Ameriprise 2012 Annual Report Download - page 102

On June 15, 2011, we announced that our Board of Directors authorized an expenditure of up to $2.0 billion for the
repurchase of shares of our common stock through June 28, 2013. As of December 31, 2012, we had $131 million
remaining under this share repurchase authorization. On October 24, 2012, we announced that our Board of Directors
authorized an expenditure of up to an additional $2.0 billion for the repurchase of shares of our common stock through
2014. We intend to fund share repurchases through existing working capital, capital released from the transition of
Ameriprise Bank, FSB from a federal savings bank to a limited powers national trust bank, future earnings and other
customary financing methods. The share repurchase program does not require the purchase of any minimum number of
shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any
time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through
privately negotiated transactions or block trades or other means. During the year ended December 31, 2012, we
repurchased a total of 24.6 million shares of our common stock at an average price of $54.54 per share.
Cash Flows
Cash flows of CIEs are reflected in our cash flows provided by (used in) operating activities, investing activities and
financing activities. Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial
cash available for general use by its CIEs. As such, the operating, investing and financing cash flows of the CIEs have no
impact to the change in cash and cash equivalents.
Operating Activities
Net cash provided by operating activities decreased $673 million to $1.5 billion for the year ended December 31, 2012
compared to $2.2 billion for the prior year driven by the change in net cash collateral held related to derivative
instruments, partially offset by lower income taxes paid compared to the prior year. Operating cash decreased $418 million
in 2012 due to a decrease in net cash collateral held related to derivative instruments compared to an increase of
$738 million in the prior year due to the change in market value of our net over-the-counter derivatives after master
netting arrangements. See Note 15 to our Consolidated Financial Statements for further information on our derivative
instruments and collateral arrangements. Income taxes paid, net decreased $153 million for the year ended
December 31, 2012 compared to the prior year primarily due to a tax refund received in 2012 resulting from an
overpayment of taxes in 2011. In addition, operating cash flows increased compared to the prior year due to higher fee
income, partially offset by higher distribution expenses, as well as changes in payables and receivables primarily driven by
timing of settlements.
Net cash provided by operating activities for the year ended December 31, 2011 increased $331 million to $2.2 billion
compared to $1.8 billion for the year ended December 31, 2010. Net cash collateral held related to derivative instruments
increased $627 million in 2011 compared to the prior year due to the change in fair value of our net over-the-counter
derivatives after master netting arrangements. Income taxes paid, net increased $309 million in 2011 compared to the
prior year primarily due to a reduction of taxes paid in 2010 due to utilization of net operating losses and tax credit
carryforwards from prior year tax returns. Net cash provided by operating activities in 2011 included an increase in cash
generated from higher fee revenue, partially offset by higher payments for distribution expenses. Net cash outflows related
to investment properties of CIEs increased $197 million in 2011 compared to 2010 primarily due to higher purchases of
properties, which was partially offset by a $175 million increase in cash provided by the change in restricted and
segregated cash primarily driven by lower amounts segregated in special reserve bank accounts for the benefit of
brokerage customers.
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 provided by investing activities was $4.4 billion for the year ended December 31, 2012 compared to net cash
used in investing activities of $1.1 billion for the prior year. The increase in cash of $5.5 billion compared to the prior year
was primarily due to a $2.3 billion decrease in purchases of Available-for-Sale securities and a $2.6 billion increase in
proceeds from sales and maturities, sinking fund payments and calls of Available-for-Sale securities driven by the
liquidation of the majority of Ameriprise Bank’s investment portfolio in 2012, as well as a $646 million increase in cash
from changes in consumer loans, net primarily due to the sale of credit card receivables to Barclays in 2012 and higher
purchases of consumer bank loans in the prior year. See our discussion of the conversion of Ameriprise Bank to a limited
powers national trust bank in our Results of Operations section above.
Net cash used in investing activities was $1.1 billion for the year ended December 31, 2011 compared to $734 million
for the year ended December 31, 2010. Cash used to purchase Available-for-Sale securities decreased $266 million
compared to the prior year and cash proceeds from sales and maturities, sinking fund payments and calls of
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