Ameriprise 2009 Annual Report Download - page 54

inducement costs (‘‘DSIC’’) assets associated with variable annuity and variable UL products, the values of liabilities for guaranteed
benefits associated with our variable annuities and the values of derivatives held to hedge these benefits. For additional information
regarding our sensitivity to equity price and interest rate risk, see Part II, Item 7A ‘‘Quantitative and Qualitative Disclosures About Market
Risk.’’
It is management’s priority to increase shareholder value over a multi-year horizon by achieving our on-average, over-time financial
targets. Our financial targets are:
• Net revenue growth of 6% to 8%,
• Earnings per diluted share growth of 12% to 15%, and
• Return on equity of 12% to 15%.
Net revenues for the year ended December 31, 2009 were $7.8 billion, an increase of $889 million, or 13%, from the prior year. Net
income attributable to Ameriprise Financial for the year ended December 31, 2009 was $722 million compared to a net loss attributable
to Ameriprise Financial of $38 million for the year ended December 31, 2008. Earnings per diluted share for the year ended December 31,
2009 were $2.95, compared to a loss per share of $0.17 for the year ended December 31, 2008.
On September 30, 2009, we announced a definitive agreement to acquire the long-term asset management business of Columbia
Management Group (‘‘Columbia’’) from Bank of America, N.A. The total consideration to be paid will be between $900 million and
$1.2 billion based on net asset flows at Columbia before closing and is expected to be funded through the use of cash on hand. The
transaction is expected to close in the spring of 2010, subject to satisfaction of closing conditions that are generally present in similar
acquisitions. Related to the transaction, we incurred $7 million of pretax non-recurring acquisition and integration costs during the year
ended December 31, 2009, and expect to incur between $130 million and $160 million of such costs through 2011. These costs include
system integration costs, proxy and other regulatory filing costs, employee reduction and retention costs, and investment banking, legal
and other acquisition costs.
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, a client retention percentage rate of 93%, and, upon
the anticipated closing of our acquisition of Columbia’s long-term asset management business, our status as a top ten ranked firm within
core portions of each of our four main operating segments, including our U.S. advisor force, long-term U.S. mutual funds, variable
annuities and variable universal life insurance.
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 $91 million and $19 million were included in general and administrative expense
for the years ended December 31, 2009 and 2008, respectively.
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 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.
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