filings.toolsItem 16. Form 10-K Summary
21K characters. Original on sec.gov ·
Item 16. Form 10-K Summary
None.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERIPRISE FINANCIAL, INC.
Registrant
| Date: | February 24, 2021 | By | /s/ Walter S. Berman | ||||||||
| Walter S. Berman Executive Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the dates indicated.
| Date: | February 24, 2021 | By | /s/ James M. Cracchiolo | ||||||||
| James M. Cracchiolo Chairman and Chief Executive Officer (Principal Executive Officer and Director) |
| Date: | February 24, 2021 | By | /s/ Walter S. Berman | ||||||||
| Walter S. Berman Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
| Date: | February 24, 2021 | By | /s/ John R. Hutt | ||||||||
| John R. Hutt Senior Vice President and Controller (Principal Accounting Officer) |
| Date: | February 24, 2021 | By | /s/ Dianne Neal Blixt* | ||||||||
| Dianne Neal Blixt Director |
| Date: | February 24, 2021 | By | /s/ Amy DiGeso* | ||||||||
| Amy DiGeso Director |
| Date: | February 24, 2021 | By | /s/ Lon R. Greenberg* | ||||||||
| Lon R. Greenberg Director |
| Date: | February 24, 2021 | By | /s/ Jeffrey Noddle* | ||||||||
| Jeffrey Noddle Director |
| Date: | February 24, 2021 | By | /s/ Robert F. Sharpe, Jr.* | ||||||||
| Robert F. Sharpe, Jr. Director |
| Date: | February 24, 2021 | By | /s/ Brian T. Shea* | ||||||||
| Brian T. Shea Director |
| Date: | February 24, 2021 | By | /s/ W. Edward Walter* | ||||||||
| W. Edward Walter Director |
| Date: | February 24, 2021 | By | /s/ Christopher J. Williams* | ||||||||
| Christopher J. Williams Director |
| *By | /s/ Walter S. Berman | ||||
| Walter S. Berman Executive Vice President and Chief Financial Officer |
*Walter S. Berman, by signing his name hereto on the 24th day of February, 2021 does hereby sign this document pursuant to powers of attorney duly executed by the Directors named, filed with the Securities and Exchange Commission on behalf of such Directors as Exhibit 24 to this Form 10-K, all in the capacities and on the date stated, such persons being the majority of the Directors of the Registrant.
Schedule I - Condensed Financial Information of Registrant
(Parent Company Only)
| Condensed Statements of Operations | 172 | ||||
| Condensed Balance Sheets | 173 | ||||
| Condensed Statements of Cash Flows | 174 | ||||
| Notes to Condensed Financial Information of Registrant | 175 |
| Schedule I — Condensed Financial Information of Registrant Condensed Statements of Operations (Parent Company Only) | |||||||||||||||||
| Years Ended December 31, | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Revenues | |||||||||||||||||
| Management and financial advice fees | $ | — | $ | (1) | $ | (1) | |||||||||||
| Net investment income | 23 | 9 | 34 | ||||||||||||||
| Other revenues | 15 | 14 | 4 | ||||||||||||||
| Gain on disposal of business | — | 213 | — | ||||||||||||||
| Total revenues | 38 | 235 | 37 | ||||||||||||||
| Banking and deposit interest expense | 3 | 9 | 7 | ||||||||||||||
| Total net revenues | 35 | 226 | 30 | ||||||||||||||
| Expenses | |||||||||||||||||
| Benefits, claims, losses and settlement expenses | — | 49 | 4 | ||||||||||||||
| Distribution expenses | 12 | 24 | 4 | ||||||||||||||
| Interest and debt expense | 105 | 126 | 120 | ||||||||||||||
| General and administrative expense | 198 | 244 | 210 | ||||||||||||||
| Total expenses | 315 | 443 | 338 | ||||||||||||||
| Pretax loss before equity in earnings of subsidiaries | (280) | (217) | (308) | ||||||||||||||
| Income tax benefit | (87) | (38) | (73) | ||||||||||||||
| Loss before equity in earnings of subsidiaries | (193) | (179) | (235) | ||||||||||||||
| Equity in earnings of subsidiaries | 1,727 | 2,072 | 2,333 | ||||||||||||||
| Net income | 1,534 | 1,893 | 2,098 | ||||||||||||||
| Other comprehensive income (loss), net of tax | 367 | 553 | (519) | ||||||||||||||
| Total comprehensive income | $ | 1,901 | $ | 2,446 | $ | 1,579 |
See Notes to Condensed Financial Information of Registrant.
| Schedule I — Condensed Financial Information of Registrant Condensed Balance Sheets (Parent Company Only) | |||||||||||
| December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| (in millions, except share amounts) | |||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 1,071 | $ | 730 | |||||||
| Investments | 877 | 1,430 | |||||||||
| Loans to subsidiaries | 247 | 361 | |||||||||
| Due from subsidiaries | 497 | 305 | |||||||||
| Receivables | 2 | 5 | |||||||||
| Land, buildings, equipment, and software, net of accumulated depreciation of $929 and $952, respectively | 208 | 207 | |||||||||
| Investments in subsidiaries | 7,153 | 6,665 | |||||||||
| Other assets | 1,334 | 1,136 | |||||||||
| Total assets | $ | 11,389 | $ | 10,839 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 936 | $ | 797 | |||||||
| Due to subsidiaries | 60 | 137 | |||||||||
| Borrowings from subsidiaries | 494 | 401 | |||||||||
| Long-term debt | 2,831 | 3,097 | |||||||||
| Other liabilities | 1,201 | 678 | |||||||||
| Total liabilities | 5,522 | 5,110 | |||||||||
| Shareholders’ Equity: | |||||||||||
| Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 332,390,132 and 329,842,827, respectively) | 3 | 3 | |||||||||
| Additional paid-in capital | 8,822 | 8,461 | |||||||||
| Retained earnings | 15,292 | 14,279 | |||||||||
| Treasury shares, at cost (215,624,519 and 205,903,593 shares, respectively) | (18,879) | (17,276) | |||||||||
| Accumulated other comprehensive income (loss), net of tax, including amounts applicable to equity investments in subsidiaries | 629 | 262 | |||||||||
| Total shareholders’ equity | 5,867 | 5,729 | |||||||||
| Total liabilities and equity | $ | 11,389 | $ | 10,839 |
See Notes to Condensed Financial Information of Registrant.
| Schedule I — Condensed Financial Information of Registrant****Condensed Statements of Cash Flows (Parent Company Only) | |||||||||||||||||
| Years Ended December 31, | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Cash Flows from Operating Activities | |||||||||||||||||
| Net income | $ | 1,534 | $ | 1,893 | $ | 2,098 | |||||||||||
| Equity in earnings of subsidiaries | (1,727) | (2,072) | (2,333) | ||||||||||||||
| Dividends received from subsidiaries | 2,018 | 2,721 | 2,093 | ||||||||||||||
| Gain on disposal of business before affinity partner payment | — | (313) | — | ||||||||||||||
| Other operating activities, primarily with subsidiaries | 282 | 596 | 57 | ||||||||||||||
| Net cash provided by (used in) operating activities | 2,107 | 2,825 | 1,915 | ||||||||||||||
| Cash Flows from Investing Activities | |||||||||||||||||
| Available-for-Sale securities: | |||||||||||||||||
| Proceeds from sales | 922 | — | — | ||||||||||||||
| Maturities, sinking fund payments and calls | 161 | 204 | 94 | ||||||||||||||
| Purchases | (15) | (1,153) | (222) | ||||||||||||||
| Proceeds from sale of other investments | — | 6 | — | ||||||||||||||
| Purchase of other investments | (12) | (12) | — | ||||||||||||||
| Proceeds from sale of land, buildings, equipment and software | 2 | — | — | ||||||||||||||
| Purchase of land, buildings, equipment and software | (54) | (42) | (62) | ||||||||||||||
| Proceeds from disposal of business | — | 1,138 | — | ||||||||||||||
| Contributions to subsidiaries | (416) | (368) | (73) | ||||||||||||||
| Return of capital from subsidiaries | 131 | 18 | 454 | ||||||||||||||
| Repayment of loans from subsidiaries | 3,288 | 2,468 | 1,623 | ||||||||||||||
| Issuance of loans to subsidiaries | (3,174) | (2,457) | (1,768) | ||||||||||||||
| Acquisition of surplus loans to subsidiaries | (500) | — | — | ||||||||||||||
| Other, net | — | (65) | 2 | ||||||||||||||
| Net cash provided by (used in) investing activities | 333 | (263) | 48 | ||||||||||||||
| Cash Flows from Financing Activities | |||||||||||||||||
| Dividends paid to shareholders | (497) | (504) | (506) | ||||||||||||||
| Repurchase of common shares | (1,441) | (1,943) | (1,630) | ||||||||||||||
| Cash paid for purchased options with deferred premiums | — | (107) | (20) | ||||||||||||||
| Issuance of long-term debt, net of issuance costs | 496 | 497 | — | ||||||||||||||
| Repayments of long-term debt | (762) | (313) | (13) | ||||||||||||||
| Borrowings from subsidiaries | 871 | 132 | 472 | ||||||||||||||
| Repayments of borrowings from subsidiaries | (751) | (79) | (273) | ||||||||||||||
| Exercise of stock options | 3 | 3 | 2 | ||||||||||||||
| Other, net | (18) | 6 | (13) | ||||||||||||||
| Net cash provided by (used in) financing activities | (2,099) | (2,308) | (1,981) | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 341 | 254 | (18) | ||||||||||||||
| Cash and cash equivalents at beginning of year | 730 | 476 | 494 | ||||||||||||||
| Cash and cash equivalents at end of year | $ | 1,071 | $ | 730 | $ | 476 | |||||||||||
| Supplemental Disclosures: | |||||||||||||||||
| Interest paid on debt | $ | 107 | $ | 123 | $ | 126 | |||||||||||
| Income taxes paid (received), net | 26 | (109) | (27) | ||||||||||||||
| Non-cash dividends from subsidiaries | — | 81 | 195 |
See Notes to Condensed Financial Information of Registrant.
Schedule I — Condensed Financial Information of Registrant
Notes to Condensed Financial Information of Registrant (Parent Company Only)
1. Basis of Presentation
The accompanying Condensed Financial Statements include the accounts of Ameriprise Financial, Inc. (the “Parent Company”) and, on an equity basis, its subsidiaries and affiliates. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The financial information of the Parent Company should be read in conjunction with the Consolidated Financial Statements and Notes of Ameriprise Financial. Parent Company revenues and expenses, other than compensation and benefits and debt and interest expense, are primarily related to intercompany transactions with subsidiaries and affiliates.
The change in the fair value of derivative instruments used as hedges is reflected in the Parent Company Only Condensed Statements of Operations. For certain of these derivatives, the change in the hedged item is reflected in the subsidiaries’ Statements of Operations. The change in fair value of certain derivatives used to economically hedge risk related to guaranteed minimum withdrawal benefit (“GMWB”) provisions is included in benefits, claims, losses and settlement expenses, while the underlying benefits, claims, losses and settlement expenses are reflected in equity in earnings of subsidiaries.
2. Investments
On December 23, 2020, RiverSource Life Insurance Company (“RVSL”) issued a $500 million unsecured 3.5% surplus note due December 31, 2050 to the Parent Company. The surplus note is subordinate in right of payment to the prior payment in full of the RVSL’s obligations to policyholders, claimants and beneficiaries and all other creditors. No payment of principal or interest shall be made without the prior approval of the Minnesota Department of Commerce and such payments shall be made only from RVSL’s statutory surplus. Interest payments are due semi-annually in arrears on June 30 and December 31, commencing on June 30, 2021. Subject to the preceding conditions, RVSL may prepay all or a portion of the principal at any time. The held-to-maturity investment of $500 million as of December 31, 2020 is recorded in Investments on the Parent Company’s Condensed Balance Sheets. Interest income will be reported in Net investment income on the Parent Company’s Condensed Statements of Operations.
In December 2018, the Parent Company invested in the residual tranche of an asset backed security structure issued by Ameriprise Advisor Financing, LLC, a subsidiary of the Parent Company. The asset backed securities are collateralized by a portfolio of loans issued to advisors affiliated with Ameriprise Financial Services, LLC (“AFS”), a subsidiary of the Parent Company. The fair value of the residual tranche was $90 million and $94 million as of December 31, 2020 and 2019, respectively, and is reported in Investments on the Parent Company’s Condensed Balance Sheets. For the year ended December 31, 2020, interest income was $6 million and is reported in Net investment income on the Parent Company’s Condensed Statements of Operations.
3. Debt
All of the debt of Ameriprise Financial is borrowings of the Parent Company, except as indicated below.
- As of December 31, 2020 and 2019, Ameriprise Financial had $200 million and $201 million, respectively, of borrowings from the Federal Home Loan Bank of Des Moines, which is collateralized with commercial mortgage backed securities and residential mortgage backed securities.
4. Borrowings from Subsidiaries
The Parent Company has intercompany lending arrangements with its subsidiaries. At the end of each business day, taking into consideration all legal and regulatory requirements associated with its subsidiaries, the Parent Company is entitled to draw on all funds in specified bank accounts. Repayment of all or a portion of the funds is due on demand. The Parent Company also has revolving credit agreements with its subsidiaries as the borrower aggregating $1.3 billion as of both December 31, 2020 and 2019, of which $172 million and $50 million was outstanding as of December 31, 2020 and 2019, respectively.
5. Guarantees, Commitments and Contingencies
The Parent Company is the guarantor for operating leases of certain subsidiaries. All consolidated legal, regulatory and arbitration proceedings, including class actions of Ameriprise Financial, Inc. and its consolidated subsidiaries are potential or current obligations of the Parent Company. The Parent Company has committed revolving credit agreements with its subsidiaries as the lender aggregating $366 million as of December 31, 2020.
The Parent Company and Ameriprise Certificate Company (“ACC”) entered into a Capital Support Agreement on March 2, 2009, pursuant to which the Parent Company agrees to commit such capital to ACC as is necessary to satisfy applicable minimum capital requirements. Effective April 30, 2014, this agreement was amended to revise the maximum commitment to $50 million. For the years ended December 31, 2020, 2019 and 2018, ACC did not draw upon the Capital Support Agreement and had met all applicable capital requirements.
AFS entered into a Financial Industry Regulatory Authority approved subordinated loan agreement with the Parent Company on December 15, 2014 for regulatory net capital purposes. The agreement consists of a $200 million secured demand note. The note is secured by cash and securities equal to the principal value of the note pledged by the Parent Company. For the year ended December 31, 2020, AFS had not made a demand of the principal amount.
Ameriprise Enterprise Investment Services, Inc. (“AEIS”) entered into a FINRA approved subordinated loan agreement with the Parent Company on January 25, 2017 for regulatory net capital purposes. Under this agreement, AEIS borrowed $60 million from the Parent Company with an initial term of five years to be repaid no later than January 22, 2022. Both companies have the option to renew the agreement in one year increments in perpetuity.
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