result from such matters. The Company cannot predict with certainty if, how, or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a potential loss or range of loss can be reasonably estimated for any matter. An adverse outcome in any matter could result in an adverse judgment, a settlement, fine, penalty, or other sanction, and may lead to further claims, examinations, or adverse publicity each of which could have a material adverse effect on the Company’s consolidated results of operations, financial condition, or liquidity. In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is at least a reasonable possibility that the outcome may be material to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter. 68 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Guaranty Fund Assessments RiverSource Life Insurance Company (“RiverSource Life”) and RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”) are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated. The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both June 30, 2024 and December 31, 2023, the estimated liability was $ 34 million. As of both June 30, 2024 and December 31, 2023, the related premium tax asset was $ 29 million. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known. 18. Earnings per Share The computations of basic and diluted earnings per share were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions, except per share amounts) Numerator: Net income $ 829 $ 890 $ 1,819 $ 1,307 Denominator: Basic: Weighted-average common shares outstanding 101.6 106.4 102.2 107.1 Effect of potentially dilutive nonqualified stock options and other share-based awards 1.8 2.0 1.8 2.1 Diluted: Weighted-average common shares outstanding 103.4 108.4 104.0 109.2 Earnings per share: Basic $ 8.16 $ 8.36 $ 17.80 $ 12.20 Diluted $ 8.02 $ 8.21 $ 17.49 $ 11.97 The calculation of diluted earnings per share excludes the incremental effect of nil options for both the three months ended June 30, 2024 and 2023, and 0.1 million and 0.2 million options for the six months ended June 30, 2024 and 2023, respectively, due to their anti-dilutive effect. 19. Segment Information The Company’s four reporting segments are Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other. The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis. Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, adjusted operating earnings is the Company’s measure of segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis. Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. Adjusted operating net revenues and adjusted operating expenses exclude net realized investment gains or losses (net of reinsurance accrual); the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and reinsurance accrual; mean reversion related impacts (the impact on VUL products for the difference between assumed and updated separate account investment performance on the reinsurance accrual and additional insurance benefit reserves); 69 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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. The market impact on non-traditional long-duration products includes changes in market risk benefits and embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values and unhedged items including the difference between assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and certain policyholder contract elections. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosure s, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the RiverSource Life companies’ nonperformance spread. The following tables summarize selected financial information by segment and reconcile segment totals to those reported on the consolidated financial statements: June 30, 2024 December 31, 2023 (in millions) Advice & Wealth Management $ 41,893 $ 42,983 Asset Management 7,358 7,288 Retirement & Protection Solutions 113,610 108,451 Corporate & Other 16,839 16,469 Total assets $ 179,700 $ 175,191 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) Adjusted operating net revenues: Advice & Wealth Management $ 2,644 $ 2,343 $ 5,204 $ 4,608 Asset Management 848 808 1,703 1,607 Retirement & Protection Solutions 928 858 1,840 1,682 Corporate & Other 111 148 232 274 Elimination of segment revenues (1)(2) ( 360 ) ( 331 ) ( 708 ) ( 647 ) Total segment adjusted operating net revenues 4,171 3,826 8,271 7,524 Adjustments: Net realized investment gains (losses) ( 3 ) 3 ( 3 ) 6 Market impact on non-traditional long-duration products ( 1 ) 1 1 1 Revenue attributable to consolidated investment entities 53 46 97 87 Total net revenues per consolidated statements of operations $ 4,220 $ 3,876 $ 8,366 $ 7,618 (1) Represents the elimination of intersegment revenues recognized for the three months ended June 30, 2024 and 2023 in each segment as follows: Advice & Wealth Management ($ 236 million and $ 211 million, respectively); Asset Management ($ 23 million and $ 19 million, respectively); Retirement & Protection Solutions ($ 108 million and $ 104 million, respectively); and Corporate & Other ($( 7 ) million and $( 3 ) million, respectively). (2) Represents the elimination of intersegment revenues recognized for the six months ended June 30, 2024 and 2023 in each segment as follows: Advice & Wealth Management ($ 461 million and $ 412 million, respectively); Asset Management ($ 47 million and $ 36 million, respectively); Retirement & Protection Solutions ($ 214 million and $ 206 million, respectively); and Corporate & Other ($( 14 ) million and $( 7 ) million, respectively). 70 Index AMERIPRISE FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) Adjusted operating earnings: Advice & Wealth Management $ 822 $ 731 $ 1,584 $ 1,424 Asset Management 218 162 424 327 Retirement & Protection Solutions 196 189 395 383 Corporate & Other ( 119 ) ( 60 ) ( 208 ) ( 134 ) Total segment adjusted operating earnings 1,117 1,022 2,195 2,000 Adjustments: Net realized investment gains (losses) ( 3 ) 3 ( 3 ) 6 Market impact on non-traditional long-duration products ( 60 ) 127 80 ( 348 ) Integration/restructuring charges — ( 25 ) — ( 35 ) Net income (loss) attributable to consolidated investment entities ( 3 ) — ( 2 ) — Pretax income per consolidated statements of operations $ 1,051 $ 1,127 $ 2,270 $ 1,623 71 Index AMERIPRISE FINANCIAL, INC.