AMERIPRISE FINANCIAL INC (AMP) FY 2023 MD&A

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

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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:

(1) Pretax adjusted operating adjustments.

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

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

(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:

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.

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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

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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.

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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.

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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:

(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 Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us. AUM also 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:

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,

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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:

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.

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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:

(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.

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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.

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Ameriprise Financial, Inc.

The following table presents summary financial information by segment:

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:

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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:

(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:

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.

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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:

(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:

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

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Index

Ameriprise Financial, Inc.

The following table presents the changes in global managed assets:

(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.

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Index

Ameriprise Financial, Inc.

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

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.

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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:

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.

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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:

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.

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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.

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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:

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.

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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:

(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:

•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.

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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.

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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:

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

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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:

(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, 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:

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.

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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:

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.

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Index

Ameriprise Financial, Inc.

The following table presents the changes in global managed assets:

(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.

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Index

Ameriprise Financial, Inc.

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

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

Distribution expenses decreased $137 million, or 12%, for 2022 compared to the prior year primarily due to market depreciation and the cumulative impact of net outflows.

General and administrative expense increased $216 million, or 15%, for 2022 compared to the prior year primarily reflecting the operating expenses of the acquired BMO Global Asset Management (EMEA) business, partially offset by the impact of foreign exchange rates and $17 million in lower performance fee related compensation.

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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:

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

Our Retirement & Protection Solutions segment pretax adjusted operating earnings, which exclude 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 increased $249 million, or 40%, for 2022 compared to the prior year.

Variable annuity account balances decreased 19% to $74.4 billion as of December 31, 2022 compared to the prior year due to market depreciation and net outflows of $2.1 billion. Variable annuity sales decreased 33% to $4.0 billion for 2022 compared to the prior year reflecting a decrease in sales of variable annuities with living benefit guarantees. Account values with living benefit riders declined to 57% as of December 31, 2022 compared to 61% 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.

We continue to optimize our risk profile and shift our business mix to lower risk offerings. During the fourth quarter of 2021, we made the decision to discontinue new sales of our variable annuities with living benefit guarantees at the end of 2021, and have stopped issuing new contracts as of mid-2022. In addition, we discontinued new sales of our universal life insurance with secondary guarantees and our single-pay fixed universal life with a long term care rider products at the end of 2021.

Net Revenues

Management and financial advice fees decreased $144 million, or 15%, for 2022 compared to the prior year primarily reflecting lower average equity markets and variable annuity net outflows.

Distribution fees decreased $67 million, or 14%, for 2022 compared to the prior year reflecting lower average equity markets and lower sales.

Net investment income, which excludes net realized investment gains or losses, increased $89 million, or 19%, for 2022 compared to the prior year reflecting higher fixed maturity investment yields and increased volume of invested assets partially driven by our portfolio repositioning in the fourth quarter.

Expenses

Distribution expenses decreased $96 million, or 18%, for 2022 compared to the prior year primarily reflecting lower variable annuity and insurance sales and market depreciation.

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Benefits, claims, losses and settlement expenses, which exclude the market impact on structured variable annuities indexed account embedded derivative (net of hedges) and mean reversion related impacts, increased $42 million, or 10%, for 2022 compared to the prior year primarily reflecting the impacts of equity market depreciation and higher interest rates, as well as increased volume in SVAs.

Change in fair value of market risk benefits, which exclude the market impact on variable annuity guaranteed benefits (net of hedges), decreased $308 million, or 45%, for 2022 compared to the prior year period primarily reflecting the impact of unlocking, equity market depreciation and variable annuity net outflows. The unlocking impact for 2022 was a benefit of $139 million primarily reflecting the impact of interest rate assumptions, partially offset by lower surrender assumptions and updated mortality assumptions for variable annuities with living benefits compared to an expense of $123 million for the prior year which was driven by lower surrender assumptions.

Corporate & Other

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

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

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 impact, gain or loss on disposal of a business that is not considered discontinued operations, integration and restructuring charges, and the impact of consolidating CIEs. Our Corporate & Other segment pretax adjusted operating loss increased $17 million, or 6%, for 2022 compared to the prior year.

Our LTC insurance had a pretax adjusted operating loss of $10 million for 2022 compared to pretax adjusted operating earnings of $29 million for the prior year primarily reflecting the favorable impacts in 2021 from COVID-19 effects on policyholder expenses.

FA business had a pretax adjusted operating loss of $22 million for 2022 compared to a pretax adjusted operating loss of $20 million for the prior year. Fixed deferred annuity account balances declined 6% to $7.1 billion as of December 31, 2022 compared to the prior year period as surrender trends continued. During the third quarter of 2021, we closed on a transaction to reinsure RiverSource Life’s fixed deferred and payout annuity policies.

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, block transfer reinsurance transaction impacts, integration and restructuring charges, and the impact of consolidating CIEs, decreased $87 million, or 36%, for 2022 compared to the prior year primarily reflecting lower average invested assets due to the sale of investments to the reinsurer as a result of the fixed deferred and payout annuity reinsurance transaction and a $15 million gain on a strategic investment in the prior year.

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Other revenues increased $84 million, or 58%, for 2022 compared to the prior year primarily reflecting the yield on deposit receivables arising from reinsurance transactions.

Expenses

Remeasurement (gains) losses of future policy benefit reserves increased $46 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 which benefited from COVID-19 related impacts.

General and administrative expense, which excludes integration and restructuring charges and expenses attributable to CIEs, decreased $39 million, or 15%, to 2022 compared to the prior year primarily due to a larger unfavorable change in the mark-to-market impact on share-based compensation expenses in the prior year due to share price appreciation.

Fair Value Measurements

We report certain assets and liabilities at fair value; specifically, separate account assets, derivatives, market risk benefits, embedded derivatives and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions and is not the result of a forced liquidation or distressed sale. We include actual market prices, or observable inputs, in our fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. We validate prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 16 to the Consolidated Financial Statements for additional information on our fair value measurements.

Fair Value of Liabilities and Nonperformance Risk

Companies are required to measure the fair value of liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for our obligations of our market risk benefits, fixed deferred indexed annuities, structured variable annuities, and IUL insurance, we consider the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, we adjust the valuation of market risk benefits, fixed deferred indexed annuities, structured variable annuities, and IUL insurance by updating certain contractholder assumptions, adding explicit margins to provide for risk, and adjusting the rates used to discount expected cash flows to reflect a current market estimate of our nonperformance risk. The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the U.S. Treasury curve as of December 31, 2023. As our estimate of this spread widens or tightens, the liability will decrease or increase, respectively. If this nonperformance credit spread moves to a zero spread over the U.S. Treasury curve, the reduction to future total equity would be approximately $795 million, net of the reinsurance accrual and income taxes (calculated at the statutory tax rate of 21%), based on December 31, 2023 credit spreads.

Liquidity and Capital Resources

Overview

As of December 31, 2023 and 2022, we had Available Capital for Capital Adequacy of $5.4 billion and $5.2 billion, respectively. Available Capital for Capital Adequacy best reflects the available capital resources of our operations.

We maintained substantial liquidity during the year ended December 31, 2023. At December 31, 2023 and 2022, we had $7.5 billion and $7.0 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis.

At December 31, 2023 and 2022, the parent company had $544 million and $389 million, respectively, in cash, cash equivalents, and unencumbered liquid securities. Liquid securities predominantly include U.S. government agency mortgage back securities. Additional sources of liquidity include a line of credit with an affiliate up to $727 million and an unsecured revolving committed credit facility for up to $1.0 billion that expires in June 2026. Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of December 31, 2023 was $1.8 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.

Under the terms of the committed credit facility, we can increase the availability to $1.25 billion upon satisfaction of certain approval requirements. Available borrowings under this facility are reduced by any outstanding letters of credit. At December 31, 2023, we had no outstanding borrowings under this credit facility and had $1 million of letters of credit issued against the facility. Our credit facility contains various administrative, reporting, legal and financial covenants. We remain in compliance with all such covenants at December 31, 2023.

In addition, we have access to collateralized borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances, and advances at the Federal Reserve. Our subsidiaries, RiverSource Life Insurance Company (“RiverSource Life”), and Ameriprise Bank are members of the FHLB of Des Moines, which provides access to collateralized borrowings. As of December 31, 2023 and 2022, we had an estimated maximum borrowing capacity of $8.6 billion and $8.0 billion, respectively, of borrowing capacity under the FHLB facilities, of which $201 million was outstanding as of both December 31, 2023 and 2022, and is collateralized with commercial mortgage backed securities. In addition, Ameriprise Bank maintains access to borrowings from the Federal Reserve which are collateralized with residential mortgage backed securities, commercial mortgage backed securities and

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corporate debt securities. As of December 31, 2023 and 2022, we estimated $12.3 billion and $9.0 billion, respectively, of borrowing capacity from the Federal Reserve in addition to the FHLB capacity and there were no outstanding obligations.

Short-term contractual obligations for the year 2024 include investment certificate maturities of $12.3 billion and estimated insurance and annuity benefits of $2.2 billion in addition to operating liquidity needs and maturing long-term debt in October 2024 of $550 million. We also hold banking and brokerage deposits of $23.9 billion that are payable on demand. Long-term contractual obligations for years after 2024 include estimated insurance and annuity benefits of $55.2 billion.

On March 9, 2023, we issued $750 million of 5.15% unsecured senior notes due May 15, 2033. We repaid $750 million principal amount of our 4.0% senior notes at maturity on October 16, 2023. On November 9, 2023, we issued $600 million of 5.7% unsecured senior notes due December 15, 2028. See Note 15 to our Consolidated Financial Statements for further information about our long-term debt maturities.

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

On August 16, 2022, federal legislation commonly referred to as the Inflation Reduction Act of 2022 (“IRA”) was enacted. We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax (“CAMT”) and the share repurchase excise tax. Both the CAMT and share repurchase tax were effective beginning in 2023. We are an applicable corporation required to compute the CAMT; however, based on current estimates we do not expect to be liable for the CAMT in 2023 and therefore a liability has not been recorded. We are a covered corporation subject to the 1% excise tax on the net shares repurchased. We have recorded in shareholders’ equity an estimate of the excise tax liability based on our interpretation of the current guidance. As the Internal Revenue Service issues additional guidance related to the IRA, we will continue to evaluate any impact to our consolidated financial statements.

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises (“MNEs”) pay a minimum level of tax on profits from each jurisdiction in which they operate. Various jurisdictions in which we operate have enacted or substantively enacted Pillar Two legislation that became effective beginning January 1, 2024. We continue to monitor the adoption and implementation of these rules and evaluate the potential impact on our consolidated financial statements.

Dividends from Subsidiaries

Ameriprise Financial is primarily a parent holding company for the operations carried out by our wholly-owned subsidiaries. Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), Ameriprise Bank, AMPF Holding, LLC, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, LLC (“AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc. (“AEIS”), our transfer agent subsidiary, Columbia Management Investment Services Corp. (“CMIS”), our investment advisory company, Columbia Management Investment Advisers, LLC (“CMIA”), TAM UK International Holdings Ltd., which includes Ameriprise International Holdings GmbH within its organizational structure, and Columbia Threadneedle Investments UK International Ltd. The payment of dividends by many of our subsidiaries is restricted and certain of our subsidiaries are subject to regulatory capital requirements. For example, RiverSource Life payments in excess of statutory unassigned funds require advanced notice to the Minnesota Department of Commerce (“MN DOC”), RiverSource Life’s primary regulator, and are subject to potential disapproval. In addition, dividends and other distributions whose fair market value, together with that of other dividends or distributions made within the preceding 12 months, exceeds the greater of the previous year’s statutory net gain from operations or 10% of the previous year-end statutory capital and surplus are referred to as “extraordinary dividends.” Extraordinary dividends also require advanced notice to MN DOC, and are subject to potential disapproval.

Our broker-dealer subsidiaries are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934. Rule 15c3-1 provides an “alternative net capital requirement” which AEIS and AFS (significant broker dealers) have elected. Regulations require that minimum net capital, as defined, be equal to the greater of $250 thousand or 2% of aggregate debit items arising from client balances. The Financial Industry Regulatory Authority (“FINRA”) may impose certain restrictions, such as restricting withdrawals of equity capital, if a member firm were to fall below a certain threshold or fail to meet minimum net capital requirements.

Ameriprise Bank is subject to regulation by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation in its role as insurer of its deposits. Ameriprise Bank is required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 Capital to average assets (as defined), and under rules defined under the Basel III capital framework, Common equity Tier 1 capital (“CEIT”) to risk-weighted assets. Ameriprise Bank calculates these ratios under the Basel III standardized approach in order to assess compliance with both regulatory requirements

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and Ameriprise Bank’s internal capital policies. As permitted under the rules of the Basel III capital framework, we have elected to exclude AOCI from the calculation of regulatory capital.

ACC is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”). ACC markets and sells investment certificates to clients. ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the SEC and the Minnesota Department of Commerce. The terms of the investment certificates issued by ACC and the provisions of the 1940 Act also require the maintenance by ACC of qualified assets.

Required capital for Columbia Threadneedle Investments UK International Ltd. is predominantly based on the requirements specified by its regulator, the FCA, under its Capital Adequacy Requirements for investment firms.

Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows:

N/A  Not applicable.

#  Amounts are less than $1 million.

(1) Actual capital is determined on a statutory basis. Regulatory capital requirement is the company action level and is based on the statutory risk-based capital filing.

(2) Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of December 31, 2023 and 2022.

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

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

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

(6) Actual capital and regulatory capital requirements are determined in accordance with rules defined under Basel III capital framework. As permitted, AOCI is excluded from the calculation of regulatory capital.

(7) In accordance with U.K. regulatory legislation, and on a prospective basis as of December 31, 2023, actual capital and the regulatory capital requirement for TAM UK International Holdings Ltd. and Columbia Threadneedle Investments UK International Ltd. are calculated and reported as a single consolidated group under TAM UK International Holdings Ltd..

In October 2023, the Federal Reserve Board (“FRB”) issued its final rule establishing a consolidated capital framework termed the “Building Block Approach” for savings and loan holding companies like Ameriprise Financial that are significantly engaged in insurance activities. The rule is effective January 1, 2024, with reporting to the FRB beginning in 2025.

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

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

In 2009, RiverSource Life established an agreement to protect its exposure to Genworth Life Insurance Company (“GLIC”) for its reinsured LTC. In 2016, substantial enhancements to this reinsurance protection agreement were finalized. The terms of these confidential provisions within the agreement have been shared, in the normal course of regular reviews, with our domiciliary regulator and rating agencies. GLIC is domiciled in Delaware, so in the event GLIC were subjected to rehabilitation or insolvency proceedings, such proceedings would be located in (and governed by) Delaware laws. Delaware courts have a long tradition of respecting commercial and reinsurance affairs, as well as contracts among sophisticated parties. Similar credit protections to what we have with GLIC have been tested and respected in Delaware and elsewhere in the United States, and as a result we believe our credit protections would be respected even in the unlikely event that GLIC becomes subject to rehabilitation or insolvency proceedings in Delaware. Accordingly, while no credit protections are perfect, we believe the correct way to think about the risks represented by our counterparty credit exposure to GLIC is not the full amount of the gross liability that GLIC reinsures, but a much smaller net exposure to GLIC (if any that might exist after taking into account our credit protections). Thus, management believes that our agreement and offsetting non-LTC legacy arrangements with Genworth will enable RiverSource Life to recover on all net exposure in all material respects in the event of a rehabilitation or insolvency of GLIC.

Dividends Paid to Shareholders and Share Repurchases

We paid regular quarterly dividends to our shareholders totaling $569 million and $553 million for the years ended December 31, 2023 and 2022, respectively. On January 24, 2024, we announced a quarterly dividend of $1.35 per common share. The dividend will be paid on February 27, 2024 to our shareholders of record at the close of business on February 9, 2024.

In January 2022, our Board of Directors authorized us to repurchase up to $3.0 billion for the repurchase of our common stock through March 31, 2024, which was exhausted in the fourth quarter of 2023. In July 2023, our Board of Directors authorized an additional $3.5 billion for the repurchase of our common stock through September 30, 2025. As of December 31, 2023, we had $3.1 billion remaining under this share repurchase authorization. We intend to fund share repurchases through existing working capital, future earnings and other customary financing methods. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means. During the year ended December 31, 2023, we repurchased a total of 5.9 million shares of our common stock at an average price of $330.94 per share.

Cash Flows

Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities. Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial cash available for general use by its CIEs. Cash and cash equivalents segregated under federal and other regulations is held for the exclusive benefit of our brokerage customers and is not available for general use by Ameriprise Financial.

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Operating Activities

Net cash provided by operating activities increased $278 million to $4.7 billion for the year ended December 31, 2023 compared to $4.4 billion for the prior year primarily reflecting higher investment income on fixed maturity securities, partially offset by higher income taxes paid and higher cash outflows in brokerage deposits. The higher investment income is driven by higher yields and the growth in Ameriprise Bank customer deposits and certificate business growth.

Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio and in recent quarters is significantly affected by the net flows of our face amount certificates and bank deposit activity.

Net cash used in investing activities decreased $4.3 billion to $9.3 billion for the year ended December 31, 2023 compared to $13.6 billion for the prior year primarily reflecting a $2.3 billion decrease in purchases of Available-for-Sale securities and a $1.6 billion increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities.

Financing Activities

Net cash provided by financing activities decreased $4.0 billion to $4.4 billion for the year ended December 31, 2023 compared to $8.4 billion for the prior year primarily reflecting a $3.7 billion decrease in the change in banking deposits, net.

Forward-Looking Statements

This report contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

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

•statements about the expected trend in the shift to lower-risk products, including the exit from variable annuities with living benefit riders;

•statements about the strategic and regulatory outcome from the withdrawal of our application to convert Ameriprise Bank to a state-chartered bank and national trust bank;

•statements about the anticipated deposit growth or statements about rising interest rates and the impacts on investment portfolio yield;

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

•statements of assumptions underlying such statements.

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

Such factors include, but are not limited to:

•market fluctuations and general economic and political factors, including volatility in the U.S. and global market conditions, client behavior and volatility in the markets for our products;

•changes in interest rates;

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

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

•declines in our investment management performance;

•our ability to compete in attracting and retaining talent, including financial advisors;

•impairment, negative performance or default by financial institutions or other counterparties;

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

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

•the determination of the amount of allowances taken on loans and investments;

•the illiquidity of some of our investments;

•failures by other insurers that lead to higher assessments we owe to state insurance guaranty funds;

•failures or defaults by counterparties to our reinsurance arrangements;

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

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

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

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

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

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

•    identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk;

•    ability of our subsidiaries to transfer funds to us to pay dividends;

•    changes in exchange rates and other risks in connection with our international operations and earnings and income generated overseas;

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

•    risks in acquisition transactions, or other potential strategic acquisitions or divestitures;

•    legal and regulatory actions brought against us;

•    changes to laws and regulations that govern operation of our business;

•    supervision by bank regulators and related regulatory and prudential standards as a savings and loan holding company that may limit our activities and strategies;

•    changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting our products;

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

•changes in and the adoption of new accounting standards.

Management cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that management is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management undertakes no obligation to update publicly or revise any forward-looking statements. The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion included in Item 1A of this Annual Report on Form 10-K - “Risk Factors”.

Ameriprise Financial announces financial and other information to investors through the Company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this report or in any other report or document the Company furnishes or files with the SEC.