Ameriprise Financial, Inc. (AMP)

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 three months ended March 31, 2009 was $2.1 billion compared to net cash provided by investing activities of $491 million for the three months ended March 31, 2008, a decrease of $2.6 billion. Cash used for purchases of Available-for-Sale securities increased $4.0 billion and proceeds from sales and maturities, sinking fund payments and calls of Available-for-Sale securities increased $1.4 billion compared to the prior year period, resulting in a $2.6 billion decrease to cash.

Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net outflows of our investment certificate, fixed annuity and universal life products reflected in financing activities.

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 cash flow decrease of $4.6 billion. Purchases of Available-for-Sale securities increased $1.9 billion and sales of Available-for-Sale securities decreased $3.2 billion compared to the prior year period, resulting in a $5.1 billion decrease to cash provided by investing activities. We also paid cash of $563 million for acquisitions in the fourth quarter of 2008, net of cash acquired. These decreases were partially offset by a $1.0 billion increase in maturities, sinking fund payments and calls of Available-for-Sale securities compared to the prior year period.

Net cash provided by investing activities for the year ended December 31, 2007 was $4.6 billion compared to $3.5 billion for the year ended December 31, 2006, a cash flow improvement of $1.1 billion. Net cash proceeds from Available-for-Sale securities increased $1.8 billion compared to the prior year period. This increase in cash was partially offset by net cash provided by the acquisition of bank deposits and loans in 2006.

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Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net outflows of our investment certificate, fixed annuity and universal life products reflected in financing activities.

Net cash provided by investing activities for the year ended December 31, 2007 was $4.5 billion compared to $3.5 billion for the year ended December 31, 2006, a cash flow improvement of $1.0 billion. Purchases of Available-for-Sale securities decreased $1.1 billion and proceeds from sales of Available-for-Sale securities increased $1.2 billion compared to the prior year period. This increase in cash was partially offset by a $547 million decrease in maturities, sinking fund payments and calls of Available-for-Sale securities compared to the prior year period.

Net cash provided by investing activities for the year ended December 31, 2006 was $3.5 billion compared to net cash used in investing activities of $273 million for the year ended December 31, 2005, a cash flow improvement of $3.8 billion. Purchases of Available-for-Sale securities decreased $5.9 billion to $2.8 billion in 2006 compared to $8.7 billion in 2005. This increase in cash was partially offset by lower proceeds from sales and lower maturities, sinking fund payments and calls of Available-for-Sale securities in 2006.

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 insurance products reflected in financing activities.

Net cash provided by investing activities for the nine months ended September 30, 2007 was $4.2 billion compared to $3.4 billion for the nine months ended September 30, 2006, a change of $0.8 billion.

Cash provided by investing activities related to Available-for-Sale securities increased $1.7 billion over the prior year period. This increase resulted from an increase in proceeds from sales of Available-for-Sale securities and lower purchases of Available-for-Sale securities, partially offset by lower maturities, sinking fund payments and calls.

Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Our total investments at September 30, 2007 and December 31, 2006 included investments held by our insurance subsidiaries of $25.9 billion and $29.6 billion, respectively.

Our Available-for-Sale investments primarily include corporate debt securities and mortgage and other asset-backed securities, which had fair values of $14.5 billion and $10.4 billion, respectively, at September 30, 2007 compared to $16.8 billion and $12.3 billion, respectively, at December 31, 2006. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries: 35% in banking and finance, 21% in utilities and 12% in media. Investments also included $3.0 billion and $3.1 billion of commercial mortgage loans as of September 30, 2007 and December 31, 2006, respectively. At September 30, 2007 and December 31, 2006, 70% and 69%, respectively, of our Available-for-Sale investment portfolio was rated A or better, while 6% and 7%, respectively, of our Available-for-Sale investment portfolio was below investment grade.

Investing activities for the nine months ended September 30, 2007 included $115 million in cash received from the sale of AMEX Assurance to American Express on September 30, 2007. Investing activities for the nine months ended September 30, 2006 included $951 million in cash received as part of the Purchase and Assumption agreement related to certain of the assets and liabilities of American Express Bank, FSB. Purchases of land, buildings, equipment and software increased $123 million, primarily due to increased spending on internally-developed software.

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 insurance products reflected in financing activities.

Net cash provided by investing activities for the six months ended June 30, 2007 was $3.4 billion compared to $1.2 billion for the six months ended June 30, 2006. Purchases of Available-for-Sale securities decreased $1.1 billion to $636 million for the six months ended June 30, 2007, compared to $1.8 billion for the six months ended June 30, 2006. Proceeds from sales of Available-for-Sale securities for the six months ended June 30, 2007 increased $1.5 billion to $2.7 billion from $1.2 billion for the six months ended June 30, 2006.

Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Our total investments at June 30, 2007 and December 31, 2006 included investments held by our insurance subsidiaries of $26.2 billion and $29.6 billion, respectively.

Our Available-for-Sale investments primarily include corporate debt securities and mortgage and other asset-backed securities, which had fair values of $14.7 billion and $10.7 billion, respectively, at June 30, 2007 compared to $16.8 billion and $12.3 billion, respectively, at December 31, 2006. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries: 35% in banking and finance, 21% in utilities and 12% in media. Investments also included $3.0 billion and $3.1 billion of commercial mortgage loans on real estate as of June 30, 2007 and December 31, 2006, respectively. At both June 30, 2007 and December 31, 2006, 69% of our Available-for-Sale investment portfolio was rated A or better, while 6% and 7%, respectively, of our Available-for-Sale investment portfolio was below investment grade.

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 insurance products reflected in financing activities.

Net cash provided by investing activities for the three months ended March 31, 2007 was $1.2 billion compared to $488 million for the three months ended March 31, 2006. Purchases of Available-for-Sale securities decreased $638 million to $345 million for the three months ended March 31, 2007, compared to $983 million for the three months ended March 31, 2006. Proceeds from sales of Available-for-Sale securities for the three months ended March 31, 2007 increased $251 million to $840 million from $589 million for the three months ended March 31, 2006.

Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Our total investments at March 31, 2007 and December 31, 2006 included investments held by our insurance subsidiaries of $28.5 billion and $29.6 billion, respectively.

Our Available-for-Sale investments primarily include corporate debt securities and mortgage and other asset-backed securities, which had fair values of $16.1 billion and $12.0 billion, respectively, at March 31, 2007 compared to $16.8 billion and $12.3 billion, respectively, at December 31, 2006. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries: 34% in banking and finance, 21% in utilities and 13% in media. Investments also included $3.0 billion and $3.1 billion of commercial mortgage loans on real estate as of March 31, 2007 and December 31, 2006, respectively. At March 31, 2007 and December 31, 2006, 70% and 69%, respectively, of our Available-for-Sale investment portfolio was rated A or better, while 6% and 7%, respectively, of our Available-for-Sale investment portfolio was below investment grade.

Investing Activities

Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net outflows of our investment certificate, fixed annuity and universal life products reflected in financing activities.

Net cash provided by investing activities for the year ended December 31, 2006 was $3.5 billion compared to net cash used in investing activities of $255 million for the year ended December 31, 2005, a cash flow improvement of $3.8 billion. Purchases of Available-for-Sale securities decreased $5.9 billion to $2.8 billion in 2006 compared to $8.7 billion in 2005. Proceeds from sales of Available-for-Sale securities in 2006 decreased $1.8 billion to $2.5 billion from $4.3 billion in 2005.

Net cash used in investing activities for the year ended December 31, 2005 was $255 million compared to $1.6 billion for the year ended December 31, 2004. This change resulted primarily from a net increase of $2.3 billion in proceeds from the sales of Available-for-Sale securities, partially offset by a net increase of $1.4 billion in purchases of Available-for-Sale securities in 2005 compared to 2004.

Investing Activities

For the nine months ended September 30, 2006, net cash provided by investing activities was $3.4 billion compared to net cash used in investing activities of $664 million for the nine months ended September 30, 2005, a cash flow improvement of $4.1 billion. The majority of this cash flow improvement was attributable 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. Purchases of Available-for-Sale securities decreased $4.2 billion to $2.2 billion for the nine months ended September 30, 2006 compared to $6.4 billion for the nine months ended September 30, 2005. Proceeds from sales of Available-for-Sale securities for the nine months ended September 30, 2006 decreased $1.4 billion to $2.1 billion from $3.5 billion for the nine months ended September 30, 2005.

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Investing activities for the nine months ended September 30, 2006 also included $1.0 billion related to the purchase of customer loans and assumption of customer deposits from AEBFSB in connection with our launch of Ameriprise Bank in September 2006. The transaction, recorded at fair value, included $963 million of customer deposits and $12 million of customer loans. We also received cash of $951 million from AEBFSB in connection with this purchase. For more information about Ameriprise Bank and the purchase of assets and assumption of liabilities from AEBFSB, see Note 4 to our Consolidated Financial Statements.

Our Available-for-Sale investments primarily included corporate debt securities and mortgage and other asset-backed securities, which had a fair value of $17.3 billion and $12.5 billion, respectively, at September 30, 2006 compared to $18.6 billion and $13.9 billion, respectively, at December 31, 2005. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries:  33% in banking and finance, 21% in utilities and 13% in media. Investments also included $3.1 billion of mortgage loans on real estate as of September 30, 2006 and December 31, 2005. At September 30, 2006 and December 31, 2005, 69% and 70%, respectively, of our Available-for-Sale investment portfolio was rated A or better, while 7% of our Available-for-Sale investment portfolio was below investment grade at both dates.

Our total investments at September 30, 2006 and December 31, 2005 included investments held by our insurance subsidiaries of $30.3 billion and $32.5 billion, respectively. Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Maturities of these investments are largely matched with the expected future payments of insurance and annuity obligations.

Investments at September 30, 2006 included $179 million of trading securities (which, prior to the adoption of EITF 04-5, would have been $154 million under the equity method of accounting) of certain hedge fund limited partnerships which were consolidated pursuant to EITF 04-5 beginning in 2006. The consolidated hedge fund and property fund limited partnerships had $126 million of restricted cash at September 30, 2006.

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. For the six months ended June 30, net cash provided by investing activities was $1.2 billion in 2006 compared to $260 million in 2005, a cash flow improvement of $910 million. This improvement was primarily attributable to less cash used for purchases of Available-for-Sale securities, partially offset by decreases in proceeds from sales and maturities, sinking fund payments and calls. Purchases of Available-for-Sale securities decreased $3.0 billion to $1.8 billion for the six months ended June 30, 2006 compared to $4.8 billion for the six months ended June 30, 2005. Proceeds from sales of Available-for-Sale securities for the six months ended June 30, 2006 decreased $1.1 billion to $1.2 billion from $2.3 billion for the six months ended June 30, 2005. Maturities, sinking fund payments and calls of Available-for-Sale securities decreased $468 million to $1.7 billion for the six months ended June 30, 2006 compared to $2.2 billion for the six months ended June 30, 2005.

Our Available-for-Sale investments primarily include corporate debt securities and mortgage and other asset-backed securities, which had a fair value of $17.5 billion and $12.8 billion, respectively, at June 30, 2006 compared to $18.6 billion and $13.9 billion, respectively, at December 31, 2005. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries:  34% in banking and finance, 21% in utilities and 13% in media.  Investments also include $3.1 billion of mortgage loans on real estate as of both June 30, 2006 and December 31, 2005. At June 30, 2006 and December 31, 2005, 69% and 70%, respectively, of our Available-for-Sale investment portfolio was rated A or better, while 7% of our Available-for-Sale investment portfolio was below investment grade.

Our total investments at June 30, 2006 and December 31, 2005 included investments held by our insurance subsidiaries of $30.8 billion and $32.5 billion, respectively. Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Maturities of these investments are largely matched with the expected future payments of insurance and annuity obligations.

Investments at June 30, 2006 included $181 million of trading securities (of which $159 million had previously been accounted for under the equity method) of certain limited partnerships which were consolidated pursuant to EITF 04-5 beginning in 2006.

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. For the three months ended March 31, 2006, net cash provided by investing activities was $488 million compared to $514 million used in investing activities during the same period in 2005, a cash flow improvement of $1.0 billion. This improvement was primarily attributable to less cash used for purchases of Available-for-Sale securities and an increase in cash inflows from maturities, sinking fund payments and calls. Purchases of Available-for-Sale securities decreased $755 million to $1.0 billion in the three months ended March 31, 2006 compared to $1.7 billion in the three months ended March 31, 2005. Maturities, sinking fund payments and calls of Available-for-Sale securities increased $283 million, to $918 million for the three months ended March 31, 2006 from $635 million for the same period of 2005.

Our Available-for-Sale investments primarily include corporate debt securities and mortgage and other asset-backed securities, which had a fair value of $18.3 billion and $13.4 billion, respectively, at March 31, 2006 compared to $18.8 billion and $13.9 billion, respectively, at December 31, 2005. Our Available-for-Sale corporate debt securities comprise a diverse portfolio, with the largest concentrations of the portfolio in the following industries:  35% in banking and finance, 20% in utilities and 13% in media. Investments also include $3.1 billion of mortgage loans on real estate as of both March 31, 2006 and December 31, 2005. At March 31, 2006 and December 31, 2005, 70% of our Available-for-Sale investment portfolio was rated A or better, while 7% of our Available-for-Sale investment portfolio was below investment grade.

Our total investments at March 31, 2006 and December 31, 2005 included investments held by our insurance subsidiaries of $31.8 billion and $32.5 billion, respectively. Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Maturities of these investments are largely matched with the expected future payments of insurance and annuity obligations.

Investments at March 31, 2006 include $178 million of trading securities (of which $160 million had previously been accounted for under the equity method) of a limited partnership for which we are the general partner, which we consolidated pursuant to our adoption as of January 1, 2006 of EITF 04-5.