Edgar Filing: AMERIPRISE FINANCIAL INC

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2019


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from_______________________to_______________________

Commission File No. 1-32525

AMERIPRISE FINANCIAL INC

(Exact name of registrant as specified in its charter)



Delaware		13-3180631
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1099 Ameriprise Financial Center, Minneapolis, Minnesota		55474
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (612) 671-3131

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer x		Accelerated Filer o
Non-Accelerated Filer o		Smaller reporting company o
		Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		Outstanding at April 19, 2019
Common Stock (par value $.01 per share)		133,904,298 shares

AMERIPRISE FINANCIAL, INC.

FORM 10-Q

INDEX



Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Operations — Three months ended March 31, 2019 and 2018				3
Consolidated Statements of Comprehensive Income — Three months ended March 31, 2019 and 2018				4
Consolidated Balance Sheets — March 31, 2019 and December 31, 2018				5
Consolidated Statements of Equity — Three months ended March 31, 2019 and 2018				6
Consolidated Statements of Cash Flows — Three months ended March 31, 2019 and 2018				7
Notes to Consolidated Financial Statements				9
1. Basis of Presentation				9
2. Recent Accounting Pronouncements				9
3. Revenue from Contracts with Customers				12
4. Variable Interest Entities				15
5. Investments				20
6. Financing Receivables				24
7. Deferred Acquisition Costs and Deferred Sales Inducement Costs				26
8. Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities				27
9. Variable Annuity and Insurance Guarantees				28
10. Debt				29
11. Fair Values of Assets and Liabilities				29
12. Offsetting Assets and Liabilities				37
13. Derivatives and Hedging Activities				39
14. Leases				42
15. Held for Sale Classification				44
16. Shareholders’ Equity				45
17. Regulatory Requirements				46
18. Income Taxes				47
19. Contingencies				47
20. Earnings per Share				48
21. Segment Information				49
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations				51
Item 3. Quantitative and Qualitative Disclosures About Market Risk				72
Item 4. Controls and Procedures				72

Part II. Other Information				73
Item 1. Legal Proceedings				73
Item 1A. Risk Factors				73
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds				73
Item 6. Exhibits				74
Signatures				75

AMERIPRISE FINANCIAL, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



	Three Months Ended March 31,
	2019			2018
	(in millions, except per share amounts)
Revenues
Management and financial advice fees	$	1,627		$	1,669
Distribution fees	480			468
Net investment income	397			396
Premiums	371			343
Other revenues	278			308
Total revenues	3,153			3,184
Banking and deposit interest expense	35			16
Total net revenues	3,118			3,168
Expenses
Distribution expenses	900			905
Interest credited to fixed accounts	204			141
Benefits, claims, losses and settlement expenses	670			494
Amortization of deferred acquisition costs	16			92
Interest and debt expense	53			51
General and administrative expense	805			789
Total expenses	2,648			2,472
Pretax income	470			696
Income tax provision	75			102
Net income	$	395		$	594

Earnings per share
Basic	$	2.85		$	3.97
Diluted	$	2.82		$	3.91

Supplemental Disclosures:
Total other-than-temporary impairment losses on securities	$	(12	)	$	—
Portion of loss recognized in other comprehensive income (before taxes)	7			—
Net impairment losses recognized in net investment income	$	(5	)	$	—

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)



	Three Months Ended March 31,
	2019			2018
	(in millions)
Net income	$	395		$	594
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	5			29
Net unrealized gains (losses) on securities	322			(262		)
Net unrealized gains (losses) on derivatives	(1		)	—
Total other comprehensive income (loss), net of tax	326			(233		)
Total comprehensive income	$	721		$	361

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)



	March 31, 2019			December 31, 2018
	(in millions, except share amounts)
Assets
Cash and cash equivalents	$	3,259		$	2,931
Cash of consolidated investment entities (“CIEs”)	88			166
Investments	33,463			35,825
Investments of consolidated investment entities, at fair value	1,740			1,706
Separate account assets	83,571			77,925
Receivables	7,434			6,173
Receivables of consolidated investment entities, at fair value	28			12
Deferred acquisition costs	2,757			2,776
Restricted and segregated cash, cash equivalents and investments	2,564			2,910
Other assets	7,472			6,792
Assets held for sale	2,027			—
Total assets	$	144,403		$	137,216

Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims	$	29,463		$	30,124
Separate account liabilities	83,571			77,925
Customer deposits	11,520			11,545
Short-term borrowings	201			201
Long-term debt	3,394			2,867
Debt of consolidated investment entities, at fair value	1,731			1,743
Accounts payable and accrued expenses	1,596			1,862
Other liabilities	5,808			5,239
Other liabilities of consolidated investment entities, at fair value	105			122
Liabilities held for sale	1,171			—
Total liabilities	138,560			131,628
Equity:
Ameriprise Financial, Inc.:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 328,900,292 and 328,537,214 respectively)	3			3
Additional paid-in capital	8,270			8,260
Retained earnings	13,172			12,909
Treasury shares, at cost (194,716,785 and 192,206,467 shares, respectively)	(15,637		)	(15,293		)
Accumulated other comprehensive income (loss), net of tax	35			(291		)
Total equity	5,843			5,588
Total liabilities and equity	$	144,403		$	137,216

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)



	Number of Outstanding Shares		Common Shares		Additional Paid-In Capital		Retained Earnings			Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Total
	(in millions, except per share data)
Balances at January 1, 2018	146,634,664		$	3	$	8,085	$	11,326		$	(13,648	)	$	229		$	5,995
Cumulative effect of adoption of equity securities guidance	—		—		—		1			—			(1		)	—
Comprehensive income:
Net income	—		—		—		594			—			—			594
Other comprehensive loss, net of tax	—		—		—		—			—			(233		)	(233		)
Total comprehensive income																361
Dividends to shareholders	—		—		—		(125		)	—			—			(125		)
Repurchase of common shares	(3,003,729	)	—		—		—			(482		)	—			(482		)
Share-based compensation plans	1,387,422		—		31		—			60			—			91
Balances at March 31, 2018	145,018,357		$	3	$	8,116	$	11,796		$	(14,070	)	$	(5	)	$	5,840