Ameriprise 2007 Annual Report Download - page 49

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the year ended December 31, 2006, an increase of $28 million. For
the year ended December 31, 2006, net cash provided by operating
activities was $817 million compared to $856 million for the year
ended December 31, 2005, a decrease of $39 million. Included in net
cash from operating activities for the year ended December 31, 2005
was a $58 million gain related to the termination of interest
rate swaps.
Investing Activities
Our investing activities primarily relate to our Available-for-Sale
investment portfolio. Further, this activity is significantly affected by
the net outflows of our investment certificate, fixed annuity and
universal life products reflected in financing activities.
Net cash provided by investing activities for the year ended
December 31, 2007 was $4.5 billion compared to $3.5 billion for the
year ended December 31, 2006, a cash flow improvement of
$1.0 billion. Purchases of Available-for-Sale securities decreased
$1.1 billion and proceeds from sales of Available-for-Sale securities
increased $1.2 billion compared to the prior year period. This
increase in cash was partially offset by a $547 million decrease in
maturities, sinking fund payments and calls of Available-for-Sale
securities compared to the prior year period.
Net cash provided by investing activities for the year ended
December 31, 2006 was $3.5 billion compared to net cash used in
investing activities of $273 million for the year ended
December 31, 2005, a cash flow improvement of $3.8 billion.
Purchases of Available-for-Sale securities decreased $5.9 billion to
$2.8 billion in 2006 compared to $8.7 billion in 2005. This increase
in cash was partially offset by lower proceeds from sales and lower
maturities, sinking fund payments and calls of Available-for-Sale
securities in 2006.
Financing Activities
Net cash used in financing activities for the year ended
December 31, 2007 was $4.3 billion compared to $4.1 billion for
the year ended December 31, 2006, an increase of $204 million.
Cash used for the repurchase of our common stock increased
$487 million to $977 million in 2007 compared to $490 million in
2006. The change in other banking deposits resulted in an increase to
cash of $614 million, as a result of Ameriprise Bank activity, which
was offset by a reduction of $516 million in cash proceeds from the
issuance of debt compared to the prior year period. The decrease in
cash related to payments we receive from certificate owners was offset
by an increase in cash related to lower maturities, withdrawals and
cash surrenders in investment certificates.
Net cash used in financing activities was $4.1 billion for the year
ended December 31, 2006 compared to net cash provided by
financing activities of $323 million for the year ended
December 31, 2005, a decrease of $4.4 billion. This decline in cash
was primarily due to higher surrenders and other benefits related to
fixed annuities, lower sales of certificate products and a net decrease
related to debt and capital transactions.
Cash used for surrenders and other benefits on policyholder and
contractholder account values, most of which related to fixed
annuities, increased $1.6 billion in 2006 compared to 2005. Cash
flows related to payments we receive from certificate owners declined
$1.3 billion in 2006 compared to 2005, while cash used for certifi-
cate maturities and cash surrenders decreased $515 million. The
reduction in sales and increase in maturities was the result of the
American Express Bank Limited and American Express Bank Interna-
tional business wind-down and a sales promotion that was in effect
during a portion of the 2005 period, offset somewhat by a sales
promotion that began in late 2006 and ended in early 2007.
On May 26, 2006, we issued $500 million of junior notes and
incurred debt issuance costs of $6 million. These junior notes are due
in 2066 and carry a fixed interest rate of 7.518% for the first
10 years, converting to a variable interest rate thereafter. The
proceeds from the issuance were for general corporate purposes.
On November 23, 2005, we issued $800 million principal amount of
5.35% unsecured senior notes due November 15, 2010 and
$700 million principal amount of 5.65% senior notes due
November 15, 2015. Considering the impact of hedge credits, the
effective interest rates on the senior notes due 2010 and 2015 are
4.8% and 5.2%, respectively. The proceeds from the issues were used
to replace the $1.4 billion bridge loan and for other general corporate
purposes.
We repaid our $50 million medium-term notes in February 2006. In
addition, $168 million of nonrecourse debt related to the consoli-
dated property fund limited partnerships was repaid in
September 2006 following a restructuring of the partnership capital.
In 2005, we entered into an unsecured bridge loan facility in the
amount of $1.4 billion and repaid $1.3 billion of American Express
intercompany debt.
Ameriprise Financial 2007 Annual Report 47