Ameriprise 2008 Annual Report Download - page 158

24. Earnings per Common Share
The computations of basic and diluted earnings (loss) per common share are as follows:
Years Ended December 31,
2008 2007 2006
(in millions, except per share amounts)
Numerator:
Net income (loss) $ (38) $ 814 $ 631
Denominator:
Basic: Weighted-average common shares outstanding 222.3 236.2 246.5
Effect of potentially dilutive nonqualified stock options
and other share-based awards 2.6 3.7 2.0
Diluted: Weighted-average common shares outstanding 224.9 239.9 248.5
Earnings (loss) per common share:
Basic $ (0.17) $ 3.45 $ 2.56
Diluted $ (0.17) (1) $ 3.39 $ 2.54
(1) Diluted shares used in this calculation represent basic shares due to the net loss. The use of actual diluted shares would result in
anti-dilution.
Basic weighted average common shares for the years ended December 31, 2008, 2007 and 2006 included 2.1 million,
1.6 million and 1.7 million, respectively, of vested, nonforfeitable restricted stock units and 3.1 million, 3.5 million and
3.7 million, respectively, of non-vested restricted stock awards and restricted stock units that are forfeitable but receive
nonforfeitable dividends. Potentially dilutive securities include nonqualified stock options and other share-based awards.
25. Shareholders’ Equity
The Company has a share repurchase program in place to return excess capital to shareholders. During the twelve months
ended December 31, 2008, 2007 and 2006 the Company repurchased a total of 12.7 million, 15.9 million and 10.7 million
shares, respectively, of its common stock at an average price of $48.26, $59.59 and $44.12, respectively. As of
December 31, 2008, the Company had approximately $1.3 billion remaining under a share repurchase authorization. In light
of the current market environment, the Company has temporarily suspended its stock repurchase program.
The Company may also reacquire shares of its common stock under its 2005 ICP related to restricted stock awards.
Restricted shares that are forfeited before the vesting period has lapsed are recorded as treasury shares. In addition, the
holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax
obligations. These vested restricted shares reacquired by the Company and the Company’s payment of the holders’ income
tax obligations are recorded as a treasury share purchase. The restricted shares forfeited under the 2005 ICP and recorded as
treasury shares were 0.3 million shares in each of the years ended December 31, 2008, 2007 and 2006. For the years
ended December 31, 2008 2007 and 2006, the Company reacquired 0.5 million, 0.5 million and 0.4 million shares,
respectively, of its common stock through the surrender of restricted shares upon vesting and paid in the aggregate
$24 million, $29 million and $20 million, respectively, related to the holders’ income tax obligations on the vesting date.
During the twelve months ended December 31, 2008, the Company reissued 1.8 million treasury shares for restricted stock
award grants and the issuance of shares vested under the P2 Deferral Plan and the Transition and Opportunity Bonus (‘‘T&O
Bonus’’) program. In 2005, the Company awarded bonuses to advisors under the T&O Bonus program which were converted
to 2.0 million share-based awards under the 2005 ICP. The awards had all been issued as of December 31, 2008.
26. Segment Information
The Company’s five segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate &
Other. Each segment records revenues and expenses as if they were each a stand-alone business using the Company’s
transfer pricing methodology. Transfer pricing uses rates that approximate market-based arm’s length prices for specific
services provided. The Company reviews the transfer pricing rates periodically and makes appropriate adjustments to ensure
the transfer pricing rates that approximate arm’s length market prices remain at current market levels. Costs related to shared
services are allocated to segments based on their usage of the services provided.
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