Ameriprise Financial Reports Second Quarter 2021 Results

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MINNEAPOLIS, July 26, 2021--(BUSINESS WIRE)--Ameriprise Financial, Inc. (NYSE: AMP):

Earnings Per Diluted Share

Return on Equity, ex AOCI (1)

Q2 2021

Q2 2021

GAAP

$4.88

GAAP

19.5%

Adjusted Operating

$5.27

Adjusted Operating

37.5%

Perspective from Jim Cracchiolo, Chairman and Chief Executive Officer

"Ameriprise delivered a strong second quarter and a record first half in operating revenue, earnings and EPS, as we continue to build on our momentum. We are delivering an excellent client experience and deepening relationships, which is driving continued growth in the business.

"In the quarter, nearly 80 percent of revenue and pretax earnings were driven by our asset-light Advice and Wealth Management and Asset Management businesses.

"We also announced a number of important strategic actions, including the acquisition of BMO’s EMEA asset management business and a significant reinsurance transaction. Together, these moves complement our organic growth while also adding key capabilities and generating shareholder value."

(1) Return on equity excluding AOCI is calculated on a trailing 12-month basis.

As indicated, the severe market dislocation and steep interest rate reduction in the first quarter of 2020 related to COVID-19 distorted the company’s prior year GAAP and operating results. This included a tax benefit from a projected net operating loss (NOL) in the first quarter of 2020 that was reversed in the second quarter of 2020.

Ameriprise Financial, Inc.

Second Quarter Summary

Quarter Ended
June 30,

% Over/
(Under)

Year-to-date
June 30,

% Over/
(Under)

(in millions, except per share amounts, unaudited)

2021

2020

2021

2020

GAAP net income

$

591

$

(539)

NM

$

1,028

$

1,497

(31)%

Adjusted operating earnings (see reconciliation on p. 25 and p. 26)

$

639

$

333

92%

$

1,302

$

1,027

27%

Adjusted operating earnings excluding Net Operating Loss (NOL) tax impacts (see reconciliation on p. 25 and p. 26)

$

639

$

477

34%

$

1,302

$

1,027

27%

GAAP net income per diluted share

$

4.88

$

(4.31)

NM

$

8.45

$

11.77

(28)%

Adjusted operating earnings per diluted share (see reconciliation on p. 25 and p. 26)

$

5.27

$

2.64

100%

$

10.70

$

8.07

33%

Adjusted operating earnings per diluted share excluding Net Operating Loss (NOL) tax impacts (see reconciliation on p. 25 and p. 26)

$

5.27

$

3.78

39%

$

10.70

$

8.07

33%

GAAP Return on Equity, ex. AOCI

19.5

%

41.7

%

Adjusted Operating Return on Equity, ex. AOCI

37.5

%

35.6

%

Weighted average common shares outstanding:

Basic

118.4

125.0

Diluted

121.2

126.2

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

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Adjusted Operating Results

Quarter Ended
June 30,

% Over/
(Under)

(in millions, unaudited)

2021

2020

Net revenues

$

1,980

$

1,537

29%

Distribution expenses

1,194

913

(31)%

G&A / other expense

363

353

(3)%

Pretax adjusted operating earnings

$

423

$

271

56%

Pretax adjusted operating margin

21.4

%

17.6

%

380 bps

Quarter Ended
June 30,

% Over/
(Under)

(in billions, unless otherwise noted)

2021

2020

Total client assets

$

807

$

630

28%

Total client net flows (1)

$

9.5

$

6.2

54%

Wrap net flows (1)

$

10.0

$

5.6

78%

AWM cash balance

$

39.2

$

38.6

2%

Average gross yield on cash balances (in bps)

63

79

Adjusted operating net revenue per advisor (TTM in thousands)

$

731

$

669

9%

Adjusted for interest rates (2)

$

731

$

641

14%

(1) See definition on page 12.

(2) Adjusted for impact from interest rates. See reconciliation on page 28.

Advice & Wealth Management pretax adjusted operating earnings were $423 million, up 56 percent driven by continued robust client net flows, higher transactional activity, market appreciation and disciplined expense management. Pretax adjusted operating margin increased 380 basis points. On a sequential basis, pretax operating earnings increased 9 percent and pretax adjusted operating margin expanded 70 basis points.

Adjusted operating net revenues grew 29 percent to $2.0 billion, reflecting strong client net flows and market appreciation. On a sequential basis, revenues increased 5 percent.

Total expenses were $1.6 billion, reflecting higher distribution expense related to strong organic growth. General and administrative expense was well managed and increased 3 percent, reflecting the cost associated with increased activity and performance-based compensation expense.

Total client assets grew 28 percent to $807 billion, with continued robust total client flows of $9.5 billion in the quarter. The company’s ability to meet client needs efficiently and effectively is translating into excellent organic growth. Advisor productivity remains high with a 78 percent increase in flows in the investment advisory business and a 29 percent increase in transactional activity. Wrap net flows were $10.0 billion, representing the third consecutive quarter at or above $9.0 billion of net flows. Cash balances remain elevated at $39.2 billion with an opportunity for clients to put cash back to work in the future.

Adjusted operating net revenue per advisor on a trailing 12-month basis was $731,000. Excluding the decline in short-term interest rates, adjusted net revenue per advisor increased 14 percent. Total advisors were 10,047, up 2 percent, from a combination of high advisor retention and the addition of 42 experienced advisors in the quarter.

Ameriprise Financial, Inc.

Asset Management Segment Adjusted Operating Results

Quarter Ended
June 30,

% Over/
(Under)

(in millions, unaudited)

2021

2020

Net revenues

$

879

$

668

32%

Distribution expenses

282

220

(28)%

G&A / other expenses

344

307

(12)%

Pretax adjusted operating earnings

$

253

$

141

79%

Net pretax adjusted operating margin (1)

45.4

%

34.5

%

Quarter Ended
June 30,

% Over/
(Under)

(in billions)

2021

2020

Total segment AUM

$

593

$

476

25%

Net Flows

Global Retail net flows

$

4.2

$

3.1

38%

Global Institutional net flows, ex. legacy insurance partners flows

3.9

0.8

NM

Legacy insurance partners flows

(1.4)

(1.3)

(7)%

Total segment net flows

$

6.7

$

2.6

NM

Model delivery AUA Flows (2)

$

0.9

$

0.3

NM

(1) See reconciliation on page 13.

(2) Estimated based on the period to period change in assets less calculated performance based on strategy returns on a one-quarter lag.

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

Asset Management pretax adjusted operating earnings were $253 million, up 79 percent, reflecting strong market appreciation and the cumulative benefit of net inflows. The net pretax adjusted operating margin was 45.4 percent. On a sequential basis, pretax operating earnings increased 11 percent and pretax adjusted operating margin expanded 150 basis points.

Adjusted operating revenues increased 32 percent to $879 million from the cumulative benefit of inflows and higher equity markets. The overall fee rate remained strong at 52 basis points. On a sequential basis, revenues increased 6 percent.

Adjusted operating expenses increased 19 percent. General and administrative expenses grew 12 percent driven primarily from strong business performance that drove higher compensation expense and foreign exchange translation, as well as the costs associated with increased activity levels.

Total assets under management increased 25 percent to $593 billion reflecting equity market appreciation and net inflows. Investment performance remained strong across equity, fixed income and asset-allocation strategies.

In the quarter, net inflows were $6.7 billion, an improvement of $4.1 billion from a year ago. Net inflows were $8.1 billion excluding legacy insurance partners outflows, reflecting a continuation of positive flow trends across multiple distribution channels and strategies:

  • Retail net inflows were $4.2 billion. Net inflows in North America were $5.1 billion with notable inflows in the broker-dealer channel, which were partially offset by outflows in EMEA.

  • Global institutional net inflows were $3.9 billion, with gross sales across multiple strategies.

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment (1) Adjusted Operating Results

Quarter Ended
June 30,

% Over/
(Under)

(in millions, unaudited)

2021

2020

Net revenues

$

808

$

755

7%

Expenses

626

533

(17)%

Pretax adjusted operating earnings

$

182

$

222

(18)%

Retirement & Protection Solutions pretax adjusted operating earnings were $182 million. Results in the prior year period benefited from lower surrenders and withdrawals that reduced the amortization of deferred acquisition costs. Results in the current quarter reflect higher distribution expenses associated with improved sales trends, compared to a year ago when sales were depressed from the environment. Overall claims remain within expected ranges.

Retirement sales increased 88 percent year-over-year to $1.6 billion. Retirement sales reflect the ongoing shift to lower risk products. Variable annuity sales without living benefit guarantees represented 66 percent of variable annuity sales in the quarter. This shift is improving the risk profile of our inforce block, with account values with living benefit riders down over 2 percentage points year-over-year to 62 percent. Annuity net amount at risk as a percent of account values was de minimis at 0.3 percent for living benefits and 0.1 percent for death benefits.

Sales of protection products nearly doubled from a year ago with a product mix shift that is consistent with our focused approach. Sales of higher-margin accumulation VUL products increased substantially while sales shifted away from indexed UL products as expected given pricing changes that reflect the low interest rate environment.

(1) Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). Fixed Annuities moved to the Corporate & Other segment in Q3 2020 as a closed block. Prior periods have been restated.

Ameriprise Financial, Inc.

Corporate & Other Segment (1) Adjusted Operating Results

Quarter Ended
June 30,

% Over/
(Under)

(in millions, unaudited)

2021

2020

Corporate & Other, excluding Closed Blocks

$

(74)

$

(77)

4%

Closed Blocks (2)

(3)

20

NM

Pretax adjusted operating earnings

$

(77)

$

(57)

(35)%

Long Term Care

$

3

$

17

(82)%

Fixed Annuities

(6)

3

NM

Closed Blocks pretax adjusted operating earnings

$

(3)

$

20

NM

(1) Fixed Annuities was moved into the Corporate & Other segment as a closed block. Prior periods have been restated.

(2) Long Term Care and Fixed Annuities.

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

Total Corporate & Other pretax adjusted operating loss was $77 million.

Corporate & Other, excluding Closed Blocks, pretax adjusted operating loss was $74 million. Results in the quarter included $7 million of affordable housing impairments.

Long Term Care pretax adjusted operating earnings were $3 million, down from last year as mortality and terminations activity returned to pre-COVID levels in the quarter.

Fixed Annuities pretax adjusted operating loss was $6 million from narrowed spreads from low interest rates.

Taxes

The operating effective tax rate was 18.2 percent for the second quarter. The full year operating effective tax rate is expected to be approximately 17 percent.

About Ameriprise Financial

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 125 years. With extensive advisory, asset management and insurance capabilities and a nationwide network of over 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors' financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.

Ameriprise Financial Services, LLC offers financial planning services, investments, insurance and annuity products. Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an SEC- and FCA-registered investment adviser affiliate of Columbia Management Investment Advisers, LLC based in the U.K. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company, and in New York only by RiverSource Life Insurance Co. of New York, Albany, New York. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuity products in the state of New York. These companies are all part of Ameriprise Financial, Inc. CA License #0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.

Non-GAAP Financial Measures

The company believes the presentation of adjusted operating earnings and other non-GAAP financial measures, and the corresponding ratios, best represents the underlying performance of our core operations and facilitates a more meaningful trend analysis without the distortion of various adjustment items. Management uses non-GAAP financial measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors and to provide a valuable perspective for investors. These non-GAAP financial measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures. Non-GAAP financial measure reconciliations can be found on the subsequent pages.

Forward-Looking Statements

This news release 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, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;

  • statements about the expected trend in the shift of the retirement product sales business to lower risk products over time, such as products without living benefit guarantees;

  • statements about the announced acquisition of BMO’s European-based asset management business, including the expected timing to close the transaction and the expected AUM of the acquired business;

  • statements about the announced reinsurance transaction, including the occurrence of any event, change or circumstance that could give rise to changes in the amount of freed up capital (including that a regulator may prohibit, delay or refuse to grant approval for the consummation of the remaining part of the proposed transaction that reduces the expected capital release);

  • 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 estimating the expected full year operating effective tax rate;

  • 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," "expands" 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.

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 cautions readers to carefully consider the risks described in the "Risk Factors" discussion under Part 1, Item 1A of and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020 available at ir.ameriprise.com. Management undertakes no obligation to update publicly or revise any forward-looking statements.

The financial results discussed in this news release represent past performance only, which may not be used to predict or project future results. The financial results and values presented in this news release are based upon asset valuations that represent estimates as of the date of this news release and may be revised in the company’s Form 10-Q for the quarter ended June 30, 2021.

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 release or in any other report or document the company furnishes or files with the SEC.

Ameriprise Financial, Inc.

Consolidated GAAP Results

(in millions, except per share amounts, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Revenues

Management and financial advice fees

$

2,251

$

1,702

32%

$

2,102

7%

Distribution fees

452

375

21%

458

(1)%

Net investment income

278

305

(9)%

377

(26)%

Premiums, policy and contract charges

364

272

34%

347

5%

Other revenues

75

76

(1)%

71

6%

Total revenues

3,420

2,730

25%

3,355

2%

Banking and deposit interest expense

2

18

89%

5

60%

Total net revenues

3,418

2,712

26%

3,350

2%

Expenses

Distribution expenses

1,233

940

(31)%

1,175

(5)%

Interest credited to fixed accounts

124

262

53%

159

22%

Benefits, claims, losses and settlement expenses

404

1,467

72%

653

38%

Amortization of deferred acquisition costs

63

(248)

NM

5

NM

Interest and debt expense

43

41

(5)%

42

(2)%

General and administrative expense

830

776

(7)%

823

(1)%

Total expenses

2,697

3,238

17%

2,857

6%

Pretax income

721

(526)

NM

493

46%

Income tax provision

130

13

NM

56

NM

Net income

$

591

$

(539)

NM

$

437

35%

Earnings per share

Basic earnings per share

$

4.99

$

(4.31)

$

3.65

Earnings per diluted share

$

4.88

$

(4.31)

$

3.58

Weighted average common shares outstanding

Basic

118.4

125.0

119.8

Diluted

121.2

126.2

122.2

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

Ameriprise Financial, Inc.

Consolidated Highlights and Capital Summary

(in millions unless otherwise noted, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Assets Under Management and Administration

Advice & Wealth Management AUM

$

426,500

$

314,820

35%

$

396,533

8%

Asset Management AUM

593,366

476,121

25%

564,131

5%

Corporate AUM

100

71

41%

97

3%

Eliminations

(42,025)

(31,928)

(32)%

(39,655)

(6)%

Total Assets Under Management

977,941

759,084

29%

921,106

6%

Total Assets Under Administration

233,334

187,696

24%

222,887

5%

Total AUM and AUA

$

1,211,275

$

946,780

28%

$

1,143,993

6%

S&P 500

Daily average

4,182

2,927

43%

3,861

8%

Period end

4,298

3,100

39%

3,973

8%

Weighted Equity Index (WEI) (1)

Daily average

2,858

1,975

45%

2,662

7%

Period end

2,921

2,099

39%

2,725

7%

Common shares

Beginning balance

116.0

122.3

(5)%

116.8

(1)%

Repurchases

(1.7)

(1.7)

-

(1.7)

-

Issuances

0.2

-

1.8

(89)%

Other

(0.2)

-

(0.9)

78%

Total common shares outstanding

114.3

120.6

(5)%

116.0

(1)%

Restricted stock units

3.1

3.2

(3)%

3.0

3%

Total basic common shares outstanding

117.4

123.8

(5)%

119.0

(1)%

Total potentially dilutive shares

2.7

1.8

50%

2.5

8%

Total diluted shares

120.1

125.6

(4)%

121.5

(1)%

Capital Returned to Shareholders

Dividends paid

$

135

$

131

3%

$

128

5%

Common stock share repurchases

450

251

79%

363

24%

Total Capital Returned to Shareholders

$

585

$

382

53%

$

491

19%

(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.

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Adjusted Operating Results

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Revenues

Management and financial advice fees:

Advisory fees

$

1,113

$

797

40%

$

1,028

8%

Financial planning fees

93

86

8%

88

6%

Transaction and other fees

93

86

8%

89

4%

Total management and financial advice fees

1,299

969

34%

1,205

8%

Distribution fees:

Mutual funds

212

170

25%

207

2%

Insurance and annuity

252

196

29%

240

5%

Other products

98

87

13%

112

(13)%

Total distribution fees

562

453

24%

559

1%

Net investment income

63

77

(18)%

64

(2)%

Other revenues

58

56

4%

56

4%

Total revenues

1,982

1,555

27%

1,884

5%

Banking and deposit interest expense

2

18

89%

5

60%

Adjusted operating total net revenues

1,980

1,537

29%

1,879

5%

Expenses

Distribution expenses

1,194

913

(31)%

1,135

(5)%

Interest and debt expense

2

3

33%

3

33%

General and administrative expense

361

350

(3)%

352

(3)%

Adjusted operating expenses

1,557

1,266

(23)%

1,490

(4)%

Pretax adjusted operating earnings

$

423

$

271

56%

$

389

9%

Pretax adjusted operating margin

21.4

%

17.6

%

20.7

%

Pretax adjusted operating earnings by product

Certificates and Banking - Combined

$

18

$

18

-

$

19

(5)%

Wealth Management & Distribution

405

253

60%

370

9%

Pretax adjusted operating earnings

423

$

271

56%

$

389

9%

Ameriprise Financial, Inc.

Advice & Wealth Management Segment Operating Metrics

(in millions unless otherwise noted, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

...

AWM Total Client Assets

$

807,335

$

630,202

28%

$

761,566

6%

Total Client Flows (1)

$

9,530

$

6,182

54%

$

9,305

2%

Total Wrap Accounts

Beginning assets

$

399,817

$

275,505

45%

$

380,013

5%

Net flows (2)

10,024

5,623

78%

10,413

(4)%

Market appreciation (depreciation) and other (2)

20,162

36,487

(45)%

9,391

NM

Total wrap ending assets

$

430,003

$

317,615

35%

$

399,817

8%

Advisory wrap account assets ending balance (3)

$

425,200

$

313,898

35%

$

395,299

8%

Brokerage Cash & Certificates Balances

On-balance sheet (Net Investment Income)

On-balance sheet - broker dealer

$

3,383

$

3,332

2%

$

3,385

-

On-balance sheet - bank

8,671

5,298

64%

7,985

9%

On-balance sheet - certificate

5,749

7,451

(23)%

6,258

(8)%

Total on-balance sheet

$

17,803

$

16,081

11%

$

17,628

1%

Off-balance sheet (Distribution Fees)

Off-balance sheet - broker dealer

$

21,391

$

22,498

(5)%

$

22,733

(6)%

Total brokerage cash & certificates balances

$

39,194

$

38,579

2%

$

40,361

(3)%

Gross Fee Yield

On-balance sheet - broker dealer

0.05

%

0.10

%

0.10

%

On-balance sheet - bank

1.32

%

1.65

%

1.37

%

On-balance sheet - certificates

1.13

%

1.83

%

1.22

%

Off-balance sheet - broker dealer

0.27

%

0.27

%

0.28

%

Weighted Average Gross Fee Yield

0.63

%

0.79

%

0.65

%

Financial Advisors

Employee advisors

2,104

2,116

(1)%

2,107

-

Franchisee advisors

7,943

7,778

2%

7,924

-

Total financial advisors

10,047

9,894

2%

10,031

-

Advisor Retention

Employee

91.4

%

90.9

%

92.0

%

Franchisee

94.1

%

93.4

%

94.4

%

(1) Total client flows represent inflows of client cash and securities less client outfows. Inflows include dividends and interest; outflows include fees. Excludes short-term and long-term capital gain distributions.

(2) Beginning in Q1 2021, wrap net flows is calculated including dividends and interest less fees, which were previously recorded in market appreciation (depreciation) and other. Net flows excludes short-term and long-term capital gain distributions. Prior periods have been restated.

(3) 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.

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

Ameriprise Financial, Inc.

Asset Management Segment Adjusted Operating Results

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Revenues

Management and financial advice fees:

Asset management fees:

Retail

$

567

$

417

36%

$

531

7%

Institutional

131

101

30%

123

7%

Transaction and other fees

56

45

24%

52

8%

Revenue from other sources (1)

4

7

(43)%

7

(43)%

Total management and financial advice fees

758

570

33%

713

6%

Distribution fees:

Mutual funds

69

55

25%

67

3%

Insurance and annuity

49

41

20%

47

4%

Total distribution fees

118

96

23%

114

4%

Net investment income

2

1

NM

1

NM

Other revenues

1

1

-

-

Total revenues

879

668

32%

828

6%

Banking and deposit interest expense

-

-

Adjusted operating total net revenues

879

668

32%

828

6%

Expenses

Distribution expenses

282

220

(28)%

268

(5)%

Amortization of deferred acquisition costs

3

3

-

3

-

Interest and debt expense

1

1

-

1

-

General and administrative expense

340

303

(12)%

328

(4)%

Adjusted operating expenses

626

527

(19)%

600

(4)%

Pretax adjusted operating earnings

$

253

$

141

79%

$

228

11%

Net Pretax Adjusted Operating Margin Reconciliation

Adjusted operating total net revenues

$

879

$

668

32%

$

828

6%

Distribution pass thru revenues

(225)

(177)

(27)%

(217)

(4)%

Subadvisory and other pass thru revenues

(94)

(76)

(24)%

(87)

(8)%

Net adjusted operating revenues

$

560

$

415

35%

$

524

7%

Pretax adjusted operating earnings

$

253

$

141

79%

$

228

11%

Adjusted operating net investment income

(2)

(1)

NM

(1)

NM

Amortization of intangibles

3

3

-

3

-

Net adjusted operating earnings

$

254

$

143

78%

$

230

10%

Pretax adjusted operating margin

28.8

%

21.1

%

27.5

%

Net pretax adjusted operating margin (2)

45.4

%

34.5

%

43.9

%

Performance fees (3)

Performance fees

$

3

$

1

NM

$

1

NM

Performance fee related to general and administrative expense

-

-

Net performance fees

$

3

$

1

NM

$

1

NM

(1) Includes revenue from separate accounts that qualify as investment contracts under insurance accounting standards.

(2) Calculated as net adjusted operating earnings as a percentage of net adjusted operating revenues.

(3) Performance fees do not include CLO incentive fees.

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

Ameriprise Financial, Inc.

Asset Management Segment Operating Metrics

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Total Managed Assets by Type

Equity

$

339,032

$

251,362

35%

$

319,446

6%

Fixed income

203,101

183,061

11%

195,020

4%

Money market

5,484

4,997

10%

5,766

(5)%

Alternative

3,839

3,148

22%

3,841

-

Hybrid and other

41,910

33,553

25%

40,058

5%

Total managed assets by type

$

593,366

$

476,121

25%

$

564,131

5%

Average Managed Assets by Type (1)

Equity

$

330,801

$

235,797

40%

$

308,816

7%

Fixed income

200,246

178,986

12%

195,823

2%

Money market

5,823

5,121

14%

5,921

(2)%

Alternative

3,812

2,956

29%

3,775

1%

Hybrid and other

41,148

33,457

23%

39,212

5%

Total average managed assets by type

$

581,830

$

456,317

28%

$

553,547

5%

Managed Assets Rollforward

Global Retail Funds

Beginning assets

$

340,270

$

239,038

42%

$

323,483

5%

Inflows

19,371

15,925

22%

22,549

(14)%

Outflows

(17,075)

(14,231)

(20)%

(17,637)

3%

Net VP/VIT fund flows

(967)

(625)

(55)%

(1,019)

5%

Net new flows

1,329

1,069

24%

3,893

(66)%

Reinvested dividends

2,874

1,983

45%

717

NM

Net flows

4,203

3,052

38%

4,610

(9)%

Distributions

(3,375)

(2,266)

(49)%

(858)

NM

Market appreciation (depreciation) and other

18,113

34,278

(47)%

13,187

37%

Foreign currency translation (2)

265

34

NM

(152)

NM

Total ending assets

359,476

274,136

31%

340,270

6%

% of total retail assets sub-advised

15.9

%

19.2

%

16.4

%

Global Institutional

Beginning assets

223,861

187,125

20%

223,130

-

Inflows (3)

9,320

6,437

45%

7,741

20%

Outflows (3)

(6,853)

(6,892)

1%

(7,462)

8%

Net flows

2,467

(455)

NM

279

NM

Market appreciation (depreciation) and other (4)

7,125

15,745

(55)%

176

NM

Foreign currency translation (2)

437

(430)

NM

276

58%

Total ending assets

233,890

201,985

16%

223,861

4%

Total managed assets

$

593,366

$

476,121

25%

$

564,131

5%

Total net flows

$

6,670

$

2,597

NM

$

4,889

36%

Legacy insurance partners flows

$

(1,353)

$

(1,270)

(7)%

$

(1,262)

(7)%

Total Assets Under Advisement (5)

$

18,036

$

10,454

73%

$

16,036

12%

Model delivery AUA flows (6)

$

912

$

315

NM

$

294

NM

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

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

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

(4) 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 Annuity product beginning in Q1 2020 and Ameriprise Bank, FSB beginning in Q1 2021.

(5) Assets are presented on a one-quarter lag.

(6) Estimated flows based on the period to period change in assets less calculated performance based on strategy returns on a one-quarter lag.

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

Ameriprise Financial, Inc.

Asset Management Segment Performance Metrics

2 Qtr 2021

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

1 year

3 year

5 year

10 year

Equity

61%

87%

87%

88%

Fixed Income

87%

73%

91%

90%

Asset Allocation

39%

88%

95%

89%

4- or 5-star Morningstar rated funds

Overall

3 year

5 year

10 year

Number of Rated Funds

110

100

98

88

Percent of Rated Assets

71%

64%

63%

73%

Retail Fund performance rankings for each fund is measured on a consistent basis against the most appropriate peer group or index. Peer Groupings are defined by either Lipper, IA, or Morningstar and based primarily on the Institutional Share Class, Net of Fees. 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.

Morningstar as of 06/30/21. Columbia funds are available for purchase by U.S. customers. Out of 90 Columbia funds (Inst. shares) rated, 18 received a 5-star Overall Rating and 37 received a 4-star Overall Rating. Out of 94 Threadneedle funds (highest rated share class) rated, 20 received a 5-star Overall Rating and 35 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. Not all funds are available in all jurisdictions, to all investors or through all firms.

© 2021 Morningstar. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment (1) Adjusted Operating Results

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Revenues

Management and financial advice fees

$

234

$

200

17%

$

222

5%

Distribution fees

122

106

15%

116

5%

Net investment income

127

129

(2)%

126

1%

Premiums, policy and contract charges

325

320

2%

323

1%

Other revenues

-

-

Total revenues

808

755

7%

787

3%

Banking and deposit interest expense

-

-

Adjusted operating total net revenues

808

755

7%

787

3%

Expenses

Distribution expenses

134

111

(21)%

129

(4)%

Interest credited to fixed accounts

98

97

(1)%

96

(2)%

Benefits, claims, losses and settlement expenses

241

212

(14)%

234

(3)%

Amortization of deferred acquisition costs

70

30

NM

63

(11)%

Interest and debt expense

9

11

18%

10

10%

General and administrative expense

74

72

(3)%

72

(3)%

Adjusted operating expenses

626

533

(17)%

604

(4)%

Pretax adjusted operating earnings

$

182

$

222

(18)%

$

183

(1)%

(1) Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). Fixed Annuities moved to the Corporate & Other segment in Q3 2020 as a closed block. Prior periods have been restated.

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

Ameriprise Financial, Inc.

Retirement & Protection Solutions Segment Operating Metrics

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Variable Annuities Rollforwards

Beginning balance

$

86,964

$

69,959

24%

$

85,774

1%

Deposit

1,597

850

88%

1,428

12%

Withdrawals and terminations

(1,946)

(1,320)

(47)%

(1,984)

2%

Net flows

(349)

(470)

26%

(556)

37%

Investment performance and interest credited

3,879

7,992

(51)%

1,746

NM

Other

-

-

Total ending balance - contract accumulation values

$

90,494

$

77,481

17%

$

86,964

4%

Variable annuities fixed sub-accounts

$

5,052

$

5,103

(1)%

$

5,075

-

Payout Annuities Reserve Balance

$

1,870

$

2,008

(7)%

$

1,908

(2)%

Life Insurance In Force

$

196,794

$

194,980

1%

$

196,164

-

Net Amount at Risk (Life)

$

37,465

$

38,950

(4)%

$

37,636

-

Net Policyholder Reserves

VUL/UL

$

14,593

$

12,387

18%

$

14,106

3%

Term and whole life

171

178

(4)%

172

(1)%

Disability insurance

494

505

(2)%

503

(2)%

Other insurance

629

661

(5)%

637

(1)%

Total net policyholder reserves

$

15,887

$

13,731

16%

$

15,418

3%

DAC Ending Balances

Variable Annuities DAC

$

1,799

$

1,614

11%

$

1,792

-

Life and Health DAC

$

799

$

836

(4)%

$

839

(5)%

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

Ameriprise Financial, Inc.

Corporate Segment Adjusted Operating Results and Metrics

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Corporate Excluding Long Term Care and Fixed Annuities Adjusted Operating Income Statements

Revenues

Management and financial advice fees

$

$

-

$

-

Distribution fees

-

-

Net investment income

(20)

(22)

9%

(1)

NM

Premiums, policy and contract charges

1

-

-

Other revenues

3

4

(25)%

1

NM

Total revenues

(16)

(18)

11%

-

Banking and deposit interest expense

1

1

-

-

Adjusted operating total net revenues

(17)

(19)

11%

-

Expenses

Distribution expenses

-

-

Interest credited to fixed accounts

-

-

Benefits, claims, losses and settlement expenses

-

-

Amortization of deferred acquisition costs

-

-

Interest and debt expense

9

9

-

7

(29)%

General and administrative expense

48

49

2%

56

14%

Adjusted operating expenses

57

58

2%

63

10%

Pretax adjusted operating earnings (loss)

$

(74)

$

(77)

4%

$

(63)

(17)%

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

Ameriprise Financial, Inc.

Corporate Segment Adjusted Operating Results and Metrics

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Long Term Care Adjusted Operating Income Statements

Revenues

Management and financial advice fees

$

$

-

$

-

Distribution fees

-

-

Net investment income

38

40

(5)%

38

-

Premiums, policy and contract charges

24

25

(4)%

24

-

Other revenues

-

-

Total revenues

62

65

(5)%

62

-

Banking and deposit interest expense

-

-

Adjusted operating total net revenues

62

65

(5)%

62

-

Expenses

Distribution expenses

(3)

(3)

-

(3)

-

Interest credited to fixed accounts

-

-

Benefits, claims, losses and settlement expenses

52

42

(24)%

11

NM

Amortization of deferred acquisition costs

-

-

Interest and debt expense

2

2

-

3

33%

General and administrative expense

8

7

(14)%

5

(60)%

Adjusted operating expenses

59

48

(23)%

16

NM

Pretax adjusted operating earnings (loss)

$

3

$

17

(82)%

$

46

(93)%

Long Term Care Policyholder Reserves, net of reinsurance (1)

Active Life Reserves

$

2,514

$

2,249

12%

$

2,431

3%

Disabled Life Reserves

548

569

(4)%

540

1%

Total long term care policyholder reserves, net of reinsurance

$

3,062

$

2,818

9%

$

2,971

3%

(1) SFAS 115 requires GAAP reserves to include all unrealized gains on available for sale securities in the portfolio to be reported as if they were realized on the last day of the accounting period with all financial impacts flowing through other comprehensive income.

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

Ameriprise Financial, Inc.

Corporate Segment (1) Adjusted Operating Results and Metrics

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Fixed Annuities Adjusted Operating Income Statements

Revenues

Management and financial advice fees

$

$

-

$

-

Distribution fees

-

-

Net investment income

61

70

(13)%

63

(3)%

Premiums, policy and contract charges

-

-

Other revenues

13

15

(13)%

14

(7)%

Total revenues

74

85

(13)%

77

(4)%

Banking and deposit interest expense

-

-

Adjusted operating total net revenues

74

85

(13)%

77

(4)%

Expenses

Distribution expenses

1

1

-

1

-

Interest credited to fixed accounts

62

64

3%

61

(2)%

Benefits, claims, losses and settlement expenses

2

-

2

-

Amortization of deferred acquisition costs

2

3

33%

4

50%

Interest and debt expense

6

5

(20)%

5

(20)%

General and administrative expense

7

9

22%

8

13%

Adjusted operating expenses

80

82

2%

81

1%

Pretax adjusted operating earnings (loss)

$

(6)

$

3

NM

$

(4)

(50)%

Fixed Deferred Annuities - ending balance - contract accumulation values

$

7,771

$

8,116

(4)%

$

7,850

(1)%

Tax Equivalent Spread - Fixed Deferred Annuities (2)

Gross rate of return of invested assets

2.8

%

3.6

%

3.1

%

Crediting rate excluding capitalized interest

(3.3)

%

(3.3)

%

(3.3)

%

Tax equivalent margin spread

(0.5)

%

0.3

%

(0.2)

%

Fixed Deferred Annuities DAC Ending Balance

$

46

$

44

5%

$

48

(4)%

(1) Fixed annuities was moved into the Corporate & Other segment as a closed block. Prior periods have been restated.

(2) Attributable to interest sensitive products only, which has been approximately 99% of the total ending fixed deferred annuities accumulation values in the periods reported. The asset earnings rate is a calculated yield based on specifically assigned assets.

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

Ameriprise Financial, Inc.

Eliminations (1) Adjusted Operating Results

(in millions, unaudited)

2 Qtr 2021

2 Qtr 2020

% Over/
(Under)

1 Qtr 2021

% Over/
(Under)

Revenues

Management and financial advice fees

$

(38)

$

(35)

(9)%

$

(36)

(6)%

Distribution fees

(350)

(280)

(25)%

(331)

(6)%

Net investment income

(5)

(4)

(25)%

(4)

(25)%

Premiums, policy and contract charges

(7)

(8)

13%

(8)

13%

Other revenues

-

-

Total revenues

(400)

(327)

(22)%

(379)

(6)%

Banking and deposit interest expense

(1)

(1)

-

-

Adjusted operating total net revenues

(399)

(326)

(22)%

(379)

(5)%

Expenses

Distribution expenses

(375)

(302)

24%

(355)

6%

Interest credited to fixed accounts

-

-

Benefits, claims, losses and settlement expenses

(5)

(3)

67%

(4)

25%

Amortization of deferred acquisition costs

-

-

Interest and debt expense

(3)

(5)

(40)%

(3)

-

General and administrative expense

(16)

(16)

-

(17)

(6)%

Adjusted operating expenses

(399)

(326)

22%

(379)

5%

Pretax adjusted operating earnings (loss)

$

$

-

$

-

(1) The majority of the amounts represent the impact of inter-segment transfer pricing for both revenues and expenses.

Ameriprise Financial, Inc.

Capital Information

(in millions, unaudited)

June 30,
2021

June 30,
2020

March 31,
2021

Long-term Debt Summary

Senior notes

$

2,800

$

2,800

$

2,800

Finance lease liabilities

44

51

46

Fair value of hedges, unamortized discount and debt issuance costs

(11)

(16)

(12)

Total Ameriprise Financial long-term debt

2,833

2,835

2,834

Non-recourse debt of consolidated investment entities

2,558

1,489

2,671

Total long-term debt

$

5,391

$

4,324

$

5,505

Total Ameriprise Financial long-term debt

$

2,833

$

2,835

$

2,834

Fair value of hedges, unamortized discount and debt issuance costs

11

16

12

Finance lease liabilities

(44)

(51)

(46)

Total Ameriprise Financial long-term debt excluding fair value of hedges, unamortized discount, debt issuance costs and finance lease liabilities

$

2,800

$

2,800

$

2,800

Total equity (1)

$

5,686

$

6,500

$

5,502

Equity of consolidated investment entities

(6)

(5)

(1)

Total equity excluding CIEs

$

5,680

$

6,495

$

5,501

Total Ameriprise Financial capital

$

8,519

$

9,335

$

8,336

Total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, debt issuance costs, finance lease liabilities and equity of CIEs

$

8,480

$

9,295

$

8,301

Debt to capital

Total Ameriprise Financial long-term debt to total Ameriprise Financial capital

33.3

%

30.4

%

34.0

%

Total Ameriprise Financial long-term debt to total Ameriprise Financial capital excluding fair value of hedges, unamortized discount, best issuance costs, finance lease liabilities and equity of CIEs (1)

33.0

%

30.1

%

33.7

%

(1) Includes accumulated other comprehensive income, net of tax.

Ameriprise Financial, Inc.

Consolidated Balance Sheets

(in millions, unaudited)

June 30,
2021

December 31,
2020

Assets

Cash and cash equivalents

$

7,121

$

6,751

Cash of consolidated investment entities

95

94

Investments

40,745

41,031

Investments of consolidated investment entities

2,611

1,918

Separate account assets

96,854

92,611

Receivables

8,030

7,819

Receivables of consolidated investment entities

48

16

Deferred acquisition costs

2,650

2,532

Restricted and segregated cash and investments

2,382

2,558

Other assets

11,165

10,551

Other assets of consolidated investment entities

2

2

Total Assets

$

171,703

$

165,883

Liabilities

Policyholder account balances, future policy benefits and claims

$

34,222

$

33,992

Separate account liabilities

96,854

92,611

Customer deposits

17,796

17,641

Short-term borrowings

200

200

Long-term debt

2,833

2,831

Debt of consolidated investment entities

2,558

1,913

Accounts payable and accrued expenses

2,034

1,998

Other liabilities

9,381

8,761

Other liabilities of consolidated investment entities

139

69

Total Liabilities

166,017

160,016

Equity

Ameriprise Financial

Common shares ($.01 par)

3

3

Additional paid-in capital

9,049

8,822

Retained earnings

16,057

15,292

Treasury stock

(19,883)

(18,879)

Accumulated other comprehensive income, net of tax

460

629

Total Equity

5,686

5,867

Total Liabilities and Equity

$

171,703

$

165,883

Ameriprise Financial, Inc.

Disclosed Items - Included in Adjusted Operating Earnings

(in millions, unaudited)

2 Qtr 2021

Corporate

Affordable Housing
Investment
Adjustment (1)

Revenues

Management and financial advice fees

$

Distribution fees

Net investment income

(7)

Premiums, policy and contract charges

Other revenues

Total revenues

(7)

Banking and deposit interest expense

Adjusted operating total net revenues

(7)

Expenses

Distribution expenses

Interest credited to fixed accounts

Benefits, claims, losses and settlement expenses

Amortization of deferred acquisition costs

Interest and debt expense

General and administrative expense

Adjusted operating expenses

Pretax adjusted operating earnings (loss)

$

(7)

(1) Adjustment for an affordable housing investment to align it with the remaining tax benefit cash flows

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

Quarter Ended
June 30,

Per Diluted Share
Quarter Ended
June 30,

% Over/
(Under)

(in millions, except per share amounts, unaudited)

2021

2020

2021

2020

Net income

$

591

$

(539)

$

4.88

$

(4.31)

(3)

NM

Add: Basic to diluted share conversion

0.04

(4)

Less: Net realized investment gains (losses) (1)

11

(2)

0.09

(0.02)

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

87

1,113

0.71

8.82

Add: Mean reversion-related impacts (1)

(42)

(14)

(0.35)

(0.12)

Add: Market impact of hedges on investments (1)

17

0.14

Add: Integration/restructuring charges (1)

7

2

0.06

0.02

Less: Net income (loss) attributable to consolidated investment entities

(2)

(0.02)

Add: Tax effect of adjustments (2)

(12)

(231)

(0.10)

(1.83)

Adjusted operating earnings

$

639

$

333

$

5.27

$

2.64

100%

Less: NOL tax impacts

(144)

(1.14)

Adjusted operating earnings excluding NOL tax impacts

$

639

$

477

$

5.27

$

3.78

39%

Weighted average common shares outstanding:

Basic

118.4

125.0

Diluted

121.2

126.2

(1) Pretax adjusted operating adjustment.

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

(3) Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in antidilution.

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

Ameriprise Financial, Inc.

Reconciliation Table: Earnings

Year-to-date
June 30,

Per Diluted Share
Year-to-date
June 30,