Ameriprise 2008 Annual Report Download - page 65

Our consolidated net loss for the year ended December 31, 2008 was $38 million, a decline of $852 million from our
consolidated net income of $814 million for the year ended December 31, 2007. Loss per share for the year ended
December 31, 2008 was $0.17, compared to earnings per diluted share of $3.39 for the prior year period.
We continue to establish Ameriprise Financial as a financial services leader as we focus on meeting the financial needs of the
mass affluent and affluent, as evidenced by our continued leadership in financial planning and our strong corporate
foundation. Our franchisee advisor and client retention remain strong at 92% and 94%, respectively, as of December 31,
2008. Branded financial plan net cash sales for the year ended December 31, 2008 increased 4% compared to the year-ago
period.
Our owned, managed and administered (‘‘OMA’’) assets declined to $372.1 billion at December 31, 2008, a net decrease of
22% from December 31, 2007, reflecting the 38% decline in the S&P 500 Index from the prior year period, partially offset by
the addition of $36.9 billion in assets from the completion of our acquisitions during the fourth quarter of 2008.
In the fourth quarter of 2008, we completed the all cash acquisitions of H&R Block Financial Advisors, Inc., subsequently
renamed Ameriprise Advisor Services, Inc. (‘‘AASI’’), J. & W. Seligman & Co., Incorporated (‘‘Seligman’’) and Brecek & Young
Advisors, Inc. to expand our retail distribution and asset management businesses. The cost of the acquisitions was
$787 million, which included the purchase price and transaction costs. We recorded the assets and liabilities acquired at fair
value and allocated the remaining costs to goodwill and intangible assets. Integration charges of $19 million were included in
general and administrative expense for the year ended December 31, 2008.
Goodwill Impairment Testing
In addition to our annual impairment evaluation for goodwill as of July 1, we evaluated goodwill for impairment in the fourth
quarter of 2008 due to the unprecedented credit and equity market events. We concluded our goodwill was not impaired.
Share Repurchase Program
During the years ended December 31, 2008 and 2007, we purchased 12.7 million shares and 15.9 million shares,
respectively, for an aggregate cost of $614 million and $948 million, respectively. In April 2008, our Board of Directors
authorized the expenditure of up to $1.5 billion for the repurchase of our common stock through April 2010. As of
December 31, 2008, we had $1.3 billion remaining under this share repurchase authorization. In light of the current market
environment, we have temporarily suspended our stock repurchase program. We may resume activity under our stock
repurchase program and begin repurchasing shares in the open market or in privately negotiated transactions from time to
time without notice. We reserve the right to suspend any such repurchases and to resume later repurchasing at any time, and
expressly disclaim any obligation to maintain or lift any such suspension.
Separation from American Express
On February 1, 2005, the American Express Board of Directors announced its intention to pursue the disposition of 100% of
its shareholdings in our company (the ‘‘Separation’’) through a tax-free distribution to American Express shareholders.
Effective as of the close of business on September 30, 2005, American Express completed the Separation of our company
and the distribution of our common shares to American Express shareholders (the ‘‘Distribution’’). Prior to the Distribution, we
had been a wholly owned subsidiary of American Express. Our separation from American Express resulted in specifically
identifiable impacts to our 2007 and 2006 consolidated results of operations and financial condition.
We incurred a total of $890 million of non-recurring separation costs as part of our separation from American Express. These
costs were primarily associated with establishing the Ameriprise Financial brand, separating and reestablishing our technology
platforms and advisor and employee retention programs. Our separation from American Express was completed in 2007.
Critical Accounting Policies
The accounting and reporting policies that we use affect our Consolidated Financial Statements. Certain of our accounting
and reporting policies are critical to an understanding of our results of operations and financial condition and, in some cases,
the application of these policies can be significantly affected by the estimates, judgments and assumptions made by
management during the preparation of our Consolidated Financial Statements. The accounting and reporting policies we have
identified as fundamental to a full understanding of our results of operations and financial condition are described below. See
Note 2 to our Consolidated Financial Statements for further information about our accounting policies.
Valuation of Investments
The most significant component of our investments is our Available-for-Sale securities, which we generally carry at fair value
within our Consolidated Balance Sheets. The fair value of our Available-for-Sale securities at December 31, 2008 was
primarily obtained from third-party pricing sources. We record unrealized securities gains (losses) in accumulated other
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