|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock (par value $.01 per share)
|
The New York Stock Exchange, Inc.
|
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
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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
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Class
|
|
Outstanding at February 15, 2019
|
|
Common Stock (par value $.01 per share)
|
135,496,261 shares
|
|
•
|
Advice & Wealth Management;
|
•
|
Asset Management;
|
•
|
Annuities;
|
•
|
Protection; and
|
•
|
Corporate & Other.
|
Subsidiary Name
|
Description of Business
|
|
|
Ameriprise International Holdings GmbH
|
A holding company based in Switzerland for various companies engaged in our overseas business, including our Threadneedle group of companies (defined below)
|
Threadneedle Asset Management Holdings Sàrl
|
A holding company based in Luxembourg for the EMEA region group of companies that provide investment management products and services
|
Ameriprise Asset Management Holdings GmbH
|
A holding company based in Switzerland for our non-EMEA region group of companies that provide investment management products and services. We refer to the group of companies in this entity and Threadneedle Asset Management Holdings Sarl as “Threadneedle” and Threadneedle is our primary provider of non-U.S. investment management products and services.
|
Columbia Management Investment Advisers, LLC (“Columbia Management”)
|
The investment adviser for the majority of funds in the Columbia Management family of funds (“Columbia Management® funds”) and to U.S. and non-U.S. institutional accounts and private funds
|
J. & W. Seligman & Co. Incorporated (“Seligman”)
|
A holding company for Columbia Management Investment Distributors, Inc. and certain other subsidiaries within our Asset Management segment
|
Columbia Management Investment Distributors, Inc.
|
Broker-dealer subsidiary that serves as the principal underwriter and distributor for Columbia Management funds
|
Columbia Management Investment Services Corp.
|
A transfer agent that processes client transactions for Columbia Management funds and Ameriprise face-amount certificates
|
•
|
Employee Advisors (Ameriprise Advisor Group). Under this option, an advisor is an employee of our company and receives a higher level of support, including leadership, training, office space and staff support. We pay compensation that is competitive with other employee advisor models, which is generally lower than that of our franchisee advisors given the higher level of support we provide our employee advisors. Some employee advisors are employed in the Ameriprise Advisor Center (“AAC”), our dedicated platform for remote-based sales and service to Ameriprise retail customers through a team model.
|
•
|
Franchisee Advisors (Ameriprise Franchise Group). Under this option, an advisor is an independent contractor franchisee who affiliates with our company and has the right to use the Ameriprise brand. We pay our franchisee advisors a higher payout rate than our employee advisors as they are responsible for paying their own overhead, staff compensation and other business expenses. In addition, our franchisee advisors pay a franchise association fee and other fees in exchange for the support we offer and the right to use our brand name. The support we offer to our franchisee advisors includes generalist and specialist leadership support, technology platforms and tools, training and marketing programs.
|
•
|
Bank Channel Advisors (Ameriprise Financial Institutions Group). Our acquisition of IPI in 2017 added a new capability where we specialize in the on-site delivery of investment programs for financial institutions including banks and credit unions. Within this channel, we have different types of relationships with our financial institution partners as well as a variety of ways for advisors to affiliate with us.
|
•
|
The UK financial service sector continues to face uncertainty over the final relationship with the EU as a result of Brexit. In the event of no arrangements as part of final negotiations, the UK would become a third country from the EU’s perspective (largely in the same way that the US is currently) which places restrictions on cross-border marketing of financial products. We continue to monitor developments in place and have an ongoing project to ensure we can continue to service our EU clients.
|
•
|
The FCA will extend the new accountability regime to almost all regulated firms in December 2019; this is an evolution of current requirements, with changes including: (i) a requirement that senior managers take all reasonable steps to prevent a breach in their area of responsibility, (ii) the introduction of a new ‘certified persons’ regime to replace the current system of “approved persons”; and (iii) nearly all employees being subject to enforceable conduct rules. Once implemented this will be an evolution of the FCA’s approach to conduct risk regulation.
|
•
|
Brexit,
|
•
|
MiFID II,
|
•
|
FCA’s Asset Management Market Study,
|
•
|
Senior Manager and Certification Regime (“SM &CR”)
|
•
|
Solvency II,
|
•
|
Packaged Retail and Insurance-based Investment Products (“PRIIPs”),
|
•
|
General Data Protection Regulation (“GDPR”),
|
•
|
Market Abuse Regulation (“MAR”),
|
•
|
Transparency Directive II (“TD II”),
|
•
|
UCITS V,
|
•
|
European Market Infrastructure Regulation II,
|
•
|
Fourth Money Laundering Directive (“MLDIV),
|
•
|
EU Benchmarks Regulation,
|
•
|
Money Market Fund Regulation (“MMFR”),
|
•
|
Insurance Distribution Directive (“IDD”),
|
•
|
Shareholder Rights Directive (“SRD”),
|
•
|
Investment Firms Review,
|
•
|
Securitisation Regulation,
|
•
|
Criminal Finance Act, and
|
•
|
The Review of the European Supervisory Authorities and new powers over delegation.
|
Entity
|
|
Company Action Level RBC
|
|
Total Adjusted Capital
|
|
% of Company Action Level RBC
|
|||||
|
|
(in millions, except percentages)
|
|||||||||
RiverSource Life
|
|
$
|
675
|
|
|
$
|
3,382
|
|
|
501
|
%
|
RiverSource Life of NY
|
|
40
|
|
|
266
|
|
|
661
|
|
||
IDS Property Casualty
|
|
140
|
|
|
789
|
|
|
564
|
|
||
Ameriprise Insurance Company
|
|
1
|
|
|
49
|
|
|
7,887
|
|
•
|
Columbia Threadneedle Investments leases offices in Boston containing approximately 156,000 square feet, leases approximately 65,000 square feet of a shared building in London (as well as a second location in Swindon, UK) and also leases property in a number of other cities to support its global operations, including in New York, Menlo Park, Chicago and Houston in the United States and Austria, Chile, Denmark, Dubai, France, Germany, Netherlands, Hong Kong, Italy, Luxembourg, Singapore, Spain, Switzerland and South Korea;
|
•
|
Ameriprise Auto and Home Insurance leases approximately 132,000 square feet at its corporate headquarters in DePere, Wisconsin and also leases space in Phoenix, Arizona; and
|
•
|
We also have leases in Las Vegas, Nevada (supporting aspects of our Advice & Wealth Management and Protection businesses, including Ameriprise Auto and Home Insurance) and Gurugram and Noida India (supporting our broader business in the United States).
|
|
Years Ended December 31,
|
||||||||||||||||||
2018
|
|
2017 Revised
|
|
2016 Revised
|
|
2015
|
|
2014
|
|||||||||||
(in millions, except per share data)
|
|||||||||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
12,835
|
|
|
$
|
12,132
|
|
|
$
|
11,800
|
|
|
$
|
12,170
|
|
|
$
|
12,268
|
|
Total expenses
|
10,351
|
|
|
9,918
|
|
|
10,209
|
|
|
10,028
|
|
|
9,721
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
|
$
|
1,687
|
|
|
$
|
2,002
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Net income
|
2,098
|
|
|
1,480
|
|
|
1,313
|
|
|
1,687
|
|
|
2,000
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
381
|
|
|||||
Net income attributable to Ameriprise Financial
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
|
$
|
1,562
|
|
|
$
|
1,619
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Share Attributable to Ameriprise Financial, Inc. Common Shareholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
14.41
|
|
|
$
|
9.60
|
|
|
$
|
7.90
|
|
|
$
|
8.60
|
|
|
$
|
8.46
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Net income
|
$
|
14.41
|
|
|
$
|
9.60
|
|
|
$
|
7.90
|
|
|
$
|
8.60
|
|
|
$
|
8.45
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
14.20
|
|
|
$
|
9.44
|
|
|
$
|
7.81
|
|
|
$
|
8.48
|
|
|
$
|
8.31
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||||
Net income
|
$
|
14.20
|
|
|
$
|
9.44
|
|
|
$
|
7.81
|
|
|
$
|
8.48
|
|
|
$
|
8.30
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Dividends Declared Per Common Share
|
$
|
3.53
|
|
|
$
|
3.24
|
|
|
$
|
2.92
|
|
|
$
|
2.59
|
|
|
$
|
2.26
|
|
|
December 31,
|
||||||||||||||||||
2018
|
|
2017 Revised
|
|
2016 Revised
|
|
2015
|
|
2014
|
|||||||||||
(in millions)
|
|||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments (1)
|
$
|
35,825
|
|
|
$
|
35,925
|
|
|
$
|
35,834
|
|
|
$
|
34,144
|
|
|
$
|
35,582
|
|
Separate account assets
|
77,925
|
|
|
87,368
|
|
|
80,210
|
|
|
80,349
|
|
|
83,256
|
|
|||||
Total assets
|
137,216
|
|
|
147,480
|
|
|
139,831
|
|
|
145,339
|
|
|
148,803
|
|
|||||
Policyholder account balances, future policy benefits and claims
|
30,124
|
|
|
29,904
|
|
|
30,202
|
|
|
29,699
|
|
|
30,350
|
|
|||||
Separate account liabilities
|
77,925
|
|
|
87,368
|
|
|
80,210
|
|
|
80,349
|
|
|
83,256
|
|
|||||
Customer deposits
|
11,545
|
|
|
10,303
|
|
|
10,036
|
|
|
8,634
|
|
|
7,664
|
|
|||||
Long-term debt (1)
|
2,867
|
|
|
2,891
|
|
|
2,917
|
|
|
2,692
|
|
|
3,045
|
|
|||||
Short-term borrowings
|
201
|
|
|
200
|
|
|
200
|
|
|
200
|
|
|
200
|
|
|||||
Total liabilities
|
131,628
|
|
|
141,485
|
|
|
133,542
|
|
|
136,960
|
|
|
139,524
|
|
|||||
Total Ameriprise Financial, Inc. shareholders’ equity
|
5,588
|
|
|
5,995
|
|
|
6,289
|
|
|
7,191
|
|
|
8,098
|
|
|||||
Noncontrolling interests’ equity
|
—
|
|
|
—
|
|
|
—
|
|
|
1,188
|
|
|
1,181
|
|
•
|
Adjusted operating total net revenue growth of 6% to 8%,
|
•
|
Adjusted operating earnings per diluted share growth of 12% to 15%, and
|
•
|
Adjusted operating return on equity excluding accumulated other comprehensive income (“AOCI”) of 19% to 23%.
|
|
Years Ended December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Total net revenues
|
$
|
12,835
|
|
|
$
|
12,132
|
|
Less: Revenue attributable to CIEs
|
127
|
|
|
94
|
|
||
Less: Net realized investment gains
|
10
|
|
|
46
|
|
||
Less: Market impact on IUL benefits
|
(7
|
)
|
|
1
|
|
||
Less: Market impact of hedges on investments
|
11
|
|
|
(2
|
)
|
||
Adjusted operating total net revenues
|
$
|
12,694
|
|
|
$
|
11,993
|
|
|
Years Ended December 31,
|
|
Per Diluted Share
Years Ended December 31, |
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in millions, except per share amounts)
|
|||||||||||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
14.20
|
|
|
$
|
9.44
|
|
Less: Net income (loss) attributable to CIEs
|
(1
|
)
|
|
1
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Add: Integration/restructuring charges (1)
|
19
|
|
|
5
|
|
|
0.13
|
|
|
0.03
|
|
||||
Add: Market impact on variable annuity guaranteed benefits (1)
|
31
|
|
|
232
|
|
|
0.21
|
|
|
1.48
|
|
||||
Add: Market impact on fixed index annuity benefits (1)
|
(1
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Add: Market impact on IUL benefits (1)
|
17
|
|
|
(4
|
)
|
|
0.12
|
|
|
(0.02
|
)
|
||||
Add: Market impact of hedges on investments (1)
|
(11
|
)
|
|
2
|
|
|
(0.08
|
)
|
|
0.01
|
|
||||
Less: Net realized investment gains (1)
|
9
|
|
|
44
|
|
|
0.06
|
|
|
0.28
|
|
||||
Tax effect of adjustments (2)
|
(10
|
)
|
|
(67
|
)
|
|
(0.07
|
)
|
|
(0.43
|
)
|
||||
Adjusted operating earnings
|
$
|
2,135
|
|
|
$
|
1,603
|
|
|
$
|
14.45
|
|
|
$
|
10.23
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
145.6
|
|
|
154.1
|
|
|
|
|
|
|
|
||||
Diluted
|
147.7
|
|
|
156.7
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
Less: Adjustments (1)
|
(37
|
)
|
|
(123
|
)
|
||
Adjusted operating earnings
|
$
|
2,135
|
|
|
$
|
1,603
|
|
|
|
|
|
||||
Total Ameriprise Financial, Inc. shareholders’ equity
|
$
|
5,735
|
|
|
$
|
6,212
|
|
Less: AOCI, net of tax
|
(98
|
)
|
|
252
|
|
||
Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI
|
5,833
|
|
|
5,960
|
|
||
Less: Equity impacts attributable to CIEs
|
1
|
|
|
—
|
|
||
Adjusted operating equity
|
$
|
5,832
|
|
|
$
|
5,960
|
|
|
|
|
|
||||
Return on equity, excluding AOCI
|
36.0
|
%
|
|
24.8
|
%
|
||
Adjusted operating return on equity, excluding AOCI (2)
|
36.6
|
%
|
|
26.9
|
%
|
(1)
|
Adjustments reflect the sum of after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; the market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on IUL benefits, net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact on fixed index annuity benefits, net of hedges and the related DAC amortization; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration and restructuring charges; and net income (loss) from consolidated investment entities. After-tax is calculated using the statutory tax rate of 21% for 2018 and 35% for 2017.
|
(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% for 2018 and 35% for 2017.
|
|
Estimated Impact to Pretax Income (1)
|
||||||||||
DAC Amortization
|
|
Benefits and Claims Expense
|
|
Total
|
|||||||
(in millions)
|
|||||||||||
Decrease in future near- and long-term fixed income fund growth returns by 100 basis points
|
$
|
(26
|
)
|
|
$
|
(70
|
)
|
|
$
|
(96
|
)
|
|
|
|
|
|
|
||||||
Decrease in future near-term equity fund growth returns by 100 basis points
|
$
|
(24
|
)
|
|
$
|
(43
|
)
|
|
$
|
(67
|
)
|
Decrease in future long-term equity fund growth returns by 100 basis points
|
(18
|
)
|
|
(33
|
)
|
|
(51
|
)
|
|||
Decrease in future near- and long-term equity fund growth returns by 100 basis points
|
$
|
(42
|
)
|
|
$
|
(76
|
)
|
|
$
|
(118
|
)
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Management and financial advice fees
|
$
|
6,776
|
|
|
$
|
6,415
|
|
|
$
|
361
|
|
|
6
|
%
|
Distribution fees
|
1,877
|
|
|
1,757
|
|
|
120
|
|
|
7
|
|
|||
Net investment income
|
1,596
|
|
|
1,509
|
|
|
87
|
|
|
6
|
|
|||
Premiums
|
1,426
|
|
|
1,394
|
|
|
32
|
|
|
2
|
|
|||
Other revenues
|
1,249
|
|
|
1,105
|
|
|
144
|
|
|
13
|
|
|||
Total revenues
|
12,924
|
|
|
12,180
|
|
|
744
|
|
|
6
|
|
|||
Banking and deposit interest expense
|
89
|
|
|
48
|
|
|
41
|
|
|
85
|
|
|||
Total net revenues
|
12,835
|
|
|
12,132
|
|
|
703
|
|
|
6
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||||
Distribution expenses
|
3,637
|
|
|
3,397
|
|
|
240
|
|
|
7
|
|
|||
Interest credited to fixed accounts
|
674
|
|
|
656
|
|
|
18
|
|
|
3
|
|
|||
Benefits, claims, losses and settlement expenses
|
2,302
|
|
|
2,233
|
|
|
69
|
|
|
3
|
|
|||
Amortization of deferred acquisition costs
|
322
|
|
|
267
|
|
|
55
|
|
|
21
|
|
|||
Interest and debt expense
|
245
|
|
|
207
|
|
|
38
|
|
|
18
|
|
|||
General and administrative expense
|
3,171
|
|
|
3,158
|
|
|
13
|
|
|
—
|
|
|||
Total expenses
|
10,351
|
|
|
9,918
|
|
|
433
|
|
|
4
|
|
|||
Pretax income
|
2,484
|
|
|
2,214
|
|
|
270
|
|
|
12
|
|
|||
Income tax provision
|
386
|
|
|
734
|
|
|
(348
|
)
|
|
(47
|
)
|
|||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
618
|
|
|
42
|
%
|
Pretax Increase (Decrease)
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Other revenues
|
|
$
|
78
|
|
|
$
|
(47
|
)
|
Total revenues
|
|
78
|
|
|
(47
|
)
|
||
|
|
|
|
|
||||
Benefits, claims, losses and settlement expenses:
|
|
|
|
|
||||
LTC loss recognition
|
|
51
|
|
|
57
|
|
||
Unlocking impact
|
|
113
|
|
|
(139
|
)
|
||
Total benefits, claims, losses and settlement expenses
|
|
164
|
|
|
(82
|
)
|
||
Amortization of DAC
|
|
(33
|
)
|
|
(12
|
)
|
||
Total expenses
|
|
131
|
|
|
(94
|
)
|
||
Pretax income (1)
|
|
$
|
(53
|
)
|
|
$
|
47
|
|
Increase (Decrease)
|
(in millions)
|
||
Net investment income (1)
|
$
|
(51
|
)
|
Pretax income
|
(51
|
)
|
|
|
|
||
Income tax provision
|
|
||
Remeasurement of deferred tax assets and liabilities
|
221
|
|
|
Foreign tax provisions
|
57
|
|
|
Remeasurement of tax contingencies
|
8
|
|
|
Total prior to tax effect of affordable housing partnership impairment
|
286
|
|
|
Tax effect of affordable housing partnership impairment
|
(17
|
)
|
|
Total income tax provision
|
269
|
|
|
|
|
||
Net income
|
$
|
(320
|
)
|
•
|
The impact of unlocking was an expense of $113 million for the year ended December 31, 2018 compared to a benefit of $139 million for the prior year. The unlocking impact for the year ended December 31, 2018 primarily reflected unfavorable mortality experience on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by a favorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits. The unlocking impact for the prior year primarily reflected a benefit from updates to market-related inputs to our living benefit valuation.
|
•
|
Our annual review of LTC active life future policy benefit reserve adequacy in the third quarter resulted in loss recognition of $51 million for the year ended December 31, 2018 compared to $57 million in the prior year. The loss recognition in both periods was primarily due to unfavorable morbidity experience, partially offset by approved, pending and future expected premium increases.
|
•
|
A $25 million increase in expense related to higher reserve funding driven by the impact of higher variable annuity guaranteed benefit rider charges.
|
•
|
The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance was an expense of $12 million for the year ended December 31, 2018 compared to a benefit of $47 million for the prior year.
|
•
|
A $356 million decrease in expense from the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed benefits. The favorable impact of the nonperformance credit spread was $250 million for the year ended December 31, 2018 compared to an unfavorable impact of $106 million for the prior year. As the estimate of the nonperformance credit spread over the LIBOR swap curve tightens or widens, the embedded derivative liability will increase or decrease. As the embedded derivative liability on which the nonperformance credit spread is applied increases (decreases), the impact of the nonperformance credit spread is favorable (unfavorable) to expense.
|
•
|
A $106 million increase in expense from other market impacts on variable annuity guaranteed benefits, net of hedges in place to offset those risks and the related DSIC amortization. This increase was the result of an unfavorable $1.2 billion change in the market impact on variable annuity guaranteed living benefits reserves, a favorable $1.1 billion change in the market impact on derivatives hedging the variable annuity guaranteed benefits and an unfavorable $4 million change in the DSIC offset. The main market drivers contributing to these changes are summarized below:
|
•
|
Equity market impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for the year ended December 31, 2018 compared to the prior year.
|
•
|
Interest rate impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the year ended December 31, 2018 compared to the prior year.
|
•
|
Volatility impact on the variable annuity guaranteed living benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for the year ended December 31, 2018 compared to the prior year.
|
•
|
Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a net unfavorable impact compared to the prior year.
|
•
|
The impact on DAC from actual versus expected market performance was an expense of $21 million for the year ended December 31, 2018 compared to a benefit of $36 million for the prior year.
|
•
|
The DAC offset to the market impact on variable annuity guaranteed benefits was an expense of $23 million for the year ended December 31, 2018 compared to a benefit of $26 million for the prior year.
|
•
|
The impact of unlocking was a benefit of $33 million for the year ended December 31, 2018 and primarily reflected updated mortality assumptions on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by an unfavorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits. The impact of unlocking for the prior year was a benefit of $12 million and primarily reflected improved persistency and mortality on UL and VUL insurance products and a $10 million benefit from a correction related to a variable annuity model assumption, partially offset by updates to market-related inputs to the living benefit valuation.
|
•
|
The positive impact on DAC from lower than expected lapses on variable annuities was $10 million.
|
|
Years Ended December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Advice & Wealth Management
|
|
|
|
|
|
||
Net revenues
|
$
|
6,189
|
|
|
$
|
5,616
|
|
Expenses
|
4,800
|
|
|
4,453
|
|
||
Adjusted operating earnings
|
$
|
1,389
|
|
|
$
|
1,163
|
|
Asset Management
|
|
|
|
||||
Net revenues
|
$
|
3,011
|
|
|
$
|
3,072
|
|
Expenses
|
2,283
|
|
|
2,332
|
|
||
Adjusted operating earnings
|
$
|
728
|
|
|
$
|
740
|
|
Annuities
|
|
|
|
||||
Net revenues
|
$
|
2,476
|
|
|
$
|
2,499
|
|
Expenses
|
2,011
|
|
|
1,789
|
|
||
Adjusted operating earnings
|
$
|
465
|
|
|
$
|
710
|
|
Protection
|
|
|
|
||||
Net revenues
|
$
|
2,206
|
|
|
$
|
2,044
|
|
Expenses
|
1,963
|
|
|
1,828
|
|
||
Adjusted operating earnings
|
$
|
243
|
|
|
$
|
216
|
|
Corporate & Other
|
|
|
|
||||
Net revenues
|
$
|
226
|
|
|
$
|
173
|
|
Expenses
|
520
|
|
|
599
|
|
||
Adjusted operating loss
|
$
|
(294
|
)
|
|
$
|
(426
|
)
|
Segment Pretax Adjusted Operating Increase (Decrease)
|
|
2018
|
|
2017
|
||||||||||||||||||||
Annuities
|
|
Protection
|
|
Corporate
|
Annuities
|
|
Protection
|
|
Corporate
|
|||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Other revenues
|
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(47
|
)
|
|
$
|
—
|
|
Total revenues
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefits, claims, losses and settlement expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
LTC loss recognition
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||
Unlocking
|
|
18
|
|
|
101
|
|
|
1
|
|
|
(119
|
)
|
|
(14
|
)
|
|
1
|
|
||||||
Total benefits, claims, losses and settlement expenses
|
|
18
|
|
|
101
|
|
|
52
|
|
|
(119
|
)
|
|
(14
|
)
|
|
58
|
|
||||||
Amortization of DAC
|
|
(17
|
)
|
|
(18
|
)
|
|
—
|
|
|
(1
|
)
|
|
(13
|
)
|
|
—
|
|
||||||
Total expenses
|
|
1
|
|
|
83
|
|
|
52
|
|
|
(120
|
)
|
|
(27
|
)
|
|
58
|
|
||||||
Pretax income
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(52
|
)
|
|
$
|
120
|
|
|
$
|
(20
|
)
|
|
$
|
(58
|
)
|
|
2018
|
|
2017
|
||||
(in billions)
|
|||||||
Beginning balance
|
$
|
248.2
|
|
|
$
|
201.1
|
|
Inflows from acquisition (1)
|
—
|
|
|
0.7
|
|
||
Other net flows
|
21.1
|
|
|
18.8
|
|
||
Net flows
|
21.1
|
|
|
19.5
|
|
||
Market appreciation (depreciation) and other
|
(17.8
|
)
|
|
27.6
|
|
||
Ending balance
|
$
|
251.5
|
|
|
$
|
248.2
|
|
|
|
|
|
||||
Advisory wrap account assets ending balance (2)
|
$
|
249.1
|
|
|
$
|
245.8
|
|
Average advisory wrap account assets (3)
|
$
|
255.5
|
|
|
$
|
222.1
|
|
(1)
|
Inflows associated with acquisition that closed during the period.
|
(2)
|
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.
|
(3)
|
Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Management and financial advice fees
|
$
|
3,538
|
|
|
$
|
3,153
|
|
|
$
|
385
|
|
|
12
|
%
|
Distribution fees
|
2,241
|
|
|
2,095
|
|
|
146
|
|
|
7
|
|
|||
Net investment income
|
316
|
|
|
239
|
|
|
77
|
|
|
32
|
|
|||
Other revenues
|
183
|
|
|
177
|
|
|
6
|
|
|
3
|
|
|||
Total revenues
|
6,278
|
|
|
5,664
|
|
|
614
|
|
|
11
|
|
|||
Banking and deposit interest expense
|
89
|
|
|
48
|
|
|
41
|
|
|
85
|
|
|||
Total net revenues
|
6,189
|
|
|
5,616
|
|
|
573
|
|
|
10
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
3,521
|
|
|
3,245
|
|
|
276
|
|
|
9
|
|
|||
Interest and debt expense
|
10
|
|
|
9
|
|
|
1
|
|
|
11
|
|
|||
General and administrative expense
|
1,269
|
|
|
1,199
|
|
|
70
|
|
|
6
|
|
|||
Total expenses
|
4,800
|
|
|
4,453
|
|
|
347
|
|
|
8
|
|
|||
Adjusted operating earnings
|
$
|
1,389
|
|
|
$
|
1,163
|
|
|
$
|
226
|
|
|
19
|
%
|
Columbia
Mutual Fund Rankings in top 2 Lipper Quartiles
|
2018
|
|
2017
|
||||
Domestic Equity
|
Equal weighted
|
1 year
|
46
|
%
|
|
69
|
%
|
|
|
3 year
|
50
|
%
|
|
75
|
%
|
|
|
5 year
|
63
|
%
|
|
69
|
%
|
|
Asset weighted
|
1 year
|
56
|
%
|
|
73
|
%
|
|
|
3 year
|
56
|
%
|
|
83
|
%
|
|
|
5 year
|
68
|
%
|
|
80
|
%
|
International Equity
|
Equal weighted
|
1 year
|
35
|
%
|
|
75
|
%
|
|
|
3 year
|
60
|
%
|
|
60
|
%
|
|
|
5 year
|
60
|
%
|
|
70
|
%
|
|
Asset weighted
|
1 year
|
49
|
%
|
|
52
|
%
|
|
|
3 year
|
69
|
%
|
|
47
|
%
|
|
|
5 year
|
65
|
%
|
|
54
|
%
|
Taxable Fixed Income
|
Equal weighted
|
1 year
|
50
|
%
|
|
67
|
%
|
|
|
3 year
|
71
|
%
|
|
83
|
%
|
|
|
5 year
|
75
|
%
|
|
82
|
%
|
|
Asset weighted
|
1 year
|
48
|
%
|
|
69
|
%
|
|
|
3 year
|
75
|
%
|
|
89
|
%
|
|
|
5 year
|
82
|
%
|
|
89
|
%
|
Tax Exempt Fixed Income
|
Equal weighted
|
1 year
|
89
|
%
|
|
79
|
%
|
|
|
3 year
|
100
|
%
|
|
89
|
%
|
|
|
5 year
|
89
|
%
|
|
100
|
%
|
|
Asset weighted
|
1 year
|
86
|
%
|
|
76
|
%
|
|
|
3 year
|
100
|
%
|
|
93
|
%
|
|
|
5 year
|
98
|
%
|
|
100
|
%
|
Asset Allocation Funds
|
Equal weighted
|
1 year
|
46
|
%
|
|
62
|
%
|
|
|
3 year
|
64
|
%
|
|
80
|
%
|
|
|
5 year
|
100
|
%
|
|
78
|
%
|
|
Asset weighted
|
1 year
|
65
|
%
|
|
51
|
%
|
|
|
3 year
|
50
|
%
|
|
94
|
%
|
|
|
5 year
|
100
|
%
|
|
94
|
%
|
Number of funds with 4 or 5 Morningstar star ratings
|
|
Overall
|
52
|
|
|
52
|
|
|
|
3 year
|
46
|
|
|
56
|
|
|
|
5 year
|
49
|
|
|
50
|
|
Percent of funds with 4 or 5 Morningstar star ratings
|
|
Overall
|
50
|
%
|
|
51
|
%
|
|
|
3 year
|
44
|
%
|
|
55
|
%
|
|
|
5 year
|
49
|
%
|
|
51
|
%
|
Percent of assets with 4 or 5 Morningstar star ratings
|
|
Overall
|
67
|
%
|
|
60
|
%
|
|
|
3 year
|
50
|
%
|
|
63
|
%
|
|
|
5 year
|
59
|
%
|
|
59
|
%
|
Threadneedle
Retail Fund Rankings in Top 2 Morningstar Quartiles or Above Index Benchmark
|
2018
|
|
2017
|
||||
Equity
|
Equal weighted
|
1 year
|
40
|
%
|
|
59
|
%
|
|
|
3 year
|
39
|
%
|
|
64
|
%
|
|
|
5 year
|
70
|
%
|
|
63
|
%
|
|
Asset weighted
|
1 year
|
51
|
%
|
|
56
|
%
|
|
|
3 year
|
53
|
%
|
|
60
|
%
|
|
|
5 year
|
79
|
%
|
|
63
|
%
|
Fixed Income
|
Equal weighted
|
1 year
|
60
|
%
|
|
83
|
%
|
|
|
3 year
|
76
|
%
|
|
82
|
%
|
|
|
5 year
|
69
|
%
|
|
72
|
%
|
|
Asset weighted
|
1 year
|
66
|
%
|
|
93
|
%
|
|
|
3 year
|
94
|
%
|
|
95
|
%
|
|
|
5 year
|
89
|
%
|
|
88
|
%
|
Allocation (Managed) Funds
|
Equal weighted
|
1 year
|
38
|
%
|
|
67
|
%
|
|
|
3 year
|
75
|
%
|
|
78
|
%
|
|
|
5 year
|
86
|
%
|
|
100
|
%
|
|
Asset weighted
|
1 year
|
41
|
%
|
|
60
|
%
|
|
|
3 year
|
84
|
%
|
|
97
|
%
|
|
|
5 year
|
95
|
%
|
|
100
|
%
|
|
December 31,
|
|
Change
|
|
Average (1)
|
|
Change
|
||||||||||||||||||||||
December 31,
|
|||||||||||||||||||||||||||||
2018
|
|
2017
|
2018
|
|
2017
|
||||||||||||||||||||||||
(in billions)
|
|||||||||||||||||||||||||||||
Equity
|
$
|
229.0
|
|
|
$
|
275.4
|
|
|
$
|
(46.4
|
)
|
|
(17
|
)%
|
|
$
|
266.4
|
|
|
$
|
258.4
|
|
|
$
|
8.0
|
|
|
3
|
%
|
Fixed income
|
160.9
|
|
|
173.6
|
|
|
(12.7
|
)
|
|
(7
|
)
|
|
168.9
|
|
|
177.0
|
|
|
(8.1
|
)
|
|
(5
|
)
|
||||||
Money market
|
5.1
|
|
|
5.4
|
|
|
(0.3
|
)
|
|
(6
|
)
|
|
5.7
|
|
|
5.8
|
|
|
(0.1
|
)
|
|
(2
|
)
|
||||||
Alternative
|
3.1
|
|
|
5.6
|
|
|
(2.5
|
)
|
|
(45
|
)
|
|
4.4
|
|
|
6.8
|
|
|
(2.4
|
)
|
|
(35
|
)
|
||||||
Hybrid and other
|
32.6
|
|
|
34.6
|
|
|
(2.0
|
)
|
|
(6
|
)
|
|
34.2
|
|
|
27.5
|
|
|
6.7
|
|
|
24
|
|
||||||
Total managed assets
|
$
|
430.7
|
|
|
$
|
494.6
|
|
|
$
|
(63.9
|
)
|
|
(13
|
)%
|
|
$
|
479.6
|
|
|
$
|
475.5
|
|
|
$
|
4.1
|
|
|
1
|
%
|
|
Years Ended December 31,
|
||||||
2018
|
|
2017
|
|||||
(in billions)
|
|||||||
Global Retail Funds
|
|
|
|
|
|
||
Beginning assets
|
$
|
287.8
|
|
|
$
|
259.9
|
|
Inflows
|
53.0
|
|
|
50.9
|
|
||
Outflows
|
(67.2
|
)
|
|
(60.0
|
)
|
||
Net VP/VIT fund flows
|
(3.0
|
)
|
|
(3.3
|
)
|
||
Net new flows
|
(17.2
|
)
|
|
(12.4
|
)
|
||
Reinvested dividends
|
11.6
|
|
|
9.8
|
|
||
Net flows
|
(5.6
|
)
|
|
(2.6
|
)
|
||
Distributions
|
(13.8
|
)
|
|
(11.7
|
)
|
||
Market appreciation (depreciation) and other
|
(18.2
|
)
|
|
38.4
|
|
||
Foreign currency translation (1)
|
(2.3
|
)
|
|
3.8
|
|
||
Total ending assets
|
247.9
|
|
|
287.8
|
|
||
|
|
|
|
||||
Global Institutional
|
|
|
|
|
|||
Beginning assets
|
206.8
|
|
|
194.5
|
|
||
Inflows
|
21.6
|
|
|
24.7
|
|
||
Inflows from acquisitions (2)
|
—
|
|
|
5.4
|
|
||
Outflows
|
(37.2
|
)
|
|
(44.2
|
)
|
||
Net flows
|
(15.6
|
)
|
|
(14.1
|
)
|
||
Market appreciation (depreciation) and other (3)
|
(4.5
|
)
|
|
18.8
|
|
||
Foreign currency translation (1)
|
(3.9
|
)
|
|
7.6
|
|
||
Total ending assets
|
182.8
|
|
|
206.8
|
|
||
Total managed assets
|
$
|
430.7
|
|
|
$
|
494.6
|
|
Total net flows
|
$
|
(21.2
|
)
|
|
$
|
(16.7
|
)
|
|
|
|
|
||||
Former Parent Company Related (4)
|
|
|
|
||||
Retail net new flows
|
$
|
(2.8
|
)
|
|
$
|
(3.0
|
)
|
Institutional net new flows
|
(5.2
|
)
|
|
(12.2
|
)
|
||
Total net new flows
|
$
|
(8.0
|
)
|
|
$
|
(15.2
|
)
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
2,540
|
|
|
$
|
2,569
|
|
|
$
|
(29
|
)
|
|
(1
|
)%
|
Distribution fees
|
433
|
|
|
458
|
|
|
(25
|
)
|
|
(5
|
)
|
|||
Net investment income
|
19
|
|
|
28
|
|
|
(9
|
)
|
|
(32
|
)
|
|||
Other revenues
|
19
|
|
|
17
|
|
|
2
|
|
|
12
|
|
|||
Total revenues
|
3,011
|
|
|
3,072
|
|
|
(61
|
)
|
|
(2
|
)
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
3,011
|
|
|
3,072
|
|
|
(61
|
)
|
|
(2
|
)
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
961
|
|
|
998
|
|
|
(37
|
)
|
|
(4
|
)
|
|||
Amortization of deferred acquisition costs
|
13
|
|
|
15
|
|
|
(2
|
)
|
|
(13
|
)
|
|||
Interest and debt expense
|
24
|
|
|
22
|
|
|
2
|
|
|
9
|
|
|||
General and administrative expense
|
1,285
|
|
|
1,297
|
|
|
(12
|
)
|
|
(1
|
)
|
|||
Total expenses
|
2,283
|
|
|
2,332
|
|
|
(49
|
)
|
|
(2
|
)
|
|||
Adjusted operating earnings
|
$
|
728
|
|
|
$
|
740
|
|
|
$
|
(12
|
)
|
|
(2
|
)%
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
792
|
|
|
$
|
790
|
|
|
$
|
2
|
|
|
—
|
%
|
Distribution fees
|
347
|
|
|
346
|
|
|
1
|
|
|
—
|
|
|||
Net investment income
|
644
|
|
|
697
|
|
|
(53
|
)
|
|
(8
|
)
|
|||
Premiums
|
108
|
|
|
116
|
|
|
(8
|
)
|
|
(7
|
)
|
|||
Other revenues
|
585
|
|
|
550
|
|
|
35
|
|
|
6
|
|
|||
Total revenues
|
2,476
|
|
|
2,499
|
|
|
(23
|
)
|
|
(1
|
)
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
2,476
|
|
|
2,499
|
|
|
(23
|
)
|
|
(1
|
)
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
432
|
|
|
428
|
|
|
4
|
|
|
1
|
|
|||
Interest credited to fixed accounts
|
461
|
|
|
473
|
|
|
(12
|
)
|
|
(3
|
)
|
|||
Benefits, claims, losses and settlement expenses
|
677
|
|
|
467
|
|
|
210
|
|
|
45
|
|
|||
Amortization of deferred acquisition costs
|
200
|
|
|
181
|
|
|
19
|
|
|
10
|
|
|||
Interest and debt expense
|
40
|
|
|
35
|
|
|
5
|
|
|
14
|
|
|||
General and administrative expense
|
201
|
|
|
205
|
|
|
(4
|
)
|
|
(2
|
)
|
|||
Total expenses
|
2,011
|
|
|
1,789
|
|
|
222
|
|
|
12
|
|
|||
Adjusted operating earnings
|
$
|
465
|
|
|
$
|
710
|
|
|
$
|
(245
|
)
|
|
(35
|
)%
|
•
|
The impact of unlocking was an $18 million expense for the year ended December 31, 2018 compared to a $119 million benefit for the prior year. See our Consolidated Results of Operations section for discussion of the drivers of unlocking.
|
•
|
The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance was an expense of $12 million for the year ended December 31, 2018 compared to a benefit of $47 million for the prior year.
|
•
|
A $25 million increase in expense related to higher reserve funding driven by the impact of higher variable annuity guaranteed benefit rider charges.
|
•
|
The impact on DAC from actual versus expected market performance was an expense of $19 million for the year ended December 31, 2018 compared to a benefit of $34 million for the prior year.
|
•
|
The impact of unlocking was a benefit of $17 million for the year ended December 31, 2018 compared to a benefit of $1 million for the prior year. See our Consolidated Results of Operations section for discussion of the drivers of unlocking.
|
•
|
The positive impact on DAC from lower than expected lapses on variable annuities was $10 million.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
52
|
|
|
$
|
53
|
|
|
$
|
(1
|
)
|
|
(2
|
)%
|
Distribution fees
|
99
|
|
|
96
|
|
|
3
|
|
|
3
|
|
|||
Net investment income
|
347
|
|
|
338
|
|
|
9
|
|
|
3
|
|
|||
Premiums
|
1,245
|
|
|
1,204
|
|
|
41
|
|
|
3
|
|
|||
Other revenues
|
463
|
|
|
353
|
|
|
110
|
|
|
31
|
|
|||
Total revenues
|
2,206
|
|
|
2,044
|
|
|
162
|
|
|
8
|
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
2,206
|
|
|
2,044
|
|
|
162
|
|
|
8
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
69
|
|
|
68
|
|
|
1
|
|
|
1
|
|
|||
Interest credited to fixed accounts
|
200
|
|
|
186
|
|
|
14
|
|
|
8
|
|
|||
Benefits, claims, losses and settlement expenses
|
1,324
|
|
|
1,209
|
|
|
115
|
|
|
10
|
|
|||
Amortization of deferred acquisition costs
|
89
|
|
|
96
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Interest and debt expense
|
26
|
|
|
25
|
|
|
1
|
|
|
4
|
|
|||
General and administrative expense
|
255
|
|
|
244
|
|
|
11
|
|
|
5
|
|
|||
Total expenses
|
1,963
|
|
|
1,828
|
|
|
135
|
|
|
7
|
|
|||
Adjusted operating earnings
|
$
|
243
|
|
|
$
|
216
|
|
|
$
|
27
|
|
|
13
|
%
|
•
|
The impact of unlocking was an expense of $101 million for the year ended December 31, 2018 compared to a benefit of $14 million for the prior year. See our Consolidated Results of Operations section for discussion of the drivers of unlocking.
|
•
|
A $4 million increase in auto and home expenses due to a 3% increase in auto policies in force and a higher non-catastrophe loss ratio, partially offset by lower catastrophe losses. Catastrophe losses (net of the impact of reinsurance), which were higher than anticipated due to storms and California wildfires, were $82 million for the year ended December 31, 2018 compared to $122 million for the prior year. Our reinsurance program resulted in ceded losses of approximately $42 million for the year ended December 31, 2018 compared to $104 million for the prior year.
|
•
|
A $14 million decrease in DI claims, partially offset by a $4 million increase in life claims.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net investment income
|
$
|
119
|
|
|
$
|
60
|
|
|
$
|
59
|
|
|
98
|
%
|
Premiums
|
107
|
|
|
109
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Other revenues
|
6
|
|
|
7
|
|
|
(1
|
)
|
|
(14
|
)
|
|||
Total revenues
|
232
|
|
|
176
|
|
|
56
|
|
|
32
|
|
|||
Banking and deposit interest expense
|
6
|
|
|
3
|
|
|
3
|
|
|
NM
|
|
|||
Total net revenues
|
226
|
|
|
173
|
|
|
53
|
|
|
31
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|||||
Distribution expenses
|
(11
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||
Benefits, claims, losses and settlement expenses
|
306
|
|
|
313
|
|
|
(7
|
)
|
|
(2
|
)
|
|||
Amortization of deferred acquisition costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Interest and debt expense
|
25
|
|
|
27
|
|
|
(2
|
)
|
|
(7
|
)
|
|||
General and administrative expense
|
200
|
|
|
270
|
|
|
(70
|
)
|
|
(26
|
)
|
|||
Total expenses
|
520
|
|
|
599
|
|
|
(79
|
)
|
|
(13
|
)
|
|||
Adjusted operating loss
|
$
|
(294
|
)
|
|
$
|
(426
|
)
|
|
$
|
132
|
|
|
31
|
%
|
NM Not Meaningful.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Management and financial advice fees
|
$
|
6,415
|
|
|
$
|
5,802
|
|
|
$
|
613
|
|
|
11
|
%
|
Distribution fees
|
1,757
|
|
|
1,781
|
|
|
(24
|
)
|
|
(1
|
)
|
|||
Net investment income
|
1,509
|
|
|
1,576
|
|
|
(67
|
)
|
|
(4
|
)
|
|||
Premiums
|
1,394
|
|
|
1,491
|
|
|
(97
|
)
|
|
(7
|
)
|
|||
Other revenues
|
1,105
|
|
|
1,189
|
|
|
(84
|
)
|
|
(7
|
)
|
|||
Total revenues
|
12,180
|
|
|
11,839
|
|
|
341
|
|
|
3
|
|
|||
Banking and deposit interest expense
|
48
|
|
|
39
|
|
|
9
|
|
|
23
|
|
|||
Total net revenues
|
12,132
|
|
|
11,800
|
|
|
332
|
|
|
3
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
3,397
|
|
|
3,200
|
|
|
197
|
|
|
6
|
|
|||
Interest credited to fixed accounts
|
656
|
|
|
623
|
|
|
33
|
|
|
5
|
|
|||
Benefits, claims, losses and settlement expenses
|
2,233
|
|
|
2,646
|
|
|
(413
|
)
|
|
(16
|
)
|
|||
Amortization of deferred acquisition costs
|
267
|
|
|
415
|
|
|
(148
|
)
|
|
(36
|
)
|
|||
Interest and debt expense
|
207
|
|
|
241
|
|
|
(34
|
)
|
|
(14
|
)
|
|||
General and administrative expense
|
3,158
|
|
|
3,084
|
|
|
74
|
|
|
2
|
|
|||
Total expenses
|
9,918
|
|
|
10,209
|
|
|
(291
|
)
|
|
(3
|
)
|
|||
Pretax income
|
2,214
|
|
|
1,591
|
|
|
623
|
|
|
39
|
|
|||
Income tax provision
|
734
|
|
|
278
|
|
|
456
|
|
|
NM
|
|
|||
Net income
|
$
|
1,480
|
|
|
$
|
1,313
|
|
|
$
|
167
|
|
|
13
|
%
|
NM Not Meaningful.
|
Pretax Increase (Decrease)
|
2017
|
|
2016
|
|||||
|
(in millions)
|
|||||||
Other revenues
|
$
|
(47
|
)
|
|
$
|
64
|
|
|
Total revenues
|
(47
|
)
|
|
64
|
|
|||
|
|
|
|
|||||
Distribution expenses:
|
|
|
|
|
||||
LTC loss recognition
|
—
|
|
|
(27
|
)
|
|||
Benefits, claims, losses and settlement expenses:
|
|
|
|
|
||||
LTC loss recognition
|
57
|
|
|
—
|
|
|||
Unlocking impact
|
(139
|
)
|
|
229
|
|
|||
Total benefits, claims, losses and settlement expenses
|
(82
|
)
|
|
229
|
|
|||
Amortization of DAC:
|
|
|
|
|
||||
LTC loss recognition
|
—
|
|
|
58
|
|
|||
Unlocking impact
|
(12
|
)
|
|
23
|
|
|||
Total amortization of DAC
|
(12
|
)
|
|
81
|
|
|||
Total expenses
|
(94
|
)
|
|
283
|
|
|||
Pretax income (1)
|
$
|
47
|
|
|
$
|
(219
|
)
|
•
|
The year ended December 31, 2017 included a $139 million benefit from unlocking compared to a $229 million expense in the prior year. The unlocking impact for the year ended December 31, 2017 primarily reflected a benefit from updates to market-related inputs to our living benefit valuation. The unlocking impact for the prior year primarily reflected low interest rates and an unfavorable impact from persistency on living benefit reserves, partially offset by a benefit from updates to withdrawal utilization and fee assumptions, as well as market-related inputs related to our living benefit valuation.
|
•
|
A $39 million increase in LTC reserves in the prior year, which included a $29 million out-of-period correction related to our claim utilization factor, a $5 million out-of-period correction related to our waiver of premium claim reserve and a $5 million impact from assumption changes for our active life reserve valuation as a result of loss recognition.
|
•
|
The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance was a benefit of $47 million for the year ended December 31, 2017 reflecting favorable equity market and bond fund returns compared to a benefit of $12 million for the prior year.
|
•
|
A $64 million decrease in auto and home expenses reflecting the impact of new reinsurance arrangements and a lower non-catastrophe loss ratio, partially offset by higher gross catastrophe losses. Catastrophe losses, net of the impact of reinsurance, were $122 million for the year ended December 31, 2017 compared to $104 million for the prior year. The expanded reinsurance program resulted in ceded losses of approximately $104 million for the year ended December 31, 2017.
|
•
|
A $57 million expense from loss recognition on the closed block LTC insurance products for the year ended December 31, 2017.
|
•
|
A $31 million increase in expense related to higher reserve funding driven by the impact of higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date.
|
•
|
A $21 million negative impact in 2017 from changes in assumptions in the prior year unlocking process that resulted in ongoing increases to living benefit reserves.
|
•
|
The impact of unlocking was a benefit of $12 million for the year ended December 31, 2017 compared to an expense of $23 million for the prior year. The impact of unlocking for the year ended December 31, 2017 primarily reflected improved persistency and mortality on life insurance contracts and a $10 million benefit from a correction related to a variable annuity model assumption, partially offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking in the prior year primarily reflected low interest rates that more than offset benefits from persistency on annuity contracts without living benefits.
|
•
|
In 2016, we wrote-off DAC of $58 million in connection with the loss recognition on LTC insurance products.
|
•
|
The impact on DAC from actual versus expected market performance was a benefit of $36 million for the year ended December 31, 2017 compared to a benefit of $6 million for the prior year.
|
•
|
The DAC offset to the market impact on IUL benefits (net of hedges, unearned revenue amortization and the reinsurance accrual) was nil for the year ended December 31, 2017 compared to an expense of $18 million for the prior year.
|
|
Years Ended December 31,
|
||||||
2017
|
|
2016
|
|||||
(in millions)
|
|||||||
Advice & Wealth Management
|
|
|
|
|
|
||
Net revenues
|
$
|
5,616
|
|
|
$
|
5,144
|
|
Expenses
|
4,453
|
|
|
4,234
|
|
||
Adjusted operating earnings
|
$
|
1,163
|
|
|
$
|
910
|
|
Asset Management
|
|
|
|
||||
Net revenues
|
$
|
3,072
|
|
|
$
|
2,960
|
|
Expenses
|
2,332
|
|
|
2,339
|
|
||
Adjusted operating earnings
|
$
|
740
|
|
|
$
|
621
|
|
Annuities
|
|
|
|
||||
Net revenues
|
$
|
2,499
|
|
|
$
|
2,463
|
|
Expenses
|
1,789
|
|
|
2,134
|
|
||
Adjusted operating earnings
|
$
|
710
|
|
|
$
|
329
|
|
Protection
|
|
|
|
||||
Net revenues
|
$
|
2,044
|
|
|
$
|
2,241
|
|
Expenses
|
1,828
|
|
|
1,978
|
|
||
Adjusted operating earnings
|
$
|
216
|
|
|
$
|
263
|
|
Corporate & Other
|
|
|
|
||||
Net revenues
|
$
|
173
|
|
|
$
|
237
|
|
Expenses
|
599
|
|
|
596
|
|
||
Adjusted operating loss
|
$
|
(426
|
)
|
|
$
|
(359
|
)
|
Segment Pretax Adjusted Operating Increase (Decrease)
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
Annuities
|
|
Protection
|
|
Corporate
|
Annuities
|
|
Protection
|
|
Corporate
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Other revenues
|
|
$
|
—
|
|
|
$
|
(47
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
—
|
|
Total revenues
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distribution expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
LTC loss recognition
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||
Benefits, claims, losses and settlement expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
LTC loss recognition
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Unlocking impact
|
|
(119
|
)
|
|
(14
|
)
|
|
1
|
|
|
197
|
|
|
40
|
|
|
6
|
|
||||||
Total benefits, claims, losses and settlement expenses
|
|
(119
|
)
|
|
(14
|
)
|
|
58
|
|
|
197
|
|
|
40
|
|
|
6
|
|
||||||
Amortization of DAC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
LTC loss recognition
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||
Unlocking impact
|
|
(1
|
)
|
|
(13
|
)
|
|
—
|
|
|
18
|
|
|
7
|
|
|
—
|
|
||||||
Total amortization of DAC
|
|
(1
|
)
|
|
(13
|
)
|
|
—
|
|
|
18
|
|
|
7
|
|
|
58
|
|
||||||
Total expenses
|
|
(120
|
)
|
|
(27
|
)
|
|
58
|
|
|
215
|
|
|
47
|
|
|
37
|
|
||||||
Pretax income
|
|
$
|
120
|
|
|
$
|
(20
|
)
|
|
$
|
(58
|
)
|
|
$
|
(215
|
)
|
|
$
|
17
|
|
|
$
|
(37
|
)
|
|
2017
|
|
2016
|
||||
(in billions)
|
|||||||
Beginning balance
|
$
|
201.1
|
|
|
$
|
180.5
|
|
Inflows from acquisition (1)
|
0.7
|
|
|
—
|
|
||
Other net flows
|
18.8
|
|
|
10.2
|
|
||
Net flows
|
19.5
|
|
|
10.2
|
|
||
Market appreciation (depreciation) and other
|
27.6
|
|
|
10.4
|
|
||
Ending balance
|
$
|
248.2
|
|
|
$
|
201.1
|
|
|
|
|
|
||||
Advisory wrap account assets ending balance (2)
|
$
|
245.8
|
|
|
$
|
198.9
|
|
Average advisory wrap account assets (3)
|
$
|
222.1
|
|
|
$
|
187.3
|
|
(1)
|
Inflows associated with acquisition that closed during the period.
|
(2)
|
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.
|
(3)
|
Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Management and financial advice fees
|
$
|
3,153
|
|
|
$
|
2,711
|
|
|
$
|
442
|
|
|
16
|
%
|
Distribution fees
|
2,095
|
|
|
2,119
|
|
|
(24
|
)
|
|
(1
|
)
|
|||
Net investment income
|
239
|
|
|
186
|
|
|
53
|
|
|
28
|
|
|||
Other revenues
|
177
|
|
|
167
|
|
|
10
|
|
|
6
|
|
|||
Total revenues
|
5,664
|
|
|
5,183
|
|
|
481
|
|
|
9
|
|
|||
Banking and deposit interest expense
|
48
|
|
|
39
|
|
|
9
|
|
|
23
|
|
|||
Total net revenues
|
5,616
|
|
|
5,144
|
|
|
472
|
|
|
9
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||
Distribution expenses
|
3,245
|
|
|
3,072
|
|
|
173
|
|
|
6
|
|
|||
Interest and debt expense
|
9
|
|
|
8
|
|
|
1
|
|
|
13
|
|
|||
General and administrative expense
|
1,199
|
|
|
1,154
|
|
|
45
|
|
|
4
|
|
|||
Total expenses
|
4,453
|
|
|
4,234
|
|
|
219
|
|
|
5
|
|
|||
Adjusted operating earnings
|
$
|
1,163
|
|
|
$
|
910
|
|
|
$
|
253
|
|
|
28
|
%
|
|
December 31,
|
|
Change
|
|
Average (1)
|
|
Change
|
||||||||||||||||||||||
December 31,
|
|||||||||||||||||||||||||||||
2017
|
|
2016
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
(in billions)
|
||||||||||||||||||||||||||||
Equity
|
$
|
275.4
|
|
|
$
|
240.0
|
|
|
$
|
35.4
|
|
|
15
|
%
|
|
$
|
258.4
|
|
|
$
|
242.7
|
|
|
$
|
15.7
|
|
|
6
|
%
|
Fixed income
|
173.6
|
|
|
175.9
|
|
|
(2.3
|
)
|
|
(1
|
)
|
|
177.0
|
|
|
179.0
|
|
|
(2.0
|
)
|
|
(1
|
)
|
||||||
Money market
|
5.4
|
|
|
6.3
|
|
|
(0.9
|
)
|
|
(14
|
)
|
|
5.8
|
|
|
7.1
|
|
|
(1.3
|
)
|
|
(18
|
)
|
||||||
Alternative
|
5.6
|
|
|
7.4
|
|
|
(1.8
|
)
|
|
(24
|
)
|
|
6.8
|
|
|
7.5
|
|
|
(0.7
|
)
|
|
(9
|
)
|
||||||
Hybrid and other
|
34.6
|
|
|
24.8
|
|
|
9.8
|
|
|
40
|
|
|
27.5
|
|
|
24.5
|
|
|
3.0
|
|
|
12
|
|
||||||
Total managed assets
|
$
|
494.6
|
|
|
$
|
454.4
|
|
|
$
|
40.2
|
|
|
9
|
%
|
|
$
|
475.5
|
|
|
$
|
460.8
|
|
|
$
|
14.7
|
|
|
3
|
%
|
|
Years Ended December 31,
|
||||||
2017
|
|
2016
|
|||||
(in billions)
|
|||||||
Global Retail Funds
|
|
|
|
|
|
||
Beginning assets
|
$
|
259.9
|
|
|
$
|
263.9
|
|
Inflows
|
50.9
|
|
|
52.2
|
|
||
Inflows from acquisitions (1)
|
—
|
|
|
1.0
|
|
||
Outflows
|
(60.0
|
)
|
|
(63.5
|
)
|
||
Net VP/VIT fund flows
|
(3.3
|
)
|
|
(2.0
|
)
|
||
Net new flows
|
(12.4
|
)
|
|
(12.3
|
)
|
||
Reinvested dividends
|
9.8
|
|
|
8.1
|
|
||
Net flows
|
(2.6
|
)
|
|
(4.2
|
)
|
||
Distributions
|
(11.7
|
)
|
|
(9.9
|
)
|
||
Market appreciation and other
|
38.4
|
|
|
15.2
|
|
||
Foreign currency translation (2)
|
3.8
|
|
|
(5.1
|
)
|
||
Total ending assets
|
287.8
|
|
|
259.9
|
|
||
|
|
|
|
|
|
||
Global Institutional
|
|
|
|
||||
Beginning assets
|
194.5
|
|
|
208.0
|
|
||
Inflows
|
24.7
|
|
|
24.1
|
|
||
Inflows from acquisitions (1)
|
5.4
|
|
|
—
|
|
||
Outflows
|
(44.2
|
)
|
|
(38.5
|
)
|
||
Net flows
|
(14.1
|
)
|
|
(14.4
|
)
|
||
Market appreciation and other (3)(4)
|
18.8
|
|
|
13.5
|
|
||
Foreign currency translation (2)
|
7.6
|
|
|
(12.6
|
)
|
||
Total ending assets
|
206.8
|
|
|
194.5
|
|
||
Total managed assets
|
$
|
494.6
|
|
|
$
|
454.4
|
|
Total net flows
|
$
|
(16.7
|
)
|
|
$
|
(18.6
|
)
|
|
|
|
|
|
|
||
Former Parent Company Related (5)
|
|
|
|
||||
Retail net new flows
|
$
|
(3.0
|
)
|
|
$
|
(1.3
|
)
|
Institutional net new flows
|
(12.2
|
)
|
|
(8.9
|
)
|
||
Total net new flows
|
$
|
(15.2
|
)
|
|
$
|
(10.2
|
)
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
2,569
|
|
|
$
|
2,448
|
|
|
$
|
121
|
|
|
5
|
%
|
Distribution fees
|
458
|
|
|
487
|
|
|
(29
|
)
|
|
(6
|
)
|
|||
Net investment income
|
28
|
|
|
14
|
|
|
14
|
|
|
NM
|
|
|||
Other revenues
|
17
|
|
|
11
|
|
|
6
|
|
|
55
|
|
|||
Total revenues
|
3,072
|
|
|
2,960
|
|
|
112
|
|
|
4
|
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
3,072
|
|
|
2,960
|
|
|
112
|
|
|
4
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||
Distribution expenses
|
998
|
|
|
1,017
|
|
|
(19
|
)
|
|
(2
|
)
|
|||
Amortization of deferred acquisition costs
|
15
|
|
|
18
|
|
|
(3
|
)
|
|
(17
|
)
|
|||
Interest and debt expense
|
22
|
|
|
21
|
|
|
1
|
|
|
5
|
|
|||
General and administrative expense
|
1,297
|
|
|
1,283
|
|
|
14
|
|
|
1
|
|
|||
Total expenses
|
2,332
|
|
|
2,339
|
|
|
(7
|
)
|
|
—
|
|
|||
Adjusted operating earnings
|
$
|
740
|
|
|
$
|
621
|
|
|
$
|
119
|
|
|
19
|
%
|
NM Not Meaningful.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
790
|
|
|
$
|
751
|
|
|
$
|
39
|
|
|
5
|
%
|
Distribution fees
|
346
|
|
|
330
|
|
|
16
|
|
|
5
|
|
|||
Net investment income
|
697
|
|
|
760
|
|
|
(63
|
)
|
|
(8
|
)
|
|||
Premiums
|
116
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|||
Other revenues
|
550
|
|
|
506
|
|
|
44
|
|
|
9
|
|
|||
Total revenues
|
2,499
|
|
|
2,463
|
|
|
36
|
|
|
1
|
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
2,499
|
|
|
2,463
|
|
|
36
|
|
|
1
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||
Distribution expenses
|
428
|
|
|
423
|
|
|
5
|
|
|
1
|
|
|||
Interest credited to fixed accounts
|
473
|
|
|
478
|
|
|
(5
|
)
|
|
(1
|
)
|
|||
Benefits, claims, losses and settlement expenses
|
467
|
|
|
780
|
|
|
(313
|
)
|
|
(40
|
)
|
|||
Amortization of deferred acquisition costs
|
181
|
|
|
209
|
|
|
(28
|
)
|
|
(13
|
)
|
|||
Interest and debt expense
|
35
|
|
|
33
|
|
|
2
|
|
|
6
|
|
|||
General and administrative expense
|
205
|
|
|
211
|
|
|
(6
|
)
|
|
(3
|
)
|
|||
Total expenses
|
1,789
|
|
|
2,134
|
|
|
(345
|
)
|
|
(16
|
)%
|
|||
Adjusted operating earnings
|
$
|
710
|
|
|
$
|
329
|
|
|
$
|
381
|
|
|
NM
|
|
NM Not Meaningful.
|
•
|
The impact of unlocking was a $119 million benefit for the year ended December 31, 2017 compared to a $197 million expense for the prior year. See our Consolidated Results of Operations section for discussion of the drivers of unlocking.
|
•
|
The impact on DSIC and reserves for insurance features in non-traditional long-duration contracts from actual versus expected market performance was a benefit of $47 million for the year ended December 31, 2017 compared to a benefit of $12 million for the prior year.
|
•
|
A $31 million increase in expense related to higher reserve funding driven by the impact of higher fees from variable annuity guarantee sales in the prior year where the fees start on the first anniversary date.
|
•
|
A $21 million negative impact in 2017 from changes in assumptions in the prior year unlocking process that resulted in ongoing increases to living benefit reserves.
|
•
|
The impact of unlocking was a benefit of $1 million for the year ended December 31, 2017 compared to an expense of $18 million for the prior year. See our Consolidated Results of Operations section for discussion of the drivers of unlocking.
|
•
|
The impact on DAC from actual versus expected market performance was a benefit of $34 million for the year ended December 31, 2017 compared to a benefit of $6 million for the prior year.
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
53
|
|
|
$
|
56
|
|
|
$
|
(3
|
)
|
|
(5
|
)%
|
Distribution fees
|
96
|
|
|
93
|
|
|
3
|
|
|
3
|
|
|||
Net investment income
|
338
|
|
|
330
|
|
|
8
|
|
|
2
|
|
|||
Premiums
|
1,204
|
|
|
1,286
|
|
|
(82
|
)
|
|
(6
|
)
|
|||
Other revenues
|
353
|
|
|
476
|
|
|
(123
|
)
|
|
(26
|
)
|
|||
Total revenues
|
2,044
|
|
|
2,241
|
|
|
(197
|
)
|
|
(9
|
)
|
|||
Banking and deposit interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
2,044
|
|
|
2,241
|
|
|
(197
|
)
|
|
(9
|
)
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||
Distribution expenses
|
68
|
|
|
70
|
|
|
(2
|
)
|
|
(3
|
)
|
|||
Interest credited to fixed accounts
|
186
|
|
|
175
|
|
|
11
|
|
|
6
|
|
|||
Benefits, claims, losses and settlement expenses
|
1,209
|
|
|
1,325
|
|
|
(116
|
)
|
|
(9
|
)
|
|||
Amortization of deferred acquisition costs
|
96
|
|
|
138
|
|
|
(42
|
)
|
|
(30
|
)
|
|||
Interest and debt expense
|
25
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|||
General and administrative expense
|
244
|
|
|
245
|
|
|
(1
|
)
|
|
—
|
|
|||
Total expenses
|
1,828
|
|
|
1,978
|
|
|
(150
|
)
|
|
(8
|
)
|
|||
Adjusted operating earnings
|
$
|
216
|
|
|
$
|
263
|
|
|
$
|
(47
|
)
|
|
(18
|
)%
|
|
Years Ended December 31,
|
|
Change
|
|||||||||||
2017
|
|
2016
|
||||||||||||
(in millions)
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net investment income
|
$
|
60
|
|
|
$
|
123
|
|
|
$
|
(63
|
)
|
|
(51
|
)%
|
Premiums
|
109
|
|
|
110
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Other revenues
|
7
|
|
|
5
|
|
|
2
|
|
|
40
|
|
|||
Total revenues
|
176
|
|
|
238
|
|
|
(62
|
)
|
|
(26
|
)
|
|||
Banking and deposit interest expense
|
3
|
|
|
1
|
|
|
2
|
|
|
NM
|
|
|||
Total net revenues
|
173
|
|
|
237
|
|
|
(64
|
)
|
|
(27
|
)
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution expenses
|
(11
|
)
|
|
(42
|
)
|
|
31
|
|
|
74
|
|
|||
Benefits, claims, losses and settlement expenses
|
313
|
|
|
294
|
|
|
19
|
|
|
6
|
|
|||
Amortization of deferred acquisition costs
|
—
|
|
|
63
|
|
|
(63
|
)
|
|
NM
|
|
|||
Interest and debt expense
|
27
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|||
General and administrative expense
|
270
|
|
|
254
|
|
|
16
|
|
|
6
|
|
|||
Total expenses
|
599
|
|
|
596
|
|
|
3
|
|
|
1
|
|
|||
Operating loss
|
$
|
(426
|
)
|
|
$
|
(359
|
)
|
|
$
|
(67
|
)
|
|
(19
|
)%
|
NM Not Meaningful.
|
|
Actual Capital
|
|
Regulatory
Capital Requirements
|
||||||||||
December 31,
|
December 31,
|
||||||||||||
2018
|
2017
|
2018
|
2017
|
||||||||||
(in millions)
|
|||||||||||||
RiverSource Life (1)(2)
|
$
|
3,382
|
|
$
|
2,451
|
|
|
$
|
675
|
|
$
|
562
|
|
RiverSource Life of NY (1)(2)
|
266
|
|
269
|
|
|
40
|
|
36
|
|
||||
IDS Property Casualty (1)(3)
|
789
|
|
781
|
|
|
233
|
|
214
|
|
||||
Ameriprise Insurance Company (1)(3)
|
49
|
|
48
|
|
|
3
|
|
3
|
|
||||
ACC (4)(5)
|
444
|
|
365
|
|
|
420
|
|
343
|
|
||||
Threadneedle Asset Management Holdings Sàrl (6)
|
218
|
|
426
|
|
|
173
|
|
170
|
|
||||
Ameriprise National Trust Bank (7)
|
24
|
|
22
|
|
|
10
|
|
10
|
|
||||
AFSI (3)(4)
|
108
|
|
63
|
|
|
#
|
|
#
|
|
||||
Ameriprise Captive Insurance Company (3)
|
51
|
|
51
|
|
|
9
|
|
8
|
|
||||
Ameriprise Trust Company (3)
|
32
|
|
31
|
|
|
27
|
|
27
|
|
||||
AEIS (3)(4)
|
136
|
|
125
|
|
|
23
|
|
22
|
|
||||
RiverSource Distributors, Inc. (3)(4)
|
13
|
|
12
|
|
|
#
|
|
#
|
|
||||
Columbia Management Investment Distributors, Inc. (3)(4)
|
18
|
|
16
|
|
|
#
|
|
#
|
|
||||
Investment Professionals, Inc. (8)
|
N/A
|
|
2
|
|
|
N/A
|
|
#
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in millions)
|
|||||||||||
RiverSource Life (1)
|
$
|
958
|
|
|
$
|
700
|
|
|
$
|
1,033
|
|
Ameriprise National Trust Bank
|
4
|
|
|
5
|
|
|
—
|
|
|||
ACC (2)
|
25
|
|
|
37
|
|
|
17
|
|
|||
Columbia Management Investment Advisers, LLC
|
395
|
|
|
388
|
|
|
296
|
|
|||
Columbia Management Investment Services Corporation
|
39
|
|
|
25
|
|
|
18
|
|
|||
Ameriprise International Holdings GmbH
|
446
|
|
|
367
|
|
|
233
|
|
|||
Ameriprise Trust Company
|
6
|
|
|
4
|
|
|
5
|
|
|||
Ameriprise Captive Insurance Company
|
64
|
|
|
64
|
|
|
64
|
|
|||
RiverSource Distributors, Inc.
|
12
|
|
|
12
|
|
|
14
|
|
|||
AMPF Holding Corporation
|
1,027
|
|
|
752
|
|
|
587
|
|
|||
Total capacity
|
$
|
2,976
|
|
|
$
|
2,354
|
|
|
$
|
2,267
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in millions)
|
|||||||||||
RiverSource Life
|
$
|
750
|
|
|
$
|
700
|
|
|
$
|
1,000
|
|
Ameriprise National Trust Bank
|
—
|
|
|
—
|
|
|
9
|
|
|||
ACC
|
(33
|
)
|
|
10
|
|
|
(33
|
)
|
|||
Columbia Management Investment Advisers, LLC (“CMIA”)
|
308
|
|
|
298
|
|
|
190
|
|
|||
Ameriprise International Holdings GmbH (1)
|
393
|
|
|
109
|
|
|
—
|
|
|||
IDS Property Casualty
|
—
|
|
|
—
|
|
|
(118
|
)
|
|||
Ameriprise Advisor Capital, LLC (“AAC”) (2)
|
401
|
|
|
(70
|
)
|
|
(46
|
)
|
|||
RiverSource Distributors, Inc.
|
—
|
|
|
—
|
|
|
3
|
|
|||
Ameriprise Captive Insurance Company
|
10
|
|
|
5
|
|
|
—
|
|
|||
AMPF Holding Corporation
|
840
|
|
|
614
|
|
|
450
|
|
|||
Total
|
$
|
2,669
|
|
|
$
|
1,666
|
|
|
$
|
1,455
|
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
2024 and Thereafter
|
||||||||||
(in millions)
|
|||||||||||||||||||
Balance Sheet
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt (1)
|
$
|
2,875
|
|
|
$
|
314
|
|
|
$
|
761
|
|
|
$
|
750
|
|
|
$
|
1,050
|
|
Insurance and annuities (2)
|
51,389
|
|
|
2,921
|
|
|
5,156
|
|
|
4,428
|
|
|
38,884
|
|
|||||
Investment certificates (3)
|
7,892
|
|
|
7,517
|
|
|
375
|
|
|
—
|
|
|
—
|
|
|||||
Deferred premium options (4)
|
1,469
|
|
|
294
|
|
|
403
|
|
|
368
|
|
|
404
|
|
|||||
Affordable housing and other real estate partnerships (5)
|
59
|
|
|
47
|
|
|
6
|
|
|
4
|
|
|
2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Off-Balance Sheet
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
|
278
|
|
|
61
|
|
|
93
|
|
|
59
|
|
|
65
|
|
|||||
Purchase obligations (6)
|
937
|
|
|
326
|
|
|
371
|
|
|
108
|
|
|
132
|
|
|||||
Interest on long-term debt (7)
|
433
|
|
|
117
|
|
|
138
|
|
|
123
|
|
|
55
|
|
|||||
Total
|
$
|
65,332
|
|
|
$
|
11,597
|
|
|
$
|
7,303
|
|
|
$
|
5,840
|
|
|
$
|
40,592
|
|
•
|
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;
|
•
|
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.
|
•
|
conditions in the interest rate, credit default, equity market and foreign exchange environments, including changes in valuations, liquidity and volatility;
|
•
|
changes in and the adoption of relevant accounting standards and securities rating agency standards and processes, as well as changes in the litigation and regulatory environment, including ongoing legal proceedings and regulatory actions, the frequency and extent of legal claims threatened or initiated by clients, other persons and regulators, and developments in regulation and legislation, including the rules and regulations implemented or that may be implemented or modified in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or in light of the U.S. Department of Labor’s fiduciary regulations (as well as state and other fiduciary rules, the SEC best interest standards, or similar standards such as the Certified Financial Planner Board standards) pertaining to the fiduciary status of investment advice providers to 401(k) plans, plan sponsors, plan participants and the holders of individual retirement or health savings accounts and related issues;
|
•
|
investment management performance and distribution partner and consumer acceptance of the Company’s products;
|
•
|
effects of competition in the financial services industry, including pricing pressure, the introduction of new products and services and changes in product distribution mix and distribution channels;
|
•
|
changes to the Company’s reputation that may arise from employee or advisor misconduct, legal or regulatory actions, cybersecurity incidents, perceptions of the financial services industry generally, improper management of conflicts of interest or otherwise;
|
•
|
the Company’s capital structure, including indebtedness, limitations on subsidiaries to pay dividends, and the extent, manner, terms and timing of any share or debt repurchases management may effect as well as the opinions of rating agencies and other analysts and the reactions of market participants or the Company’s regulators, advisors, distribution partners or customers in response to any change or prospect of change in any such opinion;
|
•
|
changes to the availability and cost of liquidity and the Company’s credit capacity that may arise due to shifts in market conditions, the Company’s credit ratings and the overall availability of credit;
|
•
|
risks of default, capacity constraint or repricing by issuers or guarantors of investments the Company owns or by counterparties to hedge, derivative, insurance or reinsurance arrangements or by manufacturers of products the Company distributes, experience deviations from the Company’s assumptions regarding such risks, the evaluations or the prospect of changes in evaluations of any such third parties published by rating agencies or other analysts, and the reactions of other market participants or the Company’s regulators, advisors, distribution partners or customers in response to any such evaluation or prospect of changes in evaluation;
|
•
|
experience deviations from the Company’s assumptions regarding morbidity, mortality, persistency and premium rate increases in certain annuity and insurance products (including, but not limited to, variable annuities and long term care policies), or from assumptions regarding market returns assumed in valuing or unlocking DAC and DSIC or market volatility underlying the Company’s valuation and hedging of guaranteed benefit annuity riders, or from assumptions regarding interest rates or asset yield assumed in the Company's loss recognition testing of its long term care business, or from assumptions regarding anticipated claims and losses relating to the Company’s auto and home insurance products;
|
•
|
changes in capital requirements that may be indicated, required or advised by regulators or rating agencies;
|
•
|
the impacts of the Company’s efforts to improve distribution economics and to grow third-party distribution of its products;
|
•
|
the ability to pursue and complete strategic transactions and initiatives, including acquisitions, divestitures, restructurings, joint ventures and the development of new products and services;
|
•
|
the ability to realize the financial, operating and business fundamental benefits of strategic transactions and initiatives the Company has completed, is pursuing or may pursue in the future, which may be impacted by the ability to obtain regulatory approvals, the ability to effectively manage related expenses and by market, business partner and consumer reactions to such strategic transactions and initiatives;
|
•
|
the ability and timing to realize savings and other benefits from re-engineering and tax planning;
|
•
|
interruptions or other failures in the Company’s communications, technology and other operating systems, including errors or failures caused by third-party service providers, interference or failures caused by third party attacks on the Company’s systems (or other cybersecurity incidents), or the failure to safeguard the privacy or confidentiality of sensitive information and data on such systems; and
|
•
|
general economic and political factors, including consumer confidence in the economy and the financial industry, the ability and inclination of consumers generally to invest as well as their ability and inclination to invest in financial instruments and products other than cash and cash equivalents, the costs of products and services the Company consumes in the conduct of its business, and applicable legislation and regulation and changes therein (such as the ongoing negotiations following the June 2016 UK referendum on membership in the European Union and the uncertain regulatory environment in the U.S. since the 2016 U.S. election), including tax laws, tax treaties, fiscal and central government treasury policy, and policies regarding the financial services industry and publicly-held firms, and regulatory rulings and pronouncements.
|
Equity Price Decline 10%
|
|
Equity Price Exposure to Pretax Income
|
|
||||||||||
Before Hedge Impact
|
|
Hedge Impact
|
|
Net Impact
|
|||||||||
|
|
(in millions)
|
|||||||||||
Asset-based management and distribution fees (1)
|
|
$
|
(232
|
)
|
|
$
|
4
|
|
|
$
|
(228
|
)
|
|
DAC and DSIC amortization (2)(3)
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|
|||
Variable annuity riders:
|
|
|
|
|
|
|
|
|
|||||
GMDB and GMIB (3)
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|
|||
GMWB (3)
|
|
(407
|
)
|
|
440
|
|
|
33
|
|
|
|||
GMAB
|
|
(24
|
)
|
|
26
|
|
|
2
|
|
|
|||
DAC and DSIC amortization (4)
|
|
N/A
|
|
|
N/A
|
|
|
(7
|
)
|
|
|||
Total variable annuity riders
|
|
(452
|
)
|
|
466
|
|
|
7
|
|
|
|||
Macro hedge program (5)
|
|
—
|
|
|
44
|
|
|
44
|
|
|
|||
Indexed annuities
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
|||
Certificates
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
|||
IUL insurance
|
|
18
|
|
|
(20
|
)
|
|
(2
|
)
|
|
|||
Total
|
|
$
|
(697
|
)
|
|
$
|
491
|
|
|
$
|
(213
|
)
|
(6)
|
Interest Rate Increase 100 Basis Points
|
|
Interest Rate Exposure to Pretax Income
|
|
||||||||||
Before Hedge Impact
|
|
Hedge Impact
|
|
Net Impact
|
|||||||||
|
|
(in millions)
|
|||||||||||
Asset-based management and distribution fees (1)
|
|
$
|
(54
|
)
|
|
$
|
—
|
|
|
$
|
(54
|
)
|
|
Variable annuity riders:
|
|
|
|
|
|
|
|
|
|||||
GMDB and GMIB
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
GMWB
|
|
912
|
|
|
(596
|
)
|
|
316
|
|
|
|||
GMAB
|
|
21
|
|
|
(9
|
)
|
|
12
|
|
|
|||
DAC and DSIC amortization (4)
|
|
N/A
|
|
|
N/A
|
|
|
(41
|
)
|
|
|||
Total variable annuity riders
|
|
933
|
|
|
(605
|
)
|
|
287
|
|
|
|||
Macro hedge program (5)
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
|||
Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products
|
|
57
|
|
|
—
|
|
|
57
|
|
|
|||
Brokerage client cash balances
|
|
122
|
|
|
—
|
|
|
122
|
|
|
|||
Certificates
|
|
16
|
|
|
—
|
|
|
16
|
|
|
|||
IUL insurance
|
|
114
|
|
|
2
|
|
|
116
|
|
|
|||
Total
|
|
$
|
1,188
|
|
|
$
|
(606
|
)
|
|
$
|
541
|
|
|
|
Account Values with Crediting Rates
|
||||||||||||||||||
At Guaranteed Minimum
|
|
1-49 bps above Guaranteed Minimum
|
|
50-99 bps above Guaranteed Minimum
|
|
100-150 bps above Guaranteed Minimum
|
|
Total
|
|||||||||||
(in billions, except percentages)
|
|||||||||||||||||||
Range of Guaranteed Minimum Crediting Rates
|
|
|
|
|
|
|
|
|
|
||||||||||
1% - 1.99%
|
$
|
1.2
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
2.1
|
|
2% - 2.99%
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
3% - 3.99%
|
8.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|||||
4% - 5.00%
|
5.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|||||
Total
|
$
|
15.6
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
16.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Percentage of Account Values That Reset In:
|
|
|
|
|
|
|
|
|
|
||||||||||
Next 12 months (1)
|
98
|
%
|
|
90
|
%
|
|
40
|
%
|
|
40
|
%
|
|
96
|
%
|
|||||
> 12 months to 24 months (2)
|
2
|
|
|
2
|
|
|
23
|
|
|
2
|
|
|
2
|
|
|||||
> 24 months (2)
|
—
|
|
|
8
|
|
|
37
|
|
|
58
|
|
|
2
|
|
|||||
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Report of Independent Registered Public Accounting Firm
|
|||
Consolidated Statements of Operations — Years Ended December 31, 2018, 2017 and 2016
|
|||
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2018, 2017 and 2016
|
|||
Consolidated Balance Sheets — December 31, 2018 and 2017
|
|||
Consolidated Statements of Equity — Years Ended December 31, 2018, 2017 and 2016
|
|||
Consolidated Statements of Cash Flows — Years Ended December 31, 2018, 2017 and 2016
|
|||
Notes to Consolidated Financial Statements
|
|||
1.
|
Basis of Presentation
|
||
2.
|
Summary of Significant Accounting Policies
|
||
3.
|
Recent Accounting Pronouncements
|
||
4.
|
Revenue from Contracts with Customers
|
||
5.
|
Variable Interest Entities
|
||
6.
|
Investments
|
||
7.
|
Financing Receivables
|
||
8.
|
Reinsurance
|
||
9.
|
Goodwill and Other Intangible Assets
|
||
10.
|
Deferred Acquisition Costs and Deferred Sales Inducement Costs
|
||
11.
|
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities
|
||
12.
|
Variable Annuity and Insurance Guarantees
|
||
13.
|
Customer Deposits
|
||
14.
|
Debt
|
||
15.
|
Fair Values of Assets and Liabilities
|
||
16.
|
Offsetting Assets and Liabilities
|
||
17.
|
Derivatives and Hedging Activities
|
||
18.
|
Share-Based Compensation
|
||
19.
|
Shareholders’ Equity
|
||
20.
|
Earnings per Share
|
||
21.
|
Regulatory Requirements
|
||
22.
|
Income Taxes
|
||
23.
|
Retirement Plans and Profit Sharing Arrangements
|
||
24.
|
Commitments, Guarantees and Contingencies
|
||
25.
|
Related Party Transactions
|
||
26.
|
Segment Information
|
||
27.
|
Quarterly Financial Data (Unaudited)
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017 (1)
|
|
2016 (1)
|
|||||||
(in millions, except per share amounts)
|
|||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||
Management and financial advice fees
|
$
|
6,776
|
|
|
$
|
6,415
|
|
|
$
|
5,802
|
|
Distribution fees
|
1,877
|
|
|
1,757
|
|
|
1,781
|
|
|||
Net investment income
|
1,596
|
|
|
1,509
|
|
|
1,576
|
|
|||
Premiums
|
1,426
|
|
|
1,394
|
|
|
1,491
|
|
|||
Other revenues
|
1,249
|
|
|
1,105
|
|
|
1,189
|
|
|||
Total revenues
|
12,924
|
|
|
12,180
|
|
|
11,839
|
|
|||
Banking and deposit interest expense
|
89
|
|
|
48
|
|
|
39
|
|
|||
Total net revenues
|
12,835
|
|
|
12,132
|
|
|
11,800
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|||
Distribution expenses
|
3,637
|
|
|
3,397
|
|
|
3,200
|
|
|||
Interest credited to fixed accounts
|
674
|
|
|
656
|
|
|
623
|
|
|||
Benefits, claims, losses and settlement expenses
|
2,302
|
|
|
2,233
|
|
|
2,646
|
|
|||
Amortization of deferred acquisition costs
|
322
|
|
|
267
|
|
|
415
|
|
|||
Interest and debt expense
|
245
|
|
|
207
|
|
|
241
|
|
|||
General and administrative expense
|
3,171
|
|
|
3,158
|
|
|
3,084
|
|
|||
Total expenses
|
10,351
|
|
|
9,918
|
|
|
10,209
|
|
|||
Pretax income
|
2,484
|
|
|
2,214
|
|
|
1,591
|
|
|||
Income tax provision
|
386
|
|
|
734
|
|
|
278
|
|
|||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
14.41
|
|
|
$
|
9.60
|
|
|
$
|
7.90
|
|
Diluted
|
$
|
14.20
|
|
|
$
|
9.44
|
|
|
$
|
7.81
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
|
|
|
|||
Total other-than-temporary impairment losses on securities
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
Portion of loss recognized in other comprehensive income (before taxes)
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net impairment losses recognized in net investment income
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016 (1)
|
|||||||
(in millions)
|
|||||||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustment
|
(31
|
)
|
|
(8
|
)
|
|
(76
|
)
|
|||
Net unrealized gains (losses) on securities
|
(465
|
)
|
|
7
|
|
|
47
|
|
|||
Net unrealized gains (losses) on derivatives
|
—
|
|
|
3
|
|
|
4
|
|
|||
Defined benefit plans
|
(23
|
)
|
|
28
|
|
|
(34
|
)
|
|||
Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss), net of tax
|
(519
|
)
|
|
29
|
|
|
(59
|
)
|
|||
Total comprehensive income
|
$
|
1,579
|
|
|
$
|
1,509
|
|
|
$
|
1,254
|
|
|
December 31,
|
||||||
2018
|
|
2017 (1)
|
|||||
(in millions, except share amounts)
|
|||||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
2,931
|
|
|
$
|
2,484
|
|
Cash of consolidated investment entities
|
166
|
|
|
136
|
|
||
Investments
|
35,825
|
|
|
35,925
|
|
||
Investments of consolidated investment entities, at fair value
|
1,706
|
|
|
2,131
|
|
||
Separate account assets
|
77,925
|
|
|
87,368
|
|
||
Receivables
|
6,173
|
|
|
5,762
|
|
||
Receivables of consolidated investment entities, at fair value
|
12
|
|
|
25
|
|
||
Deferred acquisition costs
|
2,776
|
|
|
2,676
|
|
||
Restricted and segregated cash, cash equivalents and investments
|
2,910
|
|
|
3,147
|
|
||
Other assets
|
6,792
|
|
|
7,826
|
|
||
Total assets
|
$
|
137,216
|
|
|
$
|
147,480
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Policyholder account balances, future policy benefits and claims
|
$
|
30,124
|
|
|
$
|
29,904
|
|
Separate account liabilities
|
77,925
|
|
|
87,368
|
|
||
Customer deposits
|
11,545
|
|
|
10,303
|
|
||
Short-term borrowings
|
201
|
|
|
200
|
|
||
Long-term debt
|
2,867
|
|
|
2,891
|
|
||
Debt of consolidated investment entities, at fair value
|
1,743
|
|
|
2,206
|
|
||
Accounts payable and accrued expenses
|
1,862
|
|
|
1,975
|
|
||
Other liabilities
|
5,239
|
|
|
6,575
|
|
||
Other liabilities of consolidated investment entities, at fair value
|
122
|
|
|
63
|
|
||
Total liabilities
|
131,628
|
|
|
141,485
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
|
|
||
Ameriprise Financial, Inc.:
|
|
|
|
|
|
||
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 328,537,214 and 327,506,935, respectively)
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
8,260
|
|
|
8,085
|
|
||
Retained earnings
|
12,909
|
|
|
11,326
|
|
||
Treasury shares, at cost (192,206,467 and 180,872,271 shares, respectively)
|
(15,293
|
)
|
|
(13,648
|
)
|
||
Accumulated other comprehensive income (loss), net of tax
|
(291
|
)
|
|
229
|
|
||
Total equity
|
5,588
|
|
|
5,995
|
|
||
Total liabilities and equity
|
$
|
137,216
|
|
|
$
|
147,480
|
|
|
Ameriprise Financial, Inc.
|
Non-controlling Interests
|
Total
|
|||||||||||||||||||||||||||||||||||
Number of Outstanding Shares
|
Common Shares
|
Additional Paid-In Capital
|
Retained Earnings
|
Appropriated Retained Earnings of Consolidated Investment Entities
|
Treasury Shares
|
Accumulated Other Com-prehensive Income
|
Total Ameriprise Financial, Inc. Shareholders’ Equity
|
|||||||||||||||||||||||||||||||
(in millions, except share data)
|
||||||||||||||||||||||||||||||||||||||
Balances at January 1, 2016
|
171,033,260
|
|
$
|
3
|
|
$
|
7,611
|
|
$
|
9,525
|
|
$
|
137
|
|
$
|
(10,338
|
)
|
$
|
253
|
|
$
|
7,191
|
|
$
|
1,188
|
|
$
|
8,379
|
|
|||||||||
Cumulative effect of adoption of consolidation guidance
|
—
|
|
—
|
|
—
|
|
1
|
|
(137
|
)
|
—
|
|
6
|
|
(130
|
)
|
(1,188
|
)
|
(1,318
|
)
|
||||||||||||||||||
Cumulative effect of adoption of revenue recognition guidance
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(2
|
)
|
||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
1,313
|
|
—
|
|
—
|
|
—
|
|
1,313
|
|
—
|
|
1,313
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(59
|
)
|
(59
|
)
|
—
|
|
(59
|
)
|
||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
1,254
|
|
—
|
|
1,254
|
|
|||||||||||||||||||||||||
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(489
|
)
|
—
|
|
—
|
|
—
|
|
(489
|
)
|
—
|
|
(489
|
)
|
||||||||||||||||||
Repurchase of common shares
|
(18,367,742
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,751
|
)
|
—
|
|
(1,751
|
)
|
—
|
|
(1,751
|
)
|
||||||||||||||||||
Share-based compensation plans
|
2,094,386
|
|
—
|
|
154
|
|
—
|
|
—
|
|
62
|
|
—
|
|
216
|
|
—
|
|
216
|
|
||||||||||||||||||
Balances at December 31, 2016
|
154,759,904
|
|
3
|
|
7,765
|
|
10,348
|
|
—
|
|
(12,027
|
)
|
200
|
|
6,289
|
|
—
|
|
6,289
|
|
||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
1,480
|
|
—
|
|
—
|
|
—
|
|
1,480
|
|
—
|
|
1,480
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29
|
|
29
|
|
—
|
|
29
|
|
||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
1,509
|
|
—
|
|
1,509
|
|
|||||||||||||||||||||||||
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(502
|
)
|
—
|
|
—
|
|
—
|
|
(502
|
)
|
—
|
|
(502
|
)
|
||||||||||||||||||
Repurchase of common shares
|
(12,388,348
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,675
|
)
|
—
|
|
(1,675
|
)
|
—
|
|
(1,675
|
)
|
||||||||||||||||||
Share-based compensation plans
|
4,263,108
|
|
—
|
|
320
|
|
—
|
|
—
|
|
54
|
|
—
|
|
374
|
|
—
|
|
374
|
|
||||||||||||||||||
Balances at December 31, 2017
|
146,634,664
|
|
3
|
|
8,085
|
|
11,326
|
|
—
|
|
(13,648
|
)
|
229
|
|
5,995
|
|
—
|
|
5,995
|
|
||||||||||||||||||
Cumulative effect of adoption of equity securities guidance
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
2,098
|
|
—
|
|
—
|
|
—
|
|
2,098
|
|
—
|
|
2,098
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(519
|
)
|
(519
|
)
|
—
|
|
(519
|
)
|
||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
1,579
|
|
—
|
|
1,579
|
|
|||||||||||||||||||||||||
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(516
|
)
|
—
|
|
—
|
|
—
|
|
(516
|
)
|
—
|
|
(516
|
)
|
||||||||||||||||||
Repurchase of common shares
|
(12,124,840
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,705
|
)
|
—
|
|
(1,705
|
)
|
—
|
|
(1,705
|
)
|
||||||||||||||||||
Share-based compensation plans
|
1,820,923
|
|
—
|
|
175
|
|
—
|
|
—
|
|
60
|
|
—
|
|
235
|
|
—
|
|
235
|
|
||||||||||||||||||
Balances at December 31, 2018
|
136,330,747
|
|
$
|
3
|
|
$
|
8,260
|
|
$
|
12,909
|
|
$
|
—
|
|
$
|
(15,293
|
)
|
$
|
(291
|
)
|
$
|
5,588
|
|
$
|
—
|
|
$
|
5,588
|
|
|||||||||
See Notes to Consolidated Financial Statements.
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017 (1)
|
|
2016 (1)
|
|||||||
(in millions)
|
|||||||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, amortization and accretion, net
|
198
|
|
|
234
|
|
|
248
|
|
|||
Deferred income tax expense (benefit)
|
25
|
|
|
156
|
|
|
(34
|
)
|
|||
Share-based compensation
|
144
|
|
|
121
|
|
|
134
|
|
|||
Net realized investment (gains) losses
|
(9
|
)
|
|
(50
|
)
|
|
(16
|
)
|
|||
Net trading (gains) losses
|
(12
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|||
Loss from equity method investments
|
63
|
|
|
100
|
|
|
54
|
|
|||
Other-than-temporary impairments and provision for loan losses
|
—
|
|
|
—
|
|
|
4
|
|
|||
Net (gains) losses of consolidated investment entities
|
(47
|
)
|
|
5
|
|
|
(38
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Restricted and segregated investments
|
499
|
|
|
(348
|
)
|
|
(24
|
)
|
|||
Deferred acquisition costs
|
4
|
|
|
(35
|
)
|
|
55
|
|
|||
Policyholder account balances, future policy benefits and claims, net
|
528
|
|
|
(441
|
)
|
|
8
|
|
|||
Derivatives, net of collateral
|
(144
|
)
|
|
595
|
|
|
59
|
|
|||
Receivables
|
(398
|
)
|
|
(457
|
)
|
|
(150
|
)
|
|||
Brokerage deposits
|
(255
|
)
|
|
(198
|
)
|
|
310
|
|
|||
Accounts payable and accrued expenses
|
(100
|
)
|
|
206
|
|
|
174
|
|
|||
Other operating assets and liabilities of consolidated investment entities, net
|
29
|
|
|
—
|
|
|
(9
|
)
|
|||
Other, net
|
(26
|
)
|
|
162
|
|
|
249
|
|
|||
Net cash provided by (used in) operating activities
|
2,597
|
|
|
1,523
|
|
|
2,331
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Available-for-Sale securities:
|
|
|
|
|
|
||||||
Proceeds from sales
|
435
|
|
|
454
|
|
|
366
|
|
|||
Maturities, sinking fund payments and calls
|
6,738
|
|
|
4,957
|
|
|
4,421
|
|
|||
Purchases
|
(8,346
|
)
|
|
(5,419
|
)
|
|
(6,498
|
)
|
|||
Proceeds from sales, maturities and repayments of mortgage loans
|
295
|
|
|
699
|
|
|
810
|
|
|||
Funding of mortgage loans
|
(235
|
)
|
|
(479
|
)
|
|
(451
|
)
|
|||
Proceeds from sales, maturities and collections of other investments
|
722
|
|
|
329
|
|
|
253
|
|
|||
Purchase of other investments
|
(653
|
)
|
|
(519
|
)
|
|
(269
|
)
|
|||
Purchase of investments by consolidated investment entities
|
(411
|
)
|
|
(1,268
|
)
|
|
(845
|
)
|
|||
Proceeds from sales, maturities and repayments of investments by consolidated investment entities
|
1,086
|
|
|
1,349
|
|
|
1,421
|
|
|||
Purchase of land, buildings, equipment and software
|
(162
|
)
|
|
(162
|
)
|
|
(92
|
)
|
|||
Cash paid for written options with deferred premiums
|
(133
|
)
|
|
(82
|
)
|
|
(8
|
)
|
|||
Cash received from written options with deferred premiums
|
133
|
|
|
77
|
|
|
78
|
|
|||
Other, net
|
(56
|
)
|
|
(107
|
)
|
|
31
|
|
|||
Net cash provided by (used in) investing activities
|
$
|
(587
|
)
|
|
$
|
(171
|
)
|
|
$
|
(783
|
)
|
(1) Certain prior period amounts have been restated. See Note 1 for more information.
See Notes to Consolidated Financial Statements.
|
|
Years Ended December 31,
|
|||||||||||
2018
|
|
2017 (1)
|
|
2016 (1)
|
||||||||
(in millions)
|
||||||||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
|||||||
Investment certificates:
|
|
|
|
|
|
|||||||
Proceeds from additions
|
$
|
6,238
|
|
|
$
|
4,725
|
|
|
$
|
4,250
|
|
|
Maturities, withdrawals and cash surrenders
|
(4,745
|
)
|
|
(4,262
|
)
|
|
(3,155
|
)
|
||||
Policyholder account balances:
|
|
|
|
|
|
|||||||
Deposits and other additions
|
1,933
|
|
|
2,059
|
|
|
2,086
|
|
||||
Net transfers from (to) separate accounts
|
(75
|
)
|
|
(157
|
)
|
|
127
|
|
||||
Surrenders and other benefits
|
(1,904
|
)
|
|
(1,893
|
)
|
|
(1,932
|
)
|
||||
Cash paid for purchased options with deferred premiums
|
(228
|
)
|
|
(282
|
)
|
|
(341
|
)
|
||||
Cash received from purchased options with deferred premiums
|
254
|
|
|
116
|
|
|
276
|
|
||||
Issuance of long-term debt, net of issuance costs
|
—
|
|
|
—
|
|
|
496
|
|
||||
Repayments of long-term debt
|
(13
|
)
|
|
(11
|
)
|
|
(257
|
)
|
||||
Change in short-term borrowings, net
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Dividends paid to shareholders
|
(506
|
)
|
|
(491
|
)
|
|
(479
|
)
|
||||
Repurchase of common shares
|
(1,630
|
)
|
|
(1,485
|
)
|
|
(1,707
|
)
|
||||
Exercise of stock options
|
2
|
|
|
15
|
|
|
9
|
|
||||
Borrowings of consolidated investment entities
|
936
|
|
|
—
|
|
|
—
|
|
||||
Repayments of debt by consolidated investment entities
|
(1,528
|
)
|
|
(118
|
)
|
|
(517
|
)
|
||||
Other, net
|
3
|
|
|
(1
|
)
|
|
3
|
|
||||
Net cash provided by (used in) financing activities
|
(1,263
|
)
|
|
(1,785
|
)
|
|
(1,142
|
)
|
||||
Effect of exchange rate changes on cash
|
(8
|
)
|
|
35
|
|
|
(75
|
)
|
||||
Net increase (decrease) in cash and cash equivalents, including amounts restricted
|
739
|
|
|
(398
|
)
|
|
331
|
|
||||
Cash and cash equivalents, including amounts restricted at beginning of period
|
5,144
|
|
|
5,542
|
|
|
5,557
|
|
||||
Net cash outflows upon the deconsolidation of consolidated investment entities
|
—
|
|
|
—
|
|
|
(346
|
)
|
||||
Cash and cash equivalents, including amounts restricted at end of period
|
$
|
5,883
|
|
|
$
|
5,144
|
|
|
$
|
5,542
|
|
|
|
|
|
|
|
|
|||||||
Supplemental Disclosures:
|
|
|
|
|
|
|||||||
Interest paid excluding consolidated investment entities
|
$
|
221
|
|
|
$
|
181
|
|
|
$
|
163
|
|
|
Interest paid by consolidated investment entities
|
120
|
|
|
88
|
|
|
127
|
|
||||
Income taxes paid, net
|
538
|
|
|
418
|
|
|
155
|
|
||||
Non-cash investing activities:
|
|
|
|
|
|
|||||||
Partnership commitments not yet remitted
|
1
|
|
|
9
|
|
|
108
|
|
||||
|
||||||||||||
|
December 31,
2018 |
|
December 31, 2017
|
|||||||||
Reconciliation of cash and cash equivalents, including amounts restricted:
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
2,931
|
|
|
$
|
2,484
|
|
|||||
Cash of consolidated investment entities
|
166
|
|
|
136
|
|
|||||||
Restricted and segregated cash, cash equivalents and investments
|
2,910
|
|
|
3,147
|
|
|||||||
Less: Restricted and segregated investments
|
(124
|
)
|
|
(623
|
)
|
|||||||
Total cash and cash equivalents, including amounts restricted per consolidated statements of cash flows
|
$
|
5,883
|
|
|
$
|
5,144
|
|
•
|
an $87 million decrease to other comprehensive income (“OCI”) related to deferred taxes on currency translations adjustments.
|
•
|
a $12 million out-of-period correction related to a variable annuity model assumption that decreased amortization of deferred acquisition costs (“DAC”) by $8 million and decreased benefits, claims, losses and settlement expenses by $4 million.
|
•
|
a $20 million decrease to income tax provision for a reversal of a tax reserve.
|
|
December 31, 2017
|
||||||||||
Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
|||||||
(in millions)
|
|||||||||||
Revenues
|
|
|
|
|
|
||||||
Management and financial advice fees
|
$
|
6,392
|
|
|
$
|
23
|
|
|
$
|
6,415
|
|
Distribution fees
|
1,770
|
|
|
(13
|
)
|
|
1,757
|
|
|||
Net investment income
|
1,509
|
|
|
—
|
|
|
1,509
|
|
|||
Premiums
|
1,394
|
|
|
—
|
|
|
1,394
|
|
|||
Other revenues
|
1,010
|
|
|
95
|
|
|
1,105
|
|
|||
Total revenues
|
12,075
|
|
|
105
|
|
|
12,180
|
|
|||
Banking and deposit interest expense
|
48
|
|
|
—
|
|
|
48
|
|
|||
Total net revenues
|
12,027
|
|
|
105
|
|
|
12,132
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Distribution expenses
|
3,399
|
|
|
(2
|
)
|
|
3,397
|
|
|||
Interest credited to fixed accounts
|
656
|
|
|
—
|
|
|
656
|
|
|||
Benefits, claims, losses and settlement expenses
|
2,233
|
|
|
—
|
|
|
2,233
|
|
|||
Amortization of deferred acquisition costs
|
267
|
|
|
—
|
|
|
267
|
|
|||
Interest and debt expense
|
207
|
|
|
—
|
|
|
207
|
|
|||
General and administrative expense
|
3,051
|
|
|
107
|
|
|
3,158
|
|
|||
Total expenses
|
9,813
|
|
|
105
|
|
|
9,918
|
|
|||
Pretax income
|
2,214
|
|
|
—
|
|
|
2,214
|
|
|||
Income tax provision
|
734
|
|
|
—
|
|
|
734
|
|
|||
Net income
|
$
|
1,480
|
|
|
$
|
—
|
|
|
$
|
1,480
|
|
|
December 31, 2016
|
||||||||||
Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
|||||||
(in millions)
|
|||||||||||
Revenues
|
|
|
|
|
|
||||||
Management and financial advice fees
|
$
|
5,778
|
|
|
$
|
24
|
|
|
$
|
5,802
|
|
Distribution fees
|
1,795
|
|
|
(14
|
)
|
|
1,781
|
|
|||
Net investment income
|
1,576
|
|
|
—
|
|
|
1,576
|
|
|||
Premiums
|
1,491
|
|
|
—
|
|
|
1,491
|
|
|||
Other revenues
|
1,095
|
|
|
94
|
|
|
1,189
|
|
|||
Total revenues
|
11,735
|
|
|
104
|
|
|
11,839
|
|
|||
Banking and deposit interest expense
|
39
|
|
|
—
|
|
|
39
|
|
|||
Total net revenues
|
11,696
|
|
|
104
|
|
|
11,800
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Distribution expenses
|
3,202
|
|
|
(2
|
)
|
|
3,200
|
|
|||
Interest credited to fixed accounts
|
623
|
|
|
—
|
|
|
623
|
|
|||
Benefits, claims, losses and settlement expenses
|
2,646
|
|
|
—
|
|
|
2,646
|
|
|||
Amortization of deferred acquisition costs
|
415
|
|
|
—
|
|
|
415
|
|
|||
Interest and debt expense
|
241
|
|
|
—
|
|
|
241
|
|
|||
General and administrative expense
|
2,977
|
|
|
107
|
|
|
3,084
|
|
|||
Total expenses
|
10,104
|
|
|
105
|
|
|
10,209
|
|
|||
Pretax income
|
1,592
|
|
|
(1
|
)
|
|
1,591
|
|
|||
Income tax provision
|
278
|
|
|
—
|
|
|
278
|
|
|||
Net income
|
$
|
1,314
|
|
|
$
|
(1
|
)
|
|
$
|
1,313
|
|
•
|
the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
|
•
|
the obligation to absorb potentially significant losses or the right to receive potentially significant benefits to the VIE.
|
•
|
Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception. The review of assumptions to measure the liability for all future policy benefits will be required annually at the same time each year, or more frequently if suggested by experience. The effect of updating assumptions will be measured on a retrospective catch-up basis and presented separate from the ongoing policyholder benefit expense in the statement of operations in the period the update is made. This new unlocking process will be required for the Company’s term and whole life insurance, DI and LTC insurance and immediate annuities with a life contingent feature.
|
•
|
The discount rate used to measure the liability for future policy benefits will be standardized. The current requirement to use a discount rate reflecting expected investment yields will change to an upper-medium grade (low credit risk) fixed income corporate instrument yield (generally interpreted as an “A” rating) reflecting the duration characteristics of the liability. Entities will be required to update the discount rate at each reporting date with the effect of discount rate changes reflected in OCI.
|
•
|
The current premium deficiency test is being replaced with a net premium ratio cap of 100%. If the net premium ratio (i.e. the ratio of the present value of total expected benefits and related expenses to the present value of total expected premiums) exceeds 100%, insurers are required to recognize a loss in the statement of operations in the period. Contracts from different issue years will no longer be permitted to be grouped to determine contracts in a loss position.
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||
Advice & Wealth Management
|
Asset Management
|
Annuities
|
Protection
|
Corporate
&
Other
|
Total Segments
|
Non-operating Revenue
|
Total
|
||||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||||||
Management and financial advice fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retail
|
$
|
—
|
|
|
$
|
1,874
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,874
|
|
|
$
|
—
|
|
|
$
|
1,874
|
|
Institutional
|
—
|
|
|
453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
453
|
|
||||||||
Advisory fees
|
2,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,865
|
|
|
—
|
|
|
2,865
|
|
||||||||
Financial planning fees
|
318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
318
|
|
|
—
|
|
|
318
|
|
||||||||
Transaction and other fees
|
355
|
|
|
190
|
|
|
57
|
|
|
8
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
610
|
|
||||||||
Total management and financial advice fees
|
3,538
|
|
|
2,517
|
|
|
57
|
|
|
8
|
|
|
—
|
|
|
6,120
|
|
|
—
|
|
|
6,120
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Distribution fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
729
|
|
|
260
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
989
|
|
|
—
|
|
|
989
|
|
||||||||
Insurance and annuity
|
890
|
|
|
173
|
|
|
332
|
|
|
35
|
|
|
—
|
|
|
1,430
|
|
|
—
|
|
|
1,430
|
|
||||||||
Other products
|
622
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
622
|
|
|
—
|
|
|
622
|
|
||||||||
Total distribution fees
|
2,241
|
|
|
433
|
|
|
332
|
|
|
35
|
|
|
—
|
|
|
3,041
|
|
|
—
|
|
|
3,041
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other revenues
|
171
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
||||||||
Total revenue from contracts with customers
|
5,950
|
|
|
2,953
|
|
|
389
|
|
|
44
|
|
|
—
|
|
|
9,336
|
|
|
—
|
|
|
9,336
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue from other sources (1)
|
328
|
|
|
58
|
|
|
2,087
|
|
|
2,162
|
|
|
232
|
|
|
4,867
|
|
|
158
|
|
|
5,025
|
|
||||||||
Total segment gross revenues
|
6,278
|
|
|
3,011
|
|
|
2,476
|
|
|
2,206
|
|
|
232
|
|
|
14,203
|
|
|
158
|
|
|
14,361
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: Banking and deposit interest expense
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
95
|
|
|
—
|
|
|
95
|
|
||||||||
Total segment net revenues
|
6,189
|
|
|
3,011
|
|
|
2,476
|
|
|
2,206
|
|
|
226
|
|
|
14,108
|
|
|
158
|
|
|
14,266
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: intersegment revenues
|
952
|
|
|
50
|
|
|
356
|
|
|
61
|
|
|
(5
|
)
|
|
1,414
|
|
|
17
|
|
|
1,431
|
|
||||||||
Total net revenues
|
$
|
5,237
|
|
|
$
|
2,961
|
|
|
$
|
2,120
|
|
|
$
|
2,145
|
|
|
$
|
231
|
|
|
$
|
12,694
|
|
|
$
|
141
|
|
|
$
|
12,835
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||
Advice & Wealth Management
|
Asset Management
|
Annuities
|
Protection
|
Corporate
&
Other
|
Total Segments
|
Non-operating Revenue
|
Total
|
||||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||||||
Management and financial advice fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retail
|
$
|
—
|
|
|
$
|
1,851
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,851
|
|
|
$
|
—
|
|
|
$
|
1,851
|
|
Institutional
|
—
|
|
|
495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
495
|
|
|
—
|
|
|
495
|
|
||||||||
Advisory fees
|
2,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,494
|
|
|
—
|
|
|
2,494
|
|
||||||||
Financial planning fees
|
297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
297
|
|
||||||||
Transaction and other fees
|
362
|
|
|
202
|
|
|
57
|
|
|
8
|
|
|
—
|
|
|
629
|
|
|
—
|
|
|
629
|
|
||||||||
Total management and financial advice fees
|
3,153
|
|
|
2,548
|
|
|
57
|
|
|
8
|
|
|
—
|
|
|
5,766
|
|
|
—
|
|
|
5,766
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Distribution fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
765
|
|
|
289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,054
|
|
|
—
|
|
|
1,054
|
|
||||||||
Insurance and annuity
|
855
|
|
|
169
|
|
|
327
|
|
|
33
|
|
|
—
|
|
|
1,384
|
|
|
—
|
|
|
1,384
|
|
||||||||
Other products
|
475
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
—
|
|
|
475
|
|
||||||||
Total distribution fees
|
2,095
|
|
|
458
|
|
|
327
|
|
|
33
|
|
|
—
|
|
|
2,913
|
|
|
—
|
|
|
2,913
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other revenues
|
164
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
||||||||
Total revenue from contracts with customers
|
5,412
|
|
|
3,008
|
|
|
384
|
|
|
41
|
|
|
—
|
|
|
8,845
|
|
|
—
|
|
|
8,845
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue from other sources (1)
|
252
|
|
|
64
|
|
|
2,115
|
|
|
2,003
|
|
|
176
|
|
|
4,610
|
|
|
154
|
|
|
4,764
|
|
||||||||
Total segment gross revenues
|
5,664
|
|
|
3,072
|
|
|
2,499
|
|
|
2,044
|
|
|
176
|
|
|
13,455
|
|
|
154
|
|
|
13,609
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: Banking and deposit interest expense
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||||||
Total segment net revenues
|
5,616
|
|
|
3,072
|
|
|
2,499
|
|
|
2,044
|
|
|
173
|
|
|
13,404
|
|
|
154
|
|
|
13,558
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: intersegment revenues
|
953
|
|
|
47
|
|
|
351
|
|
|
62
|
|
|
(2
|
)
|
|
1,411
|
|
|
15
|
|
|
1,426
|
|
||||||||
Total net revenues
|
$
|
4,663
|
|
|
$
|
3,025
|
|
|
$
|
2,148
|
|
|
$
|
1,982
|
|
|
$
|
175
|
|
|
$
|
11,993
|
|
|
$
|
139
|
|
|
$
|
12,132
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
Advice & Wealth Management
|
Asset Management
|
Annuities
|
Protection
|
Corporate
&
Other
|
Total Segments
|
Non-operating Revenue
|
Total
|
||||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||||||
Management and financial advice fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset management fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retail
|
$
|
—
|
|
|
$
|
1,754
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,754
|
|
|
$
|
—
|
|
|
$
|
1,754
|
|
Institutional
|
—
|
|
|
455
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
455
|
|
|
—
|
|
|
455
|
|
||||||||
Advisory fees
|
2,078
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,078
|
|
|
—
|
|
|
2,078
|
|
||||||||
Financial planning fees
|
275
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
275
|
|
||||||||
Transaction and other fees
|
358
|
|
|
220
|
|
|
56
|
|
|
8
|
|
|
—
|
|
|
642
|
|
|
—
|
|
|
642
|
|
||||||||
Total management and financial advice fees
|
2,711
|
|
|
2,429
|
|
|
56
|
|
|
8
|
|
|
—
|
|
|
5,204
|
|
|
—
|
|
|
5,204
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Distribution fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
954
|
|
|
327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,281
|
|
|
—
|
|
|
1,281
|
|
||||||||
Insurance and annuity
|
827
|
|
|
160
|
|
|
310
|
|
|
30
|
|
|
—
|
|
|
1,327
|
|
|
—
|
|
|
1,327
|
|
||||||||
Other products
|
338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
—
|
|
|
338
|
|
||||||||
Total distribution fees
|
2,119
|
|
|
487
|
|
|
310
|
|
|
30
|
|
|
—
|
|
|
2,946
|
|
|
—
|
|
|
2,946
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other revenues
|
158
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
||||||||
Total revenue from contracts with customers
|
4,988
|
|
|
2,918
|
|
|
366
|
|
|
38
|
|
|
—
|
|
|
8,310
|
|
|
—
|
|
|
8,310
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue from other sources (1)
|
195
|
|
|
42
|
|
|
2,097
|
|
|
2,203
|
|
|
238
|
|
|
4,775
|
|
|
195
|
|
|
4,970
|
|
||||||||
Total segment gross revenues
|
5,183
|
|
|
2,960
|
|
|
2,463
|
|
|
2,241
|
|
|
238
|
|
|
13,085
|
|
|
195
|
|
|
13,280
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: Banking and deposit interest expense
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||||
Total segment net revenues
|
5,144
|
|
|
2,960
|
|
|
2,463
|
|
|
2,241
|
|
|
237
|
|
|
13,045
|
|
|
195
|
|
|
13,240
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Less: intersegment revenues
|
982
|
|
|
44
|
|
|
333
|
|
|
46
|
|
|
1
|
|
|
1,406
|
|
|
34
|
|
|
1,440
|
|
||||||||
Total net revenues
|
$
|
4,162
|
|
|
$
|
2,916
|
|
|
$
|
2,130
|
|
|
$
|
2,195
|
|
|
$
|
236
|
|
|
$
|
11,639
|
|
|
$
|
161
|
|
|
$
|
11,800
|
|
|
December 31, 2018
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
(in millions)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
Common stocks
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Other investments
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Syndicated loans
|
—
|
|
|
1,465
|
|
|
226
|
|
|
1,691
|
|
||||
Total investments
|
5
|
|
|
1,475
|
|
|
226
|
|
|
1,706
|
|
||||
Receivables
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Total assets at fair value
|
$
|
5
|
|
|
$
|
1,487
|
|
|
$
|
226
|
|
|
$
|
1,718
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt (1)
|
$
|
—
|
|
|
$
|
1,743
|
|
|
$
|
—
|
|
|
$
|
1,743
|
|
Other liabilities
|
—
|
|
|
122
|
|
|
—
|
|
|
122
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
1,865
|
|
|
$
|
—
|
|
|
$
|
1,865
|
|
|
December 31, 2017
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
(in millions)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Common stocks
|
18
|
|
|
8
|
|
|
4
|
|
|
30
|
|
||||
Other investments
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Syndicated loans
|
—
|
|
|
1,889
|
|
|
180
|
|
|
2,069
|
|
||||
Total investments
|
23
|
|
|
1,924
|
|
|
184
|
|
|
2,131
|
|
||||
Receivables
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Total assets at fair value
|
$
|
23
|
|
|
$
|
1,949
|
|
|
$
|
184
|
|
|
$
|
2,156
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt (1)
|
$
|
—
|
|
|
$
|
2,206
|
|
|
$
|
—
|
|
|
$
|
2,206
|
|
Other liabilities
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
2,269
|
|
|
$
|
—
|
|
|
$
|
2,269
|
|
|
Common Stocks
|
|
Syndicated Loans
|
|
||||
(in millions)
|
||||||||
Balance, January 1, 2018
|
$
|
4
|
|
|
$
|
180
|
|
|
Total gains (losses) included in:
|
|
|
|
|
||||
Net income
|
6
|
|
(1)
|
(1
|
)
|
(1)
|
||
Purchases
|
—
|
|
|
97
|
|
|
||
Sales
|
(10
|
)
|
|
(41
|
)
|
|
||
Settlements
|
—
|
|
|
(52
|
)
|
|
||
Transfers into Level 3
|
4
|
|
|
173
|
|
|
||
Transfers out of Level 3
|
(2
|
)
|
|
(160
|
)
|
|
||
Consolidation of consolidated investment entities
|
—
|
|
|
54
|
|
|
||
Deconsolidation of consolidated investment entities
|
(2
|
)
|
|
(24
|
)
|
|
||
Balance, December 31, 2018
|
$
|
—
|
|
|
$
|
226
|
|
|
|
|
|
|
|
||||
Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2018
|
$
|
—
|
|
|
$
|
(4
|
)
|
(1)
|
|
Corporate Debt Securities
|
|
Common Stocks
|
|
Syndicated Loans
|
|
||||||
(in millions)
|
|
|||||||||||
Balance, January 1, 2017
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
254
|
|
|
Total gains (losses) included in:
|
|
|
|
|
|
|
||||||
Net income
|
—
|
|
|
(1
|
)
|
(1)
|
—
|
|
|
|||
Purchases
|
—
|
|
|
3
|
|
|
146
|
|
|
|||
Sales
|
(2
|
)
|
|
(2
|
)
|
|
(28
|
)
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
|||
Transfers into Level 3
|
2
|
|
|
7
|
|
|
266
|
|
|
|||
Transfers out of Level 3
|
—
|
|
|
(8
|
)
|
|
(388
|
)
|
|
|||
Balance, December 31, 2017
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
180
|
|
|
|
|
|
|
|
|
|
||||||
Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2017
|
$
|
—
|
|
|
$
|
(1
|
)
|
(1)
|
$
|
(1
|
)
|
(1)
|
|
Common Stocks
|
|
Syndicated Loans
|
|
Other Assets
|
|
Debt
|
|
||||||||
(in millions)
|
||||||||||||||||
Balance, January 1, 2016
|
$
|
3
|
|
|
$
|
529
|
|
|
$
|
2,065
|
|
|
$
|
(6,630
|
)
|
|
Cumulative effect of change in accounting policies (2)
|
(2
|
)
|
|
(304
|
)
|
|
(2,065
|
)
|
|
6,630
|
|
|
||||
Balance, January 1, 2016, as adjusted
|
1
|
|
|
225
|
|
|
—
|
|
|
—
|
|
|
||||
Total gains (losses) included in:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
2
|
|
(1)
|
7
|
|
(1)
|
1
|
|
(3)
|
—
|
|
|
||||
Purchases
|
1
|
|
|
145
|
|
|
—
|
|
|
—
|
|
|
||||
Sales
|
—
|
|
|
(24
|
)
|
|
(1
|
)
|
|
—
|
|
|
||||
Settlements
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
||||
Transfers into Level 3
|
3
|
|
|
405
|
|
|
—
|
|
|
—
|
|
|
||||
Transfers out of Level 3
|
(2
|
)
|
|
(435
|
)
|
|
—
|
|
|
—
|
|
|
||||
Balance, December 31, 2016
|
$
|
5
|
|
|
$
|
254
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2016
|
$
|
1
|
|
(1)
|
$
|
3
|
|
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Syndicated loans
|
|
|
|
|
|
||
Unpaid principal balance
|
$
|
1,743
|
|
|
$
|
2,140
|
|
Excess unpaid principal over fair value
|
(52
|
)
|
|
(71
|
)
|
||
Fair value
|
$
|
1,691
|
|
|
$
|
2,069
|
|
Fair value of loans more than 90 days past due
|
$
|
—
|
|
|
$
|
24
|
|
Fair value of loans in nonaccrual status
|
—
|
|
|
24
|
|
||
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both
|
—
|
|
|
35
|
|
||
|
|
|
|
||||
Debt
|
|
|
|
|
|
||
Unpaid principal balance
|
$
|
1,951
|
|
|
$
|
2,340
|
|
Excess unpaid principal over fair value
|
(208
|
)
|
|
(134
|
)
|
||
Carrying value (1)
|
$
|
1,743
|
|
|
$
|
2,206
|
|
|
Carrying Value
|
|
Weighted Average
Interest Rate
|
||||||||||
December 31,
|
December 31,
|
||||||||||||
2018
|
|
2017
|
2018
|
|
2017
|
||||||||
(in millions)
|
|
||||||||||||
Debt of consolidated CLOs due 2019-2030
|
$
|
1,743
|
|
|
$
|
2,206
|
|
|
3.7
|
%
|
|
2.8
|
%
|
|
(in millions)
|
||
2019
|
$
|
54
|
|
2020
|
—
|
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
2023
|
—
|
|
|
Thereafter
|
1,897
|
|
|
Total future maturities
|
$
|
1,951
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Available-for-Sale securities, at fair value
|
$
|
31,058
|
|
|
$
|
30,927
|
|
Mortgage loans, net
|
2,696
|
|
|
2,756
|
|
||
Policy and certificate loans
|
861
|
|
|
845
|
|
||
Other investments
|
1,210
|
|
|
1,397
|
|
||
Total
|
$
|
35,825
|
|
|
$
|
35,925
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Investment income on fixed maturities
|
$
|
1,353
|
|
|
$
|
1,349
|
|
|
$
|
1,368
|
|
Net realized gains (losses)
|
10
|
|
|
46
|
|
|
6
|
|
|||
Affordable housing partnerships
|
(58
|
)
|
|
(100
|
)
|
|
(44
|
)
|
|||
Other
|
154
|
|
|
108
|
|
|
91
|
|
|||
Consolidated investment entities
|
137
|
|
|
106
|
|
|
155
|
|
|||
Total
|
$
|
1,596
|
|
|
$
|
1,509
|
|
|
$
|
1,576
|
|
Description of Securities
|
December 31, 2018
|
|||||||||||||||||||
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Noncredit
OTTI (1)
|
||||||||||||
|
(in millions)
|
|||||||||||||||||||
Corporate debt securities
|
$
|
13,741
|
|
|
$
|
555
|
|
|
$
|
(230
|
)
|
|
$
|
14,066
|
|
|
$
|
—
|
|
|
Residential mortgage backed securities
|
6,373
|
|
|
34
|
|
|
(78
|
)
|
|
6,329
|
|
|
—
|
|
||||||
Commercial mortgage backed securities
|
4,975
|
|
|
18
|
|
|
(116
|
)
|
|
4,877
|
|
|
—
|
|
||||||
Asset backed securities
|
1,373
|
|
|
36
|
|
|
(11
|
)
|
|
1,398
|
|
|
1
|
|
||||||
State and municipal obligations
|
2,166
|
|
|
192
|
|
|
(13
|
)
|
|
2,345
|
|
|
—
|
|
||||||
U.S. government and agency obligations
|
1,745
|
|
|
—
|
|
|
—
|
|
|
1,745
|
|
|
—
|
|
||||||
Foreign government bonds and obligations
|
298
|
|
|
9
|
|
|
(9
|
)
|
|
298
|
|
|
—
|
|
||||||
Total
|
$
|
30,671
|
|
|
$
|
844
|
|
|
$
|
(457
|
)
|
|
$
|
31,058
|
|
|
$
|
1
|
|
Description of Securities
|
December 31, 2017
|
|||||||||||||||||||
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Noncredit
OTTI (1) |
||||||||||||
|
(in millions)
|
|||||||||||||||||||
Corporate debt securities
|
$
|
13,976
|
|
|
$
|
1,131
|
|
|
$
|
(32
|
)
|
|
$
|
15,075
|
|
|
$
|
—
|
|
|
Residential mortgage backed securities
|
6,585
|
|
|
63
|
|
|
(37
|
)
|
|
6,611
|
|
|
—
|
|
||||||
Commercial mortgage backed securities
|
4,362
|
|
|
48
|
|
|
(36
|
)
|
|
4,374
|
|
|
—
|
|
||||||
Asset backed securities
|
1,549
|
|
|
36
|
|
|
(5
|
)
|
|
1,580
|
|
|
1
|
|
||||||
State and municipal obligations
|
2,215
|
|
|
259
|
|
|
(11
|
)
|
|
2,463
|
|
|
—
|
|
||||||
U.S. government and agency obligations
|
502
|
|
|
1
|
|
|
—
|
|
|
503
|
|
|
—
|
|
||||||
Foreign government bonds and obligations
|
298
|
|
|
20
|
|
|
(4
|
)
|
|
314
|
|
|
—
|
|
||||||
Common stocks
|
5
|
|
|
3
|
|
|
(1
|
)
|
|
7
|
|
|
—
|
|
||||||
Total
|
$
|
29,492
|
|
|
$
|
1,561
|
|
|
$
|
(126
|
)
|
|
$
|
30,927
|
|
|
$
|
1
|
|
Ratings
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||||||||||
Amortized
Cost |
|
Fair Value
|
|
Percent of Total Fair Value
|
Amortized
Cost |
|
Fair Value
|
|
Percent of Total Fair Value
|
|||||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||||
AAA
|
$
|
13,399
|
|
|
$
|
13,252
|
|
|
43
|
%
|
|
$
|
11,293
|
|
|
$
|
11,331
|
|
|
37
|
%
|
|
AA
|
1,571
|
|
|
1,723
|
|
|
5
|
|
|
1,898
|
|
|
2,114
|
|
|
7
|
|
|||||
A
|
3,667
|
|
|
3,899
|
|
|
13
|
|
|
4,760
|
|
|
5,243
|
|
|
17
|
|
|||||
BBB
|
11,102
|
|
|
11,290
|
|
|
36
|
|
|
10,317
|
|
|
10,989
|
|
|
35
|
|
|||||
Below investment grade (1)
|
932
|
|
|
894
|
|
|
3
|
|
|
1,219
|
|
|
1,243
|
|
|
4
|
|
|||||
Total fixed maturities
|
$
|
30,671
|
|
|
$
|
31,058
|
|
|
100
|
|
|
$
|
29,487
|
|
|
$
|
30,920
|
|
|
100
|
%
|
Description of Securities
|
December 31, 2018
|
||||||||||||||||||||||||||||||||
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||||||
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
|||||||||||||||||||
|
(in millions, except number of securities)
|
||||||||||||||||||||||||||||||||
Corporate debt securities
|
345
|
|
|
$
|
5,522
|
|
|
$
|
(152
|
)
|
|
148
|
|
|
$
|
1,717
|
|
|
$
|
(78
|
)
|
|
493
|
|
|
$
|
7,239
|
|
|
$
|
(230
|
)
|
|
Residential mortgage backed securities
|
142
|
|
|
2,029
|
|
|
(18
|
)
|
|
175
|
|
|
2,132
|
|
|
(60
|
)
|
|
317
|
|
|
4,161
|
|
|
(78
|
)
|
|||||||
Commercial mortgage backed securities
|
104
|
|
|
2,062
|
|
|
(30
|
)
|
|
112
|
|
|
1,806
|
|
|
(86
|
)
|
|
216
|
|
|
3,868
|
|
|
(116
|
)
|
|||||||
Asset backed securities
|
38
|
|
|
491
|
|
|
(6
|
)
|
|
35
|
|
|
396
|
|
|
(5
|
)
|
|
73
|
|
|
887
|
|
|
(11
|
)
|
|||||||
State and municipal obligations
|
81
|
|
|
255
|
|
|
(4
|
)
|
|
100
|
|
|
254
|
|
|
(9
|
)
|
|
181
|
|
|
509
|
|
|
(13
|
)
|
|||||||
Foreign government bonds and obligations
|
17
|
|
|
86
|
|
|
(4
|
)
|
|
14
|
|
|
17
|
|
|
(5
|
)
|
|
31
|
|
|
103
|
|
|
(9
|
)
|
|||||||
Total
|
727
|
|
|
$
|
10,445
|
|
|
$
|
(214
|
)
|
|
584
|
|
|
$
|
6,322
|
|
|
$
|
(243
|
)
|
|
1,311
|
|
|
$
|
16,767
|
|
|
$
|
(457
|
)
|
Description of Securities
|
December 31, 2017
|
||||||||||||||||||||||||||||||||
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||||||
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
Number of Securities
|
|
Fair
Value |
|
Unrealized
Losses |
|||||||||||||||||||
|
(in millions, except number of securities)
|
||||||||||||||||||||||||||||||||
Corporate debt securities
|
150
|
|
|
$
|
1,791
|
|
|
$
|
(8
|
)
|
|
70
|
|
|
$
|
740
|
|
|
$
|
(24
|
)
|
|
220
|
|
|
$
|
2,531
|
|
|
$
|
(32
|
)
|
|
Residential mortgage backed securities
|
102
|
|
|
1,772
|
|
|
(11
|
)
|
|
130
|
|
|
1,467
|
|
|
(26
|
)
|
|
232
|
|
|
3,239
|
|
|
(37
|
)
|
|||||||
Commercial mortgage backed securities
|
67
|
|
|
1,178
|
|
|
(12
|
)
|
|
58
|
|
|
783
|
|
|
(24
|
)
|
|
125
|
|
|
1,961
|
|
|
(36
|
)
|
|||||||
Asset backed securities
|
36
|
|
|
424
|
|
|
(2
|
)
|
|
26
|
|
|
187
|
|
|
(3
|
)
|
|
62
|
|
|
611
|
|
|
(5
|
)
|
|||||||
State and municipal obligations
|
76
|
|
|
141
|
|
|
(1
|
)
|
|
34
|
|
|
180
|
|
|
(10
|
)
|
|
110
|
|
|
321
|
|
|
(11
|
)
|
|||||||
Foreign government bonds and obligations
|
3
|
|
|
6
|
|
|
—
|
|
|
15
|
|
|
23
|
|
|
(4
|
)
|
|
18
|
|
|
29
|
|
|
(4
|
)
|
|||||||
Common and preferred stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
(1
|
)
|
|
4
|
|
|
1
|
|
|
(1
|
)
|
|||||||
Total
|
434
|
|
|
$
|
5,312
|
|
|
$
|
(34
|
)
|
|
337
|
|
|
$
|
3,381
|
|
|
$
|
(92
|
)
|
|
771
|
|
|
$
|
8,693
|
|
|
$
|
(126
|
)
|
|
December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Beginning balance
|
$
|
2
|
|
|
$
|
69
|
|
|
$
|
85
|
|
Credit losses for which an other-than-temporary impairment was not previously recognized
|
—
|
|
|
—
|
|
|
1
|
|
|||
Credit losses for which an other-than-temporary impairment was previously recognized
|
—
|
|
|
1
|
|
|
1
|
|
|||
Reductions for securities sold during the period (realized)
|
—
|
|
|
(68
|
)
|
|
(18
|
)
|
|||
Ending balance
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
69
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Gross realized gains
|
$
|
18
|
|
|
$
|
63
|
|
|
$
|
37
|
|
Gross realized losses
|
(9
|
)
|
|
(7
|
)
|
|
(13
|
)
|
|||
Other-than-temporary impairments
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
Total
|
$
|
9
|
|
|
$
|
55
|
|
|
$
|
22
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
(in millions)
|
|||||||
Due within one year
|
$
|
3,621
|
|
|
$
|
3,624
|
|
Due after one year through five years
|
5,967
|
|
|
5,954
|
|
||
Due after five years through 10 years
|
3,899
|
|
|
3,870
|
|
||
Due after 10 years
|
4,463
|
|
|
5,006
|
|
||
|
17,950
|
|
|
18,454
|
|
||
Residential mortgage backed securities
|
6,373
|
|
|
6,329
|
|
||
Commercial mortgage backed securities
|
4,975
|
|
|
4,877
|
|
||
Asset backed securities
|
1,373
|
|
|
1,398
|
|
||
Total
|
$
|
30,671
|
|
|
$
|
31,058
|
|
|
December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Beginning balance
|
$
|
26
|
|
|
$
|
29
|
|
|
$
|
32
|
|
Charge-offs
|
(2
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|||
Provisions
|
—
|
|
|
(1
|
)
|
|
2
|
|
|||
Ending balance
|
$
|
24
|
|
|
$
|
26
|
|
|
$
|
29
|
|
|
|
|
|
|
|
||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Collectively evaluated for impairment
|
24
|
|
|
26
|
|
|
27
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Individually evaluated for impairment
|
$
|
24
|
|
|
$
|
17
|
|
Collectively evaluated for impairment
|
3,239
|
|
|
3,258
|
|
||
Total
|
$
|
3,263
|
|
|
$
|
3,275
|
|
|
Loans
|
|
Percentage
|
||||||||||
December 31,
|
December 31,
|
||||||||||||
2018
|
|
2017
|
2018
|
|
2017
|
||||||||
(in millions)
|
|
|
|
||||||||||
East North Central
|
$
|
216
|
|
|
$
|
215
|
|
|
8
|
%
|
|
8
|
%
|
East South Central
|
107
|
|
|
90
|
|
|
4
|
|
|
3
|
|
||
Middle Atlantic
|
187
|
|
|
192
|
|
|
7
|
|
|
7
|
|
||
Mountain
|
237
|
|
|
256
|
|
|
9
|
|
|
9
|
|
||
New England
|
62
|
|
|
74
|
|
|
2
|
|
|
3
|
|
||
Pacific
|
814
|
|
|
812
|
|
|
30
|
|
|
29
|
|
||
South Atlantic
|
731
|
|
|
768
|
|
|
27
|
|
|
28
|
|
||
West North Central
|
213
|
|
|
235
|
|
|
8
|
|
|
8
|
|
||
West South Central
|
148
|
|
|
133
|
|
|
5
|
|
|
5
|
|
||
|
2,715
|
|
|
2,775
|
|
|
100
|
%
|
|
100
|
%
|
||
Less: allowance for loan losses
|
19
|
|
|
19
|
|
|
|
|
|||||
Total
|
$
|
2,696
|
|
|
$
|
2,756
|
|
|
Loans
|
|
Percentage
|
||||||||||
December 31,
|
|
December 31,
|
|||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||
(in millions)
|
|
|
|
|
|||||||||
Apartments
|
$
|
621
|
|
|
$
|
566
|
|
|
23
|
%
|
|
20
|
%
|
Hotel
|
43
|
|
|
40
|
|
|
1
|
|
|
1
|
|
||
Industrial
|
453
|
|
|
476
|
|
|
17
|
|
|
17
|
|
||
Mixed use
|
54
|
|
|
44
|
|
|
2
|
|
|
2
|
|
||
Office
|
435
|
|
|
492
|
|
|
16
|
|
|
18
|
|
||
Retail
|
897
|
|
|
937
|
|
|
33
|
|
|
34
|
|
||
Other
|
212
|
|
|
220
|
|
|
8
|
|
|
8
|
|
||
|
2,715
|
|
|
2,775
|
|
|
100
|
%
|
|
100
|
%
|
||
Less: allowance for loan losses
|
19
|
|
|
19
|
|
|
|
|
|||||
Total
|
$
|
2,696
|
|
|
$
|
2,756
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Direct premiums
|
$
|
621
|
|
|
$
|
637
|
|
|
$
|
642
|
|
Reinsurance ceded
|
(225
|
)
|
|
(227
|
)
|
|
(225
|
)
|
|||
Net premiums
|
$
|
396
|
|
|
$
|
410
|
|
|
$
|
417
|
|
•
|
auto and home reinsurance with a limit of $5 million per loss and the Company retained $1 million per loss.
|
•
|
catastrophe reinsurance with a limit of $200 million for the first event and $180 million for a second event and the Company retained $20 million per event.
|
•
|
ceding 90% of every personal umbrella loss with a limit of $5 million per loss.
|
•
|
ceding 90% of home insurance products originating from a certain agency.
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Written premiums
|
|
|
|
|
|
||||||
Direct
|
$
|
1,101
|
|
|
$
|
1,119
|
|
|
$
|
1,085
|
|
Ceded
|
(55
|
)
|
|
(171
|
)
|
|
(20
|
)
|
|||
Total net written premiums
|
$
|
1,046
|
|
|
$
|
948
|
|
|
$
|
1,065
|
|
Earned premiums
|
|
|
|
|
|
||||||
Direct
|
$
|
1,124
|
|
|
$
|
1,107
|
|
|
$
|
1,094
|
|
Ceded
|
(94
|
)
|
|
(123
|
)
|
|
(20
|
)
|
|||
Total net earned premiums
|
$
|
1,030
|
|
|
$
|
984
|
|
|
$
|
1,074
|
|
|
Advice & Wealth
Management |
|
Asset
Management |
|
Annuities
|
|
Protection
|
|
Consolidated
|
||||||||||
(in millions)
|
|||||||||||||||||||
Balance at January 1, 2017
|
$
|
252
|
|
|
$
|
761
|
|
|
$
|
46
|
|
|
$
|
45
|
|
|
$
|
1,104
|
|
Acquisitions (1)
|
27
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|||||
Foreign currency translation
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Purchase price adjustments
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Balance at December 31, 2017
|
279
|
|
|
805
|
|
|
46
|
|
|
45
|
|
|
1,175
|
|
|||||
Foreign currency translation
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||
Purchase price adjustments
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Balance at December 31, 2018
|
$
|
279
|
|
|
$
|
788
|
|
|
$
|
46
|
|
|
$
|
45
|
|
|
$
|
1,158
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||||
(in millions)
|
|||||||||||||||||||||||
Customer relationships
|
$
|
184
|
|
|
$
|
(134
|
)
|
|
$
|
50
|
|
|
$
|
194
|
|
|
$
|
(124
|
)
|
|
$
|
70
|
|
Contracts
|
215
|
|
|
(193
|
)
|
|
22
|
|
|
222
|
|
|
(194
|
)
|
|
28
|
|
||||||
Other
|
168
|
|
|
(124
|
)
|
|
44
|
|
|
156
|
|
|
(116
|
)
|
|
40
|
|
||||||
Total
|
$
|
567
|
|
|
$
|
(451
|
)
|
|
$
|
116
|
|
|
$
|
572
|
|
|
$
|
(434
|
)
|
|
$
|
138
|
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
(in millions)
|
|
|||||||||||
Balance at January 1
|
$
|
2,676
|
|
|
$
|
2,648
|
|
|
$
|
2,730
|
|
|
Capitalization of acquisition costs
|
318
|
|
|
302
|
|
|
360
|
|
(1)
|
|||
Amortization, excluding the impact of valuation assumptions review
|
(355
|
)
|
|
(279
|
)
|
|
(334
|
)
|
|
|||
Amortization, impact of valuation assumptions review
|
33
|
|
|
12
|
|
|
(81
|
)
|
(2)
|
|||
Impact of change in net unrealized (gains) losses on securities
|
104
|
|
|
(7
|
)
|
|
(27
|
)
|
|
|||
Balance at December 31
|
$
|
2,776
|
|
|
$
|
2,676
|
|
|
$
|
2,648
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in millions)
|
|||||||||||
Balance at January 1
|
$
|
276
|
|
|
$
|
302
|
|
|
$
|
335
|
|
Capitalization of sales inducement costs
|
2
|
|
|
4
|
|
|
5
|
|
|||
Amortization, excluding the impact of valuation assumptions review
|
(43
|
)
|
|
(35
|
)
|
|
(42
|
)
|
|||
Amortization, impact of valuation assumptions review
|
—
|
|
|
(1
|
)
|
|
4
|
|
|||
Impact of change in net unrealized (gains) losses on securities
|
16
|
|
|
6
|
|
|
—
|
|
|||
Balance at December 31
|
$
|
251
|
|
|
$
|
276
|
|
|
$
|
302
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Policyholder account balances
|
|
|
|
||||
Fixed annuities (1)
|
$
|
9,338
|
|
|
$
|
9,934
|
|
Variable annuity fixed sub-accounts
|
5,129
|
|
|
5,166
|
|
||
UL/VUL insurance
|
3,063
|
|
|
3,047
|
|
||
IUL insurance
|
1,728
|
|
|
1,384
|
|
||
Other life insurance
|
683
|
|
|
720
|
|
||
Total policyholder account balances
|
19,941
|
|
|
20,251
|
|
||
|
|
|
|
||||
Future policy benefits
|
|
|
|
||||
Variable annuity GMWB
|
875
|
|
|
463
|
|
||
Variable annuity GMAB (2)
|
(19
|
)
|
|
(80
|
)
|
||
Other annuity liabilities
|
26
|
|
|
78
|
|
||
Fixed annuity life contingent liabilities
|
1,459
|
|
|
1,484
|
|
||
Life and DI insurance
|
1,221
|
|
|
1,221
|
|
||
LTC insurance
|
4,981
|
|
|
4,896
|
|
||
UL/VUL and other life insurance additional liabilities
|
749
|
|
|
688
|
|
||
Total future policy benefits
|
9,292
|
|
|
8,750
|
|
||
Policy claims and other policyholders’ funds
|
891
|
|
|
903
|
|
||
Total policyholder account balances, future policy benefits and claims
|
$
|
30,124
|
|
|
$
|
29,904
|
|
(1)
|
Includes fixed deferred annuities, non-life contingent fixed payout annuities and indexed annuity host contracts.
|
(2)
|
Includes the fair value of GMAB embedded derivatives that was a net asset as of both December 31, 2018 and 2017 reported as a contra liability.
|
•
|
In 2018, there was a $28 million decrease primarily reflecting favorable closed claim trends of DI and LTC policies and a decrease of $2 million related to favorable prior year catastrophe reserve development.
|
•
|
In 2017, there was a $50 million decrease primarily reflecting favorable closed claim trends of LTC policies partially offset by an increase of $9 million related to updated estimates for prior year catastrophes recognized in the current year along with a slight increase in non-catastrophe claims.
|
•
|
In 2016, there was a $6 million decrease primarily reflecting favorable closed claim trends of DI and LTC policies and a decrease of $18 million related to favorable prior year reserve development for auto and home business of $20 million partially offset by unfavorable prior year catastrophe reserve development of $2 million.
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Variable annuity
|
$
|
66,913
|
|
|
$
|
75,174
|
|
VUL insurance
|
6,451
|
|
|
7,352
|
|
||
Other insurance
|
29
|
|
|
34
|
|
||
Threadneedle investment liabilities
|
4,532
|
|
|
4,808
|
|
||
Total
|
$
|
77,925
|
|
|
$
|
87,368
|
|
•
|
Return of premium — provides purchase payments minus adjusted partial surrenders.
|
•
|
Reset — provides that the value resets to the account value every sixth contract anniversary minus adjusted partial surrenders. This provision was often provided in combination with the return of premium provision and is no longer offered.
|
•
|
Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus subsequent purchase payments less adjusted partial surrenders.
|
•
|
Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount.
|
•
|
Withdrawals at a specified rate per year for the life of the contractholder (“GMWB for life”).
|
•
|
Withdrawals at a specified rate per year for joint contractholders while either is alive.
|
•
|
Withdrawals based on performance of the contract.
|
•
|
Withdrawals based on the age withdrawals begin.
|
•
|
Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals have not been taken.
|
Variable Annuity Guarantees by Benefit Type (1)
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||||||||||||||||
Total Contract Value
|
Contract Value in Separate Accounts
|
Net Amount at Risk
|
|
Weighted Average Attained Age
|
Total Contract Value
|
|
Contract Value in Separate Accounts
|
|
Net Amount at Risk
|
|
Weighted Average Attained Age
|
|||||||||||||||||
|
(in millions, except age)
|
|||||||||||||||||||||||||||
GMDB:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Return of premium
|
$
|
55,810
|
|
$
|
53,872
|
|
$
|
417
|
|
|
67
|
|
$
|
61,418
|
|
$
|
59,461
|
|
$
|
9
|
|
|
66
|
|||||
Five/six-year reset
|
7,670
|
|
4,941
|
|
112
|
|
|
67
|
|
8,870
|
|
6,149
|
|
12
|
|
|
66
|
|||||||||||
One-year ratchet
|
5,560
|
|
5,210
|
|
417
|
|
|
70
|
|
6,548
|
|
6,187
|
|
11
|
|
|
69
|
|||||||||||
Five-year ratchet
|
1,307
|
|
1,251
|
|
23
|
|
|
66
|
|
1,563
|
|
1,506
|
|
1
|
|
|
65
|
|||||||||||
Other
|
1,033
|
|
1,014
|
|
148
|
|
|
72
|
|
1,099
|
|
1,075
|
|
50
|
|
|
72
|
|||||||||||
Total — GMDB
|
$
|
71,380
|
|
$
|
66,288
|
|
$
|
1,117
|
|
|
67
|
|
$
|
79,498
|
|
$
|
74,378
|
|
$
|
83
|
|
|
66
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
GGU death benefit
|
$
|
992
|
|
$
|
940
|
|
$
|
112
|
|
|
70
|
|
$
|
1,118
|
|
$
|
1,067
|
|
$
|
133
|
|
|
70
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
GMIB
|
$
|
180
|
|
$
|
164
|
|
$
|
12
|
|
|
69
|
|
$
|
233
|
|
$
|
216
|
|
$
|
7
|
|
|
69
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
GMWB:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
GMWB
|
$
|
1,990
|
|
$
|
1,984
|
|
$
|
3
|
|
|
72
|
|
$
|
2,508
|
|
$
|
2,500
|
|
$
|
1
|
|
|
71
|
|||||
GMWB for life
|
40,966
|
|
40,876
|
|
742
|
|
|
68
|
|
44,375
|
|
44,259
|
|
129
|
|
|
67
|
|||||||||||
Total — GMWB
|
$
|
42,956
|
|
$
|
42,860
|
|
$
|
745
|
|
|
68
|
|
$
|
46,883
|
|
$
|
46,759
|
|
$
|
130
|
|
|
67
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
GMAB
|
$
|
2,456
|
|
$
|
2,450
|
|
$
|
24
|
|
|
59
|
|
$
|
3,086
|
|
$
|
3,083
|
|
$
|
—
|
|
|
59
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
Net Amount at Risk
|
|
Weighted Average Attained Age
|
Net Amount at Risk
|
|
Weighted Average Attained Age
|
||||||
(in millions, except age)
|
|||||||||||
UL secondary guarantees
|
$
|
6,513
|
|
|
66
|
|
$
|
6,460
|
|
|
65
|
|
GMDB & GGU
|
|
GMIB
|
|
GMWB (1)
|
|
GMAB (1)
|
|
UL
|
||||||||||
(in millions)
|
|||||||||||||||||||
Balance at January 1, 2016
|
$
|
14
|
|
|
$
|
8
|
|
|
$
|
1,057
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Incurred claims
|
11
|
|
|
1
|
|
|
(40
|
)
|
|
(23
|
)
|
|
127
|
|
|||||
Paid claims
|
(9
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(25
|
)
|
|||||
Balance at December 31, 2016
|
16
|
|
|
8
|
|
|
1,017
|
|
|
(24
|
)
|
|
434
|
|
|||||
Incurred claims
|
5
|
|
|
—
|
|
|
(554
|
)
|
|
(56
|
)
|
|
84
|
|
|||||
Paid claims
|
(4
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Balance at December 31, 2017
|
17
|
|
|
6
|
|
|
463
|
|
|
(80
|
)
|
|
489
|
|
|||||
Incurred claims
|
8
|
|
|
2
|
|
|
412
|
|
|
61
|
|
|
201
|
|
|||||
Paid claims
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||
Balance at December 31, 2018
|
$
|
19
|
|
|
$
|
8
|
|
|
$
|
875
|
|
|
$
|
(19
|
)
|
|
$
|
659
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Mutual funds:
|
|
|
|
||||
Equity
|
$
|
39,764
|
|
|
$
|
46,038
|
|
Bond
|
21,190
|
|
|
23,529
|
|
||
Other
|
5,568
|
|
|
5,109
|
|
||
Total mutual funds
|
$
|
66,522
|
|
|
$
|
74,676
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Fixed rate certificates
|
$
|
7,377
|
|
|
$
|
5,837
|
|
Stock market certificates
|
476
|
|
|
520
|
|
||
Stock market embedded derivative
|
6
|
|
|
10
|
|
||
Other
|
33
|
|
|
33
|
|
||
Less: accrued interest classified in other liabilities
|
(7
|
)
|
|
(12
|
)
|
||
Total investment certificate reserves
|
7,885
|
|
|
6,388
|
|
||
Brokerage deposits
|
3,660
|
|
|
3,915
|
|
||
Total
|
$
|
11,545
|
|
|
$
|
10,303
|
|
|
Outstanding Balance
|
|
Stated Interest Rate
|
||||||||||
December 31,
|
December 31,
|
||||||||||||
2018
|
|
2017
|
2018
|
|
2017
|
||||||||
(in millions)
|
|
|
|||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
||||||
Senior notes due 2019
|
$
|
300
|
|
|
$
|
300
|
|
|
7.3
|
%
|
|
7.3
|
%
|
Senior notes due 2020
|
750
|
|
|
750
|
|
|
5.3
|
|
|
5.3
|
|
||
Senior notes due 2023
|
750
|
|
|
750
|
|
|
4.0
|
|
|
4.0
|
|
||
Senior notes due 2024
|
550
|
|
|
550
|
|
|
3.7
|
|
|
3.7
|
|
||
Senior notes due 2026
|
500
|
|
|
500
|
|
|
2.9
|
|
|
2.9
|
|
||
Capitalized lease obligations
|
25
|
|
|
38
|
|
|
|
|
|
||||
Other (1)
|
(8
|
)
|
|
3
|
|
|
|
|
|
||||
Total long-term debt
|
2,867
|
|
|
2,891
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
||||||
Federal Home Loan Bank (“FHLB”) advances
|
151
|
|
|
150
|
|
|
2.6
|
|
|
1.5
|
|
||
Repurchase agreements
|
50
|
|
|
50
|
|
|
2.6
|
|
|
1.4
|
|
||
Total short-term borrowings
|
201
|
|
|
200
|
|
|
|
|
|
|
|
||
Total
|
$
|
3,068
|
|
|
$
|
3,091
|
|
|
|
|
|
|
|
|
(in millions)
|
||
2019
|
$
|
314
|
|
2020
|
761
|
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
2023
|
750
|
|
|
Thereafter
|
1,050
|
|
|
Total future maturities
|
$
|
2,875
|
|
Level 1
|
Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
|
Level 2
|
Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
|
Level 3
|
Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
|
December 31, 2018
|
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
(in millions)
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
155
|
|
|
$
|
2,350
|
|
|
$
|
—
|
|
|
$
|
2,505
|
|
|
Available-for-Sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
13,153
|
|
|
913
|
|
|
14,066
|
|
|
||||
Residential mortgage backed securities
|
—
|
|
|
6,193
|
|
|
136
|
|
|
6,329
|
|
|
||||
Commercial mortgage backed securities
|
—
|
|
|
4,857
|
|
|
20
|
|
|
4,877
|
|
|
||||
Asset backed securities
|
—
|
|
|
1,392
|
|
|
6
|
|
|
1,398
|
|
|
||||
State and municipal obligations
|
—
|
|
|
2,345
|
|
|
—
|
|
|
2,345
|
|
|
||||
U.S. government and agency obligations
|
1,745
|
|
|
—
|
|
|
—
|
|
|
1,745
|
|
|
||||
Foreign government bonds and obligations
|
—
|
|
|
298
|
|
|
—
|
|
|
298
|
|
|
||||
Total Available-for-Sale securities
|
1,745
|
|
|
28,238
|
|
|
1,075
|
|
|
31,058
|
|
|
||||
Equity securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
||||
Equity securities at net asset value (“NAV”)
|
|
|
|
|
|
|
6
|
|
(1)
|
|||||||
Trading securities
|
36
|
|
|
38
|
|
|
—
|
|
|
74
|
|
|
||||
Separate account assets at NAV
|
|
|
|
|
|
|
77,925
|
|
(1)
|
|||||||
Investments and cash equivalents segregated for regulatory purposes
|
301
|
|
|
—
|
|
|
—
|
|
|
301
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivative contracts
|
—
|
|
|
796
|
|
|
—
|
|
|
796
|
|
|
||||
Equity derivative contracts
|
191
|
|
|
1,527
|
|
|
—
|
|
|
1,718
|
|
|
||||
Foreign exchange derivative contracts
|
5
|
|
|
55
|
|
|
—
|
|
|
60
|
|
|
||||
Total other assets
|
196
|
|
|
2,378
|
|
|
—
|
|
|
2,574
|
|
|
||||
Total assets at fair value
|
$
|
2,433
|
|
|
$
|
33,005
|
|
|
$
|
1,075
|
|
|
$
|
114,444
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Policyholder account balances, future policy benefits and claims:
|
|
|
|
|
|
|
|
|
||||||||
Indexed annuity embedded derivatives
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
IUL embedded derivatives
|
—
|
|
|
—
|
|
|
628
|
|
|
628
|
|
|
||||
GMWB and GMAB embedded derivatives
|
—
|
|
|
—
|
|
|
328
|
|
|
328
|
|
(2)
|
||||
Total policyholder account balances, future policy benefits and claims
|
—
|
|
|
3
|
|
|
970
|
|
|
973
|
|
(3)
|
||||
Customer deposits
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
||||
Other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivative contracts
|
—
|
|
|
424
|
|
|
—
|
|
|
424
|
|
|
||||
Equity derivative contracts
|
78
|
|
|
2,076
|
|
|
—
|
|
|
2,154
|
|
|
||||
Credit derivative contracts
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|
||||
Foreign exchange derivative contracts
|
4
|
|
|
31
|
|
|
—
|
|
|
35
|
|
|
||||
Other
|
13
|
|
|
6
|
|
|
30
|
|
|
49
|
|
|
||||
Total other liabilities
|
95
|
|
|
2,555
|
|
|
30
|
|
|
2,680
|
|
|
||||
Total liabilities at fair value
|
$
|
95
|
|
|
$
|
2,564
|
|
|
$
|
1,000
|
|
|
$
|
3,659
|
|
|
|
December 31, 2017
|
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
(in millions)
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
147
|
|
|
$
|
2,025
|
|
|
$
|
—
|
|
|
$
|
2,172
|
|
|
Available-for-Sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
13,936
|
|
|
1,139
|
|
|
15,075
|
|
|
||||
Residential mortgage backed securities
|
—
|
|
|
6,456
|
|
|
155
|
|
|
6,611
|
|
|
||||
Commercial mortgage backed securities
|
—
|
|
|
4,374
|
|
|
—
|
|
|
4,374
|
|
|
||||
Asset backed securities
|
—
|
|
|
1,573
|
|
|
7
|
|
|
1,580
|
|
|
||||
State and municipal obligations
|
—
|
|
|
2,463
|
|
|
—
|
|
|
2,463
|
|
|
||||
U.S. government and agency obligations
|
503
|
|
|
—
|
|
|
—
|
|
|
503
|
|
|
||||
Foreign government bonds and obligations
|
—
|
|
|
314
|
|
|
—
|
|
|
314
|
|
|
||||
Common stocks
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
||||
Common stocks at NAV
|
|
|
|
|
|
|
6
|
|
(1)
|
|||||||
Total Available-for-Sale securities
|
504
|
|
|
29,116
|
|
|
1,301
|
|
|
30,927
|
|
|
||||
Trading securities
|
10
|
|
|
34
|
|
|
—
|
|
|
44
|
|
|
||||
Separate account assets at NAV
|
|
|
|
|
|
|
87,368
|
|
(1)
|
|||||||
Investments and cash equivalents segregated for regulatory purposes
|
623
|
|
|
—
|
|
|
—
|
|
|
623
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivative contracts
|
—
|
|
|
1,104
|
|
|
—
|
|
|
1,104
|
|
|
||||
Equity derivative contracts
|
63
|
|
|
2,360
|
|
|
—
|
|
|
2,423
|
|
|
||||
Foreign exchange derivative contracts
|
2
|
|
|
34
|
|
|
—
|
|
|
36
|
|
|
||||
Total other assets
|
65
|
|
|
3,498
|
|
|
—
|
|
|
3,563
|
|
|
||||
Total assets at fair value
|
$
|
1,349
|
|
|
$
|
34,673
|
|
|
$
|
1,301
|
|
|
$
|
124,697
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Policyholder account balances, future policy benefits and claims:
|
|
|
|
|
|
|
|
|
||||||||
Indexed annuity embedded derivatives
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
IUL embedded derivatives
|
—
|
|
|
—
|
|
|
601
|
|
|
601
|
|
|
||||
GMWB and GMAB embedded derivatives
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
(4)
|
||||
Total policyholder account balances, future policy benefits and claims
|
—
|
|
|
5
|
|
|
552
|
|
|
557
|
|
(5)
|
||||
Customer deposits
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
||||
Other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivative contracts
|
1
|
|
|
415
|
|
|
—
|
|
|
416
|
|
|
||||
Equity derivative contracts
|
7
|
|
|
2,876
|
|
|
—
|
|
|
2,883
|
|
|
||||
Credit derivative contracts
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
||||
Foreign exchange derivative contracts
|
4
|
|
|
23
|
|
|
—
|
|
|
27
|
|
|
||||
Other
|
9
|
|
|
6
|
|
|
28
|
|
|
43
|
|
|
||||
Total other liabilities
|
21
|
|
|
3,322
|
|
|
28
|
|
|
3,371
|
|
|
||||
Total liabilities at fair value
|
$
|
21
|
|
|
$
|
3,337
|
|
|
$
|
580
|
|
|
$
|
3,938
|
|
|
|
Available-for-Sale Securities
|
|
Other Derivatives Contracts
|
|
||||||||||||||||||||
Corporate Debt Securities
|
|
Residential Mortgage Backed Securities
|
|
Commercial Mortgage Backed Securities
|
|
Asset Backed Securities
|
|
Total
|
|
|||||||||||||||
(in millions)
|
|
|
||||||||||||||||||||||
Balance, January 1, 2018
|
$
|
1,139
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1,301
|
|
|
$
|
—
|
|
|
Total gains (losses) included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
(1)
|
(3
|
)
|
(2)
|
||||||
Other comprehensive income (loss)
|
(26
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(24
|
)
|
|
—
|
|
|
||||||
Purchases
|
15
|
|
|
70
|
|
|
72
|
|
|
32
|
|
|
189
|
|
|
3
|
|
|
||||||
Settlements
|
(214
|
)
|
|
(29
|
)
|
|
—
|
|
|
(1
|
)
|
|
(244
|
)
|
|
—
|
|
|
||||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
||||||
Transfers out of Level 3
|
—
|
|
|
(61
|
)
|
|
(52
|
)
|
|
(35
|
)
|
|
(148
|
)
|
|
—
|
|
|
||||||
Balance, December 31, 2018
|
$
|
913
|
|
|
$
|
136
|
|
|
$
|
20
|
|
|
$
|
6
|
|
|
$
|
1,075
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in unrealized gains (losses) relating to assets held at December 31, 2018
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
(1)
|
$
|
—
|
|
|
|
Available-for-Sale Securities
|
|
||||||||||||||||||||||
Corporate Debt Securities
|
|
Residential Mortgage Backed Securities
|
|
Commercial Mortgage Backed Securities
|
|
Asset Backed Securities
|
|
Common Stocks
|
|
Total
|
||||||||||||||
(in millions)
|
||||||||||||||||||||||||
Balance, January 1, 2017
|
$
|
1,311
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
1
|
|
|
$
|
1,648
|
|
|
Total gains (losses) included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
(1)
|
||||||
Other comprehensive income (loss)
|
(8
|
)
|
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(11
|
)
|
|
||||||
Purchases
|
138
|
|
|
132
|
|
|
65
|
|
|
64
|
|
|
—
|
|
|
399
|
|
|
||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
||||||
Settlements
|
(302
|
)
|
|
(43
|
)
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(374
|
)
|
|
||||||
Transfers into Level 3
|
—
|
|
|
20
|
|
|
—
|
|
|
27
|
|
|
8
|
|
|
55
|
|
|
||||||
Transfers out of Level 3
|
—
|
|
|
(223
|
)
|
|
(65
|
)
|
|
(119
|
)
|
|
(9
|
)
|
|
(416
|
)
|
|
||||||
Balance, December 31, 2017
|
$
|
1,139
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
1,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Changes in unrealized gains (losses) relating to assets held at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
(1)
|
|
Available-for-Sale Securities
|
|
Other Derivative Contracts
|
|
||||||||||||||||||||||||
Corporate Debt Securities
|
|
Residential Mortgage Backed Securities
|
|
Commercial Mortgage Backed Securities
|
|
Asset Backed Securities
|
|
Common Stocks
|
|
Total
|
||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||||
Balance, January 1, 2016
|
$
|
1,425
|
|
|
$
|
218
|
|
|
$
|
3
|
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
1,808
|
|
|
$
|
—
|
|
|
Cumulative effect of change in accounting policies
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
|||||||
Total gains (losses) included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
(1)
|
(2
|
)
|
(2)
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
|||||||
Purchases
|
54
|
|
|
209
|
|
|
42
|
|
|
58
|
|
|
—
|
|
|
363
|
|
|
2
|
|
|
|||||||
Settlements
|
(168
|
)
|
|
(67
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
|||||||
Transfers into Level 3
|
1
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
1
|
|
|
14
|
|
|
—
|
|
|
|||||||
Transfers out of Level 3
|
—
|
|
|
(92
|
)
|
|
(42
|
)
|
|
(178
|
)
|
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
|||||||
Balance, December 31, 2016
|
$
|
1,311
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
1
|
|
|
$
|
1,648
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Changes in unrealized gains (losses) relating to assets held
at December 31, 2016 |
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
(1)
|
$
|
(2
|
)
|
(2)
|
|
December 31, 2018
|
||||||||||||||
Fair Value
|
Valuation Technique
|
Unobservable Input
|
Range
|
Weighted
Average
|
|||||||||||
(in millions)
|
|
||||||||||||||
Corporate debt securities (private placements)
|
$
|
912
|
|
Discounted cash flow
|
Yield/spread to U.S. Treasuries
|
1.0
|
%
|
–
|
3.6%
|
1.5
|
%
|
||||
Asset backed securities
|
$
|
6
|
|
Discounted cash flow
|
Annual short-term default rate
|
2.3%
|
|
||||||||
|
|
|
Annual long-term default rate
|
2.5%
|
–
|
3.0%
|
2.9
|
%
|
|||||||
|
|
|
Discount rate
|
11.5%
|
|
||||||||||
|
|
|
Constant prepayment rate
|
5.0
|
%
|
–
|
10.0%
|
10.0
|
%
|
||||||
|
|
|
Loss recovery
|
36.4
|
%
|
–
|
63.6%
|
63.6
|
%
|
||||||
IUL embedded derivatives
|
$
|
628
|
|
Discounted cash flow
|
Nonperformance risk (1)
|
119 bps
|
|
||||||||
Indexed annuity embedded derivatives
|
$
|
14
|
|
Discounted cash flow
|
Surrender rate
|
0.0
|
%
|
–
|
50.0%
|
|
|||||
|
|
|
Nonperformance risk (1)
|
119 bps
|
|
||||||||||
GMWB and GMAB embedded derivatives
|
$
|
328
|
|
Discounted cash flow
|
Utilization of guaranteed withdrawals (2)
|
0.0%
|
–
|
36.0%
|
|
||||||
|
|
|
|
Surrender rate
|
0.1%
|
–
|
73.4%
|
|
|||||||
|
|
|
|
Market volatility (3)
|
4.0%
|
–
|
16.1%
|
|
|||||||
|
|
|
|
Nonperformance risk (1)
|
119 bps
|
|
|||||||||
Contingent consideration liabilities
|
$
|
30
|
|
Discounted cash flow
|
Discount rate
|
9.0%
|
|
|
December 31, 2017
|
|||||||||||||
Fair Value
|
Valuation Technique
|
Unobservable Input
|
Range
|
Weighted
Average
|
||||||||||
(in millions)
|
|
|||||||||||||
Corporate debt securities (private placements)
|
$
|
1,138
|
|
Discounted cash flow
|
Yield/spread to U.S. Treasuries
|
0.7
|
%
|
–
|
2.3%
|
1.1%
|
||||
Asset backed securities
|
$
|
7
|
|
Discounted cash flow
|
Annual short-term default rate
|
3.8%
|
|
|||||||
|
|
|
Annual long-term default rate
|
2.5
|
%
|
–
|
3.0%
|
2.7%
|
||||||
|
|
|
Discount rate
|
10.5%
|
|
|||||||||
|
|
|
Constant prepayment rate
|
5.0
|
%
|
–
|
10.0%
|
9.9%
|
||||||
|
|
|
Loss recovery
|
36.4
|
%
|
–
|
63.6%
|
63.2%
|
||||||
IUL embedded derivatives
|
$
|
601
|
|
Discounted cash flow
|
Nonperformance risk (1)
|
71 bps
|
|
|||||||
GMWB and GMAB embedded derivatives
|
$
|
(49
|
)
|
Discounted cash flow
|
Utilization of guaranteed withdrawals (2)
|
0.0%
|
–
|
42.0%
|
|
|||||
|
|
|
Surrender rate
|
0.1%
|
–
|
74.7%
|
|
|||||||
|
|
|
|
Market volatility (3)
|
3.7%
|
–
|
16.1%
|
|
||||||
|
|
|
|
Nonperformance risk (1)
|
71 bps
|
|
||||||||
Contingent consideration liabilities
|
$
|
28
|
|
Discounted cash flow
|
Discount rate
|
9.0%
|
|
|
December 31, 2018
|
|
||||||||||||||||||
Carrying Value
|
|
Fair Value
|
||||||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||
(in millions)
|
||||||||||||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans, net
|
$
|
2,696
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,661
|
|
|
$
|
2,661
|
|
|
Policy and certificate loans
|
861
|
|
|
—
|
|
|
—
|
|
|
810
|
|
|
810
|
|
|
|||||
Receivables
|
1,677
|
|
|
179
|
|
|
965
|
|
|
489
|
|
|
1,633
|
|
|
|||||
Restricted and segregated cash
|
2,609
|
|
|
2,609
|
|
|
—
|
|
|
—
|
|
|
2,609
|
|
|
|||||
Other investments and assets
|
572
|
|
|
—
|
|
|
491
|
|
|
60
|
|
|
551
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances, future policy benefits and claims
|
$
|
9,609
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,672
|
|
|
$
|
9,672
|
|
|
Investment certificate reserves
|
7,886
|
|
|
—
|
|
|
—
|
|
|
7,845
|
|
|
7,845
|
|
|
|||||
Brokerage customer deposits
|
3,660
|
|
|
3,660
|
|
|
—
|
|
|
—
|
|
|
3,660
|
|
|
|||||
Separate account liabilities at NAV
|
4,843
|
|
|
|
|
|
|
|
|
4,843
|
|
(1)
|
||||||||
Debt and other liabilities
|
3,296
|
|
|
188
|
|
|
3,059
|
|
|
57
|
|
|
3,304
|
|
|
|
December 31, 2017
|
|
||||||||||||||||||
Carrying Value
|
|
Fair Value
|
||||||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||
(in millions)
|
||||||||||||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans, net
|
$
|
2,756
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,752
|
|
|
$
|
2,752
|
|
|
Policy and certificate loans
|
845
|
|
|
—
|
|
|
—
|
|
|
801
|
|
|
801
|
|
|
|||||
Receivables
|
1,537
|
|
|
103
|
|
|
946
|
|
|
487
|
|
|
1,536
|
|
|
|||||
Restricted and segregated cash
|
2,524
|
|
|
2,524
|
|
|
—
|
|
|
—
|
|
|
2,524
|
|
|
|||||
Other investments and assets (2)
|
725
|
|
|
—
|
|
|
677
|
|
|
49
|
|
|
726
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances, future policy benefits and claims
|
$
|
10,246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,755
|
|
|
$
|
10,755
|
|
|
Investment certificate reserves
|
6,390
|
|
|
—
|
|
|
—
|
|
|
6,374
|
|
|
6,374
|
|
|
|||||
Brokerage customer deposits
|
3,915
|
|
|
3,915
|
|
|
—
|
|
|
—
|
|
|
3,915
|
|
|
|||||
Separate account liabilities at NAV
|
5,177
|
|
|
|
|
|
|
|
|
5,177
|
|
(1)
|
||||||||
Debt and other liabilities
|
3,290
|
|
|
118
|
|
|
3,180
|
|
|
119
|
|
|
3,417
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Amounts of Assets Presented in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheets
|
|
Net Amount
|
|||||||||||||||||||
Financial Instruments (1)
|
|
Cash Collateral
|
|
Securities Collateral
|
|||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC
|
$
|
2,525
|
|
|
$
|
—
|
|
|
$
|
2,525
|
|
|
$
|
(2,075
|
)
|
|
$
|
(403
|
)
|
|
$
|
(26
|
)
|
|
$
|
21
|
|
OTC cleared
|
34
|
|
|
—
|
|
|
34
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||||
Exchange-traded
|
15
|
|
|
—
|
|
|
15
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
Total derivatives
|
2,574
|
|
|
—
|
|
|
2,574
|
|
|
(2,099
|
)
|
|
(403
|
)
|
|
(26
|
)
|
|
46
|
|
|||||||
Securities borrowed
|
179
|
|
|
—
|
|
|
179
|
|
|
(37
|
)
|
|
—
|
|
|
(139
|
)
|
|
3
|
|
|||||||
Total
|
$
|
2,753
|
|
|
$
|
—
|
|
|
$
|
2,753
|
|
|
$
|
(2,136
|
)
|
|
$
|
(403
|
)
|
|
$
|
(165
|
)
|
|
$
|
49
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Amounts of Assets Presented in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheets
|
|
Net Amount
|
|||||||||||||||||||
Financial Instruments (1)
|
|
Cash Collateral
|
|
Securities Collateral
|
|||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC
|
$
|
3,520
|
|
|
$
|
—
|
|
|
$
|
3,520
|
|
|
$
|
(2,653
|
)
|
|
$
|
(760
|
)
|
|
$
|
(88
|
)
|
|
$
|
19
|
|
OTC cleared
|
21
|
|
|
—
|
|
|
21
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Exchange-traded
|
22
|
|
|
—
|
|
|
22
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Total derivatives
|
3,563
|
|
|
—
|
|
|
3,563
|
|
|
(2,669
|
)
|
|
(760
|
)
|
|
(88
|
)
|
|
46
|
|
|||||||
Securities borrowed
|
103
|
|
|
—
|
|
|
103
|
|
|
(19
|
)
|
|
—
|
|
|
(82
|
)
|
|
2
|
|
|||||||
Total
|
$
|
3,666
|
|
|
$
|
—
|
|
|
$
|
3,666
|
|
|
$
|
(2,688
|
)
|
|
$
|
(760
|
)
|
|
$
|
(170
|
)
|
|
$
|
48
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheets
|
|
Net Amount
|
|||||||||||||||||||
Financial Instruments (1)
|
|
Cash Collateral
|
|
Securities Collateral
|
|||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC
|
$
|
2,597
|
|
|
$
|
—
|
|
|
$
|
2,597
|
|
|
$
|
(2,075
|
)
|
|
$
|
(89
|
)
|
|
$
|
(430
|
)
|
|
$
|
3
|
|
OTC cleared
|
24
|
|
|
—
|
|
|
24
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Exchange-traded
|
10
|
|
|
—
|
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Total derivatives
|
2,631
|
|
|
—
|
|
|
2,631
|
|
|
(2,099
|
)
|
|
(89
|
)
|
|
(430
|
)
|
|
13
|
|
|||||||
Securities loaned
|
188
|
|
|
—
|
|
|
188
|
|
|
(37
|
)
|
|
—
|
|
|
(146
|
)
|
|
5
|
|
|||||||
Repurchase agreements
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|||||||
Total
|
$
|
2,869
|
|
|
$
|
—
|
|
|
$
|
2,869
|
|
|
$
|
(2,136
|
)
|
|
$
|
(89
|
)
|
|
$
|
(626
|
)
|
|
$
|
18
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheets
|
|
Net Amount
|
|||||||||||||||||||
Financial Instruments (1)
|
|
Cash Collateral
|
|
Securities Collateral
|
|||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
OTC
|
$
|
3,309
|
|
|
$
|
—
|
|
|
$
|
3,309
|
|
|
$
|
(2,653
|
)
|
|
$
|
(70
|
)
|
|
$
|
(579
|
)
|
|
$
|
7
|
|
OTC cleared
|
16
|
|
|
—
|
|
|
16
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Exchange-traded
|
3
|
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Total derivatives
|
3,328
|
|
|
—
|
|
|
3,328
|
|
|
(2,669
|
)
|
|
(70
|
)
|
|
(579
|
)
|
|
10
|
|
|||||||
Securities loaned
|
118
|
|
|
—
|
|
|
118
|
|
|
(19
|
)
|
|
—
|
|
|
(94
|
)
|
|
5
|
|
|||||||
Repurchase agreements
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|||||||
Total
|
$
|
3,496
|
|
|
$
|
—
|
|
|
$
|
3,496
|
|
|
$
|
(2,688
|
)
|
|
$
|
(70
|
)
|
|
$
|
(723
|
)
|
|
$
|
15
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Notional
|
|
Gross Fair Value
|
Notional
|
|
Gross Fair Value
|
||||||||||||||||||
Assets (1)
|
|
Liabilities (2)(3)
|
Assets (1)
|
|
Liabilities (2)(3)
|
||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
675
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
675
|
|
|
$
|
23
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
103
|
|
|
1
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
4
|
|
||||||
Total qualifying hedges
|
778
|
|
|
8
|
|
|
—
|
|
|
762
|
|
|
23
|
|
|
4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
58,244
|
|
|
789
|
|
|
424
|
|
|
66,043
|
|
|
1,081
|
|
|
416
|
|
||||||
Equity contracts
|
54,079
|
|
|
1,718
|
|
|
2,154
|
|
|
59,292
|
|
|
2,423
|
|
|
2,883
|
|
||||||
Credit contracts
|
1,209
|
|
|
—
|
|
|
18
|
|
|
721
|
|
|
—
|
|
|
2
|
|
||||||
Foreign exchange contracts
|
4,908
|
|
|
59
|
|
|
35
|
|
|
4,163
|
|
|
36
|
|
|
23
|
|
||||||
Other contracts
|
2
|
|
|
—
|
|
|
—
|
|
|
452
|
|
|
—
|
|
|
—
|
|
||||||
Total non-designated hedges
|
118,442
|
|
|
2,566
|
|
|
2,631
|
|
|
130,671
|
|
|
3,540
|
|
|
3,324
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GMWB and GMAB (4)
|
N/A
|
|
|
—
|
|
|
328
|
|
|
N/A
|
|
|
—
|
|
|
(49
|
)
|
||||||
IUL
|
N/A
|
|
|
—
|
|
|
628
|
|
|
N/A
|
|
|
—
|
|
|
601
|
|
||||||
Indexed annuities
|
N/A
|
|
|
—
|
|
|
17
|
|
|
N/A
|
|
|
—
|
|
|
5
|
|
||||||
SMC
|
N/A
|
|
|
—
|
|
|
6
|
|
|
N/A
|
|
|
—
|
|
|
10
|
|
||||||
Total embedded derivatives
|
N/A
|
|
|
—
|
|
|
979
|
|
|
N/A
|
|
|
—
|
|
|
567
|
|
||||||
Total derivatives
|
$
|
119,220
|
|
|
$
|
2,574
|
|
|
$
|
3,610
|
|
|
$
|
131,433
|
|
|
$
|
3,563
|
|
|
$
|
3,895
|
|
(2)
|
The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, and indexed annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets.
|
(4)
|
The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2018 included $646 million of individual contracts in a liability position and $318 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2017 included $443 million of individual contracts in a liability position and $492 million of individual contracts in an asset position.
|
|
Net Investment Income
|
|
Banking and Deposit Interest Expense
|
|
Distribution Expenses
|
|
Interest Credited to Fixed Accounts
|
|
Benefits, Claims, Losses and Settlement Expenses
|
|
General and Administrative Expense
|
||||||||||||
(in millions)
|
|||||||||||||||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(312
|
)
|
|
$
|
—
|
|
Equity contracts
|
—
|
|
|
(4
|
)
|
|
(42
|
)
|
|
(49
|
)
|
|
302
|
|
|
(7
|
)
|
||||||
Credit contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||||
Foreign exchange contracts
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(9
|
)
|
||||||
Other contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||||
GMWB and GMAB embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(377
|
)
|
|
—
|
|
||||||
IUL embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||||
Indexed annuity embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
SMC embedded derivatives
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total gain (loss)
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
(42
|
)
|
|
$
|
17
|
|
|
$
|
(382
|
)
|
|
$
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Equity contracts
|
(10
|
)
|
|
4
|
|
|
54
|
|
|
75
|
|
|
(1,081
|
)
|
|
11
|
|
||||||
Credit contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(23
|
)
|
|
6
|
|
||||||
Other contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
GMWB and GMAB embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
663
|
|
|
—
|
|
||||||
IUL embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
||||||
SMC embedded derivatives
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total gain (loss)
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
30
|
|
|
$
|
(464
|
)
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
Equity contracts
|
(1
|
)
|
|
2
|
|
|
23
|
|
|
20
|
|
|
(897
|
)
|
|
6
|
|
||||||
Credit contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||
Other contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
GMWB and GMAB embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237
|
|
|
—
|
|
||||||
IUL embedded derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||||||
SMC embedded derivatives
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total gain (loss)
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
35
|
|
|
$
|
(624
|
)
|
|
$
|
20
|
|
|
Premiums Payable
|
|
Premiums Receivable
|
||||
|
(in millions)
|
||||||
2019
|
$
|
294
|
|
|
$
|
170
|
|
2020
|
216
|
|
|
132
|
|
||
2021
|
187
|
|
|
119
|
|
||
2022
|
226
|
|
|
200
|
|
||
2023
|
142
|
|
|
42
|
|
||
2024-2028
|
404
|
|
|
17
|
|
||
Total
|
$
|
1,469
|
|
|
$
|
680
|
|
Derivatives designated as hedging instruments
|
Location of Gain Recorded into Income
|
Amount of Gain Recognized in
Income on Derivatives
|
||||||||||||
Years Ended December 31,
|
||||||||||||||
2018
|
|
2017
|
|
2016
|
||||||||||
|
(in millions)
|
|||||||||||||
Interest rate contracts
|
Interest and debt expense
|
$
|
11
|
|
|
$
|
16
|
|
|
$
|
19
|
|
|
December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Stock option
|
$
|
35
|
|
|
$
|
32
|
|
|
$
|
34
|
|
Restricted stock
|
24
|
|
|
24
|
|
|
24
|
|
|||
Restricted stock units
|
85
|
|
|
65
|
|
|
76
|
|
|||
Liability awards
|
2
|
|
|
45
|
|
|
4
|
|
|||
Total
|
$
|
146
|
|
|
$
|
166
|
|
|
$
|
138
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Dividend yield
|
2.3
|
%
|
|
2.3
|
%
|
|
2.3
|
%
|
Expected volatility
|
24
|
%
|
|
30
|
%
|
|
27
|
%
|
Risk-free interest rate
|
2.4
|
%
|
|
1.9
|
%
|
|
1.3
|
%
|
Expected life of stock option (years)
|
5.0
|
|
5.0
|
|
5.0
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual
Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 1
|
6.0
|
|
|
$
|
100.38
|
|
|
7.0
|
|
$
|
413
|
|
Granted
|
1.0
|
|
|
179.23
|
|
|
|
|
|
|||
Exercised
|
(0.8
|
)
|
|
83.21
|
|
|
|
|
|
|||
Forfeited
|
(0.1
|
)
|
|
128.08
|
|
|
|
|
|
|||
Outstanding at December 31
|
6.1
|
|
|
115.73
|
|
|
6.7
|
|
57
|
|
||
Exercisable at December 31
|
3.8
|
|
|
101.61
|
|
|
5.7
|
|
48
|
|
|
Shares
|
|
Weighted Average Grant-date Fair Value
|
|||
Non-vested shares at January 1
|
1.2
|
|
|
$
|
107.52
|
|
Granted
|
0.6
|
|
|
165.42
|
|
|
Deferred
|
0.2
|
|
|
139.64
|
|
|
Vested
|
(0.8
|
)
|
|
124.28
|
|
|
Forfeited
|
(0.1
|
)
|
|
124.49
|
|
|
Non-vested shares at December 31
|
1.1
|
|
|
130.17
|
|
|
Year Ended December 31, 2018
|
||||||||||
Pretax
|
|
Income Tax Benefit (Expense)
|
|
Net of Tax
|
|||||||
(in millions)
|
|||||||||||
Net unrealized gains (losses) on securities:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities arising during the period (1)
|
$
|
(1,039
|
)
|
|
$
|
237
|
|
|
$
|
(802
|
)
|
Reclassification of net (gains) losses on securities included in net income (2)
|
(9
|
)
|
|
2
|
|
|
(7
|
)
|
|||
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables
|
435
|
|
|
(91
|
)
|
|
344
|
|
|||
Net unrealized gains (losses) on securities
|
(613
|
)
|
|
148
|
|
|
(465
|
)
|
|||
Defined benefit plans:
|
|
|
|
|
|
||||||
Net gain (loss) arising during the period
|
(30
|
)
|
|
7
|
|
|
(23
|
)
|
|||
Defined benefit plans
|
(30
|
)
|
|
7
|
|
|
(23
|
)
|
|||
Foreign currency translation
|
(32
|
)
|
|
1
|
|
|
(31
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(675
|
)
|
|
$
|
156
|
|
|
$
|
(519
|
)
|
|
Year Ended December 31, 2017
|
||||||||||
Pretax
|
|
Income Tax Benefit (Expense)
|
|
Net of Tax
|
|||||||
(in millions)
|
|||||||||||
Net unrealized gains (losses) on securities:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities arising during the period (1)
|
$
|
243
|
|
|
$
|
(77
|
)
|
|
$
|
166
|
|
Reclassification of net (gains) losses on securities included in net income (2)
|
(55
|
)
|
|
19
|
|
|
(36
|
)
|
|||
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables
|
(180
|
)
|
|
57
|
|
|
(123
|
)
|
|||
Net unrealized gains (losses) on securities
|
8
|
|
|
(1
|
)
|
|
7
|
|
|||
Net unrealized gains (losses) on derivatives:
|
|
|
|
|
|
||||||
Reclassification of net (gains) losses on derivatives included in net income (3)
|
5
|
|
|
(2
|
)
|
|
3
|
|
|||
Net unrealized gains (losses) on derivatives
|
5
|
|
|
(2
|
)
|
|
3
|
|
|||
Defined benefit plans:
|
|
|
|
|
|
||||||
Prior service credit
|
2
|
|
|
(1
|
)
|
|
1
|
|
|||
Net gain (loss) arising during the period
|
38
|
|
|
(11
|
)
|
|
27
|
|
|||
Defined benefit plans
|
40
|
|
|
(12
|
)
|
|
28
|
|
|||
Foreign currency translation
|
74
|
|
|
(82
|
)
|
(4)
|
(8
|
)
|
|||
Other
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
126
|
|
|
$
|
(97
|
)
|
|
$
|
29
|
|
|
Year Ended December 31, 2016
|
||||||||||
Pretax
|
|
Income Tax Benefit (Expense)
|
|
Net of Tax
|
|||||||
(in millions)
|
|||||||||||
Net unrealized gains (losses) on securities:
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities arising during the period (1)
|
$
|
339
|
|
|
$
|
(121
|
)
|
|
$
|
218
|
|
Reclassification of net (gains) losses on securities included in net income (2)
|
(22
|
)
|
|
8
|
|
|
(14
|
)
|
|||
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables
|
(242
|
)
|
|
85
|
|
|
(157
|
)
|
|||
Net unrealized gains (losses) on securities
|
75
|
|
|
(28
|
)
|
|
47
|
|
|||
Net unrealized gains (losses) on derivatives:
|
|
|
|
|
|
||||||
Reclassification of net (gains) losses on derivatives included in net income (3)
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Net unrealized gains (losses) on derivatives
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Defined benefit plans:
|
|
|
|
|
|
||||||
Net gain (loss) arising during the period
|
(45
|
)
|
|
11
|
|
|
(34
|
)
|
|||
Defined benefit plans
|
(45
|
)
|
|
11
|
|
|
(34
|
)
|
|||
Foreign currency translation
|
(117
|
)
|
|
41
|
|
|
(76
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(81
|
)
|
|
$
|
22
|
|
|
$
|
(59
|
)
|
|
Net Unrealized Gains (Losses) on Securities
|
|
Net Unrealized Gains (Losses) on Derivatives
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation
|
|
Other
|
|
Total
|
||||||||||||
(in millions)
|
|||||||||||||||||||||||
Balance, January 1, 2016
|
$
|
426
|
|
|
$
|
1
|
|
|
$
|
(91
|
)
|
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
$
|
253
|
|
Cumulative effect of change in accounting policies
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
OCI before reclassifications
|
61
|
|
|
—
|
|
|
(39
|
)
|
|
(76
|
)
|
|
—
|
|
|
(54
|
)
|
||||||
Amounts reclassified from AOCI
|
(14
|
)
|
|
4
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Total OCI
|
47
|
|
|
4
|
|
|
(34
|
)
|
|
(76
|
)
|
|
—
|
|
|
(59
|
)
|
||||||
Balance, December 31, 2016
|
479
|
|
(1)
|
5
|
|
|
(125
|
)
|
|
(159
|
)
|
|
—
|
|
|
200
|
|
||||||
OCI before reclassifications
|
43
|
|
|
—
|
|
|
20
|
|
|
(8
|
)
|
|
(1
|
)
|
|
54
|
|
||||||
Amounts reclassified from AOCI
|
(36
|
)
|
|
3
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
||||||
Total OCI
|
7
|
|
|
3
|
|
|
28
|
|
|
(8
|
)
|
|
(1
|
)
|
|
29
|
|
||||||
Balance, December 31, 2017
|
486
|
|
(1)
|
8
|
|
|
(97
|
)
|
|
(167
|
)
|
|
(1
|
)
|
|
229
|
|
||||||
Cumulative effect of change in accounting policies
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
OCI before reclassifications
|
(458
|
)
|
|
—
|
|
|
(36
|
)
|
|
(31
|
)
|
|
—
|
|
|
(525
|
)
|
||||||
Amounts reclassified from AOCI
|
(7
|
)
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Total OCI
|
(465
|
)
|
|
—
|
|
|
(23
|
)
|
|
(31
|
)
|
|
—
|
|
|
(519
|
)
|
||||||
Balance, December 31, 2018
|
$
|
20
|
|
(1)
|
$
|
8
|
|
|
$
|
(120
|
)
|
|
$
|
(198
|
)
|
|
$
|
(1
|
)
|
|
$
|
(291
|
)
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions, except per share amounts)
|
|||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Basic: Weighted-average common shares outstanding
|
145.6
|
|
|
154.1
|
|
|
166.3
|
|
|||
Effect of potentially dilutive nonqualified stock options and other share-based awards
|
2.1
|
|
|
2.6
|
|
|
1.9
|
|
|||
Diluted: Weighted-average common shares outstanding
|
147.7
|
|
|
156.7
|
|
|
168.2
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share attributable to Ameriprise Financial, Inc. common shareholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
14.41
|
|
|
$
|
9.60
|
|
|
$
|
7.90
|
|
Diluted
|
$
|
14.20
|
|
|
$
|
9.44
|
|
|
$
|
7.81
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
RiverSource Life
|
|
|
|
|
|
||||||
Statutory net gain from operations
|
$
|
1,686
|
|
|
$
|
958
|
|
|
$
|
834
|
|
Statutory net income (loss)
|
1,628
|
|
|
222
|
|
|
322
|
|
|||
IDS Property Casualty
|
|
|
|
|
|
||||||
Statutory net income (loss)
|
9
|
|
|
(10
|
)
|
|
(8
|
)
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Current income tax
|
|
|
|
|
|
||||||
Federal
|
$
|
275
|
|
|
$
|
468
|
|
|
$
|
245
|
|
State and local
|
45
|
|
|
58
|
|
|
44
|
|
|||
Foreign
|
41
|
|
|
52
|
|
|
23
|
|
|||
Total current income tax
|
361
|
|
|
578
|
|
|
312
|
|
|||
|
|
|
|
|
|
||||||
Deferred income tax
|
|
|
|
|
|
||||||
Federal
|
20
|
|
|
169
|
|
|
(36
|
)
|
|||
State and local
|
2
|
|
|
(5
|
)
|
|
3
|
|
|||
Foreign
|
3
|
|
|
(8
|
)
|
|
(1
|
)
|
|||
Total deferred income tax
|
25
|
|
|
156
|
|
|
(34
|
)
|
|||
Total income tax provision
|
$
|
386
|
|
|
$
|
734
|
|
|
$
|
278
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
United States
|
$
|
2,263
|
|
|
$
|
1,988
|
|
|
$
|
1,411
|
|
Foreign
|
221
|
|
|
226
|
|
|
180
|
|
|||
Total
|
$
|
2,484
|
|
|
$
|
2,214
|
|
|
$
|
1,591
|
|
|
Years Ended December 31,
|
|||||||
2018
|
|
2017
|
|
2016
|
||||
Tax at U.S. statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Changes in taxes resulting from:
|
|
|
|
|
|
|||
Low income housing tax credits
|
(3.2
|
)
|
|
(3.4
|
)
|
|
(4.2
|
)
|
Dividends received deduction
|
(1.6
|
)
|
|
(5.8
|
)
|
|
(7.6
|
)
|
State taxes, net of federal benefit
|
1.5
|
|
|
—
|
|
|
1.9
|
|
Foreign tax credits, net of addback
|
(1.1
|
)
|
|
—
|
|
|
(1.6
|
)
|
Impact of the Tax Act
|
—
|
|
|
13.0
|
|
|
—
|
|
Incentive compensation
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
Foreign taxes
|
—
|
|
|
(2.0
|
)
|
|
(2.5
|
)
|
Taxes applicable to prior years
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
Other, net
|
(1.1
|
)
|
|
(0.7
|
)
|
|
(0.5
|
)
|
Income tax provision
|
15.5
|
%
|
|
33.1
|
%
|
|
17.4
|
%
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Deferred income tax assets
|
|||||||
Liabilities for policyholder account balances, future policy benefits and claims
|
$
|
725
|
|
|
$
|
620
|
|
Deferred compensation
|
329
|
|
|
345
|
|
||
Investment related
|
145
|
|
|
245
|
|
||
Postretirement benefits
|
44
|
|
|
34
|
|
||
Other
|
57
|
|
|
66
|
|
||
Gross deferred income tax assets
|
1,300
|
|
|
1,310
|
|
||
Less: valuation allowance
|
20
|
|
|
17
|
|
||
Total deferred income tax assets
|
1,280
|
|
|
1,293
|
|
||
|
|
|
|
||||
Deferred income tax liabilities
|
|
|
|
||||
Deferred acquisition costs
|
437
|
|
|
446
|
|
||
Intangible assets
|
104
|
|
|
93
|
|
||
Depreciation expense
|
101
|
|
|
93
|
|
||
Goodwill
|
60
|
|
|
52
|
|
||
Deferred sales inducement costs
|
53
|
|
|
62
|
|
||
Net unrealized gains on Available-for-Sale securities
|
30
|
|
|
162
|
|
||
Other
|
6
|
|
|
7
|
|
||
Gross deferred income tax liabilities
|
791
|
|
|
915
|
|
||
Net deferred income tax assets
|
$
|
489
|
|
|
$
|
378
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in millions)
|
|||||||||||
Balance at January 1
|
$
|
76
|
|
|
$
|
115
|
|
|
$
|
161
|
|
Additions based on tax positions related to the current year
|
22
|
|
|
16
|
|
|
15
|
|
|||
Additions for tax positions of prior years
|
9
|
|
|
3
|
|
|
33
|
|
|||
Reductions for tax positions of prior years
|
(3
|
)
|
|
(57
|
)
|
|
(87
|
)
|
|||
Audit settlements
|
(12
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Balance at December 31
|
$
|
92
|
|
|
$
|
76
|
|
|
$
|
115
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Service cost
|
$
|
48
|
|
|
$
|
47
|
|
|
$
|
44
|
|
Interest cost
|
30
|
|
|
28
|
|
|
29
|
|
|||
Expected return on plan assets
|
(48
|
)
|
|
(45
|
)
|
|
(41
|
)
|
|||
Amortization of prior service costs
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Amortization of net loss
|
11
|
|
|
10
|
|
|
6
|
|
|||
Other
|
5
|
|
|
3
|
|
|
4
|
|
|||
Net periodic benefit cost
|
$
|
46
|
|
|
$
|
42
|
|
|
$
|
41
|
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in millions)
|
|||||||||||||||
Benefit obligation, January 1
|
$
|
995
|
|
|
$
|
899
|
|
|
$
|
15
|
|
|
$
|
15
|
|
Service cost
|
48
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
30
|
|
|
28
|
|
|
1
|
|
|
—
|
|
||||
Benefits paid
|
(9
|
)
|
|
(12
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Actuarial (gain) loss
|
(59
|
)
|
|
39
|
|
|
(1
|
)
|
|
1
|
|
||||
Settlements
|
(29
|
)
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency rate changes
|
(9
|
)
|
|
15
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation, December 31
|
$
|
967
|
|
|
$
|
995
|
|
|
$
|
14
|
|
|
$
|
15
|
|
|
Pension Plans
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Fair value of plan assets, January 1
|
$
|
748
|
|
|
$
|
628
|
|
Actual return on plan assets
|
(59
|
)
|
|
107
|
|
||
Employer contributions
|
86
|
|
|
32
|
|
||
Benefits paid
|
(9
|
)
|
|
(12
|
)
|
||
Settlements
|
(29
|
)
|
|
(21
|
)
|
||
Foreign currency rate changes
|
(9
|
)
|
|
14
|
|
||
Fair value of plan assets, December 31
|
$
|
728
|
|
|
$
|
748
|
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in millions)
|
|||||||||||||||
Benefit liability
|
$
|
(256
|
)
|
|
$
|
(253
|
)
|
|
$
|
(14
|
)
|
|
$
|
(15
|
)
|
Benefit asset
|
17
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
$
|
(239
|
)
|
|
$
|
(247
|
)
|
|
$
|
(14
|
)
|
|
$
|
(15
|
)
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Pension plans with accumulated benefit obligations in excess of plan assets
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
762
|
|
|
$
|
759
|
|
Fair value of plan assets
|
559
|
|
|
562
|
|
||
Pension plans with projected benefit obligations in excess of plan assets
|
|
|
|
||||
Projected benefit obligation
|
$
|
815
|
|
|
$
|
816
|
|
Fair value of plan assets
|
559
|
|
|
562
|
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||
Discount rates
|
4.01
|
%
|
|
3.32
|
%
|
|
4.11
|
%
|
|
3.41
|
%
|
Rates of increase in compensation levels
|
4.25
|
|
|
4.29
|
|
|
N/A
|
|
|
N/A
|
|
Interest crediting rates for cash balance plans
|
5.00
|
|
|
5.00
|
|
|
N/A
|
|
|
N/A
|
|
Asset Category
|
December 31, 2018
|
|
|||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
|
(in millions)
|
||||||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||||||
U.S. large cap stocks
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90
|
|
|
|
U.S. small cap stocks
|
70
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
|||||
Non-U.S. large cap stocks
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
|||||
Non-U.S. small cap stocks
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
|||||
Debt securities:
|
|
|
|
|
|
|
|
|
|||||||||
U.S. investment grade bonds
|
39
|
|
|
23
|
|
|
—
|
|
|
62
|
|
|
|||||
U.S. high yield bonds
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|||||
Non-U.S. investment grade bonds
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|||||
Cash equivalents at NAV
|
|
|
|
|
|
|
36
|
|
(1)
|
||||||||
Collective investment funds at NAV
|
|
|
|
|
|
|
188
|
|
(1)
|
||||||||
Real estate investment trusts at NAV
|
|
|
|
|
|
|
19
|
|
(1)
|
||||||||
Hedge funds at NAV
|
|
|
|
|
|
|
27
|
|
(1)
|
||||||||
Pooled pension funds at NAV
|
|
|
|
|
|
|
169
|
|
(1)
|
||||||||
Total
|
$
|
266
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
728
|
|
|
Asset Category
|
December 31, 2017
|
|
|||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
|
(in millions)
|
||||||||||||||||
Equity securities: (2)
|
|
|
|
|
|
|
|
|
|||||||||
U.S. large cap stocks
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
|
U.S. small cap stocks
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
|||||
Non-U.S. large cap stocks
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
|||||
Non-U.S. small cap stocks
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
|||||
Emerging markets
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
|||||
Debt securities: (2)
|
|
|
|
|
|
|
|
|
|||||||||
U.S. investment grade bonds
|
27
|
|
|
11
|
|
|
—
|
|
|
38
|
|
|
|||||
U.S. high yield bonds
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|||||
Non-U.S. investment grade bonds
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
|||||
Cash equivalents at NAV (2)
|
|
|
|
|
|
|
18
|
|
(1)
|
||||||||
Collective investment funds at NAV (2)
|
|
|
|
|
|
|
181
|
|
(1)
|
||||||||
Real estate investment trusts at NAV
|
|
|
|
|
|
|
18
|
|
(1)
|
||||||||
Hedge funds at NAV
|
|
|
|
|
|
|
27
|
|
(1)
|
||||||||
Pooled pension funds at NAV (2)
|
|
|
|
|
|
|
186
|
|
(1)
|
||||||||
Total
|
$
|
307
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
748
|
|
|
|
Pension Plans
|
|
Other
Postretirement Plans
|
||||
(in millions)
|
|||||||
2019
|
$
|
82
|
|
|
$
|
1
|
|
2020
|
74
|
|
|
1
|
|
||
2021
|
62
|
|
|
1
|
|
||
2022
|
65
|
|
|
1
|
|
||
2023
|
69
|
|
|
1
|
|
||
2024-2028
|
374
|
|
|
5
|
|
|
2018
|
|
2017
|
||||
(in millions)
|
|||||||
Commercial mortgage loans
|
$
|
57
|
|
|
$
|
31
|
|
Consumer lines of credit
|
1
|
|
|
2
|
|
||
Affordable housing and other real estate partnerships
|
59
|
|
|
123
|
|
||
Total funding commitments
|
$
|
117
|
|
|
$
|
156
|
|
|
December 31,
|
||||||
2018
|
|
2017
|
|||||
(in millions)
|
|||||||
Advice & Wealth Management
|
$
|
14,480
|
|
|
$
|
13,270
|
|
Asset Management
|
7,558
|
|
|
8,401
|
|
||
Annuities
|
88,771
|
|
|
98,276
|
|
||
Protection
|
17,126
|
|
|
18,039
|
|
||
Corporate & Other
|
9,281
|
|
|
9,494
|
|
||
Total assets
|
$
|
137,216
|
|
|
$
|
147,480
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Adjusted operating net revenues:
|
|
|
|
|
|
||||||
Advice & Wealth Management
|
$
|
6,189
|
|
|
$
|
5,616
|
|
|
$
|
5,144
|
|
Asset Management
|
3,011
|
|
|
3,072
|
|
|
2,960
|
|
|||
Annuities
|
2,476
|
|
|
2,499
|
|
|
2,463
|
|
|||
Protection
|
2,206
|
|
|
2,044
|
|
|
2,241
|
|
|||
Corporate & Other
|
226
|
|
|
173
|
|
|
237
|
|
|||
Less: Eliminations (1)
|
1,414
|
|
|
1,411
|
|
|
1,406
|
|
|||
Total segment adjusted operating net revenues
|
12,694
|
|
|
11,993
|
|
|
11,639
|
|
|||
Net realized gains (losses)
|
10
|
|
|
46
|
|
|
6
|
|
|||
Revenue attributable to consolidated investment entities
|
127
|
|
|
94
|
|
|
128
|
|
|||
Market impact on IUL benefits, net
|
(7
|
)
|
|
1
|
|
|
24
|
|
|||
Market impact of hedges on investments
|
11
|
|
|
(2
|
)
|
|
3
|
|
|||
Total net revenues per consolidated statements of operations
|
$
|
12,835
|
|
|
$
|
12,132
|
|
|
$
|
11,800
|
|
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
(in millions)
|
|||||||||||
Adjusted operating earnings:
|
|
|
|
|
|
||||||
Advice & Wealth Management
|
$
|
1,389
|
|
|
$
|
1,163
|
|
|
$
|
910
|
|
Asset Management
|
728
|
|
|
740
|
|
|
621
|
|
|||
Annuities
|
465
|
|
|
710
|
|
|
329
|
|
|||
Protection
|
243
|
|
|
216
|
|
|
263
|
|
|||
Corporate & Other
|
(294
|
)
|
|
(426
|
)
|
|
(359
|
)
|
|||
Total segment adjusted operating earnings
|
2,531
|
|
|
2,403
|
|
|
1,764
|
|
|||
Net realized gains (losses)
|
9
|
|
|
44
|
|
|
6
|
|
|||
Net income (loss) attributable to consolidated investment entities
|
(1
|
)
|
|
2
|
|
|
(2
|
)
|
|||
Market impact on variable annuity guaranteed benefits, net
|
(31
|
)
|
|
(232
|
)
|
|
(216
|
)
|
|||
Market impact on IUL benefits, net
|
(17
|
)
|
|
4
|
|
|
36
|
|
|||
Market impact on fixed annuity benefits
|
1
|
|
|
—
|
|
|
—
|
|
|||
Market impact of hedges on investments
|
11
|
|
|
(2
|
)
|
|
3
|
|
|||
Integration and restructuring charges
|
(19
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Pretax income per consolidated statements of operations
|
$
|
2,484
|
|
|
$
|
2,214
|
|
|
$
|
1,591
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
12/31
|
|
9/30
|
|
6/30
|
|
3/31
|
12/31
|
|
9/30
|
|
6/30
|
|
3/31
|
||||||||||||||||||
(in millions, except per share data)
|
|||||||||||||||||||||||||||||||
Net revenues
|
$
|
3,179
|
|
|
$
|
3,292
|
|
|
$
|
3,196
|
|
|
$
|
3,168
|
|
|
$
|
3,180
|
|
|
$
|
3,014
|
|
|
$
|
3,012
|
|
|
$
|
2,926
|
|
Pretax income
|
652
|
|
|
588
|
|
|
548
|
|
|
696
|
|
|
595
|
|
|
633
|
|
|
511
|
|
|
475
|
|
||||||||
Net income
|
539
|
|
|
503
|
|
|
462
|
|
|
594
|
|
|
177
|
|
|
507
|
|
|
393
|
|
|
403
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
3.81
|
|
|
$
|
3.48
|
|
|
$
|
3.14
|
|
|
$
|
3.97
|
|
|
$
|
1.17
|
|
|
$
|
3.31
|
|
|
$
|
2.53
|
|
|
$
|
2.56
|
|
Diluted
|
$
|
3.76
|
|
|
$
|
3.43
|
|
|
$
|
3.10
|
|
|
$
|
3.91
|
|
|
$
|
1.15
|
|
|
$
|
3.26
|
|
|
$
|
2.50
|
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
141.5
|
|
|
144.4
|
|
|
147.0
|
|
|
149.5
|
|
|
151.0
|
|
|
153.0
|
|
|
155.1
|
|
|
157.5
|
|
||||||||
Diluted
|
143.2
|
|
|
146.5
|
|
|
149.0
|
|
|
152.1
|
|
|
153.8
|
|
|
155.4
|
|
|
157.5
|
|
|
160.1
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash dividends declared per common share
|
$
|
0.90
|
|
|
$
|
0.90
|
|
|
$
|
0.90
|
|
|
$
|
0.83
|
|
|
$
|
0.83
|
|
|
$
|
0.83
|
|
|
$
|
0.83
|
|
|
$
|
0.75
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
•
|
information included under the caption “Items to be Voted on by Shareholders-Item 1-Election of the Eight Director Nominees Named Below”;
|
•
|
information included under the caption “Requirements, Including Deadlines, for Submission of Proxy Proposals, Nomination of Directors and Other Business by Shareholders”;
|
•
|
information under the caption “Corporate Governance-Codes of Conduct”;
|
•
|
information included under the caption “Corporate Governance-Membership on Board Committees”;
|
•
|
information under the caption “Corporate Governance-Nominating and Governance Committee-Director Nomination Process”;
|
•
|
information included under the caption “Corporate Governance-Audit Committee”;
|
•
|
information included under the caption “Corporate Governance-Audit Committee Financial Experts”; and
|
•
|
information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance.”
|
•
|
information under the caption “Corporate Governance-Compensation and Benefits Committee-Compensation Committee Interlocks and Insider Participation”;
|
•
|
information included under the caption “Compensation of Executive Officers”; and
|
•
|
information included under the caption “Compensation of Directors.”
|
Plan category
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) – shares
|
|
|||||
Equity compensation plans approved by security holders
|
8,034,670
|
|
(1)
|
$
|
115.79
|
|
|
11,977,882
|
|
|
Equity compensation plans not approved by security holders
|
2,872,278
|
|
(2)
|
$
|
47.50
|
|
|
6,807,639
|
|
(3)
|
Total
|
10,906,948
|
|
|
$
|
115.73
|
|
|
18,785,521
|
|
|
(1)
|
Includes 1,913,440 share units subject to vesting per the terms of the applicable plan which could result in the issuance of common stock. As the terms of these share based awards do not provide for an exercise price, they have been excluded from the weighted average exercise price in column B.
|
(2)
|
Includes 2,867,203 share units subject to vesting per the terms of the applicable plans which could result in the issuance of common stock. As the terms of these share based awards do not provide for an exercise price, they have been excluded from the weighted average exercise price in column B. For additional information on the Company’s equity compensation plans see Note 18 — Share-Based Compensation to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. The non-shareholder approved plans consist of the Ameriprise Financial 2008 Employment Incentive Equity Award Plan, the Ameriprise Advisor Group Deferred Compensation Plan and the Ameriprise Financial Franchise Advisor Deferred Compensation Plan.
|
(3)
|
Consists of 3,258,635 shares of common stock issuable under the terms of the Ameriprise Financial 2008 Employment Incentive Equity Award Plan, 1,685,994 shares of common stock issuable under the Ameriprise Advisor Group Deferred Compensation Plan, and 1,863,009 shares of common stock issuable under the Ameriprise Financial Franchise Advisor Deferred Compensation Plan.
|
|
Exhibit
|
Description
|
|
|
|
|
Ameriprise Financial 2005 Incentive Compensation Plan, as amended and restated effective April 30, 2014 (incorporated by reference to Exhibit B to the Proxy Statement for the Annual Meeting of Shareholders held on April 30, 2014, File No. 001-32525, filed on March 17, 2014).
|
|
|
Ameriprise Financial Deferred Compensation Plan, as amended and restated effective January 1, 2012 (incorporated by reference to Exhibit 10.3 of the Annual Report on Form 10-K, File No. 1-32525, filed on February 24, 2012).
|
|
|
Ameriprise Financial Supplemental Retirement Plan, as amended and restated effective October 3, 2017 (incorporated by reference to Exhibit 10.4 of the Annual Report on Form 10-K, File No. 1-32525, filed on February 23, 2018).
|
|
|
Form of Ameriprise Financial 2005 Incentive Compensation Plan Master Agreement for Substitution Awards (incorporated by reference to Exhibit 10.8 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).
|
|
|
Ameriprise Financial Form of Award Certificate — Non-Qualified Stock Option Award (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).
|
|
|
Ameriprise Financial Form of Award Certificate — Restricted Stock Award (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).
|
|
|
Ameriprise Financial Form of Award Certificate — Restricted Stock Unit Award (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).
|
|
|
Ameriprise Financial Form of Agreement — Cash Incentive Award (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).
|
|
|
Ameriprise Financial Long-Term Incentive Award Program Guide (incorporated by reference to Exhibit 10.10 of the Annual Report on Form 10-K, File No. 1-32525, filed on February 23, 2017).
|
|
|
Ameriprise Financial Performance Cash Unit Plan Supplement to the Long Term Incentive Award Program Guide
|
|
|
Ameriprise Financial Form of Award Certificate — Performance Cash Unit Plan Award (incorporated by reference to Exhibit 10.12 of the Annual Report on Form 10-K File No. 1-32525, filed on February 25, 2016)
|
|
|
Ameriprise Financial Performance Share Unit Plan Supplement to the Long-Term Incentive Award Program Guide (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q, File No. 1-32525, filed on May 2, 2011).
|
|
|
Ameriprise Financial Form of Award Certificate — Performance Share Unit Plan Award (incorporated by reference to Exhibit 10.14 of the Annual Report on Form 10-K File No. 1-32525, filed on February 25, 2016).
|
|
|
Ameriprise Financial Deferred Share Plan for Outside Directors, as amended and restated effective December 3, 2014 (incorporated by reference to Exhibit 10.15 of the Annual Report on Form 10-K File No. 1-32525, filed on February 24, 2015).
|
|
|
CEO Security and Compensation Arrangements (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on October 31, 2005).
|
|
|
Ameriprise Financial Senior Executive Severance Plan, as amended and restated effective January 1, 2012 (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10-K, File No. 1-32525, filed on February 24, 2012).
|
|
|
Restricted Stock Awards in lieu of Key Executive Life Insurance Program (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on November 18, 2005).
|
|
|
Ameriprise Financial Annual Incentive Award Plan, adopted effective as of September 30, 2005 (incorporated by reference to Exhibit 10.28 of the Annual Report on Form 10-K, File No. 1-32525, filed on March 8, 2006).
|
|
|
Form of Indemnification Agreement for directors, Chief Executive Officer, Chief Financial Officer, General Counsel and Principal Accounting Officer and any other officers designated by the Chief Executive Officer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on April 26, 2012).
|
|
|
Ameriprise Financial 2008 Employment Incentive Equity Award Plan, as amended and restated effective November 20, 2018.
|
|
|
Ameriprise Advisor Group Deferred Compensation Plan, as amended and restated effective January 1, 2016 (incorporated by reference to Exhibit 10.23 of the Annual Report on Form 10-K File No. 1-32525, filed on February 25, 2016).
|
|
|
Ameriprise Financial Annual Incentive Award Plan, as amended and restated as of January 1, 2009 (incorporated by
reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q, File No. 1-32525, filed on May 2, 2018).
|
|
Exhibit
|
Description
|
|
|
|
|
Third Amended and Restated Credit Agreement, dated as of October 12, 2017, among Ameriprise Financial, Inc., as Borrower, the lenders party thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A. and Citibank, N.A. as Co-Syndication Agents, Credit Suisse AG, Cayman Islands Branch, Goldman Sachs Bank USA, HSBC Bank USA, National Association, JPMorgan Chase Bank, N.A. and U.S. Bank National Association as Co-Documentation Agents, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on October 16, 2017).
|
|
|
13*
|
Portions of the Ameriprise Financial, Inc. 2018 Annual Report to Shareholders, which, except for those sections incorporated herein by reference, are furnished solely for the information of the SEC and are not to be deemed “filed.”
|
|
21*
|
Subsidiaries of Ameriprise Financial, Inc.
|
|
23*
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
24
|
Powers of attorney (included on Signature Page).
|
|
31.1*
|
Certification of James M. Cracchiolo pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
|
31.2*
|
Certification of Walter S. Berman pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
|
32*
|
Certification of James M. Cracchiolo and Walter S. Berman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
The following materials from Ameriprise Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL: (i) Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016; (iii) Consolidated Balance Sheets at December 31, 2018 and 2017; (iv) Consolidated Statements of Equity for the years ended December 31, 2018, 2017 and 2016; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016; (vi) Notes to the Consolidated Financial Statements; and (vii) Schedule I - Condensed Financial Information of Registrant (Parent Only).
|
|
* Filed electronically herewithin.
|
Date:
|
February 26, 2019
|
By
|
/s/ Walter S. Berman
|
|
Walter S. Berman Executive Vice President and Chief Financial Officer
|
Date:
|
February 26, 2019
|
By
|
/s/ James M. Cracchiolo
|
|
James M. Cracchiolo Chairman and Chief Executive Officer
(Principal Executive Officer and Director)
|
Date:
|
February 26, 2019
|
By
|
/s/ Walter S. Berman
|
|
Walter S. Berman Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
Date:
|
February 26, 2019
|
By
|
/s/ David K. Stewart
|
|
David K. Stewart
Senior Vice President and Controller (Principal Accounting Officer) |
Date:
|
February 26, 2019
|
By
|
/s/ Amy DiGeso
|
|
Amy DiGeso
Director |
Date:
|
February 26, 2019
|
By
|
/s/ Lon R. Greenberg
|
|
Lon R. Greenberg
Director |
Date:
|
February 26, 2019
|
By
|
/s/ W. Edward Walter
|
|
W. Edward Walter
Director |
Date:
|
February 26, 2019
|
By
|
/s/ Jeffrey Noddle
|
|
Jeffrey Noddle
Director |
Date:
|
February 26, 2019
|
By
|
/s/ Robert F. Sharpe, Jr.
|
|
Robert F. Sharpe, Jr.
Director |
Date:
|
February 26, 2019
|
By
|
/s/ Christopher J. Williams
|
|
Christopher J. Williams
Director |
(Parent Company Only)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017 (1)
|
|
2016 (1)
|
|||||||
(in millions)
|
|||||||||||
Revenues
|
|
|
|
|
|
||||||
Management and financial advice fees
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Net investment income
|
34
|
|
|
11
|
|
|
14
|
|
|||
Other revenues
|
4
|
|
|
8
|
|
|
5
|
|
|||
Total revenues
|
37
|
|
|
18
|
|
|
18
|
|
|||
Banking and deposit interest expense
|
7
|
|
|
5
|
|
|
1
|
|
|||
Total net revenues
|
30
|
|
|
13
|
|
|
17
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Benefits, claims, losses and settlement expenses
|
4
|
|
|
76
|
|
|
41
|
|
|||
Distribution expenses
|
4
|
|
|
18
|
|
|
—
|
|
|||
Interest and debt expense
|
120
|
|
|
116
|
|
|
113
|
|
|||
General and administrative expense
|
210
|
|
|
246
|
|
|
189
|
|
|||
Total expenses
|
338
|
|
|
456
|
|
|
343
|
|
|||
Pretax loss before equity in earnings of subsidiaries
|
(308
|
)
|
|
(443
|
)
|
|
(326
|
)
|
|||
Income tax benefit
|
(73
|
)
|
|
(47
|
)
|
|
(146
|
)
|
|||
Loss before equity in earnings of subsidiaries
|
(235
|
)
|
|
(396
|
)
|
|
(180
|
)
|
|||
Equity in earnings of subsidiaries
|
2,333
|
|
|
1,876
|
|
|
1,493
|
|
|||
Net income
|
2,098
|
|
|
1,480
|
|
|
1,313
|
|
|||
Other comprehensive income (loss), net of tax
|
(519
|
)
|
|
29
|
|
|
(59
|
)
|
|||
Total comprehensive income
|
$
|
1,579
|
|
|
$
|
1,509
|
|
|
$
|
1,254
|
|
Schedule I — Condensed Financial Information of Registrant
Condensed Balance Sheets
(Parent Company Only)
|
|||||||
|
December 31,
|
||||||
2018
|
|
2017 (1)
|
|||||
(in millions, except share amounts)
|
|||||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
476
|
|
|
$
|
494
|
|
Investments
|
467
|
|
|
341
|
|
||
Loans to subsidiaries
|
372
|
|
|
227
|
|
||
Due from subsidiaries
|
288
|
|
|
382
|
|
||
Receivables
|
5
|
|
|
5
|
|
||
Land, buildings, equipment, and software, net of accumulated depreciation of $1,168 and $1,111, respectively
|
237
|
|
|
236
|
|
||
Investments in subsidiaries
|
7,231
|
|
|
8,066
|
|
||
Other assets
|
1,209
|
|
|
1,150
|
|
||
Total assets
|
$
|
10,285
|
|
|
$
|
10,901
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
636
|
|
|
$
|
640
|
|
Due to subsidiaries
|
146
|
|
|
74
|
|
||
Borrowings from subsidiaries
|
346
|
|
|
363
|
|
||
Long-term debt
|
2,867
|
|
|
2,891
|
|
||
Other liabilities
|
702
|
|
|
938
|
|
||
Total liabilities
|
4,697
|
|
|
4,906
|
|
||
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 328,537,214 and 327,506,935, respectively)
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
8,260
|
|
|
8,085
|
|
||
Retained earnings
|
12,909
|
|
|
11,326
|
|
||
Treasury shares, at cost (192,206,467 and 180,872,271 shares, respectively)
|
(15,293
|
)
|
|
(13,648
|
)
|
||
Accumulated other comprehensive income, net of tax, including amounts applicable to equity investments in subsidiaries
|
(291
|
)
|
|
229
|
|
||
Total shareholders’ equity
|
5,588
|
|
|
5,995
|
|
||
Total liabilities and equity
|
$
|
10,285
|
|
|
$
|
10,901
|
|
(Parent Company Only)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
2018
|
|
2017 (1)
|
|
2016 (1)
|
|||||||
(in millions)
|
|||||||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,098
|
|
|
$
|
1,480
|
|
|
$
|
1,313
|
|
Equity in earnings of subsidiaries
|
(2,333
|
)
|
|
(1,876
|
)
|
|
(1,493
|
)
|
|||
Dividends received from subsidiaries
|
2,093
|
|
|
1,589
|
|
|
1,465
|
|
|||
Other operating activities, primarily with subsidiaries
|
57
|
|
|
712
|
|
|
529
|
|
|||
Net cash provided by operating activities
|
1,915
|
|
|
1,905
|
|
|
1,814
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Available-for-Sale securities:
|
|
|
|
|
|
||||||
Proceeds from sales
|
—
|
|
|
—
|
|
|
55
|
|
|||
Maturities, sinking fund payments and calls
|
94
|
|
|
44
|
|
|
277
|
|
|||
Purchases
|
(222
|
)
|
|
(77
|
)
|
|
(129
|
)
|
|||
Proceeds from sale of other investments
|
—
|
|
|
3
|
|
|
—
|
|
|||
Purchase of land, buildings, equipment and software
|
(62
|
)
|
|
(69
|
)
|
|
(49
|
)
|
|||
Contributions to subsidiaries
|
(73
|
)
|
|
(79
|
)
|
|
(197
|
)
|
|||
Return of capital from subsidiaries
|
454
|
|
|
47
|
|
|
187
|
|
|||
Repayment of loans to subsidiaries
|
1,623
|
|
|
1,277
|
|
|
1,910
|
|
|||
Issuance of loans to subsidiaries
|
(1,768
|
)
|
|
(1,337
|
)
|
|
(1,910
|
)
|
|||
Other, net
|
2
|
|
|
(91
|
)
|
|
59
|
|
|||
Net cash provided by investing activities
|
48
|
|
|
(282
|
)
|
|
203
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Dividends paid to shareholders
|
(506
|
)
|
|
(491
|
)
|
|
(479
|
)
|
|||
Repurchase of common shares
|
(1,630
|
)
|
|
(1,485
|
)
|
|
(1,707
|
)
|
|||
Cash paid for purchased options with deferred premiums
|
(20
|
)
|
|
(19
|
)
|
|
(22
|
)
|
|||
Issuance of long-term debt, net of issuance costs
|
—
|
|
|
—
|
|
|
496
|
|
|||
Repayments of long-term debt
|
(13
|
)
|
|
(11
|
)
|
|
(257
|
)
|
|||
Borrowings from subsidiaries
|
472
|
|
|
124
|
|
|
—
|
|
|||
Repayments of borrowings from subsidiaries
|
(273
|
)
|
|
(15
|
)
|
|
—
|
|
|||
Exercise of stock options
|
2
|
|
|
15
|
|
|
9
|
|
|||
Other, net
|
(13
|
)
|
|
(1
|
)
|
|
36
|
|
|||
Net cash used in financing activities
|
(1,981
|
)
|
|
(1,883
|
)
|
|
(1,924
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(18
|
)
|
|
(260
|
)
|
|
93
|
|
|||
Cash and cash equivalents at beginning of year
|
494
|
|
|
754
|
|
|
661
|
|
|||
Cash and cash equivalents at end of year
|
$
|
476
|
|
|
$
|
494
|
|
|
$
|
754
|
|
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Interest paid on debt
|
$
|
126
|
|
|
$
|
128
|
|
|
$
|
121
|
|
Income taxes paid (received), net
|
(27
|
)
|
|
(368
|
)
|
|
(112
|
)
|
|||
Non-cash dividends from subsidiaries
|
195
|
|
|
109
|
|
|
11
|
|
•
|
As of both December 31, 2018 and 2017, the debt of Ameriprise Financial included $50 million of repurchase agreements, which are accounted for as secured borrowings.
|
•
|
As of both December 31, 2018 and 2017, Ameriprise Financial had $150 million of borrowings from the Federal Home Loan Bank of Des Moines, which is collateralized with commercial mortgage backed securities.
|
Performance Measure
|
Percentage Payout Earned*
|
Weighting
|
Weighted Payout Percentage
Calculation
|
|
Compound Annual Growth Rate of EPS
|
150%
|
x 50% =
|
75
|
%
|
Average Annual ROE
|
100%
|
x 50% =
|
50
|
%
|
PERFORMANCE MATRIX PAYOUT PERCENTAGE
|
|
|
125
|
%
|
Information Needed
|
Contact/E-mail/Web Address
|
Phone Number
|
Fax Number
|
PCU Award
History Report
|
Ameriprise Corporate Compensation
e-mail: ameriprise.compensation@ampf.com
website: Inside
|
(612) 671-2282
or
(612) 671-3072
|
(612) 671-3948
|
Detrimental Conduct provisions for Bands 50 and above
|
|||
Other information requests (e.g., LTIA policy questions for HR, general LTIA questions)
|
1.
|
Purpose of the Plan
|
2.
|
Definitions
|
2.4
|
“Board” means the board of directors of Ameriprise Financial.
|
2.7
|
“Company” means Ameriprise Financial and all of its Subsidiaries, collectively.
|
2.8
|
“Director” means a non-employee member of the Board.
|
2.9
|
“Dividend Equivalents” has the meaning set forth in Section 8.7.
|
2.21
|
“Securities Act” means the Securities Act of 1933, as amended from time to time.
|
3.
|
Available Shares
|
3.1
|
Number of Shares.
|
(b)
|
For purposes of counting Shares against the Share reserves under
|
4.
|
Administration of the Plan
|
4.1
|
Administration. The Plan shall be administered by the Committee.
|
5.
|
Eligibility
|
6.
|
Options
|
6.4
|
Exercise.
|
7.
|
Restricted Stock, Restricted Stock Units and Other Share-Based Awards
|
8.
|
Generally Applicable Award Provisions
|
9.
|
Change in Control
|
(c)
|
the consummation of:
|
(ii)
|
a complete liquidation or dissolution of the Company; or
|
10.
|
Anti-Dilution Adjustments
|
11.
|
Amendment and Termination
|
12.
|
Miscellaneous
|
•
|
Registration Statement (Form S-8 No. 333-128789 and No. 333-195690) pertaining to the Ameriprise Financial 2005 Incentive Compensation Plan,
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•
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Registration Statements (Form S-8 No. 333-128790 and No. 333-156074) pertaining to the Ameriprise Financial 401(k) Plan,
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•
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Registration Statements (Form S-8 No. 333-128791, No. 333-150677, No. 333-181008 and No. 333-219786) pertaining to the Ameriprise Financial Franchise Advisor Deferred Compensation Plan (formerly the Ameriprise Financial Deferred Equity Program for Independent Financial Advisors),
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•
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Registration Statement (Form S-3ASR No. 333-223309) of Ameriprise Financial, Inc.,
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•
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Registration Statement (Form S-8 No. 333-156075) pertaining to the Ameriprise Financial 2008 Employment Incentive Equity Award Plan,
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•
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Registration Statement (Form S-8 No. 333-159025) pertaining to the Ameriprise Advisor Group Deferred Compensation Plan;
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1.
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I have reviewed this Annual Report on Form 10-K of Ameriprise Financial, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 26, 2019
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By
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/s/ James M. Cracchiolo
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James M. Cracchiolo
Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Ameriprise Financial, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 26, 2019
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By
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/s/ Walter S. Berman
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Walter S. Berman Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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February 26, 2019
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By
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/s/ James M. Cracchiolo
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James M. Cracchiolo
Chief Executive Officer
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Date:
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February 26, 2019
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By
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/s/ Walter S. Berman
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Walter S. Berman Chief Financial Officer
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