Ameriprise 2009 Annual Report Download - page 48

which could increase required capital and constrain our and our Changes in U.S. federal income or estate tax law could
subsidiaries’ ability to pay dividends or make other permitted make some of our products less attractive to clients.
payments. The regulatory capital requirements and dividend- Many of the products we issue or on which our businesses are
paying ability of our subsidiaries may also be affected by a change based (including both insurance products and non-insurance
in the mix of products sold by such subsidiaries. For example, products) enjoy favorable treatment under current U.S. federal
fixed annuities typically require more capital than variable income or estate tax law. Changes in U.S. federal income or estate
annuities, and an increase in the proportion of fixed annuities sold tax law could thus make some of our products less attractive to
in relation to variable annuities could increase the regulatory clients.
capital requirements of our life insurance subsidiaries. This may
We are subject to tax contingencies that could adversely
reduce the dividends or other permitted payments which could be
affect our provision for income taxes.
made from those subsidiaries in the near term without the rating
organizations viewing this negatively. Further, the capital We are subject to the income tax laws of the U.S., its states and
requirements imposed upon our subsidiaries may be impacted by municipalities and those of the foreign jurisdictions in which we
heightened regulatory scrutiny and intervention, which could have significant business operations. These tax laws are complex
negatively affect our and our subsidiaries’ ability to pay dividends and may be subject to different interpretations. We must make
or make other permitted payments. Additionally, in the past we judgments and interpretations about the application of these
have found it necessary to provide support to certain of our inherently complex tax laws when determining the provision for
subsidiaries in order to maintain adequate capital for regulatory income taxes and must also make estimates about when in the
or other purposes and we may provide such support in the future. future certain items affect taxable income in the various tax
The provision of such support could adversely affect our excess jurisdictions. Disputes over interpretations of the tax laws may be
capital, liquidity, and the dividends or other permitted payments settled with the taxing authority upon examination or audit. In
received from our subsidiaries. addition, changes to the Internal Revenue Code, administrative
rulings or court decisions could increase our provision for income
The operation of our business in foreign markets and taxes.
our investments in non-U.S. denominated securities and
investment products subjects us to exchange rate and Risks Relating to Our Common Stock
other risks in connection with earnings and income The market price of our shares may fluctuate.
generated overseas. The market price of our common stock may fluctuate widely,
While we are a U.S.-based company, a portion of our business depending upon many factors, some of which may be beyond our
operations occur outside of the U.S. and some of our investments control, including:
are not denominated in U.S. dollars. As a result, we are exposed to
> changes in expectations concerning our future financial
certain foreign currency exchange risks that could reduce U.S.
performance and the future performance of the financial
dollar equivalent earnings as well as negatively impact our general
services industry in general, including financial estimates and
account and other proprietary investment portfolios. Appreciation
recommendations by securities analysts;
of the U.S. dollar could unfavorably affect net income from foreign
operations, the value of non-U.S. dollar denominated investments > differences between our actual financial and operating results
and investments in foreign subsidiaries. In comparison, and those expected by investors and analysts;
depreciation of the U.S. dollar could positively affect our net > our strategic moves and those of our competitors, such as
income from foreign operations and the value of non-U.S. dollar acquisitions or restructurings;
denominated investments, though such depreciation could also
> changes in the regulatory framework of the financial services
diminish investor, creditor and ratings agency perceptions of our
industry and regulatory action; and
company compared to peer companies that have a relatively
greater proportion of foreign operations or investments. > changes in general economic or market conditions.
We may seek to mitigate these risks by employing various hedging Stock markets in general have experienced volatility that has often
strategies including entering into derivative contracts. Currency been unrelated to the operating performance of a particular
fluctuations, including the effect of changes in the value of U.S. company. These broad market fluctuations may adversely affect
dollar denominated investments that vary from the amounts the trading price of our common stock.
ultimately needed to hedge our exposure to changes in the U.S.
dollar equivalent of earnings and equity of these operations, may
adversely affect our results of operations, cash flows or financial
condition.
ANNUAL REPORT 2009 33