Ameriprise 2009 Annual Report Download - page 124

The Company incurred significant non-recurring separation costs in 2007 as a result of the Separation. These costs were primarily
associated with establishing the Ameriprise Financial brand, separating and reestablishing the Company’s technology platforms and
advisor and employee retention programs.
5. Acquisitions and Pending Transactions
On September 30, 2009, the Company announced a definitive agreement to acquire the long-term asset management business of
Columbia Management Group (‘‘Columbia’’). The total consideration to be paid will be between $900 million and $1.2 billion based on
net asset flows at Columbia before closing. The acquisition is expected to be funded through the use of cash on hand and is expected to
close in the spring of 2010, subject to satisfaction of closing conditions that are generally present in similar acquisitions.
In the fourth quarter of 2008, the Company completed its 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. for $329 million, $432 million and $26 million, respectively. The cost of the acquisitions included the purchase price and transaction
costs. These acquisitions further expanded the Company’s retail distribution and asset management businesses. The Company recorded
the assets and liabilities acquired at fair value and allocated the remaining costs to goodwill and intangible assets. See Note 2 and Note 9
for additional information on goodwill and intangible assets.
6. Variable Interest Entities
The Company consolidates a VIE for which it is considered the primary beneficiary. As of December 31, 2009 and 2008, the Company had
investments of $10 million and non-recourse debt of $6 million, respectively, on the Consolidated Balance Sheet related to this entity.
The Company has variable interests for which it is not the primary beneficiary and, therefore, does not consolidate. The Company’s
maximum exposure to loss as a result of its investment in these entities is limited to its carrying value. The Company has no obligation to
provide further financial or other support to the VIEs nor has the Company provided any additional support to the VIEs other than
services it is separately compensated for through management agreements. The Company had no liabilities recorded as of December 31,
2009 and 2008 related to these entities.
The Company is a limited partner in affordable housing partnerships which qualify for government sponsored low income housing tax
credit programs. Certain of these partnerships are considered to be variable interest entities; however, the Company does not consolidate
these partnerships because it is not the primary beneficiary. The carrying values of the affordable housing partnerships are reflected in
investments and were $28 million and $54 million as of December 31, 2009 and 2008, respectively.
For the collateralized debt obligations (‘‘CDOs’’) managed by the Company, the Company has evaluated its variability in losses and
returns considering its investment levels, which are less than 50% of the residual tranches, and the fees received from managing the
structures and has determined that consolidation is not required. The carrying values of the CDOs are reflected in investments and were
$58 million and $50 million as of December 31, 2009 and 2008, respectively. The Company manages $6.4 billion of underlying collateral
consisting primarily of below investment grade syndicated bank loans within the CDOs.
7. Investments
The following is a summary of investments:
December 31,
2009 2008
(in millions)
Available-for-Sale securities, at fair value $ 32,546 $ 22,873
Commercial mortgage loans, net 2,663 2,887
Trading securities 592 501
Policy loans 720 729
Other investments 453 532
Total $ 36,974 $ 27,522
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