AMP · Read the filing

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements,” our Consolidated Financial Statements and Notes that follow and the “Risk Factors” included in our Annual Report on Form 10-K. References to “Ameriprise Financial,” “Ameriprise,” the “Company,” “we,” “us,” and “our” refer to Ameriprise Financial, Inc. exclusively, to our entire family of companies, or to one or more of our subsidiaries.

Overview

Ameriprise Financial is a diversified financial services company with a nearly 130-year history of providing financial solutions. We are a long-standing leader in financial planning and advice with $1.4 trillion in assets under management and administration as of December 31, 2023. We offer a broad range of products and services designed to achieve individual and institutional clients’ financial objectives. For additional discussion of our businesses, see Part I, Item 1 of this Annual Report on Form 10-K.

The products and services we provide retail clients and, to a lesser extent, institutional clients, are the primary source of our revenues and net income. Revenues and net income are significantly affected by investment performance and the total value and composition of assets we manage and administer for our retail and institutional clients as well as the distribution fees we receive from other companies. These factors, in turn, are largely determined by overall investment market performance and the depth and breadth of our individual client relationships.

We operate our business in the broader context of the macroeconomic forces around us, including the global and U.S. economies, changes in interest and inflation rates, financial market volatility, fluctuations in foreign exchange rates, geopolitical strain, pandemics, the competitive environment, client and customer activities and preferences, and the various regulatory and legislative developments. Financial markets and macroeconomic conditions have had and will continue to have a significant impact on our operating and performance results. In addition, the business, political and regulatory environments in which we operate are subject to elevated uncertainty and substantial, frequent change. Accordingly, we expect to continue focusing on our key strategic objectives and obtaining operational and strategic leverage from our core capabilities. The success of these and other strategies may be affected by the factors discussed in Item 1A of this Annual Report on Form 10-K - “Risk Factors” - and other factors as discussed herein.

Equity price, credit market and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects they have on the asset management and other asset-based fees we earn, the values of market risk benefits and embedded derivatives associated with our variable annuities and the values of derivatives held to hedge these benefits and the “spread” income generated on our deposit products, fixed insurance, the fixed portion of variable annuities and variable insurance contracts and fixed deferred annuities. We have been operating in a historically low interest rate environment but have recently experienced a substantial increase in rates with uncertainty about where rates will go in the future. A higher (lower) interest rate environment may result in decreases (increases) to our long-duration contract reserves, which may impact our adjusted operating earnings after tax. For additional discussion on our interest rate risk, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.”

In the third quarter, we conducted our annual review of life insurance, annuity and long term care (“LTC”) valuation assumptions relative to current experience and management expectations including modeling changes. These annual assumption updates are collectively referred to as unlocking. See our Consolidated and Segment Results of Operations sections for the pretax impacts on our revenues and expenses attributable to unlocking.

On July 13, 2023, we announced that we withdrew our application to convert Ameriprise Bank, FSB (“Ameriprise Bank”) to a state-chartered industrial bank and our application to establish a new limited purpose national trust bank. Ameriprise Bank will continue to operate as it does today, regulated by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. These changes are not expected to impact our long-term growth strategy for Ameriprise Bank and we will continue to offer our strong lineup of banking solutions, including deposits, credit cards, mortgages and securities-based lending to our wealth management clients without interruption.

We consolidate certain variable interest entities for which we provide asset management services. These entities are defined as consolidated investment entities (“CIEs”). While the consolidation of the CIEs impacts our balance sheet and income statement, our exposure to these entities is unchanged and there is no impact to the underlying business results. For further information on CIEs, see Note 5 to our Consolidated Financial Statements. The results of operations of the CIEs are reflected in the Corporate & Other segment. On a consolidated basis, the management fees we earn for the services we provide to the CIEs and the related general and administrative expenses are eliminated and the changes in fair value of assets and liabilities related to the CIEs, primarily syndicated loans and debt, are reflected in Net investment income. We include the fees from these entities in the Management and financial advice fees line within our Asset Management segment.

While our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and universal life (“UL”) insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and variable universal life (“VUL”) products for the difference between assumed and updated separate account investment performance on the reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to

Index

Ameriprise Financial, Inc.

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; income (loss) from discontinued operations; and the impact of consolidating CIEs, best reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis.

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 Disclosures, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of our life insurance subsidiaries’ nonperformance spread.

In the first quarter of 2023, management introduced an adjusted capital measure (“Available Capital for Capital Adequacy”), which management believes best reflects the available capital resources of our operations and facilitates a meaningful trend analysis. Available Capital for Capital Adequacy adjusts GAAP total equity and excludes accumulated other comprehensive income (“AOCI”); goodwill and intangibles; RiverSource Life Insurance Company’s GAAP equity excluding AOCI; and includes RiverSource Life Insurance Company’s statutory total adjusted capital prepared in conformity with accounting practices prescribed or permitted by the State of Minnesota Department of Commerce; and other adjustments, primarily certain deferred tax balances.

Management uses these non-GAAP measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors. Also, certain of these non-GAAP measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters. Throughout our Management’s Discussion and Analysis, these non-GAAP measures are referred to as adjusted operating measures. These non-GAAP measures should not be viewed as a substitute for U.S. GAAP measures.

Concurrent with the adoption of Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts, management no longer excludes adjustments for deferred acquisition costs (“DAC”), deferred sales inducement costs (“DSIC”) and unearned revenue amortization from adjusted operating earnings measures. Amortization of DAC, DSIC, and unearned revenue is no longer impacted by markets and is now amortized on a constant-level basis in accordance with GAAP.

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

Our financial targets are:

•Adjusted operating earnings per diluted share growth of 12% to 15%, and

•Adjusted operating return on equity of over 30%.

The following table reconciles our GAAP measures to adjusted operating measures:

Per Diluted Share

Years Ended December 31, Years Ended December 31,

(in millions, except per share amounts)

Less Adjustments:

Net realized investment gains (losses) (1) (32) (93) (0.30) (0.82)

Mean reversion related impacts (1) — (1) — (0.01)

Integration/restructuring charges (1) (62) (50) (0.58) (0.44)

Net income (loss) attributable to CIEs — (4) — (0.04)

Weighted average common shares outstanding:

(1) Pretax adjusted operating adjustments.

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

Index

Ameriprise Financial, Inc.

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

Years Ended December 31,

(in millions)

Adjusted operating earnings $ 3,111 $ 2,885

Total Ameriprise Financial, Inc. shareholders’ equity $ 4,116 $ 4,170

Less: Equity impacts attributable to CIEs (4) —

Adjusted operating equity $ 6,417 $ 5,939

Return on equity, excluding AOCI 39.9 % 53.0 %

Adjusted operating return on equity, excluding AOCI (2) 48.5 % 48.6 %

(1) Adjustments reflect the sum of after-tax net realized investment gains/losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts; block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and net income (loss) from consolidated investment entities. After-tax is calculated using the statutory tax rate of 21%.

(2) Adjusted operating return on equity, excluding AOCI is calculated using adjusted operating earnings in the numerator and Ameriprise Financial shareholders’ equity, excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory rate of 21%.

The following table reconciles GAAP total equity to Available Capital for Capital Adequacy:

(in millions)

Ameriprise Financial, Inc. GAAP total equity $ 4,729 $ 3,803

Ameriprise Financial, Inc. GAAP total equity, excluding AOCI 6,495 6,349

Less: RiverSource Life Insurance Company GAAP equity, excluding AOCI 1,851 2,057

Less: Goodwill and intangibles 2,622 2,485

Available Capital for Capital Adequacy $ 5,418 $ 5,209

Critical Accounting Estimates

The accounting and reporting policies that we use affect our Consolidated Financial Statements. Certain of our accounting and reporting policies are critical to an understanding of our consolidated results of operations and financial condition and, in some cases, the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of our Consolidated Financial Statements. The accounting and reporting policies and estimates we have identified as fundamental to a full understanding of our consolidated results of operations and financial condition are described below. See Note 2 to our Consolidated Financial Statements for further information about our accounting policies.

Valuation of Investments

The most significant component of our investments is our Available-for-Sale securities, which we carry at fair value within our Consolidated Balance Sheets. See Note 16 to our Consolidated Financial Statements for discussion of the fair value of our Available-for-Sale securities. Financial markets are subject to significant movements in valuation and liquidity, which can impact our ability to liquidate and the selling price that can be realized for our securities and increases the use of judgment in determining the estimated fair value of certain investments. We are unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on our aggregate Available-for-Sale portfolio. Changes to these assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

Index

Ameriprise Financial, Inc.

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 us to other-than-nominal capital market risk. Market risk benefits include certain contract features on variable annuity products that provide minimum guarantees to policyholders. Guarantees accounted for as market risk benefits include guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”).

Variable Annuities

We have approximately $81 billion of variable annuity account value that has been issued over a period of more than fifty years. The diversified variable annuity block consists of $37 billion of account value with no living benefit guarantees and $44 billion of account value with living benefit guarantees, primarily GMWB provisions. The business is predominately issued through the Ameriprise Financial® advisor network. The majority of the variable annuity contracts currently offered by us contain GMDB provisions. We discontinued most new sales of GMWB and GMAB at the end of 2021 and new sales were completely discontinued as of mid-2022. We also previously offered contracts containing GMIB provisions. See Note 13 to our Consolidated Financial Statements for further discussion of our variable annuity contracts.

In determining the assets or liabilities for market risk benefits, we project these benefits and contract assessments using actuarial models to simulate various equity market scenarios. Significant assumptions made in projecting future benefits and assessments relate to customer asset value growth rates, mortality, surrenders (also referred to as persistency), benefit utilization and investment margins. Management reviews, and where appropriate, adjusts its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management reviews and updates these assumptions annually in the third quarter of each year.

In addition, the valuation of market risk benefits is impacted by an estimate of our nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As our estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase. The change in fair value due to changes in our nonperformance risk is recorded in other comprehensive income.

Regarding the exposure to variable annuity living benefit guarantees, changes to reserves due to behavioral risk are driven by changes in policyholder surrenders and utilization of guaranteed withdrawal benefits. We have extensive experience studies and analysis to monitor changes and trends in policyholder behavior. A significant volume of company-specific policyholder experience data is available and provides management with the ability to regularly analyze policyholder behavior. On a monthly basis, actual surrender and benefit utilization experience is compared to expectations. Experience data includes detailed policy information providing the opportunity to review impacts of multiple variables. The ability to analyze differences in experience, such as presence of a living benefit rider, existence of surrender charges, and tax qualifications provide us an effective approach in detecting changes in policyholder behavior.

At least annually, we perform a thorough policyholder behavior analysis to validate the assumptions included in our market risk benefit reserves. The variable annuity assumptions and resulting reserve computations reflect multiple policyholder variables. Differentiation in assumptions by policyholder age, existence of surrender charges, guaranteed withdrawal utilization, and tax qualification are examples of factors recognized in establishing management’s assumptions used in market risk benefit calculations. The extensive data derived from our variable annuity block informs management in confirming previous assumptions and revising the variable annuity behavior assumptions. Changes in assumptions are governed by a review and approval process to ensure an appropriate measurement of all impacted financial statement balances. Changes in these assumptions can be offsetting and we are unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

Future Policy Benefits and Claims

We establish reserves to cover the benefits associated with non-traditional and traditional long-duration products. Non-traditional long-duration products include variable and structured variable annuity contracts, fixed annuity contracts and UL and VUL policies. Traditional long-duration products include term life insurance, whole life insurance, disability income (“DI”) and LTC insurance and life contingent payout annuity products. UL and VUL policies with product features that result in profits followed by losses are accounted for as insurance liabilities. The portion of structured variable annuities, indexed annuities and indexed universal life (“IUL”) policies allocated to the indexed account is accounted for as an embedded derivative.

The establishment of reserves is an estimation process using a variety of methods, assumptions and data elements. If actual experience is better than or equal to the results of the estimation process, then reserves should be adequate to provide for future benefits and expenses. If actual experience is worse than the results of the estimation process, additional reserves may be required.

Non-Traditional Long-Duration Products, including Embedded Derivatives

UL and VUL

A portion of our UL and VUL policies have product features that result in profits followed by losses from the insurance component of the contract. These profits followed by losses can be generated by the cost structure of the product or secondary guarantees in the contract. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to

Index

Ameriprise Financial, Inc.

provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The liability for these future losses is determined at the reporting date using actuarial models to estimate the death benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments (e.g. cost of insurance charges, contractual administrative charges, similar fees and investment margin). Significant assumptions made in projecting future benefits and assessments relate to client asset value growth rates, mortality, persistency and investment margins. Changes in these assumptions can be offsetting and we are unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period. See Note 11 to our Consolidated Financial Statements for information regarding the liability for contracts with secondary guarantees.

Embedded Derivatives

The fair value of embedded derivatives related to structured variable annuities, indexed annuities and IUL fluctuates based on equity markets and interest rates and is reported within our total liabilities. In addition, the valuation of embedded derivatives is impacted by an estimate of our nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As our estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase.

See Note 16 to our Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives.

Traditional Long-Duration Products

The liabilities for traditional long-duration products include cash flows related to unpaid amounts on reported claims, estimates of benefits payable on claims incurred but not yet reported and estimates of benefits that will become payable on term life, whole life, DI, LTC, and life contingent payout annuity policies as claims are incurred in the future. Accordingly, the claim liability (also referred to as disabled life reserves) is presented together as one liability for future policy benefits.

A liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses less the present value of estimated future net premiums to be collected from policyholders, is accrued as premium revenue is recognized. Expected insurance benefits are accrued over the life of the contract in proportion to premium revenue recognized (referred to as the net premium approach). The net premium ratio reflects cash flows from contract inception to contract termination (i.e., through the claim paying period) and cannot exceed 100%.

The liability for future policy benefits is updated for actual experience at least on an annual basis and concurrent with changes to cash flow assumptions. When net premiums are updated for cash flow changes, the estimated cash flows over the entire life of a group of contracts are updated using historical experience and updated future cash flow assumptions. Changes in these assumptions can be offsetting and we are unable to predict their movement, sensitivities in reported amounts, offsetting impacts, or future impacts to the Consolidated Financial Statements over time or in any given future period.

The cash flows used in the calculation are discounted using the forward rate curve on the original contract issue date. The discount rate represents an upper-medium-grade (i.e., low credit risk) fixed-income instrument yield (i.e., an A rating) that reflects the duration characteristics of the liability.

Derivative Instruments and Hedging Activities

We use derivative instruments to manage our exposure to various market risks. All derivatives are recorded at fair value. The fair value of our derivative instruments is determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market observable inputs to the extent available. We are unable to predict impacts and determine sensitivities in reported amounts reflecting such market movements on our aggregate derivative portfolio. Changes to assumptions do not occur in isolation and it is impracticable to predict such impacts at the individual security unit of measure which are predominately Level 2 fair value and based on observable inputs.

For further details on the types of derivatives we use and how we account for them, see Note 2, Note 16 and Note 18 to our Consolidated Financial Statements. For discussion of our market risk exposures and hedging program and related sensitivity testing, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.”

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements and their expected impact on our future consolidated results of operations and financial condition, see Note 3 to our Consolidated Financial Statements.

Sources of Revenues and Expenses

Management and Financial Advice Fees

Management and financial advice fees relate primarily to fees earned from managing mutual funds, private funds, separate account and wrap account assets and institutional investments, as well as fees earned from providing financial advice, administrative services (including transfer agent and administration fees earned from providing services to retail mutual funds) and other custodial services. Management and financial advice fees include performance-based incentive management fees, which we may receive on certain management contracts. Management and financial advice fees also include mortality and expense risk fees.

Index

Ameriprise Financial, Inc.

Distribution Fees

Distribution fees primarily include point-of-sale fees (such as mutual fund front-end sales loads) and asset-based fees (such as 12b-1 distribution and shareholder service fees). Distribution fees also include amounts received under marketing support arrangements for sales of mutual funds and other companies’ products, such as through our wrap accounts, as well as surrender charges on annuities and UL and VUL insurance. Distribution fees also include revenue for placing clients’ deposits in its brokerage sweep program with third-party banks as well as revenue from brokerage clients for the execution of requested trades.

Net Investment Income

Net investment income primarily includes interest income on fixed maturity securities classified as Available-for-Sale, mortgage loans, policy loans, margin loans, pledged asset lines of credit, other investments, cash and cash equivalents and investments of CIEs; the changes in fair value of trading securities, certain derivatives and certain assets and liabilities of CIEs; the pro rata share of net income or loss on equity method investments; realized gains and losses on the sale of investments; and changes for the allowance for credit losses.

Premiums, Policy and Contract Charges

Premiums include premiums on traditional life, DI and LTC insurance and payout annuities with a life contingent feature and are net of reinsurance premiums. Policy and contract charges include variable annuity rider charges and UL and VUL insurance charges, which consist of cost of insurance charges (net of reinsurance premiums and cost of reinsurance for UL and VUL insurance products) and administrative charges.

Other Revenues

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

Banking and Deposit Interest Expense

Banking and deposit interest expense primarily includes interest expense related to investment certificates and banking deposits.

Distribution Expenses

Distribution expenses primarily include compensation paid to our financial advisors, registered representatives, third-party distributors and wholesalers. The portion of these costs which are incremental and direct to the acquisition of a new or renewal insurance policy or annuity contract issued by the RiverSource Life companies are deferred. The amounts capitalized and amortized are based on actual distribution costs. The majority of these costs, such as advisor and wholesaler compensation, vary directly with the level of sales. Distribution expenses also include marketing support and other distribution and administration related payments made to affiliated and unaffiliated distributors of products provided by our affiliates. The majority of these expenses vary with the level of sales, or assets held, by these distributors, and the remainder is fixed. Distribution expenses also include wholesaling costs.

Interest Credited to Fixed Accounts

Interest credited to fixed accounts represents amounts earned by contractholders and policyholders on fixed account values associated with UL and VUL insurance and annuity contracts. The changes in fair value of fixed deferred indexed annuity and IUL embedded derivatives and the derivatives hedging these products are also included within Interest credited to fixed accounts.

Benefits, Claims, Losses and Settlement Expenses

Benefits, claims, losses and settlement expenses consist of amounts paid and changes in liabilities held for anticipated future benefit payments under insurance policies and annuity contracts, along with costs to process and pay such amounts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts. Benefits, claims, losses and settlement expenses exclude the impact of remeasurement of future policy benefit reserves, which is separately presented. The changes in fair value of structured variable annuity embedded derivatives and the derivatives hedging this benefit, as well as the amortization of DSIC are also included in Benefits, claims, losses and settlement expenses.

Remeasurement (Gains) Losses of Future Policy Benefit Reserves

Remeasurement (gains) losses of future policy benefit reserves represents changes to the net premium ratio for actual versus expected experience and updates to cash flow assumptions used to measure traditional long-duration and limited-payment insurance contracts.

Change in Fair Value of Market Risk Benefits

Change in fair value of market risk benefits includes the change in fair value of GMDB, GMIB, GMWB and GMAB as well as the changes in fair value of derivatives hedging these market risk benefits. Changes in fair value of market risk benefits are recognized in net income each period with the exception of the portion of the change in fair value due to a change in the instrument-specific credit risk, which is recognized in other comprehensive income (“OCI”).

Amortization of DAC

Direct sales commissions and other costs capitalized as DAC are amortized over time. DAC are amortized on a constant-level basis for the grouped contracts over the expected contract term to approximate straight-line amortization.

Index

Ameriprise Financial, Inc.

Interest and Debt Expense

Interest and debt expense primarily includes interest on corporate debt and CIE debt, the impact of interest rate hedging activities and amortization of debt issuance costs.

General and Administrative Expense

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

Economic Environment

Global equity market conditions and fluctuations affect our results of operations and financial condition. The following table presents relevant market indices:

Years Ended December 31,

Weighted Equity Index (“WEI”) (1)

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

See our segment results of operations discussion below for additional information on how changes in the economic environment have and may continue to impact our results. For further information regarding the impact of the economic environment on our results of operations and financial condition, and potentially material effects, see Part 1 - Item 1A “Risk Factors” of this Annual Report on Form 10-K.

Assets Under Management and Administration

Assets under management (“AUM”) include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investmentsfunds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us. AUM also include certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees in our Asset Management segment, such as the assets of the general account and the variable product funds held in the separate accounts of our life insurance subsidiaries and CIEs.

Assets under administration (“AUA”) include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ brokerage accounts. We generally record revenues received from administered assets as distribution fees. We do not exercise management discretion over these assets and do not earn a management fee. These assets are not reported on our Consolidated Balance Sheets. AUA also include certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-affiliated funds held in the separate accounts of our life insurance subsidiaries.

AUM and AUA do not include assets under advisement, for which we provide advisory services such as model portfolios but do not have full discretionary investment authority.

The following table presents detail regarding our AUM and AUA:

December 31, Change

(in billions)

Assets Under Management and Administration

NM Not Meaningful - variance equal to or greater than 100%.

Total AUM increased $124.8 billion, or 13%, to $1.1 trillion as of December 31, 2023 compared to $956.3 billion as of December 31,

Index

Ameriprise Financial, Inc.

2022 due to a $75.8 billion increase in Advice & Wealth Management AUM driven by market appreciation and wrap account net inflows and a $52.9 billion increase in Asset Management AUM primarily driven by market appreciation. Total AUA increased $57.5 billion, or 26%, to $279.5 billion as of December 31, 2023 compared to the prior year primarily driven by equity market appreciation, and an increase in third-party money market funds and brokered CDs. See our segment results of operations discussion for additional information on changes in our AUM.

Consolidated Results of Operations

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

The following table presents our consolidated results of operations:

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 8,907 $ 9,033 $ (126) (1) %

Banking and deposit interest expense 561 76 485 NM

Expenses

Interest credited to fixed accounts 654 665 (11) (2)

Benefits, claims, losses and settlement expenses 1,350 242 1,108 NM

Remeasurement (gains) losses of future policy benefit reserves (20) 1 (21) NM

Change in fair value of market risk benefits 798 311 487 NM

Amortization of deferred acquisition costs 246 252 (6) (2)

NM Not Meaningful - variance equal to or greater than 100%.

Overall

Pretax income decreased $697 million, or 18%, for 2023 compared to the prior year. The following impacts were significant drivers of the year-over-year change in pretax income:

•The market impact on non-traditional long-duration products, net of hedges was an expense of $608 million for 2023 compared to a benefit of $483 million for the prior year.

•The unfavorable impact of unlocking was $99 million for 2023 compared to a favorable impact of unlocking of $133 million for the prior year.

•A favorable impact from the trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in our insurance business in the fourth quarter of 2022, along with higher balances in bank and certificate products.

Index

Ameriprise Financial, Inc.

The following table presents the total pretax impacts on our revenues and expenses attributable to our annual assumption updates, referred to as unlocking, for the years ended December 31:

(in millions)

Premiums, policy and contract charges $ 1 $ (1)

Total revenues 1 (1)

Benefits, claims, losses and settlement expenses (17) 7

Remeasurement (gains) losses of future policy benefit reserves:

LTC unlocking (5) (6)

Unlocking impact, excluding LTC (6) 6

Total remeasurement (gains) losses of future policy benefit reserves (11) —

Change in fair value of market risk benefits 128 (139)

Amortization of DAC — (2)

Total benefits and expenses 100 (134)

Pretax income (loss) (1) $ (99) $ 133

(1) Includes a $2 million net expense related to the market impact on IUL benefits for 2022, which is excluded from adjusted operating earnings. Refer to Results of Operations by Segment for the impact to pretax adjusted operating earnings attributable to unlocking.

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

•We lowered our surrender assumptions on variable annuities with living benefits resulting in an expense in 2023.

•Interest rate assumptions resulted in a benefit in 2022, partially offset by lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits.

Net Revenues

Management and financial advice fees decreased $126 million, or 1%, for 2023 compared to the prior year primarily reflecting the cumulative impact of Asset Management and variable annuity net outflows, partially offset by continued wrap account net inflows.

Net investment income increased $1.7 billion for 2023 compared to the prior year primarily due to the following impacts:

•The favorable impact of growth in Ameriprise Bank customer deposits and certificate business as a result of the market environment and our strategic decision to continue to invest in these businesses.

•The favorable impact of the trend in rising interest rates on the investment portfolio yield, including from investment portfolio repositioning in our insurance business in the fourth quarter of 2022.

•The favorable impact of higher net investment income of CIEs.

•Net realized investment losses of $27 million for 2023 compared to net realized investment losses of $87 million for the prior year. Net realized investment losses for 2023 and 2022 were primarily driven by the fixed maturity investment portfolio repositioning in response to market conditions.

Premiums, policy and contract charges increased $142 million, or 10%, for 2023 compared to the prior year primarily due to higher sales of life contingent payout annuities.

Banking and deposit interest expense increased $485 million for 2023 compared to the prior year primarily reflecting higher average crediting rates and higher average volumes on certificates and Ameriprise Bank cash deposits.

Expenses

Distribution expenses increased $143 million, or 3%, for 2023 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors, partially offset by the cumulative impact of Asset Management net outflows.

Interest credited to fixed accounts decreased $11 million, or 2%, for 2023 compared to the prior year primarily reflecting the following items:

•A $28 million increase in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The unfavorable impact of the nonperformance credit spread was $15 million for 2023 compared to a favorable impact of $13 million for the prior year.

•A $17 million decrease in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $34 million for 2023 compared to an expense of $51 million for the prior year. The decrease in expense was primarily due to an increase in the IUL embedded derivative in the prior year, which reflected higher option costs due to a higher new money rate, offset by more discounting due to higher Treasury rates.

•A decrease in expense driven by variable annuity net outflows.

Index

Ameriprise Financial, Inc.

Benefits, claims, losses and settlement expenses increased $1.1 billion for 2023 compared to the prior year primarily reflecting the following items:

•An $824 million increase in expense from market impacts on structured variable annuities (“SVA”) embedded derivative, net of hedging activity. This increase was the result of a favorable $955 million change in the market impact on derivatives hedging the SVA embedded derivative and an unfavorable $1.8 billion change in the market impact on the SVA embedded derivative. The main market driver contributing to these changes was the equity market impact on the SVA embedded derivative net of the impact on the corresponding hedge assets resulted in an expense for the 2023 compared to a benefit in the prior year.

•The impact of higher sales of life contingent payout annuities and increased volume in SVAs.

Change in fair value of market risk benefits increased $487 million for 2023 compared to the prior year primarily reflecting the following items:

•The impact of unlocking was an expense of $128 million for 2023 primarily reflecting the impact of lower surrender assumptions on variable annuities with living benefits compared to a benefit of $139 million for the prior year primarily reflecting the impact of interest rate assumptions, partially offset by continued lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits.

•A $191 million increase in expense from market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks. This increase was the result of an unfavorable $132 million change in the market impact on variable annuity guaranteed benefits reserves and an unfavorable $59 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits. The main market drivers contributing to these changes are summarized below:

•Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for 2023 compared to an expense in the prior year.

•Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower benefit for 2023 compared to the prior year.

•Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for 2023 compared to the prior year.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for 2023 compared to the prior year.

Interest and debt expense increased $126 million, or 64%, for 2023 compared to the prior year primarily reflecting higher interest expense of CIEs and the issuance of $750 million of unsecured senior notes in March 2023 and $600 million of unsecured senior notes in November 2023, partially offset by the maturity of $750 million of unsecured senior notes in October 2023.

General and administrative expense increased $148 million, or 4%, for 2023 compared to the prior year primarily reflecting a $50 million accrual for a regulatory matter relating to electronic communication recordkeeping requirements, increased severance expense related to our expense management initiatives, $12 million of higher integration related expenses, higher volume related expenses and investments for business growth and a larger unfavorable change in the mark-to-market impact on share-based compensation due to share price appreciation. A portion of the higher integration related expenses was driven by the consolidation of the majority of our London-based teams into a single location following the acquisition of the BMO Global Asset Management (EMEA) business.

Income Taxes

Our effective tax rate was 21.0% for 2023 compared to 19.9% for the prior year. See Note 24 to our Consolidated Financial Statements for additional discussion on income taxes.

Results of Operations by Segment

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Adjusted operating earnings is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. See Note 28 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.

Index

Ameriprise Financial, Inc.

The following table presents summary financial information by segment:

Years Ended December 31,

(in millions)

Advice & Wealth Management

Adjusted operating earnings $ 2,851 $ 2,192

Asset Management

Adjusted operating earnings $ 720 $ 844

Retirement & Protection Solutions

Adjusted operating earnings $ 685 $ 867

Corporate & Other

Adjusted operating loss $ (320) $ (306)

The following table presents the segment pretax adjusted operating impacts on our revenues and expenses attributable to our annual assumption updates, referred to as unlocking, for the years ended December 31:

Segment Pretax Adjusted Operating Increase (Decrease) 2023 2022

(in millions)

Premiums, policy and contract charges $ 1 $ — $ 1 $ (2)

Total revenues 1 — 1 (2)

Benefits, claims, losses and settlement expenses (17) — 6 (1)

Remeasurement (gains) losses of future policy benefit reserves:

LTC unlocking — (5) — (6)

Unlocking, excluding LTC (6) — 6 —

Change in fair value of market risk benefits 128 — (139) —

Amortization of DAC — — — (2)

Total benefits and expenses 105 (5) (127) (9)

Pretax income (loss) $ (104) $ 5 $ 128 $ 7

Index

Ameriprise Financial, Inc.

Advice & Wealth Management

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

(in billions)

Market appreciation (depreciation) and other 51.9 (80.1)

Advisory wrap account assets ending balance (1) $ 483.3 $ 407.8

Average advisory wrap account assets (2) $ 437.8 $ 419.9

(1) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts. Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee.

(2) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the twelve months ended December 31, 2023 and 2022, which is reflective of our billing cycle.

Wrap account assets increased $76.1 billion, or 18%, during 2023 primarily due to market appreciation of $51.9 billion and net inflows of $24.2 billion. Average advisory wrap account assets increased $17.9 billion, or 4%, compared to the prior year primarily reflecting continued net inflows and market appreciation.

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

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 5,485 $ 5,308 $ 177 3 %

Banking and deposit interest expense 561 76 485 NM

Expenses

Interest and debt expense 27 10 17 NM

NM Not Meaningful - variance equal to or greater than 100%.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $659 million, or 30%, for 2023 compared to the prior year primarily reflecting the benefit from higher interest rates and client net inflows. Pretax adjusted operating margin was 30.3% for 2023 compared to 25.9% for the prior year. Adjusted operating net revenue per advisor increased to $916,000 for 2023, up 11%, from $827,000 for the prior year.

Ameriprise Bank is continuing its deposit growth trend, with bank deposit balances increasing $3.2 billion from the prior year to $21.5 billion as of December 31, 2023. The daily average interest-bearing deposit balance increased to $20.4 billion for 2023 compared to $15.3 billion for the prior year with the average interest rate paid on deposits increasing to 0.41% for 2023 from 0.12% for 2022. Profitability at the bank increased compared to the prior year primarily reflecting increased interest rates along with the trend in deposit growth. The Ameriprise Certificate Company experienced strong growth given the current market environment with client deposits increasing $4.2 billion from the prior year to $13.5 billion as of December 31, 2023.

In November 2023, we successfully closed on our partnership with Comerica Bank to become Comerica’s new investment program provider, adding $14.7 billion of client flows, including $2.0 billion of wrap net flows.

Index

Ameriprise Financial, Inc.

Net Revenues

Management and financial advice fees increased $177 million, or 3%, for 2023 compared to the prior year primarily due to growth in average wrap account assets. Average advisory wrap account assets increased $17.9 billion, or 4%, compared to the prior year reflecting net inflows and market appreciation.

Net investment income increased $1.2 billion for 2023 compared to the prior year primarily due to higher average invested assets due to increased bank and certificate deposits and the favorable impact of increased short-term rates, including higher investment yields on the investment portfolio supporting the bank and certificate products.

Banking and deposit interest expense increased $485 million for 2023 compared to the prior year primarily reflecting higher average crediting rates and higher average balances on certificates and bank cash deposits.

Expenses

Distribution expenses increased $169 million, or 4%, for 2023 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors.

Interest and debt expense increased $17 million for 2023 compared to the prior year due to the increase in capital supporting the growth in the bank and certificate products.

General and administrative expense increased $112 million, or 7%, for 2023 compared to the prior year primarily reflecting a $50 million accrual for a regulatory matter relating to electronic communication recordkeeping requirements, higher volume related expenses and investments for business growth.

Asset Management

The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds as of December 31, 2023:

4- or 5-star Morningstar Rated Funds (2) Overall 3 year 5 year 10 year

(1) Retail Fund performance rankings for each fund are measured on a consistent basis against the most appropriate peer group or index. Peer groupings of Columbia funds are defined by Lipper category and are based on the Primary Share Class (i.e., Institutional if available, otherwise Advisor or Instl3 share class), net of fees. Peer groupings of Threadneedle funds are defined by either IA or Morningstar index and are based on the Primary Share Class. Comparisons to Index are measured gross of fees.

To calculate asset weighted performance, the sum of the total assets of the funds with above median ranking are divided by total assets of all funds. Funds with more assets will receive a greater share of the total percentage above or below median.

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

(2) Columbia funds are available for purchase by U.S. customers. Out of 89 Columbia funds rated (based on primary share class), 5 received a 5-star Overall Rating and 35 received a 4-star Overall Rating. Out of 149 Threadneedle funds rated (based on highest-rated share class), 21 received a 5-star Overall Rating and 52 received a 4-star Overall Rating. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

The following table presents managed assets by type:

December 31, Change Average (1) Change

December 31,

(in billions) (in billions)

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

Index

Ameriprise Financial, Inc.

The following table presents the changes in global managed assets:

Years Ended December 31,

(in billions)

Global Retail Funds

Net VP/VIT fund flows (5.0) (4.3)

Reinvested dividends 8.1 11.4

Distributions (9.4) (12.9)

Market appreciation (depreciation) and other 45.1 (65.6)

Foreign currency translation (1) 4.1 (4.9)

Global Institutional

Market appreciation (depreciation) and other (3) 21.9 (65.0)

Foreign currency translation (1) 8.4 (15.1)

Total net flows $ (17.2) $ (6.6)

Legacy insurance partners net flows (4) $ (4.3) $ (4.6)

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

(2) Global Institutional inflows and outflows include net flows from our structured variable annuity product and Ameriprise Bank.

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

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

Total segment AUM increased $52.9 billion, or 9%, during 2023 primarily driven by equity and fixed income market appreciation, partially offset by net outflows.

Index

Ameriprise Financial, Inc.

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

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 2,844 $ 3,086 $ (242) (8) %

Net investment income 44 9 35 NM

Banking and deposit interest expense — — — —

Expenses

Amortization of deferred acquisition costs 6 9 (3) (33)

Interest and debt expense 7 5 2 40

NM Not Meaningful - variance equal to or greater than 100%.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $124 million, or 15%, for 2023 compared to the prior year primarily due to the cumulative impact of net outflows.

Net Revenues

Management and financial advice fees decreased $242 million, or 8%, for 2023 compared to the prior year primarily driven by the cumulative impact of net outflows and a decrease in performance fees.

Distribution fees decreased $34 million, or 9%, for 2023 compared to the prior year primarily due to the cumulative impact from net outflows.

Net investment income increased $35 million for 2023 compared to the prior year primarily driven by higher interest rates.

Expenses

Distribution expenses decreased $70 million, or 7%, for 2023 compared to the prior year primarily due to the cumulative impact of net outflows.

General and administrative expense decreased $33 million, or 2%, for 2023 compared to the prior year primarily reflecting $11 million of lower performance fee related compensation and disciplined expense management.

Index

Ameriprise Financial, Inc.

Retirement & Protection Solutions

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

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 735 $ 788 $ (53) (7) %

Banking and deposit interest expense — — — —

Expenses

Interest credited to fixed accounts 369 386 (17) (4)

Benefits, claims, losses and settlement expenses 744 469 275 59

Remeasurement (gains) losses of future policy benefit reserves (19) 1 (20) NM

Change in fair value of market risk benefits 628 372 256 69

Amortization of deferred acquisition costs 229 233 (4) (2)

General and administrative expense 325 309 16 5

NM Not Meaningful - variance equal to or greater than 100%.

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which excludes net realized investment gains or losses (net of the reinsurance accrual), the market impact on variable annuity guaranteed benefits (net of hedges), the market impact on IUL benefits (net of hedges and the reinsurance accrual), mean reversion related impacts, and block transfer reinsurance transaction impacts decreased $182 million, or 21%, for 2023 compared to the prior year.

Variable annuity account balances increased 9% to $80.8 billion as of December 31, 2023 compared to the prior year due to market appreciation, partially offset by net outflows of $3.0 billion. Variable annuity sales decreased 1% to $4.0 billion for 2023 compared to the prior year reflecting a decrease in sales of variable annuities with living benefit guarantees, mostly offset by an increase in sales of SVAs. Account values with living benefit riders declined to 54% as of December 31, 2023 compared to 57% a year ago reflecting our actions to optimize our business mix. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.

Net Revenues

Management and financial advice fees decreased $53 million, or 7%, for 2023 compared to the prior year primarily reflecting variable annuity net outflows.

Distribution fees decreased $20 million, or 5%, for 2023 compared to the prior year primarily reflecting lower sales.

Net investment income, which excludes net realized investment gains or losses, increased $289 million, or 51%, for 2023 compared to the prior year reflecting higher interest rates, investment portfolio repositioning resulting in higher yields and increased SVA balances.

Premiums, policy and contract charges increased $138 million, or 10%, for 2023 compared to the prior year due to higher sales of life contingent payout annuities.

Expenses

Benefits, claims, losses and settlement expenses, which exclude the market impact on SVA indexed account embedded derivative (net of hedges) and mean reversion related impacts, increased $275 million, or 59%, for 2023 compared to the prior year primarily reflecting the impact of higher sales of life contingent payout annuities and increased volume in SVAs.

Index

Ameriprise Financial, Inc.

Change in fair value of market risk benefits, which exclude the market impact on variable annuity guaranteed benefits (net of hedges), increased $256 million, or 69%, for 2023 compared to the prior year primarily reflecting the impact of unlocking. The unlocking impact for 2023 was an expense of $128 million primarily reflecting continued lower surrender assumptions on variable annuities with living benefits compared to a benefit of $139 million for the prior year period primarily reflecting continued lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits.

Corporate & Other

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

Years Ended December 31, Change

(in millions)

Revenues

Distribution fees $ 1 $ — $ 1 — %

Premiums, policy and contract charges 96 99 (3) (3)

Banking and deposit interest expense 20 5 15 NM

Expenses

Distribution expenses (10) (10) — —

Interest credited to fixed accounts 234 242 (8) (3)

Benefits, claims, losses and settlement expenses 236 247 (11) (4)

Remeasurement (gains) losses of future policy benefit reserves (1) — (1) —

Amortization of deferred acquisition costs 11 10 1 10

Adjusted operating loss $ (320) $ (306) $ (14) (5) %

NM Not Meaningful - variance equal to or greater than 100%.

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

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

Our Corporate & Other segment pretax adjusted operating loss increased $14 million, or 5%, for 2023 compared to the prior year, reflecting higher severance expense.

LTC insurance had pretax adjusted operating earnings of $29 million for 2023 compared to pretax adjusted operating loss of $10 million for the prior year primarily reflecting the benefit of investment portfolio repositioning and higher interest rates on cash positions compared to the prior year.

FA business had a pretax adjusted operating loss of $29 million for 2023 compared to a pretax adjusted operating loss of $22 million for the prior year. Fixed deferred annuity account balances declined 12% to $6.3 billion as of December 31, 2023 compared to the prior year as policies continue to lapse and we previously discontinued new sales of fixed deferred annuities.

Net Revenues

Net investment income, which excludes net realized investment gains or losses, the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments, integration and restructuring charges, and the impact of consolidating CIEs, increased $92 million, or 59%, for 2023 compared to the prior year primarily reflecting the benefit of investment portfolio repositioning and higher interest rates on cash positions.

Other revenues decreased $21 million, or 9%, for 2023 compared to the prior year primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Index

Ameriprise Financial, Inc.

Expenses

Interest and debt expense increased $27 million, or 39%, for 2023 compared to the prior year primarily reflecting the issuance of $750 million of unsecured senior notes in March 2023 and $600 million of unsecured senior notes in November 2023, partially offset by the maturity of $750 million of unsecured senior notes in October 2023.

General and administrative expense, which excludes integration and restructuring charges and expenses attributable to CIEs, increased $60 million, or 27%, for 2023 compared to the prior year primarily due to increased severance expense related to our expense management initiatives and a larger unfavorable change in the mark-to-market impact on share-based compensation expense due to share price appreciation.

Closed Block LTC Insurance

As of December 31, 2023, our nursing home indemnity LTC block had approximately $68 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.4 billion, net of reinsurance, which was 51% of GAAP reserves. This block has been shrinking over the last few years given the average attained age is 84 and the average attained age of policyholders on claim is 89. Fifty-four percent of daily benefits in force in this block are lifetime benefits.

As of December 31, 2023, our comprehensive reimbursement LTC block had approximately $113 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.3 billion, net of reinsurance. This block has higher premiums per policy than the nursing home indemnity LTC policies. The average attained age is 79 and the average attained age of policyholders on claim is 86. Thirty-four percent of daily benefits in force in this block are lifetime benefits.

We utilize three primary levers to manage our LTC business. First, we have taken an active approach of steadily increasing rates since 2005, with cumulative rate increases of 251% on our nursing home indemnity LTC block (excluding home care riders) and 154% on our comprehensive reimbursement LTC block as of December 31, 2023. Second, we have a reserving process that reflects the policy features and risk characteristics of our blocks. As of December 31, 2023, we had 43,000 policies that were closed with claim activity, as well as 8,000 open claims. We apply this experience to our in force policies, which were 80,000 as of December 31, 2023, at a very granular level by issue year, attained age and benefit features. Our statutory reserves are $265 million higher than our GAAP reserves and include margins on key assumptions for morbidity and mortality, as well as $345 million in asset adequacy reserves as of December 31, 2023. Lastly, we have prudently managed our investment portfolio primarily through a liquid, investment grade portfolio.

We undertake an extensive review of the cash flow and expense assumptions supporting the liability for future policy benefits annually during the third quarter of each year, or more frequently if appropriate, using current best estimate assumptions as of the date of the review. Our annual review process includes an analysis of our key reserve assumptions, including those for morbidity, terminations (mortality and lapses), and premium rate increases.

Index

Ameriprise Financial, Inc.

Consolidated Results of Operations

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

The following table presents our consolidated results of operations:

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 9,033 $ 9,275 $ (242) (3) %

Premiums, policy and contract charges 1,397 221 1,176 NM

Banking and deposit interest expense 76 12 64 NM

Expenses

Benefits, claims, losses and settlement expenses 242 (156) 398 NM

Remeasurement (gains) losses of future policy benefit reserves 1 (52) 53 NM

Change in fair value of market risk benefits 311 (113) 424 NM

Amortization of deferred acquisition costs 252 259 (7) (3)

NM Not Meaningful - variance equal to or greater than 100%.

Overall

Pretax income decreased $254 million, or 6%, for 2022 compared to the prior year. The following impacts were significant drivers of the year-over-year change in pretax income:

•The prior year impact of the block transfer reinsurance transaction resulted in $524 million of pretax income for 2021 primarily reflecting the net realized gains on investments sold to the reinsurer.

•A negative impact from lower average equity markets compared to the prior year. Our average WEI, which is a proxy for equity movements on AUM, decreased 7% in 2022 compared to the prior year. The average S&P 500 index was 4% lower for 2022 compared to the prior year.

•The favorable impact of unlocking was $133 million for 2022 compared to an unfavorable impact of $113 million for the prior year.

•A favorable impact from the increase in short-term interest rates compared to the prior year.

•The market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the reinsurance accrual was a benefit of $483 million for 2022 compared to a benefit of $464 million for the prior year.

Index

Ameriprise Financial, Inc.

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

(in millions)

Premiums, policy and contract charges $ (1) $ 16

Total revenues (1) 16

Benefits, claims, losses and settlement expenses 7 6

Remeasurement (gains) losses of future policy benefit reserves:

LTC unlocking (6) —

Unlocking impact, excluding LTC 6 —

Total remeasurement (gains) losses of future policy benefit reserves — —

Change in fair value of market risk benefits (139) 123

Amortization of DAC (2) —

Total benefits and expenses (134) 129

Pretax income (loss) (1) $ 133 $ (113)

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

•Interest rate assumptions resulted in a benefit in 2022.

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

Net Revenues

Management and financial advice fees decreased $242 million, or 3%, for 2022 compared to the prior year primarily reflecting market depreciation, an unfavorable foreign exchange impact, and a decrease in performance fees of $39 million, partially offset by revenue associated with the acquisition of the BMO Global Asset Management (EMEA) business and continued wrap account net inflows.

Distribution fees increased $111 million, or 6%, for 2022 compared to the prior year due to $264 million of higher fees on off-balance sheet brokerage cash primarily due to an increase in short-term interest rates, partially offset by lower average equity markets and decreased transactional activity.

Net investment income decreased $209 million, or 12%, for 2022 compared to the prior year primarily due to the following impacts:

•Net realized investment losses of $87 million for 2022 compared to net realized investment gains of $636 million for the prior year period. Net realized losses for 2022 were primarily driven by the fixed maturity investment portfolio repositioning in the fourth quarter of 2022. Net realized gains for 2021 included net realized gains of $561 million on Available-for-Sale securities and a $58 million net gain related to commercial mortgage loans primarily due to the sale of securities and loans to the reinsurer as a result of the fixed deferred and payout annuity reinsurance transaction that closed in the third quarter 2021, as well as a $15 million gain on a strategic investment.

•The favorable impact of the recent trend in rising interest rates on the investment portfolio yield, including the fourth quarter of 2022 impact of portfolio repositioning.

•The favorable impact of growth in Ameriprise Bank and certificate businesses as a result of the market environment and our strategic decision to invest in the businesses.

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

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

Premiums, policy and contract charges increased $1.2 billion for 2022 compared to the prior year primarily reflecting ceded premiums of $1.2 billion associated with the reinsurance transaction for life contingent payout annuity policies in the prior year.

Other revenues increased $109 million, or 29%, for 2022 compared to the prior year primarily reflecting the yield on deposit receivables arising from the reinsurance transactions.

Banking and deposit interest expense increased $64 million for 2022 compared to the prior year primarily due to higher average crediting rates on certificates and bank cash deposits and increased cash deposits at the bank.

Index

Ameriprise Financial, Inc.

Expenses

Distribution expenses decreased $93 million, or 2%, for 2022 compared to the prior year primarily lower average equity markets and decreased transactional activity.

Interest credited to fixed accounts increased $65 million, or 11%, for 2022 compared to the prior year primarily reflecting the following items:

•An $23 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on IUL benefits. The favorable impact of the nonperformance credit spread was $13 million for 2022 compared to an unfavorable impact of $10 million for the prior year.

•A $105 million increase in expense from other market impacts on IUL benefits, net of hedges, which was an expense of $51 million for 2022 compared to a benefit of $54 million for the prior year. The increase in expense was primarily due to an increase in the IUL embedded derivative in the current year period, which reflected higher option costs due to a higher new money rate, compared to a decrease in the IUL embedded derivative in the prior year period, which reflected lower option costs due to higher discount rates.

Benefits, claims, losses and settlement expenses increased $398 million for 2022 compared to the prior year primarily reflecting the following items:

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

•An $806 million decrease in expense from market impacts on SVA embedded derivative, net of hedges in place to offset those risks. This decrease was the result of a favorable $1.0 billion change in the market impact on the SVA embedded derivative, partially offset by an unfavorable $224 million change in the market impact on derivatives hedging the SVA embedded derivative. The main market driver contributing to these changes was the equity market impact on the SVA embedded derivative net of the impact on the corresponding hedge assets, which resulted in a benefit for 2022 compared to an expense in the prior year.

Remeasurement (gains) losses of future policy benefit reserves increased $53 million for 2022 compared to the prior year primarily reflecting an increase in expense on LTC insurance as policy and claim terminations returned to more normalized levels compared to the prior year period which benefited from COVID-19 related impacts.

Change in fair value of market risk benefits increased $424 million for 2022 compared to the prior year primarily reflecting the following items:

•A $769 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks. This decrease was the result of an unfavorable $865 million change in the market impact on variable annuity guaranteed benefits reserves, partially offset by a favorable $96 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits. The main market drivers contributing to these changes are summarized below:

•Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in an expense for 2022 compared to a benefit in the prior year.

•Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for 2022 compared to an expense in the prior year.

•Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for 2022 compared to the prior year.

•Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a higher net expense for 2022 compared to the prior year.

General and administrative expense increased $288 million, or 8%, 2022 the prior year primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business and higher integration related expenses, partially offset by disciplined expense management and reengineering, lower performance fee related compensation and a favorable foreign exchange impact.

Income Taxes

Our effective tax rate was 19.9% for 2022 compared to 18.3% for the prior year. See Note 24 to our Consolidated Financial Statements for additional discussion on income taxes.

Index

Ameriprise Financial, Inc.

Results of Operations by Segment

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

The following table presents summary financial information by segment:

Years Ended December 31,

(in millions)

Advice & Wealth Management

Adjusted operating earnings $ 2,192 $ 1,743

Asset Management

Adjusted operating earnings $ 844 $ 1,096

Retirement & Protection Solutions

Adjusted operating earnings $ 867 $ 618

Corporate & Other

Adjusted operating loss $ (306) $ (289)

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

Segment Pretax Adjusted Operating Increase (Decrease) 2022 2021

(in millions)

Premiums, policy and contract charges $ 1 $ (2) $ 16 $ —

Total revenues 1 (2) 16 —

Benefits, claims, losses and settlement expenses 6 (1) 6 —

Remeasurement (gains) losses of future policy benefit reserves:

LTC unlocking and loss recognition — (6) — —

Unlocking impact, excluding LTC 6 — — —

Total remeasurement (gains) losses of future policy benefit reserves 6 (6) — —

Change in fair value of market risk benefits (139) — 123 —

Amortization of DAC — (2) — —

Pretax income (loss) $ 128 $ 7 $ (113) $ —

Index

Ameriprise Financial, Inc.

Advice & Wealth Management

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

(in billions)

Market appreciation (depreciation) and other (80.1) 44.3

Advisory wrap account assets ending balance (1) $ 407.8 $ 459.5

Average advisory wrap account assets (2) $ 419.9 $ 415.3

(2) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the twelve months ended December 31, 2022 and 2021, which is reflective of our billing cycle.

Wrap account assets decreased $52.6 billion, or 11%, during 2022 due to market depreciation of $80.1 billion, partially offset by net inflows of $27.5 billion. Average advisory wrap account assets increased $4.6 billion, or 1%, compared to the prior year primarily reflecting continued net inflows, partially offset by market depreciation.

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

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 5,308 $ 5,297 $ 11 — %

Banking and deposit interest expense 76 12 64 NM

Expenses

Interest and debt expense 10 10 — —

NM Not Meaningful - variance equal to or greater than 100%.

Our Advice & Wealth Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, increased $449 million, or 26%, for 2022 compared to the prior year primarily reflecting the benefit from higher interest rates and client net inflows, partially offset by market depreciation and decreased transactional activity. Pretax adjusted operating margin was 25.9% for 2022 compared to 21.7% for the prior year. Adjusted operating net revenue per advisor increased to $827,000 for 2022, up 4%, from $796,000 for the prior year.

Ameriprise Bank is continuing its deposit growth trend, with bank deposits balances increasing $6.9 billion from the prior year period to $18.3 billion and brokerage client pledged asset lines of credit increasing $122 million from the prior year to $589 million as of December 31, 2022.

Net Revenues

Management and financial fees increased $11 million for 2022 compared to the prior year primarily due to an increase in financial planning fees, offset by lower advisory fees. Average advisory wrap account assets increased $4.6 billion, or 1%, compared to the prior year reflecting net inflows, partially offset by market depreciation.

Index

Ameriprise Financial, Inc.

Distribution fees decreased $4 million for 2022 compared to the prior year reflecting lower average equity markets and decreased transactional activity mostly offset by $264 million of higher fees on off-balance sheet brokerage cash due to an increase in average short-term interest rates.

Net investment income increased $491 million for 2022 compared to the prior year primarily due to higher average invested assets due to increased bank deposits and higher investment yields on the investment portfolio supporting the bank and certificate products.

Banking and deposit interest expense increased $64 million for 2022 compared to the prior year primarily due to higher average crediting rates on bank cash deposits and certificates and increased cash deposits at the bank.

Expenses

Distribution expenses decreased $123 million, or 3%, for 2022 compared to the prior year reflecting market depreciation and decreased transactional activity.

General and administrative expense increased $114 million, or 8%, for 2022 compared to the prior year primarily due to higher volume related expenses and investments in business growth as well as lower staffing levels and limited travel and entertainment expenses in the prior year.

Asset Management

The following table presents managed assets by type:

December 31, Change Average (1) Change

December 31,

(in billions)

NM Not Meaningful - variance equal to or greater than 100%.

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

Index

Ameriprise Financial, Inc.

The following table presents the changes in global managed assets:

Years Ended December 31,

(in billions)

Global Retail Funds

Net VP/VIT fund flows (4.3) (4.2)

Acquired assets (2) — 37.0

Market appreciation (depreciation) and other (65.6) 47.5

Foreign currency translation (3) (4.9) (1.6)

Global Institutional

Acquired assets (2) — 99.2

Market appreciation (depreciation) and other (5) (65.0) 6.7

Foreign currency translation (3) (15.1) (2.7)

Total net flows $ (6.6) $ 42.9

Legacy insurance partners net flows (6) $ (4.6) $ (4.9)

(1) Included in net flows are the amounts from the U.S. asset transfer from the BMO acquisition of $2.6 billion ($2.5 billion retail and $0.1 billion institutional) in 2022 and $16.9 billion ($2.9 billion retail and $14.0 billion institutional) in 2021.

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

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

(4) Global Institutional inflows and outflows include net flows from our structured variable annuity product and Ameriprise Bank.

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

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

Total segment AUM decreased $170.1 billion, or 23%, during 2022 driven by equity and bond market depreciation and an unfavorable foreign exchange impact. Net outflows were $6.6 billion for 2022, compared to net inflows of $42.9 billion in the prior year which included the transfer of $16.9 billion of retail and institutional assets from U.S. BMO asset management clients that elected to move their assets to us during the fourth quarter of 2021, resulting from the transition of investment advisory services as part of an arrangement with BMO Financial Group for their U.S. business.

Index

Ameriprise Financial, Inc.

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

Years Ended December 31, Change

(in millions)

Revenues

Management and financial advice fees $ 3,086 $ 3,202 $ (116) (4) %

Net investment income 9 6 3 50

Banking and deposit interest expense — — — —

Expenses

Amortization of deferred acquisition costs 9 12 (3) (25)

Interest and debt expense 5 5 — —

NM Not Meaningful - variance equal to or greater than 100%.

Our Asset Management segment pretax adjusted operating earnings, which exclude net realized investment gains or losses, decreased $252 million, or 23%, for 2022 compared to the prior year primarily due market depreciation, an unfavorable foreign exchange impact and the cumulative impact of net outflows.

Net Revenues

Management and financial advice fees decreased $116 million, or 4%, for 2022 compared to the prior year primarily driven by lower average markets, the cumulative impact of net outflows, the impact of foreign exchange rates and a decrease in performance fees, partially offset by revenue associated with the acquired BMO Global Asset Management (EMEA) business.

Distribution fees decreased $74 million, or 16%, for 2022 compared to the prior year primarily due to lower average markets and the cumulative impact from net outflows.

Other revenues increased $11 million for 2022 compared to prior year primarily due to the acquired BMO Global Asset Management (EMEA) business.

Expenses

AMP US Equity

AMP · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

AMP US Equity☆

AMP · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

AMP US Equity