Ameriprise 2009 Annual Report Download - page 139

impact of the hedge credits, the effective interest rates on the senior notes due 2010, 2015, 2019 and 2039 are 4.8%, 5.2%, 7.2% and 7.5%,
respectively.
On May 26, 2006, the Company issued $500 million of unsecured junior subordinated notes, which mature June 1, 2066, and incurred
debt issuance costs of $6 million. For the initial 10-year period, the junior notes carry a fixed interest rate of 7.5% payable semi-annually
in arrears on June 1 and December 1. From June 1, 2016 until the maturity date, interest on the junior notes will accrue at an annual rate
equal to the three-month LIBOR plus a margin equal to 290.5 basis points, payable quarterly in arrears. The Company has the option to
defer interest payments, subject to certain limitations. In addition, interest payments are mandatorily deferred if the Company does not
meet specified capital adequacy, net income or shareholders’ equity levels. As of December 31, 2009 and 2008, the Company had met the
specified levels. In 2009 and 2008, the Company extinguished $135 million and $43 million, respectively, of its junior notes in open
market transactions and recognized a gain of $58 million and $19 million, respectively, in other revenues.
The floating rate revolving credit borrowings due 2013 and 2014 are non-recourse debt related to certain consolidated property funds.
The debt will be extinguished with the cash flows from the sale of the investments held within the partnerships.
The municipal bond inverse floater certificates mature in 2021 and are non-recourse debt obligations of a consolidated structured entity
supported by a $10 million portfolio of municipal bonds.
On September 30, 2005, the Company obtained an unsecured revolving credit facility for $750 million expiring in September 2010 from
various third party financial institutions. Under the terms of the credit agreement, the Company may increase the amount of this facility
to $1.0 billion. As of December 31, 2009 and 2008, no borrowings were outstanding under this facility. Outstanding letters of credit
issued against this facility were $2 million as of December 31, 2009 and 2008. The Company has agreed under this credit agreement not
to pledge the shares of its principal subsidiaries and was in compliance with this covenant as of December 31, 2009 and 2008.
At December 31, 2009, future maturities of debt were as follows:
(in millions)
2010 $ 340
2011 —
2012 —
2013 142
2014 239
Thereafter 1,528
Total future maturities $ 2,249
15. Related Party Transactions
The Company may engage in transactions in the ordinary course of business with significant shareholders or their subsidiaries, between
the Company and its directors and officers or with other companies whose directors or officers may also serve as directors or officers for
the Company or its subsidiaries. The Company carries out these transactions on customary terms. The transactions have not had a
material impact on the Company’s consolidated results of operations or financial condition.
The Company’s executive officers and directors may have transactions with the Company or its subsidiaries involving financial products
and insurance services. All obligations arising from these transactions are in the ordinary course of the Company’s business and are on the
same terms in effect for comparable transactions with the general public. Such obligations involve normal risks of collection and do not
have features or terms that are unfavorable to the Company’s subsidiaries.
16. Share-Based Compensation
The Company’s share-based compensation plans consist of the Amended and Restated Ameriprise Financial 2005 Incentive
Compensation Plan (the ‘‘2005 ICP’’), the Ameriprise Financial 2008 Employment Incentive Equity Award Plan (the ‘‘2008 Plan’’), the
Amended Deferred Equity Program for Independent Financial Advisors (‘‘P2 Deferral Plan’’), and the Ameriprise Advisor Group Deferred
Compensation Plan (‘‘P1 Plan’’).
124 ANNUAL REPORT 2009