Ameriprise 2009 Annual Report Download - page 95

Government Fund. The positive impacts to operating cash flows in 2009 from lower performance based compensation payments and a
net decrease in income taxes paid compared to the prior year were offset by the negative impacts of integration and restructuring
payments in 2009.
Net cash provided by operating activities for the year ended December 31, 2008 was $1.9 billion compared to $766 million for the year
ended December 31, 2007, an increase of $1.2 billion. The increase was driven by a $1.6 billion increase in net cash collateral held related
to derivative instruments at December 31, 2008. This increase was partially offset by the impact of advancing approximately $300 million
to our clients to fund their critical liquidity needs following the freeze of funds in the Reserve Primary Fund and the Reserve Government
Fund, as well as the costs associated with supporting RiverSource 2a-7 money market funds and a net increase in income taxes paid
compared to the prior year. Reduced cash inflows related to lower fee revenues were offset by lower cash outflows due to lower expenses,
including the completion of separation costs in 2007 and a $100 million settlement paid in 2007.
Investing Activities
Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the
net flows of our investment certificate, fixed annuity and universal life products reflected in financing activities.
Net cash used in investing activities for the year ended December 31, 2009 was $6.4 billion compared to net cash provided by investing
activities of $15 million for the year ended December 31, 2008, a decrease of $6.4 billion. Cash used for purchases of Available-for-Sale
securities increased $14.2 billion and proceeds from sales and maturities, sinking fund payments and calls of Available-for-Sale securities
increased $7.1 billion compared to the prior year, resulting in a $7.1 billion net decrease to cash. In 2008, we paid cash of $563 million for
acquisitions, net of cash acquired. Net cash provided by investing activities for the year ended December 31, 2008 was $15 million
compared to $4.6 billion for the year ended December 31, 2007, a decrease of $4.6 billion. Cash used for purchases of Available-for-Sale
securities increased $1.9 billion and proceeds from sales and maturities, sinking fund payments and calls of Available-for-Sale securities
decreased $2.2 billion compared to the prior year, resulting in a $4.1 billion net decrease to cash. We also paid cash of $563 million for
acquisitions in the fourth quarter of 2008, net of cash acquired.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2009 was $4.5 billion compared to $506 million for the year
ended December 31, 2008, an increase in cash of $4.0 billion. Cash received from the issuance of our senior notes and common stock in
June 2009, net of issuance costs, was $491 million and $869 million, respectively. Net cash received from policyholder and
contractholder account values increased $3.1 billion compared to the prior year primarily due to higher net flows of fixed annuities. Cash
used for the repurchase of our common stock decreased $627 million compared to the prior year due to the suspension of our repurchase
program. These increases to cash were offset by $550 million of cash used to extinguish $135 million of our junior notes and $460 million
of our 5.35% senior notes due 2010 in 2009. The net cash decrease of $1.9 billion related to investment certificates and banking time
deposits was primarily due to net outflows in investment certificates. Cash provided by other banking deposits increased $1.2 billion due
to higher Ameriprise Bank, FSB activity in 2009.
Net cash provided by financing activities for the year ended December 31, 2008 was $506 million compared to net cash used in financing
activities of $4.3 billion for the year ended December 31, 2007, an increase in cash of $4.8 billion. Cash proceeds from additions of
investment certificates and banking time deposits increased $1.9 billion, primarily due to an increase in sales of investment certificates as
a result of the market environment, as well as a sales promotion we began in April 2008. Net cash from policyholder and contractholder
account values increased $2.9 billion from the prior year primarily due to $2.2 billion of lower net outflows in fixed annuities as a result of
the market environment and sales initiatives. Cash used for the repurchase of our common stock decreased $351 million compared to the
prior year due to fewer shares repurchased in 2008 at a lower average price. In the fourth quarter of 2008, we temporarily suspended our
stock repurchase program in light of the market environment. Cash provided by other banking deposits decreased $520 million due to
lower Ameriprise Bank, FSB activity in 2008.
80 ANNUAL REPORT 2009