CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Revenues | ||
Management and financial advice fees | $774 | $554 |
Distribution fees | 391 | 311 |
Net investment income | 590 | 418 |
Premiums | 282 | 266 |
Other revenues | 255 | 209 |
Total revenues | 2,292 | 1,758 |
Banking and deposit interest expense | 21 | 42 |
Total net revenues | 2,271 | 1,716 |
Expenses | ||
Distribution expenses | 525 | 384 |
Interest credited to fixed accounts | 228 | 205 |
Benefits, claims, losses and settlement expenses | 354 | 100 |
Amortization of deferred acquisition costs | 118 | 286 |
Interest and debt expense | 64 | 26 |
General and administrative expense | 621 | 581 |
Total expenses | 1,910 | 1,582 |
Pretax income | 361 | 134 |
Income tax provision | 65 | 18 |
Net income | 296 | 116 |
Less: Net income (loss) attributable to noncontrolling interests | 82 | (14) |
Net income attributable to Ameriprise Financial | 214 | 130 |
Earnings per Share Attributable to Ameriprise Financial Common Shareholders | ||
Basic (in dollars per share) | 0.82 | 0.58 |
Diluted (in dollars per share) | 0.81 | 0.58 |
Weighted average common shares outstanding | ||
Basic (in shares) | 260.8 | 222.3 |
Diluted (in shares) | 265 | 223.5 |
Cash dividends paid per common share (in dollars per share) | 0.17 | 0.17 |
Net investment income: | ||
Net investment income before impairment losses on securities | 620 | 453 |
Total other-than-temporary impairment losses on securities | (32) | (25) |
Portion of loss recognized in other comprehensive income | 2 | (10) |
Net impairment losses recognized in net investment income | (30) | (35) |
Net investment income | $590 | $418 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | Mar. 31, 2010
| Dec. 31, 2009
|
Assets | ||
Cash and cash equivalents | $4,816 | $3,097 |
Total assets | 122,377 | 113,774 |
Liabilities: | ||
Total liabilities | 111,677 | 103,898 |
Ameriprise Financial, Inc.: | ||
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 298,578,896 and 295,839,581, respectively) | 3 | 3 |
Additional paid-in capital | 5,819 | 5,748 |
Retained earnings | 5,451 | 5,282 |
Appropriated retained earnings of consolidated investment entities | 508 | |
Treasury shares, at cost (41,173,408 and 40,744,090 shares, respectively) | (2,038) | (2,023) |
Accumulated other comprehensive income, net of tax | 365 | 263 |
Total Ameriprise Financial, Inc. shareholders' equity | 10,108 | 9,273 |
Noncontrolling interests | 592 | 603 |
Total equity | 10,700 | 9,876 |
Total liabilities and equity | 122,377 | 113,774 |
Ameriprise Financial, Inc.: | ||
Assets | ||
Cash and cash equivalents | 4,816 | 3,097 |
Investments | 35,765 | 36,938 |
Separate account assets | 60,326 | 58,129 |
Receivables | 4,768 | 4,435 |
Deferred acquisition costs | 4,243 | 4,334 |
Restricted and segregated cash | 1,532 | 1,452 |
Other assets | 4,011 | 4,290 |
Total assets | 115,461 | 112,675 |
Liabilities: | ||
Future policy benefits and claims | 30,866 | 30,886 |
Separate account liabilities | 60,326 | 58,129 |
Customer deposits | 8,632 | 8,554 |
Debt | 2,612 | 1,868 |
Accounts payable and accrued expenses | 748 | 918 |
Other liabilities | 2,743 | 3,093 |
Total liabilities | 105,927 | 103,448 |
Consolidated Investment Entities: | ||
Assets | ||
Cash and cash equivalents | 613 | 181 |
Investments | 5,349 | 36 |
Receivables | 80 | 49 |
Other assets | 874 | 833 |
Total assets | 6,916 | 1,099 |
Liabilities: | ||
Debt | 5,502 | 381 |
Accounts payable and accrued expenses | 17 | 28 |
Other liabilities | 231 | 41 |
Total liabilities | $5,750 | $450 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
In Millions, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Receivables, fair value for Consolidated Investment Entities | $39 | |
Debt, fair value for Consolidated Investment Entities | 5,144 | |
Other liabilities, fair value for Consolidated Investment Entities | $214 | $30 |
Common shares, par value (in dollars per share) | 0.01 | 0.01 |
Common shares, shares authorized | 1,250,000,000 | 1,250,000,000 |
Common shares, shares issued | 298,578,896 | 295,839,581 |
Treasury shares, shares | 41,173,408 | 40,744,090 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash Flows from Operating Activities | ||
Net income | $296 | $116 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Capitalization of deferred acquisition and sales inducement costs | (119) | (229) |
Amortization of deferred acquisition and sales inducement costs | 130 | 335 |
Depreciation, amortization and accretion, net | 22 | 56 |
Deferred income tax expense | 437 | 82 |
Share-based compensation | 39 | 40 |
Net realized investment gains | (32) | (51) |
Other-than-temporary impairments and provision for loan losses | 34 | 39 |
Net (income) loss attributable to noncontrolling interests | (82) | 14 |
Changes in operating assets and liabilities before consolidated investment entities: | ||
Restricted and segregated cash | 127 | 82 |
Trading securities and equity method investments, net | 5 | (336) |
Future policy benefits and claims, net | 8 | 167 |
Receivables | (267) | 303 |
Brokerage deposits | 8 | (151) |
Accounts payable and accrued expenses | (161) | (172) |
Derivatives collateral, net | (265) | (625) |
Other, net | 7 | (229) |
Changes in operating assets and liabilities of consolidated investment entities | (56) | (13) |
Net cash provided by (used in) operating activities | 131 | (572) |
Available-for-Sale securities: | ||
Proceeds from sales | 1,539 | 1,285 |
Maturities, sinking fund payments and calls | 1,842 | 1,207 |
Purchases | (2,523) | (4,561) |
Proceeds from sales and maturities of commercial mortgage loans | 62 | 52 |
Funding of commercial mortgage loans | (49) | (34) |
Proceeds from sales of other investments | 36 | 11 |
Purchase of other investments | (21) | (10) |
Purchase of investments by consolidated investment entities | (405) | |
Proceeds from sales and maturities of investments by consolidated investment entities | 454 | |
Return of capital in investments of consolidated investment entities | 1 | |
Purchase of land, buildings, equipment and software | (21) | (15) |
Change in policy and certificate loans, net | 7 | |
Change in consumer banking loans and credit card receivables, net | (75) | (15) |
Other, net | (1) | 4 |
Net cash provided by (used in) investing activities | 839 | (2,069) |
Investment certificates and banking time deposits: | ||
Proceeds from additions | 294 | 980 |
Maturities, withdrawals and cash surrenders | (607) | (866) |
Change in other banking deposits | 384 | 271 |
Policyholder and contractholder account values: | ||
Consideration received | 430 | 2,417 |
Net transfers (to) from separate accounts | (39) | 284 |
Surrenders and other benefits | (358) | (770) |
Deferred premium options, net | (36) | 61 |
Issuances of debt, net of issuance costs | 744 | |
Repayments of debt | (113) | |
Dividends paid to shareholders | (45) | (37) |
Repurchase of common shares | (15) | (9) |
Exercise of stock options | 32 | |
Excess tax benefits from share-based compensation | 1 | 1 |
Borrowings of consolidated investment entities | 9 | |
Repayments of debt of consolidated investment entities | (1) | |
Noncontrolling interests investments in subsidiaries | 1 | 1 |
Distributions to noncontrolling interests | (23) | (18) |
Other, net | (3) | |
Net cash provided by financing activities | 759 | 2,211 |
Effect of exchange rate changes on cash | (10) | (2) |
Net increase (decrease) in cash and cash equivalents | 1,719 | (432) |
Cash and cash equivalents at beginning of period | 3,097 | 6,228 |
Cash and cash equivalents at end of period | 4,816 | 5,796 |
Supplemental Disclosures: | ||
Interest paid on debt before consolidated investment entities | 4 | 3 |
Income taxes paid (received), net | $154 | ($1) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | ||||||||
In Millions, except Share data | Common Shares
| Additional Paid-In Capital
| Retained Earnings
| Appropriated Retained Earnings of Consolidated Investment Entities
| Treasury Shares
| Accumulated Other Comprehensive Income (Loss)
| Non-controlling Interests
| Total
|
Balances at Dec. 31, 2008 | $3 | $4,688 | $4,592 | ($2,012) | ($1,093) | $289 | $6,467 | |
Balance (in shares) at Dec. 31, 2008 | 216,510,699 | |||||||
Statement of Equity | ||||||||
Change in accounting principles, net of tax | 132 | (132) | ||||||
Comprehensive income: | ||||||||
Net income (loss) | 130 | (14) | 116 | |||||
Other comprehensive income, net of tax: | ||||||||
Change in net unrealized securities gains/losses | 96 | 96 | ||||||
Change in noncredit related impairments on securities and net unrealized securities losses on previously impaired securities | (2) | (2) | ||||||
Foreign currency translation adjustment | (3) | (5) | (8) | |||||
Total comprehensive income | 202 | |||||||
Dividends paid to shareholders | (37) | (37) | ||||||
Noncontrolling interests investments in subsidiaries | 1 | 1 | ||||||
Distributions to noncontrolling interests | (18) | (18) | ||||||
Repurchase of common shares | (9) | (9) | ||||||
Repurchase of common shares, (in shares) | (509,778) | |||||||
Share-based compensation plans | 31 | 31 | ||||||
Share-based compensation plans (in shares) | 3,136,459 | |||||||
Balances at Mar. 31, 2009 | 3 | 4,719 | 4,817 | (2,021) | (1,134) | 253 | 6,637 | |
Balance (in shares) at Mar. 31, 2009 | 219,137,380 | |||||||
Balances at Dec. 31, 2009 | 3 | 5,748 | 5,282 | (2,023) | 263 | 603 | 9,876 | |
Balance (in shares) at Dec. 31, 2009 | 255,095,491 | |||||||
Statement of Equity | ||||||||
Change in accounting principles, net of tax | 473 | 473 | ||||||
Comprehensive income: | ||||||||
Net income (loss) | 214 | 82 | 296 | |||||
Net income reclassified to appropriated retained earnings | 35 | (35) | ||||||
Other comprehensive income, net of tax: | ||||||||
Change in net unrealized securities gains/losses | 164 | 164 | ||||||
Change in noncredit related impairments on securities and net unrealized securities losses on previously impaired securities | (24) | (24) | ||||||
Change in net unrealized derivatives losses | (7) | (7) | ||||||
Foreign currency translation adjustment | (31) | (36) | (67) | |||||
Total comprehensive income | 362 | |||||||
Dividends paid to shareholders | (45) | (45) | ||||||
Noncontrolling interests investments in subsidiaries | 1 | 1 | ||||||
Distributions to noncontrolling interests | (23) | (23) | ||||||
Repurchase of common shares | (15) | (15) | ||||||
Repurchase of common shares, (in shares) | (429,318) | |||||||
Share-based compensation plans | 71 | 71 | ||||||
Share-based compensation plans (in shares) | 2,739,315 | |||||||
Balances at Mar. 31, 2010 | $3 | $5,819 | $5,451 | $508 | ($2,038) | $365 | $592 | $10,700 |
Balance (in shares) at Mar. 31, 2010 | 257,405,488 |
Basis of Presentation
Basis of Presentation | |
3 Months Ended
Mar. 31, 2010 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation Ameriprise Financial,Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning and products and services that are designed to be utilized as solutions for clients cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. TheCompanys foreign operations in the United Kingdom are conducted through its subsidiary, Threadneedle Asset Management Holdings Srl (Threadneedle). The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial,Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (VIEs) in which it is the primary beneficiary (collectively, the Company). The income or loss generated by consolidated entities which will not be realized by the Companys shareholders is attributed to noncontrolling interests in the Consolidated Statements of Operations. Noncontrolling interests are the ownership interests in subsidiaries not attributable, directly or indirectly, to Ameriprise Financial,Inc. and are classified as equity within the Consolidated Balance Sheets. The Company excluding noncontrolling interests is defined as Ameriprise Financial. All material intercompany transactions and balances have been eliminated in consolidation. See Note 3 for additional information related to the consolidated VIEs. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature. The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain reclassifications of prior year amounts have been made to conform to the current presentation. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Companys Annual Report on Form10-K for the year ended December31,2009, filed with the Securities and Exchange Commission (SEC) on February24,2010. The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | |
3 Months Ended
Mar. 31, 2010 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements Adoption of New Accounting Standards Consolidation of Variable Interest Entities In June2009, the Financial Accounting Standards Board (FASB) updated the accounting standards related to the consolidation of VIEs. The standard amends the guidance on the determination of the primary beneficiary of a VIE from a quantitative model to a qualitative model and requires additional disclosures about an enterprises involvement in VIEs. Under the new qualitative model, the primary beneficiary must have both the power to direct the activities of the VIE and the obligation to absorb losses or the right to receive gains that could be potentially significant to the VIE. In February2010, the FASB amended this guidance to defer application of the consolidation requirements for certain investment funds. The standards are effective for interim and annual reporting periods beginning after November15,2009. The Company adopted the standards effective January1, 2010 and consolidated certain collateralized debt obligations (CDOs). As a result of the adoption, the Company recorded a cumulative effect increase of $473 million to appropriated retained earnings of consolidated investment entities, a $5.5 billion increase to assets and a $5.1 billion increase to liabilities. See Note 3 for additional information related to the application of the amended VIE consolidation model and the required disclosures. Subsequent Events In February2010, the FASB amended the accounting standards related to the recognition and disclosure of subsequent events. The amendments remove the requirement to disclose the date through which subsequent events are evaluated for SEC filers. The standard is effective upon issuance and shall be applied prospectively. TheCompany adopted the standard in the first quarter of2010. The adoption did not have any effect on the Companys consolidated results of operations and financialcondition. Fair Value In January2010, the FASB updated the accounting standards related to disclosures on fair value measurements. The standard expands the current disclosure requirements to include additional detail about significant transfers between Levels 1 and 2 within the fair value hierarchy and presents activity in the rollforward of Level 3 activity on a gross basis. The standard also clarifies existing disclosure requirements related to the level of disaggregation to be used for assets and liabilities as well as disclosures on the inputs and valuation techniques used to measure fair value. The standard is effective for interim and annual reporting periods beginning after December15, 2009, except for the disclosure requirements related to the Level 3 rollforward, which are effective for interim and annual periods beginning after December15, 2010. TheCompany adopted the standard in the first quarter of 2010, except for the additional disclosures related to the Level 3 rollforward, which the Company will adopt in the first quarter of 2011. The adoption did not have any effect on the Companys consolidated results of operations and financial condition. Recognition and Presentation of Other-Than-Temporary Impairmen |
Consolidated Investment Entitie
Consolidated Investment Entities | |
3 Months Ended
Mar. 31, 2009 | |
Consolidated Investment Entities | |
Consolidated Investment Entities | 3. Consolidated Investment Entities The Company provides asset management services to various CDOs and other investment products (collectively, investment entities), which are sponsored by the Company for the investment of client assets in the normal course of business. Certain of these investment entities are considered to be VIEs while others are considered to be voting rights entities (VREs). The Company consolidates certain of these investment entities. Variable Interest Entities A VIE is an entity that either has equity investors that lack certain essential characteristics of a controlling financial interest (including substantive voting rights, the obligation to absorb the entitys losses, or the rights to receive the entitys returns) or has equity investors that do not provide sufficient financial resources for the entity to support its activities. A VIE is required to be assessed for consolidation under two models: If the VIE is a money market fund or is an investment company, or has the financial characteristics of an investment company, and the following is true: (i) the entity does not have an explicit or implicit obligation to fund the investment companys losses; and (ii) the investment company is not a securitization entity, asset-backed financing entity, or an entity formally considered a qualifying special purpose entity, then, the VIE will be consolidated by the entity that determines it stands to absorb a majority of the VIEs expected losses or to receive a majority of the VIEs expected residual returns. Examples of entities that are likely to be assessed for consolidation under this framework include hedge funds, property funds, private equity funds and venture capital funds. If the VIE does not meet the criteria above, the VIE will be consolidated by the entity that determines it has both: (i) the power to direct the activities of a VIE that most significantly impact the VIEs economic performance; and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Companys CDOs are generally assessed for consolidation under this framework. When determining whether the Company stands to absorb the majority of the VIEs expected losses or receive a majority of the VIEs expected returns, it analyzes the design of the VIE to identify the variable interests it holds. Then the Company quantitatively determines whether its variable interests will absorb a majority of the VIEs variability. If the Company determines it has control over the activities that most significantly impact the economic performance of the VIE and it will absorb a majority of the VIEs expected variability, the Company consolidates the VIE. The calculation of variability is based on an analysis of projected probability-weighted cash flows based on the design of the particular VIE. When determining whether the Company has the power and the obligation to absorb losses or rights to receive benefits from the VIE that could potentially be significant, the Company qualitatively determines if its variable inter |
Investments
Investments | |
3 Months Ended
Mar. 31, 2010 | |
Investments | |
Investments | 4. Investments The following is a summary of Ameriprise Financial investments: March31, 2010 December31, 2009 (in millions) Available-for-Sale securities, at fair value $ 31,414 $ 32,546 Commercial mortgage loans, net 2,643 2,663 Trading securities 544 556 Policy loans 720 720 Other investments 444 453 Total $ 35,765 $ 36,938 Available-for-Sale securities distributed by type were as follows: March31, 2010 Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-Credit OTTI (1) (in millions) Corporate debt securities $ 14,693 $ 987 $ (51 ) $ 15,629 $ 16 Residential mortgage backed securities 7,502 255 (440 ) 7,317 (160 ) Commercial mortgage backed securities 4,200 273 (6 ) 4,467 Asset backed securities 1,937 80 (49 ) 1,968 (17 ) State and municipal obligations 1,608 28 (67 ) 1,569 U.S. government and agencies obligations 220 9 229 Foreign government bonds and obligations 93 15 108 Common and preferred stocks 53 2 (5 ) 50 Other debt obligations 77 77 Total $ 30,383 $ 1,649 $ (618 ) $ 31,414 $ (161 ) December31, 2009 Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-Credit OTTI (1) (in millions) Corporate debt securities $ 15,336 $ 894 $ (107 ) $ 16,123 $ 12 Residential mortgage backed securities 8,050 218 (498 ) 7,770 (152 ) Commercial mortgage backed securities 4,437 196 (20 ) 4,613 Asset backed securities 1,984 72 (62 ) 1,994 (18 ) State and municipal obligations 1,472 21 (76 ) 1,417 U.S. government and agencies obligations 379 9 (1 ) 387 Foreign government bonds and obligations 95 14 (1 ) 108 Common and preferred stocks 52 1 (10 ) 43 Other structured investments 22 36 58 21 Other debt obligations 33 33 Total $ 31,860 $ 1,461 $ (775 ) $ 32,546 $ (137 ) (1)Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income. Amount includes unrealized gains and losses on impaired securities subsequent to the impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period. At March31,2010 and December31, 2009, fixed maturity securities comprised approximately 88% of Ameriprise Financial investments. These securities were rated by Moodys Investors Service (Moodys), Standard Poors Ratings Services (SP) and Fitch Ratings Ltd. (Fitch), except for approximately $1.2billion of securities at March31,2010 and December31, 2009, which were rated by the Companys internal analysts using criteria si |
Deferred Acquisition Costs and
Deferred Acquisition Costs and Deferred Sales Inducement Costs | |
3 Months Ended
Mar. 31, 2009 | |
Deferred Acquisition Costs and Deferred Sales Inducement Costs | |
Deferred Acquisition Costs and Deferred Sales Inducement Costs | 5. Deferred Acquisition Costs and Deferred Sales Inducement Costs The balances of and changes in DAC were as follows: 2010 2009 (in millions) Balance at January1 $ 4,334 $ 4,383 Capitalization of acquisition costs 104 207 Amortization (118 ) (286 ) Impact of change in net unrealized securities gains (77 ) (67 ) Balance at March31 $ 4,243 $ 4,237 The balances of and changes in DSIC, which is included in other assets, were as follows: 2010 2009 (in millions) Balance at January1 $ 524 $ 518 Capitalization of sales inducement costs 15 22 Amortization (12 ) (49 ) Impact of change in net unrealized securities gains (13 ) (14 ) Balance at March31 $ 514 $ 477 |
Future Policy Benefits and Clai
Future Policy Benefits and Claims and Separate Account Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Future Policy Benefits and Claims and Separate Account Liabilities | |
Future Policy Benefits and Claims and Separate Account Liabilities | 6. Future Policy Benefits and Claims and Separate Account Liabilities Future policy benefits and claims consisted of the following: March31, 2010 December31, 2009 (in millions) Fixed annuities $ 16,571 $ 16,558 Equity indexed annuities (EIA) accumulated host values 141 159 EIA embedded derivatives 7 9 Variable annuities fixed sub-accounts 6,123 6,127 Variable annuity guaranteed minimum withdrawal benefits (GMWB) 121 204 Variable annuity guaranteed minimum accumulation benefits (GMAB) 78 100 Other variable annuity guarantees 10 12 Total annuities 23,051 23,169 Variable universal life (VUL)/ universal life (UL) insurance 2,609 2,595 Other life, disability income and long term care insurance 4,678 4,619 Auto, home and other insurance 386 380 Policy claims and other policyholders funds 142 123 Total $ 30,866 $ 30,886 Separate account liabilities consisted of the following: March31, 2010 December31, 2009 (in millions) Variable annuity variable sub-accounts $ 50,921 $ 48,982 VUL insurance variable sub-accounts 5,446 5,239 Other insurance variable sub-accounts 45 46 Threadneedle investment liabilities 3,914 3,862 Total $ 60,326 $ 58,129 |
Variable Annuity and Insurance
Variable Annuity and Insurance Guarantees | |
3 Months Ended
Mar. 31, 2010 | |
Variable Annuity and Insurance Guarantees | |
Variable Annuity and Insurance Guarantees | 7. Variable Annuity and Insurance Guarantees The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. TheCompany also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (GGU) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. TheCompany previously offered contracts containing guaranteed minimum income benefit (GMIB) provisions. Certain universal life contracts offered by the Company provide secondary guarantee benefits. Thesecondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities: March31, 2010 December31, 2009 Variable annuity guarantees by benefit type(1) Total contract value Contract value in separate accounts Net amount at risk(2) Weighted average attained age Total contract value Contract value in separate accounts Net amount at risk(2) Weighted average attained age (in millions, except age) GMDB: Return of premium $ 32,513 $ 29,959 $ 614 62 $ 30,938 $ 28,415 $ 974 61 Five/six-year reset 13,998 11,325 691 62 13,919 11,223 929 61 One-year ratchet 7,284 6,620 666 63 7,081 6,400 873 63 Five-year ratchet 1,309 1,223 25 59 1,256 1,171 38 59 Other 565 535 84 67 549 516 95 67 Total GMDB $ 55,669 $ 49,662 $ 2,080 62 $ 53,743 $ 47,725 $ 2,909 61 GGU death benefit $ 887 $ 806 $ 72 63 $ 853 $ 775 $ 70 63 GMIB $ 631 $ 588 $ 110 63 $ 628 $ 582 $ 126 63 GMWB: GMWB $ 4,273 $ 4,141 $ 322 64 $ 4,196 $ 4,067 $ 454 64 GMWB for life 16,051 15,379 526 63 14,988 14,333 795 63 Total GMWB $ 20,324 $ 19,520 $ 848 63 $ 19,184 $ 18,400 $ 1,249 63 GMAB $ 3,063 $ 2,986 $ 98 56 $ 2,926 $ 2,853 $ 153 56 (1)Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. (2)Represents the current guaranteed benefit amount in excess of the current contract value. GMIB, GMWB and GMAB benefits are subject to waiting periods and payment periods specified in the contract. Changes in additional liabilities were as follows: GMDB GGU GMIB GMW |
Customer Deposits
Customer Deposits | |
3 Months Ended
Mar. 31, 2010 | |
Customer Deposits | |
Customer Deposits | 8. Customer Deposits Customer deposits consisted of the following: March31, 2010 December31, 2009 (in millions) Fixed rate certificates $ 2,834 $ 3,172 Stock market based certificates 863 852 Stock market embedded derivative reserve 22 26 Other 57 59 Less: accrued interest classified in other liabilities (29 ) (33 ) Total investment certificate reserves 3,747 4,076 Brokerage deposits 1,902 1,894 Banking deposits 2,983 2,584 Total $ 8,632 $ 8,554 |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Debt | |
Debt | 9. Debt The balances and the stated interest rates of outstanding debt of Ameriprise Financial were as follows: Outstanding Balance Stated Interest Rate March31, 2010 December31, 2009 March31, 2010 December31, 2009 (in millions) Senior notes due 2010 $ 340 $ 340 5.4 % 5.4 % Senior notes due 2015 700 (1) 700 5.7 5.7 Senior notes due 2019 298 (1) 300 7.3 7.3 Senior notes due 2020 746 (1) 5.3 Senior notes due 2039 200 200 7.8 7.8 Junior subordinated notes due 2066 322 322 7.5 7.5 Municipal bond inverse floater certificates due 2021 6 6 0.3 0.3 Total $ 2,612 $ 1,868 (1)Amounts include the fair value of associated fair value hedges on the Companys long-term debt and any unamortized discounts. On March11, 2010, Ameriprise Financial issued $750 million aggregate principal amount of unsecured senior notes which mature on March15, 2020, and incurred debt issuance costs of $6 million. Interest payments are due semi-annually in arrears on March15 and September15, commencing September15, 2010. During the first quarter of 2009, Ameriprise Financial extinguished $113million aggregate principal amount of its junior subordinated notes due 2066 in open market transactions and recognized a gain of $50million in other revenues. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Fair Values of Assets and Liabilities | |
Fair Values of Assets and Liabilities | 10. Fair Values of Assets and Liabilities GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. Theexit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale. Valuation Hierarchy The Company categorizes its fair value measurements according to a three-level hierarchy. Thehierarchy prioritizes the inputs used by the Companys valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. Thethree levels of the fair value hierarchy are defined as follows: 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. Determination of Fair Value The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. TheCompanys market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. TheCompanys income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Assets Cash Equivalents Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value (NAV)and classified as Level 1. TheCompanys remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization. Investments (Trading Securities and Available-for-Sale Securities) When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, broker quotes, or other model-based valuation techniques. Level 1 securities include U.S. Treasuries and seed money in funds traded in active markets. Level 2 securities include agency mortgage backed securities, commercial mortgage backed securities, asset backed securities, municipal and corporate bonds, U.S. and foreign government and agency securities, and seed money and other investments in certain hedge funds. The fair value of these Level 2 securities is based on a market appr |
Derivatives and Hedging Activit
Derivatives and Hedging Activities of Ameriprise Financial | |
3 Months Ended
Mar. 31, 2010 | |
Derivatives and Hedging Activities of Ameriprise Financial | |
Derivatives and Hedging Activities of Ameriprise Financial | 11. Derivatives and Hedging Activities of Ameriprise Financial Derivative instruments enable theCompany to manage its exposure to various market risks. Thevalue of such instruments is derived from an underlying variable or multiple variables, including equity, foreign exchange and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Companys products and operations. The Company uses derivatives as economic hedges and occasionally holds derivatives designated for hedge accounting. The following table presents the balance sheet location and the gross fair value of derivative instruments, including embedded derivatives, by type of derivative and product: Balance Asset Balance Liability Derivatives designated Sheet March31, December31, Sheet March31, December31, as hedging instruments Location 2010 2009 Location 2010 2009 (inmillions) (inmillions) Cash flow hedges Interest on debt Other assets $ $ 19 $ $ Fair value hedges Fixed rate debt Other assets 3 Other liabilities 2 Total qualifying hedges 3 19 2 Derivativesnotdesignated ashedginginstruments Interest rate contracts GMWB and GMAB Other assets 166 176 Other liabilities 195 280 Interest rate lock commitments Other assets 1 Equity contracts GMWB and GMAB Other assets 326 437 Other liabilities 589 474 GMDB Other liabilities 2 2 Equity indexed annuities Other assets 1 2 Equity indexed annuities embedded derivatives Future policy benefits and claims 7 9 Stock market certificates Other assets 131 166 Other liabilities 109 141 Stock market certificates embedded derivatives Customer deposits 22 26 Seed money Other liabilities 1 Foreign exchange contracts Seed money Other assets 1 Other GMWB and GMAB embedded derivatives(1) Future policy benefits and claims 193 299 Total non-designated 625 782 1,117 1,232 Total derivatives $ 628 $ 801 $ 1,119 $ 1,232 (1)The fair values of GMWB and GMAB embedded derivatives fluctuate primarily based on changes in equity, interest rate and credit markets. See Note 10 for additional information regarding the Companys fair value measurement of derivative instruments. Derivatives Not Designated as Hedges The following table presents a summary of the impact of derivatives not designated as hedging instruments on the Consolidated Statements ofOperations: AmountofGain(Loss)on Derivatives Recognized in Income Three Months Three Months Derivatives not designated as Location of Gain (Loss) on Ended Ended hedging instruments Derivatives Recognized in Income March31, 2010 March31, 2009 (in millions) Interest rate contracts GMWB and GMAB Benefits, claims, losses and settlement expenses $ |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Companys effective tax rates were 17.9% and 13.3% for the three months ended March31,2010 and 2009, respectively. The increase in the effective tax rate primarily reflects an increase in pretax income relative to tax advantaged items for the three months ended March31, 2010. The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Included in deferred tax assets is a significant deferred tax asset relating to capital losses that have been recognized for financial statement purposes but not yet for tax return purposes. Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business including the ability to generate capital gains. Consideration is given to, among other things in making this determination, i)future taxable income exclusive of reversing temporary differences and carryforwards, ii)future reversals of existing taxable temporary differences, iii)taxable income in prior carryback years, and iv)tax planning strategies. Based on analysis of the Companys tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will generate sufficient taxable income to enable the Company to utilize all of its deferred tax assets. Accordingly, no valuation allowance for deferred tax assets has been established as of March31,2010 and 2009. Included in the Companys deferred income tax assets are tax benefits related to net operating loss carryforwards of $14million which will expire beginning December31, 2025. As a result of the Companys ability to file a consolidated U.S. federal income tax return including the Companys life insurance subsidiaries in 2010, as well as the expected level of taxable income management believes the Companys tax credit carryforwards will be utilized in the current year and therefore are not reflected as a deferred tax asset. As of March31,2010 and December31, 2009, the Company had $7 million of gross unrecognized tax benefits and $33million of gross unrecognized tax expense, respectively. If recognized, approximately $79 million and $81million, net of federal tax benefits, of unrecognized tax benefits as of March31,2010 and December31,2009, respectively, would affect the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. TheCompany recognized a net reduction of $10 million in interest and penalties for the three months ended March31,2010. At March31,2010 and December31, 2009, theCompany had a receivable of $22million and $12million, respectively, related to accrued interest and penalties. It is reasonably possible that the total amounts of |
Contingencies
Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Contingencies | |
Contingencies | 13. Contingencies Owing to conditions then-prevailing in the credit markets and the isolated defaults of unaffiliated structured investment vehicles held in the portfolios of money market funds advised by its RiverSource InvestmentsLLC subsidiary (the 2a-7 Funds), the Company closely monitored the net asset value of the 2a-7 Funds during 2008 and through the date of this report and, as circumstances warranted from time to time during 2008 and 2009, injected capital into one or more of the 2a-7 Funds. Management believes that the market conditions which gave rise to those circumstances have significantly diminished. The Company has not provided a formal capital support agreement or net asset value guarantee to any of the 2a-7 Funds. The Company and its subsidiaries are involved in the normal course of business in legal, regulatory and arbitration proceedings, including class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to litigation arising out of its general business activities, such as its investments, contracts, leases and employment relationships. Uncertain economic conditions heightened volatility in the financial markets, such as those which have been experienced from the latter part of 2007 through 2009, and significant regulatory reform proposals may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally. As with other financial services firms, the level of regulatory activity and inquiry concerning the Companys businesses remains elevated. From time to time, the Company receives requests for information from, and/or has been subject to examination or claims by, the SEC, the Financial Industry Regulatory Authority, the Office of Thrift Supervision, state insurance and securities regulators, state attorneys general and various other governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Companys business activities and practices, and the practices of the Companys financial advisors. Pending matters about which the Company has during recent periods received such information requests or claims include: sales and product or service features of, or disclosures pertaining to, mutual funds, annuities, equity and fixed income securities, insurance products, brokerage services, financial plans and other advice offerings; supervision of the Companys financial advisors; supervisory practices in connection with financial advisors outside business activities; sales practices and supervision associated with the sale of fixed and variable annuities and non-exchange traded (or private placement) securities; information security; the delivery of financial plans and the suitability of investments and product selection processes. The number of reviews and inv |
Guarantees
Guarantees | |
3 Months Ended
Mar. 31, 2010 | |
Guarantees | |
Guarantees | 14. Guarantees An unaffiliated third party is providing liquidity to clients of SAI registered representatives that have assets in the Reserve Primary Fund that have been blocked from redemption and frozen by the Reserve Fund since September16,2008. The Company has agreed to indemnify the unaffiliated third party up to $10million until April15,2015, for costs incurred as a result of an arbitration or litigation initiated against the unaffiliated third party by clients of SAI registered representatives. Inthe event that a client defaults in the repayment of an advance, SAI has recourse to collect from the defaulting client. Certain property fund limited partnerships that the Company consolidates have floating rate revolving credit borrowings of $358million as of March31,2010. Certain Threadneedle subsidiaries guarantee the repayment of outstanding borrowings up to the value of the assets of the partnerships. The debt is secured by the assets of the partnerships and there is no recourse to Ameriprise Financial. |
Earnings per Share Attributable
Earnings per Share Attributable to Ameriprise Financial Common Shareholders | |
3 Months Ended
Mar. 31, 2010 | |
Earnings per Share Attributable to Ameriprise Financial Common Shareholders | |
Earnings per Share Attributable to Ameriprise Financial Common Shareholders | 15. Earnings per Share Attributable to Ameriprise Financial Common Shareholders The computations of basic and diluted earningsper share attributable to Ameriprise Financial common shareholders are asfollows: Three Months Ended March31, 2010 2009 (in millions, except per share amounts) Numerator: Net income attributable to Ameriprise Financial $ 214 $ 130 Denominator: Basic: Weighted-average common shares outstanding 260.8 222.3 Effect of potentially dilutive nonqualified stock options and other share-based awards 4.2 1.2 Diluted: Weighted-average common shares outstanding 265.0 223.5 Earnings per share attributable to Ameriprise Financial common shareholders: Basic $ 0.82 $ 0.58 Diluted $ 0.81 $ 0.58 |
Segment Information
Segment Information | |
3 Months Ended
Mar. 31, 2010 | |
Segment Information | |
Segment Information | 16. Segment Information The Companys five segments are Advice Wealth Management, Asset Management, Annuities, Protection and Corporate Other. The following is a summary of assets by segment: March31, 2010 December31, 2009 (in millions) Advice Wealth Management $ 11,049 $ 11,098 Asset Management 6,256 5,955 Annuities 78,326 77,037 Protection 16,767 16,758 Corporate Other 9,979 2,926 Total assets $ 122,377 $ 113,774 The following is a summary of segment operating results: Three Months Ended March31, 2010 Advice Wealth Asset Corporate Management Management Annuities Protection Other Eliminations Consolidated (in millions) Revenue from external customers $ 716 $ 351 $ 580 $ 490 $ 155 $ $ 2,292 Intersegment revenue 184 19 22 17 2 (244 ) Total revenues 900 370 602 507 157 (244 ) 2,292 Banking and deposit interest expense 21 21 Net revenues 879 370 602 507 157 (244 ) 2,271 Pretax income $ 51 $ 18 $ 120 $ 119 $ 53 $ 361 Income tax provision 65 Net income 296 Less: Net income attributable to noncontrolling interests 82 Net income attributable to Ameriprise Financial $ 214 Three Months Ended March31, 2009 Advice Wealth Asset Corporate Management Management Annuities Protection Other Eliminations Consolidated (in millions) Revenue from external customers $ 530 $ 250 $ 477 $ 483 $ 18 $ $ 1,758 Intersegment revenue 237 10 15 13 1 (276 ) Total revenues 767 260 492 496 19 (276 ) 1,758 Banking and deposit interest expense 41 2 (1 ) 42 Net revenues 726 260 492 496 17 (275 ) 1,716 Pretax income (loss) $ (61 ) $ (8 ) $ 129 $ 112 $ (38 ) $ 134 Income tax provision 18 Net income 116 Less: Net loss attributable to noncontrolling interests (14 ) Net income attributable to Ameriprise Financial $ 130 |
Acquisition of the Long-Term As
Acquisition of the Long-Term Asset Management Business of Columbia Management Group | |
3 Months Ended
Mar. 31, 2010 | |
Acquisition of the Long-Term Asset Management Business of Columbia Management Group | |
Acquisition of the Long-Term Asset Management Business of Columbia Management Group | 17. Acquisition of the Long-Term Asset Management Business of Columbia Management Group On April 30, 2010, the Company completed its all-cash acquisition of the long-term asset management business of Columbia Management. The total consideration paid, subject to post-closing adjustment, was approximately $1 billion and was funded through the use of cash on hand. This acquisition is intended to further enhance the scale and performance of the Companys retail mutual fund and institutional management businesses. |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | Apr. 23, 2010
| |
Document Entity Information | ||
Entity Registrant Name | AMERIPRISE FINANCIAL INC | |
Entity Central Index Key | 0000820027 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 257,513,353 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,010 |