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<SEC-DOCUMENT>0000950123-10-015869.txt : 20100224
<SEC-HEADER>0000950123-10-015869.hdr.sgml : 20100224
<ACCEPTANCE-DATETIME>20100223185110
ACCESSION NUMBER: 0000950123-10-015869
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 5
CONFORMED PERIOD OF REPORT: 20091231
FILED AS OF DATE: 20100224
DATE AS OF CHANGE: 20100223
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMERIPRISE CERTIFICATE CO
CENTRAL INDEX KEY: 0000052428
IRS NUMBER: 416009975
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 811-00002
FILM NUMBER: 10627812
BUSINESS ADDRESS:
STREET 1: 50606 AMERIPRISE FINANCIAL CENTER
CITY: MINNEAPOLIS
STATE: MN
ZIP: 55474
BUSINESS PHONE: 6123723131
MAIL ADDRESS:
STREET 1: 50606 AMERIPRISE FINANCIAL CENTER
CITY: MINNEAPOLIS
STATE: MN
ZIP: 55474
FORMER COMPANY:
FORMER CONFORMED NAME: AMERICAN EXPRESS CERTIFICATE CO
DATE OF NAME CHANGE: 20000512
FORMER COMPANY:
FORMER CONFORMED NAME: IDS CERTIFICATE CO /MN/
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: INVESTORS SYNDICATE OF AMERICA INC
DATE OF NAME CHANGE: 19860303
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c56392e10vk.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 30 OF THE INVESTMENT COMPANY ACT OF 1940
AND SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NO. 811-00002
AMERIPRISE CERTIFICATE COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 41-6009975
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
<TABLE>
<S> <C>
1099 AMERIPRISE FINANCIAL CENTER, MINNEAPOLIS, MINNESOTA 55474
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (612) 671-3131
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[Not applicable]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer [ ] Accelerated Filer [ ]
Non-Accelerated Filer [X] Smaller reporting company [ ]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT FEBRUARY 23, 2010
- ----- --------------------------------
<S> <C>
Common Shares (par value $10 per share) 150,000 shares
</TABLE>
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (I)(1)(a)
AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
<PAGE>
FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM NUMBER PAGE
- ----------- ----
<S> <C>
PART I
1. Business....................................................... 3
1A. Risk Factors................................................... 5
1B. Unresolved Staff Comments...................................... 9
2. Properties..................................................... 9
3. Legal Proceedings.............................................. 9
4. Submission of Matters to a Vote of Security Holders............ 9
PART II
5. Market for Registrant's Common Equity, Related Stockholder
Matters And Issuer Purchases of Equity Securities.............. 10
6. Selected Financial Data........................................ 10
7. Management's Narrative Analysis................................ 11
7A. Quantitative and Qualitative Disclosures About Market Risk..... 14
8. Financial Statements and Supplementary Data.................... 15
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................... 16
9A(T). Controls and Procedures........................................ 16
9B. Other Information.............................................. 16
PART III
10. Directors, Executive Officers and Corporate Governance......... 16
11. Executive Compensation......................................... 16
12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters................................ 16
13. Certain Relationships and Related Transactions, and Director
Independence................................................... 16
14. Principal Accounting Fees and Services......................... 16
PART IV
15. Exhibits and Financial Statement Schedules..................... 17
Signatures..................................................... 18
Index to Financial Statements and Schedules.................... F-1
Exhibit Index.................................................. E-1
</TABLE>
2
<PAGE>
PART I
ITEM 1. BUSINESS
OVERVIEW
Ameriprise Certificate Company ("ACC" or the "Company") was incorporated on
October 28, 1977 under the laws of Delaware. Ameriprise Financial, Inc.
("Ameriprise Financial"), a Delaware corporation, owns 100% of the outstanding
voting securities of ACC. Ameriprise Financial and its predecessor companies
have more than 110 years of history providing clients with financial solutions.
ACC is registered as an investment company under the Investment Company Act of
1940 (the "1940 Act") and is in the business of issuing face-amount investment
certificates. Face-amount certificates issued by ACC entitle the certificate
owner to receive at maturity a stated amount of money and interest or credits
declared from time to time by ACC, at its discretion. The certificates issued by
ACC are not insured by any government agency. ACC's certificates are sold by
Ameriprise Financial Services, Inc. ("AFSI"), an affiliate of ACC. AFSI is
registered as a broker-dealer in all 50 states, the District of Columbia and
Puerto Rico.
To ACC's knowledge, ACC is the largest issuer of face-amount certificates in the
United States. However, such certificates compete with many other products
(including investments) offered by banks, savings and loan associations, mutual
funds, broker-dealers and others, which may be viewed by potential clients as
offering a comparable or superior combination of safety and return on
investment. In particular, some of ACC's products are designed to be competitive
with the types of investments offered by banks and thrifts. Since ACC's
face-amount certificates are securities, their offer and sale are subject to
regulation under federal and state securities laws. ACC's certificates are
backed by ACC's qualified assets on deposit and are not insured by any
governmental agency or other entity.
PRODUCTS
As of the date of this report, ACC offers the following four different
certificate products to the public:
1. Ameriprise Flexible Savings Certificate
- Single payment certificate that permits a limited amount of additional
payments and on which ACC guarantees interest rates in advance for a
term of six, seven, twelve, thirteen, eighteen, twenty-four, thirty or
thirty-six months, and potentially other terms, at ACC's option.
- Currently sold without a sales charge.
- Currently bears surrender charges for premature surrenders.
- Available as qualified investments for IRAs, 401(k) plans, and other
qualified retirement plans.
- Distributed pursuant to a Distribution Agreement with AFSI.
- Current policy is to re-evaluate the certificate product interest
crediting rates weekly to respond to marketplace changes.
- ACC refers to an independent index or source to set the rates for new
sales and must set the rates for an initial purchase of the
certificate within a specified range of the rate from such index or
source. For renewals, ACC uses such rates as an indication of the
competitors' rates, but is not required to set rates within a
specified range.
- Constant Maturity Treasuries (CMTs) are used as the guide in setting
rates.
- Competes with popular short-term investment vehicles such as
certificates of deposit, money market certificates, and money market
mutual funds that offer comparable yields, liquidity and safety of
principal.
2. Ameriprise Installment Certificate
- Installment payment certificate that declares interest rates in
advance for a three-month period.
- Currently sold without a sales charge.
- Currently bears surrender charges for premature surrenders.
- Available as qualified investments for IRAs, 401(k) plans, and other
qualified retirement plans.
- Distributed pursuant to a Distribution Agreement with AFSI.
- Current policy is to re-evaluate the certificate product interest
crediting rates weekly to respond to marketplace changes.
- As of the date of this report, ACC has a fixed rate of 0.60% for new
sales.
- Intended to help clients save systematically and may compete with
passbook savings and NOW accounts.
3
<PAGE>
3. Ameriprise Market Strategy Certificate
- Single payment certificate that also permits additional payments, with
a flexible yield, that pays interest at a fixed rate or that offers
the certificate product owner the opportunity to have all or part of
the certificate product returns tied to fifty-two week stock market
performance, up to a maximum return, as measured by a broad stock
market index, for a series of fifty-two week terms starting every
month or at intervals the certificate product owner selects.
- Currently sold without a sales charge.
- Currently bears surrender charges for premature surrenders.
- Available as qualified investments for IRAs, 401(k) plans, and other
qualified retirement plans.
- Distributed pursuant to a Distribution Agreement with AFSI.
- Current policy is to re-evaluate the certificate product interest
crediting rates weekly and maximum return rates at least
monthly to respond to marketplace changes.
- Certain banks offer certificates of deposit that have features similar
to this certificate.
- The rate of interest is calculated in whole or in part based on any
upward movement in a broad-based stock market index up to a maximum
return, where the maximum is a fixed rate for a given term, but can be
changed at ACC's discretion for prospective terms.
4. Ameriprise Stock Market Certificate
- Single payment certificate that offers the certificate product owner
the opportunity to have all or part of the certificate product returns
tied to fifty-two week stock market performance, up to a maximum
return, as measured by a broad stock market index, with return of
principal guaranteed by ACC. The owner can also choose to earn a fixed
rate of interest after the first term.
- Currently sold without a sales charge.
- Currently bears surrender charges for premature surrenders.
- Available as qualified investments for IRAs, 401(k) plans, and other
qualified retirement plans.
- Distributed pursuant to a Distribution Agreement with AFSI.
- Current policy is to re-evaluate the certificate product interest
crediting rates weekly and maximum return rates at least
monthly to respond to marketplace changes.
- Certain banks offer certificates of deposit that have features similar
to this certificate.
- The rate of interest is calculated in whole or in part based on any
upward movement in a broad-based stock market index up to a maximum
return, where the maximum is a fixed rate for a given term, but can be
changed at ACC's discretion for prospective terms.
The specified maturities of most of ACC's certificate products range from ten to
twenty years. Within that maturity period, most certificates have interest
crediting rate terms ranging from three to thirty-six months. Interest crediting
rates are subject to change and certificate product owners can surrender their
certificates without penalty at term end. Currently offered Ameriprise
Certificates (listed above), as well as certain certificates previously issued
by ACC (not listed above), contain renewal features which enable certificate
owners to renew their certificate term until certificate maturity. Accordingly,
certificate products that are currently outstanding in their renewal periods or
are exercised for renewal in the future are, and continue to be, liabilities of
ACC until their withdrawals or maturity whether or not such certificates are
available for new sales.
DISTRIBUTION AND MARKETING CHANNELS
ACC's certificates offered by AFSI are sold pursuant to a distribution agreement
which is terminable on sixty days' notice and is subject to annual approval by
ACC's Board of Directors, including a majority of the directors who are not
"interested persons" of AFSI or ACC as that term is defined in the 1940 Act. The
distribution agreement provides for the payment of distribution fees to AFSI for
services provided.
ASSET MANAGEMENT
ACC has retained RiverSource Investments, LLC, a wholly owned subsidiary of
Ameriprise Financial, to manage ACC's investment portfolio under an investment
management agreement, which is subject to annual review and approval by ACC's
Board of Directors, including a majority of the directors who are not
"interested persons" of AFSI, RiverSource Investments, LLC or ACC. This
investment management agreement with RiverSource Investments, LLC, can be
terminated by either party. On November 17, 2009, ACC's Board of Directors
conducted its annual review of the investment management agreement and
re-approved the agreement for another year, effective January 1, 2010.
4
<PAGE>
REGULATION
ACC is required to maintain cash and "qualified assets" meeting the standards of
Section 28(b) of the 1940 Act, as modified by an exemptive order of the
Securities and Exchange Commission (the "SEC"). The amortized cost of such
investments must be at least equal to ACC's net liabilities on all outstanding
face-amount certificates plus $250,000. ACC's qualified assets consist of cash
equivalents, below investment grade syndicated bank loans and commercial
mortgage loans, U.S. government and government agency securities, municipal
bonds, corporate bonds, preferred stocks, equity index options and other
securities meeting specified standards. So long as ACC wishes to rely on the SEC
order, as a condition to the order, ACC has agreed to maintain an amount of
unappropriated retained earnings and capital equal to at least 5% of certificate
reserves (less outstanding certificate loans). To the extent that payment of a
dividend would decrease the capital ratio below the required 5%, payment of a
dividend would be restricted. In determining compliance with this condition,
qualified assets are valued in accordance with the provisions of Minnesota
Statutes where such provisions are applicable.
ACC has also entered into a written understanding with the Minnesota Department
of Commerce, that ACC will maintain capital equal to 5% of the assets of ACC
(less outstanding certificate loans). To the extent that payment of a dividend
would decrease this ratio below the required 5%, payment of a dividend would be
restricted. When computing its capital for these purposes, ACC values its assets
on the basis of statutory accounting for insurance companies rather than U.S.
generally accepted accounting principles ("GAAP"). ACC is subject to annual
examination and supervision by the State of Minnesota, Department of Commerce
(Banking Division).
ITEM 1A. RISK FACTORS
ACC's operations and financial results are subject to various risks and
uncertainties, including those described below, that could have a material
adverse effect on ACC's business, financial condition or results of operations.
Based on information currently known, the following information identifies the
material factors affecting ACC. However, the risks and uncertainties ACC faces
are not limited to those described below. Additional risks and uncertainties
which are not presently known or which are currently believed to be immaterial
may also adversely affect ACC's business.
RISKS RELATING TO ACC'S BUSINESS
ACC'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY
MARKET FLUCTUATIONS AND BY ECONOMIC AND OTHER FACTORS.
ACC's financial condition and results of operations in the past have been, and
in the future may continue to be, materially affected by many factors of a
global or localized nature, including political, economic and market conditions;
the availability and cost of capital; the level and volatility of equity prices,
commodity prices and interest rates; currency values and other market indices;
technological changes and events; the availability and cost of credit;
inflation; and investor sentiment and confidence in the financial markets. These
factors also may have an impact on ACC's ability to achieve its strategic
objectives.
ACC's financial condition and results of operations are affected by the
"spread", or the difference between the returns ACC earns on the investments
that support its product obligations and the amounts that ACC must pay
certificate holders.
ACC's investment products are sensitive to interest rate fluctuations and ACC's
future costs associated with such variations may differ from its historical
costs. During periods of increasing market interest rates, ACC expects to
increase crediting rates on existing face-amount certificates. Because returns
on invested assets may not increase as quickly as current interest rates, ACC
may have to accept a lower spread and thus lower profitability or face a decline
in sales and greater loss of existing certificates. In addition, increases in
market interest rates may cause increased certificate surrenders as certificate
holders seek to shift assets to products with perceived higher returns. This
process may lead to an earlier than expected outflow of cash from ACC's
business. Also, increases in market interest rates may result in the extension
of the maturities of some of ACC's investment assets. These earlier outflows and
asset maturity extensions may require investment assets to be sold at a time
when the prices of those assets are lower because of the increase in market
interest rates, which may result in realized investment losses. Increases in
crediting rates, as well as surrenders and withdrawals, could have an adverse
effect on ACC's financial condition and results of operations.
During periods of falling interest rates, or stagnancy of low interest rates,
ACC's spread may also be reduced. Because ACC may adjust the interest rates it
credits on most of the products downward only at limited, pre-established
intervals, ACC's spreads could decrease and potentially become negative.
Interest rate fluctuations could also have an adverse effect on the results of
ACC's investment portfolio. During periods of declining market interest rates,
or stagnancy of low interest rates, the interest ACC receives on variable
interest rate investments decreases. In addition, during those periods, ACC is
forced to reinvest the cash it receives as interest or return of principal on
its investments in lower-yielding, high-grade instruments or in lower-credit
instruments to maintain comparable returns. Issuers of fixed income securities
also may decide to prepay their
5
<PAGE>
obligations in order to borrow at lower market rates. This increases the risk
that ACC may have to invest the cash proceeds of these securities in
lower-yielding or lower-credit instruments. Offsetting some of these risks is
the fact that a significant portion of certificate balances do not have a
minimum guaranteed interest crediting rate.
For additional information regarding the sensitivity of the fixed income
securities in ACC's investment portfolio to interest rate fluctuations, see Item
7A of this Form 10-K--"Quantitative and Qualitative Disclosures About Market
Risk."
GOVERNMENTAL INITIATIVES INTENDED TO ADDRESS CAPITAL MARKET CONDITIONS MAY NOT
BE EFFECTIVE AND MAY GIVE RISE TO ADDITIONAL REQUIREMENTS FOR ACC'S BUSINESS,
INCLUDING ENHANCED OVERSIGHT, NEW CAPITAL REQUIREMENTS, ADDITIONAL FEES AND
TAXES OR OTHER REGULATIONS, THAT COULD MATERIALLY AFFECT ACC'S RESULTS OF
OPERATIONS, FINANCIAL CONDITION AND LIQUIDITY IN WAYS THAT ACC CANNOT PREDICT.
Recent economic conditions have caused the U.S. federal government, Federal
Reserve and other U.S. and foreign governmental and regulatory bodies to take or
to consider taking legislative and regulatory actions designed to address the
financial crisis and to mitigate against the risk of similar crises going
forward. In 2009, the U.S. Senate and House of Representatives passed various
forms of legislation setting forth a comprehensive plan for regulatory reform in
the financial industry. While such legislation has not been finalized, these
plans contemplate significant structural reforms, including heightened
governmental powers to regulate risk across the financial system and the
creation of a new consumer financial protection agency. The legislation also
calls for increased substantive regulation of the financial industry, including
heightened regulation of large financial institutions whose combination of size,
leverage, and interconnectedness could, upon the failure of such an institution,
pose a threat to financial stability, a modified standard of care for
broker-dealers, expanded regulation over credit ratings agencies and derivatives
and securitization markets, effective increases in regulatory capital
requirements and various corporate governance initiatives. In addition, specific
taxes targeted at larger financial institutions have been proposed that could
increase ACC's costs and reduce ACC's earnings. There can be no assurance as to
whether or when any of the parts of the proposed financial reform plans will be
enacted into legislation, and if adopted, what the final provisions of such
legislation will be.
This legislation or similar proposals, as well as other actions such as monetary
or fiscal actions of U.S. government instrumentalities or comparable authorities
in other countries, may fail to stabilize the financial markets. Any new
legislation or regulatory changes could require ACC to change certain of ACC's
business practices, impose additional costs on ACC, or otherwise adversely
affect ACC's business operations, regulatory reporting relationships, results of
operations or financial condition. Consequences may include material effects on
interest rates, which could materially affect ACC's investments, results of
operations and liquidity in ways that ACC cannot predict.
In addition, ACC is subject to extensive laws and regulations that are
administered and enforced by a number of different governmental authorities and
non-governmental self-regulatory agencies. The current financial crisis has
prompted or may prompt some of these authorities to consider additional
regulatory requirements intended to prevent future crises or otherwise assure
the stability of institutions under their supervision. These authorities may
also seek to exercise their authority in new or more expansive ways. All of
these possibilities, if they occurred, could affect the way ACC conducts its
business and manages its capital, and may require ACC to satisfy increased
capital requirements, any of which in turn could materially affect ACC's results
of operations, financial condition and liquidity.
DEFAULTS IN ACC'S FIXED MATURITY SECURITIES PORTFOLIO COULD ADVERSELY AFFECT
ACC'S EARNINGS.
Issuers of the fixed income maturities owned by ACC may default on principal and
interest payments. As of December 31, 2009, 10.3% of ACC's invested assets had
ratings below investment grade. Moreover, economic downturns and corporate
malfeasance can increase the number of companies, including those with
investment-grade ratings, that default on their debt obligations.
IF THE COUNTERPARTIES TO THE DERIVATIVE INSTRUMENTS ACC USES TO HEDGE CERTAIN
CERTIFICATE LIABILITIES DEFAULT, ACC MAY BE EXPOSED TO RISKS IT HAD SOUGHT TO
MITIGATE, WHICH COULD ADVERSELY AFFECT ACC'S FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
ACC uses derivative instruments to hedge certain certificate liabilities. ACC
enters into a variety of derivative instruments with a number of counterparties.
If ACC's counterparties fail to honor their obligations under the derivative
instruments, ACC's hedges of the related liabilities will be ineffective. That
failure could have an adverse effect on ACC's financial condition and results of
operations that could be material. This risk of failure of ACC's hedge
transactions may be increased by capital market volatility.
6
<PAGE>
SOME OF ACC'S INVESTMENTS ARE RELATIVELY ILLIQUID.
ACC invests a portion of its assets in privately placed fixed income securities
and mortgage loans. Mortgage loans are relatively illiquid. ACC's investment
manager periodically reviews ACC's private placement investments using adopted
standards to categorize such investments as liquid or illiquid. As of December
31, 2009, mortgage loans and private placement fixed income securities that have
been categorized as illiquid represented approximately 3.5% of the carrying
value of ACC's investment portfolio. If ACC requires significant amounts of cash
on short notice in excess of its normal cash requirements, ACC may have
difficulty selling these investments in a timely manner or be forced to sell
them for an amount less than it would otherwise have been able to realize, or
both. Any inability to quickly dispose of illiquid investments could have an
adverse effect on ACC's financial condition and results of operations.
THE DETERMINATION OF THE AMOUNT OF ALLOWANCES AND IMPAIRMENTS TAKEN ON CERTAIN
INVESTMENTS IS SUBJECT TO MANAGEMENT'S EVALUATION AND JUDGMENT AND COULD
MATERIALLY IMPACT ACC'S RESULTS OF OPERATIONS OR FINANCIAL POSITION.
The determination of the amount of allowances and impairments varies by
investment type and is based upon ACC's periodic evaluation and assessment of
inherent and known risks associated with the respective asset class. Such
evaluations and assessments are revised as conditions change and new information
becomes available. Management updates its evaluations regularly and reflects
changes in allowances and impairments in operations as such evaluations are
revised. Historical trends may not be indicative of future impairments or
allowances.
The assessment of whether impairments have occurred is based on management's
case-by-case evaluation of the underlying reasons for the decline in fair value
that considers a wide range of factors about the security issuer and management
uses its best judgment in evaluating the cause of the decline in the estimated
fair value of the security and in assessing the prospects for recovery. Inherent
in management's evaluation of the security are assumptions and estimates about
the operations of the issuer and its future earnings potential, which
assumptions and estimates are more difficult to make with certainty under
current market conditions.
IF ACC'S RESERVES FOR FUTURE CERTIFICATE REDEMPTIONS AND MATURITIES ARE
INADEQUATE, ACC MAY BE REQUIRED TO INCREASE ITS RESERVE LIABILITIES, WHICH COULD
ADVERSELY AFFECT ACC'S RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Investment certificates may be purchased either with a lump-sum payment or by
installment payments. Certificate product owners are entitled to receive, at
maturity, a definite sum of money. Payments from certificate owners are credited
to investment certificate reserves. Investment certificate reserves accumulate
interest at specified percentage rates as declared by ACC. Reserves are also
maintained for advance payments made by certificate owners, accrued interest
thereon, and for additional credits in excess of minimum guaranteed rates and
accrued interest thereon. On certificates allowing for the deduction of a
surrender charge, the cash surrender values may be less than accumulated
investment certificate reserves prior to maturity dates. Cash surrender values
on certificates allowing for no surrender charge are equal to certificate
reserves. The payment distribution, reserve accumulation rates, cash surrender
values, reserve values and other matters are governed by the 1940 Act.
Certain certificates offer a return based on the relative change in a stock
market index. The certificates with an equity-based return contain embedded
derivatives, which are carried at fair value within investment certificate
reserves on the balance sheets. The fair values of these embedded derivatives
incorporate current market data inputs. Changes in fair value are reflected in
provision for certificate reserves within the statements of operations.
ACC monitors its reserve levels continually. If ACC concluded its reserves were
insufficient to cover actual or expected redemptions or maturities, ACC would be
required to increase its reserves and incur income statement charges for the
period in which it makes the determination. Such a determination could adversely
affect ACC's financial condition and results of operations.
INTENSE COMPETITION COULD NEGATIVELY AFFECT ACC'S ABILITY TO MAINTAIN OR
INCREASE ITS MARKET SHARE AND PROFITABILITY.
ACC's business operates in an intensely competitive industry segment. ACC
competes based on a number of factors including name recognition, service,
interest rates, product features and perceived financial strength. ACC's
competitors include broker-dealers, banks, asset managers and other financial
institutions. ACC's business faces competitors that have greater market share,
offer a broader range of products or have greater financial resources.
ACC'S AFFILIATED DISTRIBUTOR MAY BE UNABLE TO ATTRACT AND RETAIN FINANCIAL
ADVISORS.
ACC is dependent on the branded financial advisors of its affiliated
broker-dealer selling firm for all of the sales of its certificate products. A
significant number of its branded financial advisors operate as independent
contractors under a franchise agreement with its affiliated selling firm. There
can be no assurance that ACC's affiliated selling firm will be successful in its
efforts to recruit and retain new advisors to its network. If ACC's affiliated
selling firm is unable to attract
7
<PAGE>
and retain quality financial advisors, fewer advisors would be available to sell
ACC's certificate products and ACC's financial condition and results of
operations could be materially adversely affected.
ACC'S BUSINESS IS REGULATED AND CHANGES IN LEGISLATION OR REGULATION MAY REDUCE
ACC'S PROFITABILITY AND LIMIT ITS GROWTH.
ACC operates in a regulated industry. Various regulatory and governmental bodies
have the authority to review ACC's products and business practices and to bring
regulatory or other legal actions against ACC if, in their view, ACC's practices
are improper. Changes in these regulations may lead to increased fees to service
providers. Additionally, ACC is subject to heightened regulatory requirements
relating to privacy and protection of customer data.
A FAILURE TO PROPERLY MANAGE CONFLICTS OF INTEREST COULD ADVERSELY AFFECT ACC'S
BUSINESS.
ACC has to address potential conflicts of interest, including those relating to
the activities of its affiliated entities. For example, conflicts may arise
between ACC's position as a manufacturer of certificate products and the
position of an ACC affiliate, AFSI, as the distributor of these products. ACC
and its affiliated entities have procedures and controls in place that are
designed to address conflicts of interest. Appropriately dealing with conflicts
of interest, however, is complex and difficult and ACC's reputation could be
damaged if it fails, or appears to fail, to deal appropriately with conflicts of
interest. In addition, the SEC and other federal and state regulators have
increased their scrutiny of potential conflicts of interest. It is possible that
potential or perceived conflicts could give rise to litigation or enforcement
actions. It is possible that the regulatory scrutiny of, and litigation in
connection with, conflicts of interest could make ACC's clients less willing to
enter into transactions in which such a conflict may occur, and could adversely
affect ACC's business.
FAILURE OF ACC'S SERVICE PROVIDERS TO PERFORM THEIR RESPONSIBILITIES COULD
ADVERSELY AFFECT ACC'S BUSINESS.
ACC's business operations, including investment management, transfer agent,
custody and distribution services, are performed by affiliated service providers
pursuant to formal contracts. The failure of a service provider to fulfill its
responsibilities could have an adverse effect on ACC's financial condition and
results of operations that could be material.
ACC IS SUBJECT TO TAX CONTINGENCIES THAT COULD ADVERSELY AFFECT ITS PROVISION
FOR INCOME TAXES.
ACC is subject to the income tax laws of the U.S., its states and
municipalities. These tax laws are complex and may be subject to different
interpretations. ACC must make judgments and interpretations about the
application of these inherently complex tax laws when determining the provision
for income taxes and must also make estimates about when in the future certain
items affect taxable income in the various tax jurisdictions. Disputes over
interpretations of the tax laws may be settled with the taxing authority upon
examination or audit.
BREACHES OF SECURITY, OR THE PERCEPTION THAT ACC'S TECHNOLOGY INFRASTRUCTURE IS
NOT SECURE, COULD HARM ACC'S BUSINESS.
ACC's business requires the appropriate and secure utilization of consumer and
other sensitive information. ACC's operations require the secure transmission of
confidential information over public networks. Security breaches in connection
with the delivery of ACC's products and services, including products and
services utilizing the Internet, and the trend toward broad consumer and general
public notification of such incidents, could significantly harm ACC's business,
financial condition or results of operations. Even if ACC successfully protects
its technology infrastructure and the confidentiality of sensitive data, ACC
could suffer harm to its business and reputation if attempted security breaches
are publicized. ACC cannot be certain that advances in criminal capabilities,
discovery of new vulnerabilities, attempts to exploit vulnerabilities in ACC's
systems, data thefts, physical system or network break-ins or inappropriate
access, or other developments will not compromise or breach the technology or
other security measures protecting the networks used in connection with ACC's
products and services.
PROTECTION FROM SYSTEM INTERRUPTIONS IS IMPORTANT TO ACC'S BUSINESS. IF ACC
EXPERIENCES A SUSTAINED INTERRUPTION TO ACC'S TELECOMMUNICATIONS OR DATA
PROCESSING SYSTEMS, IT COULD HARM ACC'S BUSINESS.
System or network interruptions could delay and disrupt ACC's ability to
develop, deliver or maintain ACC's products and services, causing harm to ACC's
business and reputation and resulting in loss of customers or revenue. These
interruptions can include fires, floods, earthquakes, power losses, equipment
failures, software failures and other events beyond ACC's control.
RISK MANAGEMENT POLICIES AND PROCEDURES MAY NOT BE FULLY EFFECTIVE IN
IDENTIFYING OR MITIGATING RISK EXPOSURE IN ALL MARKET ENVIRONMENTS OR AGAINST
ALL TYPES OF RISK, INCLUDING EMPLOYEE AND FINANCIAL ADVISOR MISCONDUCT.
ACC has devoted significant resources to develop ACC's risk management policies
and procedures and will continue to do so in the future. Nonetheless, ACC's
policies and procedures to identify, monitor and manage risks may not be fully
effective in mitigating ACC's risk exposure in all market environments or
against all types of risk. Many of ACC's methods of managing risk and exposures
are based upon ACC's use of observed historical market behavior or statistics
based on historical models. During periods of market volatility or due to
unforeseen events, the historically derived correlations upon
8
<PAGE>
which these methods are based may not be valid. As a result, these methods may
not accurately predict future exposures, which could be significantly greater
than what ACC's models indicate. This could cause ACC to incur investment losses
or cause ACC's hedging and other risk management strategies to be ineffective.
Other risk management methods depend upon the evaluation of information
regarding markets, clients, catastrophe occurrence or other matters that are
publicly available or otherwise accessible to ACC, which may not always be
accurate, complete, up-to-date or properly evaluated.
Moreover, ACC is subject to the risks of errors and misconduct by ACC's
employees and AFSI's financial advisors -- such as fraud, non-compliance with
policies, recommending transactions that are not suitable, and improperly using
or disclosing confidential information -- which is difficult to detect in
advance and deter, and could harm ACC's business, results of operations or
financial condition. ACC is further subject to the risk of nonperformance or
inadequate performance of contractual obligations by third-party vendors of
products and services that are used in ACC's businesses. Management of
operational, legal and regulatory risks requires, among other things, policies
and procedures to record properly and verify a large number of transactions and
events, and these policies and procedures may not be fully effective in
mitigating ACC's risk exposure in all market environments or against all types
of risk. Insurance and other traditional risk-shifting tools may be held by or
be available to ACC in order to manage certain exposures, but they are subject
to terms such as deductibles, coinsurance, limits and policy exclusions, as well
as risk of counterparty denial of coverage, default or insolvency.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
ACC occupies office space in Minneapolis, Minnesota, which is leased or owned by
Ameriprise Financial.
ITEM 3. LEGAL PROCEEDINGS
ACC may be a party to litigation and arbitration proceedings in the ordinary
course of its business. The outcome of any litigation or threatened litigation
cannot be predicted with any certainty. ACC believes that it is not a party to,
nor are any of its properties the subject of, any pending legal, arbitration or
regulatory proceedings that would have a material adverse effect on its
financial condition or results of operations. However, it is possible that the
outcome of any such proceedings could have a material impact on ACC's financial
position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item omitted pursuant to General Instructions (I)(2)(c) of Form 10-K.
9
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
All of ACC's outstanding common stock is owned by Ameriprise Financial. There is
no established public trading market for ACC's common stock. Frequency and
amount of capital transactions with Ameriprise Financial during the past two
years were (in millions):
<TABLE>
<CAPTION>
DIVIDENDS/RETURNS RECEIPT OF
OF CAPITAL PAID TO CAPITAL FROM
AMERIPRISE FINANCIAL AMERIPRISE FINANCIAL
-------------------- --------------------
<S> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 2009:
January 20, 2009 $-- $25
February 27, 2009 -- 5
May 29, 2009 -- 5
November 17, 2009 60 --
--- ---
Total $60 $35
=== ===
</TABLE>
<TABLE>
<CAPTION>
DIVIDENDS/RETURNS RECEIPT OF
OF CAPITAL PAID TO CAPITAL FROM
AMERIPRISE FINANCIAL AMERIPRISE FINANCIAL
-------------------- --------------------
<S> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 2008:
April 30, 2008 $-- $15
June 30, 2008 -- 20
August 29, 2008 -- 10
September 30, 2008 -- 30
November 28, 2008 -- 5
December 31, 2008 -- 35
--- ----
Total $-- $115
=== ====
</TABLE>
Restriction on ACC's present or future ability to pay dividends to Ameriprise
Financial:
Certain series of installment certificate products outstanding provide that cash
dividends may be paid by ACC only in calendar years for which additional credits
of at least one-half of 1% on such series of certificates have been authorized
by ACC. This restriction has been satisfied for 2009 and 2008 by ACC's
declaration of additional credits.
Appropriated retained earnings resulting from the pre-declaration of additional
credits to ACC's certificate product owners are not available for the payment of
dividends by ACC. In addition, ACC will discontinue issuance of certificates
subject to the pre-declaration of additional credits and will make no further
pre-declaration as to outstanding certificates if at any time the calculation of
ACC's capital and unappropriated retained earnings should be less than 5% of net
certificate reserves (certificate reserves less certificate loans).
ITEM 6. SELECTED FINANCIAL DATA
Item omitted pursuant to General Instructions (I)(2)(a) of Form 10-K.
10
<PAGE>
ITEM 7. MANAGEMENT'S NARRATIVE ANALYSIS
The following information should be read in conjunction with the accompanying
audited financial statements and related notes included elsewhere in this
report. The following discussion may contain forward-looking statements that
reflect ACC's plans, estimates and beliefs. ACC's actual results could differ
materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to these differences include, but are not limited
to, those discussed below under the heading "Forward-Looking Statements" and
elsewhere in this report, particularly in "Item 1A-Risk Factors." Management's
narrative analysis is presented pursuant to General Instructions I(2)(a) of Form
10-K in lieu of Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
ACC's net income (loss) is derived primarily from the after-tax yield on
investments and realized investment gains (losses), less investment expenses and
interest credited on certificate reserve liabilities. Net income (loss) trends
occur largely due to changes in returns on ACC's investment portfolio, from
realization of investment gains (losses) and from changes in interest credited
to certificate products. ACC follows U.S. generally accepted accounting
principles ("GAAP").
In 2009, investment income increased $29.5 million, or 15%, compared to 2008.
The increase in investment income was primarily driven by higher average
invested asset levels compared to the prior year period.
Investment expenses in 2009 increased $1.4 million, or 4%, compared to 2008,
primarily due to higher average investment balances compared to the prior year
period as well as higher distribution fees as a result of rate promotions in
early 2009.
In 2009, net provision for certificate reserves decreased $32.5 million, or 21%,
compared to 2008, primarily due to a decrease in interest crediting rates.
Net realized gain on investments before income taxes was $3.3 million for 2009
compared to a net realized loss of $129.5 million for 2008. For the year ended
December 31, 2009, net realized gains from sales of Available-for-Sale
securities were $14.9 million and other-than-temporary impairments recognized in
earnings were $10.0 million, which related primarily to credit losses on
non-agency residential mortgage backed securities. For the year ended December
31, 2008, net realized losses from sales of Available-for-Sale securities were
$4.5 million and other-than-temporary impairments recognized in earnings were
$114.2 million, primarily related to credit losses on non-agency residential
mortgage backed securities and corporate debt securities. Investment losses for
the year ended December 31, 2008 also included an increase of $10.6 million to
the allowance for loan losses on below investment grade syndicated bank loans.
The effective tax rate was 36.6% for the year ended December 31, 2009 compared
to 33.9% for the year ended December 31, 2008.
11
<PAGE>
FAIR VALUE MEASUREMENTS
ACC reports certain assets and liabilities at fair value; specifically
derivatives, embedded derivatives, and most investments and cash equivalents.
Fair value assumes the exchange of assets or liabilities occurs in orderly
transactions. Companies are not permitted to use market prices that are the
result of a forced liquidation or distressed sale. ACC includes actual market
price or observable inputs in its fair value measurements to the extent
available. Broker quotes are obtained when quotes from pricing services are not
available. ACC validates prices obtained from third parties through a variety of
means such as: price variance analysis, subsequent sales testing, stale price
review, price comparison across pricing vendors and due diligence reviews of
vendors.
Inactive Markets
Through ACC's own experience transacting in the marketplace and through
discussions with its pricing vendors, ACC believes that the market for certain
non-agency residential mortgage backed securities is inactive. Indicators of
inactive markets include: pricing services' reliance on brokers or discounted
cash flow analyses to provide prices, an increase in the disparity between
prices provided by different pricing services for the same security,
unreasonably large bid-offer spreads and a significant decrease in the volume of
trades relative to historical levels. In certain cases, this market inactivity
has resulted in ACC applying valuation techniques that rely more on an income
approach (discounted cash flows using market rates) than on a market approach
(prices from pricing services). ACC considers market observable yields for other
asset classes it considers to be of similar risk which includes nonperformance
and liquidity for individual securities to set the discount rate for applying
the income approach to certain non-agency residential mortgage backed
securities. The discount rates used for these securities at December 31, 2009
ranged from 11% to 22%.
Non-agency Residential Mortgage Backed Securities Backed by Subprime, Alt-A or
Prime Collateral
Subprime mortgage lending is the origination of residential mortgage loans to
customers with weak credit profiles. Alt-A mortgage lending is the origination
of residential mortgage loans to customers who have credit ratings above
subprime but may not conform to government-sponsored standards. Prime mortgage
lending is the origination of residential mortgage loans to customers with good
credit profiles. ACC has exposure to these types of loans predominantly through
mortgage backed and asset backed securities. The slowdown in the U.S. housing
market, combined with relaxed underwriting standards by some originators, has
led to higher delinquency and loss rates for some of these investments. Market
conditions have increased the likelihood of other-than-temporary impairments for
certain non-agency residential mortgage backed securities. As a part of ACC's
risk management process, an internal rating system is used in conjunction with
market data as the basis for analysis to assess the likelihood that ACC will not
receive all contractual principal and interest payments for these investments.
For the investments that are more at risk for impairment, ACC performs its own
assessment of projected cash flows incorporating assumptions about default
rates, prepayment speeds, loss severity, and geographic concentrations to
determine if an other-than-temporary impairment should be recognized.
12
<PAGE>
The following table presents as of December 31, 2009, ACC's non-agency
residential mortgage backed and asset backed securities backed by subprime,
Alt-A or prime mortgage loans by credit rating and vintage year (in thousands):
<TABLE>
<CAPTION>
AAA AA A BBB BB & BELOW TOTAL
------------------- ------------------- ------------------ ------------------ ------------------- -------------------
AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE COST VALUE COST VALUE COST VALUE COST VALUE
--------- -------- --------- -------- --------- ------- --------- ------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUBPRIME
2003 &
prior $ 1,692 $ 1,317 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 1,692 $ 1,317
2004 11,241 10,727 -- -- 6,889 6,769 -- -- 9,600 6,472 27,730 23,968
2005 13,161 12,883 39,696 40,218 4,591 4,553 1,303 1,140 -- -- 58,751 58,794
2006 -- -- 2,557 2,450 6,244 6,047 4,882 4,600 -- -- 13,683 13,097
2007 -- -- -- -- 6,313 6,240 -- -- -- -- 6,313 6,240
2008 -- -- -- -- -- -- -- -- -- -- -- --
2009 -- -- -- -- -- -- -- -- -- -- -- --
Re-
Remic(1) -- -- -- -- -- -- 18,521 18,271 -- -- 18,521 18,271
-------- -------- -------- -------- ------- ------- ------- ------- -------- -------- -------- --------
Total
Subprime $ 26,094 $ 24,927 $ 42,253 $ 42,668 $24,037 $23,609 $24,706 $24,011 $ 9,600 $ 6,472 $126,690 $121,687
======== ======== ======== ======== ======= ======= ======= ======= ======== ======== ======== ========
ALT-A
2003 &
prior $ 5,961 $ 5,452 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 5,961 $ 5,452
2004 5,595 5,125 2,834 1,771 21,126 15,347 10,885 5,319 -- -- 40,440 27,562
2005 -- -- 5,857 3,980 -- -- 7,564 5,023 85,714 53,111 99,135 62,114
2006 -- -- -- -- -- -- -- -- 38,349 28,065 38,349 28,065
2007 -- -- -- -- -- -- -- -- 56,301 32,601 56,301 32,601
2008 -- -- -- -- -- -- -- -- -- -- -- --
2009 -- -- -- -- -- -- -- -- -- -- -- --
-------- -------- -------- -------- ------- ------- ------- ------- -------- -------- -------- --------
Total
Alt-A $ 11,556 $ 10,577 $ 8,691 $ 5,751 $21,126 $15,347 $18,449 $10,342 $180,364 $113,777 $240,186 $155,794
======== ======== ======== ======== ======= ======= ======= ======= ======== ======== ======== ========
PRIME
2003 &
prior $ 35,669 $ 35,265 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 35,669 $ 35,265
2004 30,126 29,317 46,126 39,129 5,762 4,356 6,484 3,108 18,649 7,567 107,147 83,477
2005 3,996 3,462 22,452 18,496 11,142 9,716 41,292 32,586 43,000 35,690 121,882 99,950
2006 -- -- -- -- -- -- -- -- 4,145 3,257 4,145 3,257
2007 -- -- -- -- -- -- -- -- -- -- -- --
2008 -- -- -- -- -- -- -- -- -- -- -- --
2009 -- -- -- -- -- -- -- -- -- -- -- --
Re-
Remic(1) 348,483 345,553 -- -- -- -- -- -- -- -- 348,483 345,553
-------- -------- -------- -------- ------- ------- ------- ------- -------- -------- -------- --------
Total
Prime $418,274 $413,597 $ 68,578 $ 57,625 $16,904 $14,072 $47,776 $35,694 $ 65,794 $ 46,514 $617,326 $567,502
======== ======== ======== ======== ======= ======= ======= ======= ======== ======== ======== ========
GRAND
TOTAL $455,924 $449,101 $119,522 $106,044 $62,067 $53,028 $90,931 $70,047 $255,758 $166,763 $984,202 $844,983
======== ======== ======== ======== ======= ======= ======= ======= ======== ======== ======== ========
</TABLE>
(1) Re-Remics of mortgage backed securities are prior vintages with cash flows
structured into senior and subordinated bonds. Credit enhancement on senior
bonds is increased through the Re-Remic process. ACC did not have any
exposure to subordinate tranches as of December 31, 2009.
RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES
For information regarding recent accounting pronouncements and their expected
impact on ACC's future results of operations or financial condition, see Note 1
to ACC's financial statements. Also see Note 1 for significant accounting
policies.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that reflect management's plans,
estimates and beliefs. Actual results could differ materially from those
described in these forward-looking statements. The words "believe," "expect,"
"anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should,"
"could," "would," "likely," "forecast," "on pace," "project" and similar
expressions are intended to identify forward-looking statements but are not the
exclusive means of identifying such statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date on which they are made. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors, which could cause
actual results, performance or achievements to differ materially from future
results, performance or achievements. These statements are not guarantees or
indicative of future performance. Important assumptions and other important
factors that could cause actual results to differ materially from those
forward-looking statements include, but are not limited to, those factors, risks
and uncertainties described in "Item 1A-Risk Factors" and elsewhere in this
Annual Report on Form 10-K. ACC's future financial condition and results of
operations, as well as any forward-looking statements contained in this report,
are made only as of the date hereof. ACC undertakes no obligation to update or
revise any forward-looking statements.
13
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
IMPACT OF MARKET VOLATILITY ON RESULTS OF OPERATIONS
ACC has three principal components of market risk: interest rate risk, equity
price risk, and credit risk. Interest rate risk results from investing in assets
that are somewhat longer and reset less frequently than the liabilities they
support. In prior years, ACC managed interest rate risk through the use of a
variety of tools that included derivative instruments, such as interest rate
swaps, caps, and floors, which change the interest rate characteristics of
client liabilities or investment assets. Due to certain provisions for
certificates being impacted by the value of equity indices, from time to time
ACC enters into risk management strategies that may include the use of equity
derivative instruments, such as equity options, to mitigate ACC's exposure to
volatility in the equity markets.
Ameriprise Financial's Asset Liability Committee ("ALCO"), which is comprised of
senior business managers, holds regularly scheduled meetings to review models
projecting various interest rate scenarios and risk/return measures and their
effect on various portfolios managed by RiverSource Investments, LLC, including
that of ACC. ACC's Board of Directors has appointed ALCO as the investment
committee of ACC. ALCO's objectives are to structure ACC's portfolio of
investment securities based upon the type and behavior of the certificates in
the certificate reserve liabilities, to achieve targeted levels of profitability
within defined risk parameters and to meet certificate contractual obligations.
ACC primarily invests in mortgage and asset backed securities and intermediate
term corporate debt securities to provide its certificate owners with a
competitive rate of return on their certificates while managing risk. These
investments provide ACC with a historically dependable and targeted margin
between the interest rate earned on investments and the interest rate credited
to certificate owners' accounts. ACC does not invest in securities to generate
short-term trading profits for its own account.
To evaluate interest rate and equity price risk, ACC performs sensitivity
testing which measures the impact on pretax income from the sources listed below
for a 12 month period following a hypothetical 100 basis point increase in
interest rates and a hypothetical 10% decline in equity prices. The interest
rate risk test assumes a sudden 100 basis point parallel shift in the yield
curve, with rates then staying at those levels for the next 12 months. The
equity price risk test assumes a sudden 10% drop in equity prices, with equity
prices then staying at those levels for the next 12 months. In estimating the
values of stock market certificates, ACC assumes no change in implied market
volatility despite the 10% drop in equity prices.
The following table presents ACC's estimate of the pretax impact of these
hypothetical market moves, net of hedging, as of December 31, 2009:
<TABLE>
<CAPTION>
INTEREST RATE EXPOSURE TO PRETAX INCOME
-----------------------------------------------
INTEREST RATE INCREASE 100 BASIS POINTS BEFORE HEDGE IMPACT HEDGE IMPACT NET IMPACT
- --------------------------------------- ------------------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Flexible Savings and other fixed rate certificates $(5,456) N/A $(5,456)
</TABLE>
<TABLE>
<CAPTION>
EQUITY PRICE EXPOSURE TO PRETAX INCOME
-----------------------------------------------
EQUITY PRICE DECLINE 10% BEFORE HEDGE IMPACT HEDGE IMPACT NET IMPACT
- ------------------------ ------------------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Stock market certificates $3,827 $(3,827) $--
</TABLE>
N/A Not Applicable.
At December 31, 2009, aggregating ACC's exposure from all sources of interest
rate risk, ACC estimates a negative impact of $5.5 million on pretax income for
the 12 month period if, hypothetically, interest rates had increased by 100
basis points and remained at that level for 12 months. This compares with an
estimate of a positive impact of $2.1 million for 12 months following a
hypothetical 100 basis point increase in interest rates at December 31, 2008.
At December 31, 2009, aggregating ACC's exposure from all sources of equity
price risk, net of financial derivatives hedging that exposure detailed below,
ACC estimates no impact on pretax income for the 12 month period if,
hypothetically, equity markets had declined by 10% and remained at that level
for 12 months. This compares with an estimate of no impact at December 31, 2008
for 12 months following a hypothetical 10% drop in equity markets.
Actual results could differ materially from those illustrated above as they are
based on a number of estimates and assumptions. These include assuming that
implied market volatility does not change when equity values fall by 10%, the
composition of invested assets and liabilities does not change in the 12 month
period following the hypothetical market decline and that the 100 basis point
increase in interest rates is a parallel shift in the yield curve. Furthermore,
ACC has not tried to anticipate changes in client preferences for different
types of assets or other changes in client behavior, nor has ACC tried to
anticipate actions management might take to increase revenues or reduce expenses
in these scenarios.
14
<PAGE>
The selection of a 100 basis point interest rate increase and a 10% equity
market decline should not be construed as a prediction of future market events.
Impacts of larger or smaller changes in interest rates or equity prices may not
be proportional to those shown for a 100 basis point increase in interest rates
or a 10% decline in equity prices.
FLEXIBLE SAVINGS AND OTHER FIXED RATE CERTIFICATES
ACC has interest rate risk from its Flexible Savings and other fixed rate
certificates. These products are investment certificates generally ranging in
amounts from $1,000 to $1 million with terms ranging from three to thirty-six
months. ACC guarantees an interest rate to the holders of these products.
Payments collected from clients are primarily invested in fixed rate securities
to fund the client credited rate with the spread between the rate earned from
investments and the rate credited to clients recorded as earned income. Client
liabilities and investment assets generally differ as it relates to basis,
repricing or maturity characteristics. Rates credited to clients generally reset
at shorter intervals than the yield on underlying investments. This exposure is
not currently hedged although ACC monitors its investment strategy and makes
modifications based on changing liabilities and the expected rate environment.
ACC had $3.2 billion in reserves included in certificate reserves on the Balance
Sheet at December 31, 2009 to cover the liabilities associated with these
products.
STOCK MARKET CERTIFICATES
ACC has equity price risk from its stock market certificates. Stock market
certificates are purchased for amounts generally from $1,000 to $1 million for
terms of fifty-two weeks which can be extended to a maximum of twenty years. For
each term the certificate holder can choose to participate 100% in any
percentage increase in the S&P 500 Index up to a maximum return or choose
partial participation in any increase in the S&P 500 Index plus a fixed rate of
interest guaranteed in advance. If partial participation is selected, the total
of equity-linked return and guaranteed rate of interest cannot exceed the
maximum return. Reserves for the stock market certificates of $878 million were
included in certificate reserves on ACC's Balance Sheet at December 31, 2009.
Equity Price Risk - Stock Market Certificates
The equity-linked return to investors creates equity price risk exposure. ACC
seeks to minimize this exposure with purchased futures and call spreads that
replicate what ACC must credit to client accounts.
Interest Rate Risk - Stock Market Certificates
Stock market certificates have interest rate risk as changes in interest rates
affect the fair value of the payout to be made to the certificate holder. This
risk continues to be fully hedged.
Credit Risk
ACC is exposed to credit risk within its investment portfolio, including its
loan portfolio, and through derivative counterparties. Credit risk relates to
the uncertainty of an obligor's continued ability to make timely payments in
accordance with the contractual terms of the instrument or contract. ACC
considers its total potential credit exposure to each counterparty and its
affiliates to ensure compliance with pre-established credit guidelines at the
time it enters into a transaction which would potentially increase ACC's credit
risk. These guidelines and oversight of credit risk are managed through ACC's
comprehensive enterprise risk management program that includes members of senior
management.
ACC manages the risk of credit-related losses in the event of nonperformance by
counterparties by applying disciplined fundamental credit analysis and
underwriting standards, prudently limiting exposures to lower-quality,
higher-yielding investments, and diversifying exposures by issuer, industry,
region and underlying investment type. ACC remains exposed to occasional adverse
cyclical economic downturns during which default rates may be significantly
higher than the long-term historical average used in pricing.
ACC manages its credit risk related to over-the-counter derivatives by entering
into transactions with creditworthy counterparties, maintaining collateral
arrangements and through the use of master netting arrangements that provide for
a single net payment to be made by one counterparty to another at each due date
and upon termination. Generally, ACC's current credit exposure on
over-the-counter derivative contracts is limited to a derivative counterparty's
net positive fair value of derivative contracts after taking into consideration
the existence of netting arrangements and any collateral received. This exposure
is monitored and managed to an acceptable threshold level.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Schedules on page F-1 hereof.
15
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
ACC maintains disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) designed to provide reasonable assurance that the information required to
be reported in the Exchange Act filings is recorded, processed, summarized and
reported within the time periods specified in and pursuant to SEC regulations,
including controls and procedures designed to ensure that this information is
accumulated and communicated to ACC's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding the required disclosure. It should be noted that, because of inherent
limitations, ACC's disclosure controls and procedures, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the disclosure controls and procedures are met.
ACC's management, under the supervision and with the participation of its Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
ACC's disclosure controls and procedures as of the end of the period covered by
this report. Based upon that evaluation, ACC's Chief Executive Officer and Chief
Financial Officer have concluded that ACC's disclosure controls and procedures
were effective at a reasonable level of assurance as of December 31, 2009.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in ACC's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fourth fiscal quarter of the year to which this report
relates that have materially affected, or are reasonably likely to materially
affect, ACC's internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item omitted pursuant to General Instructions (I)(2)(c) of Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Item omitted pursuant to General Instructions (I)(2)(c) of Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Item omitted pursuant to General Instructions (I)(2)(c) of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Item omitted pursuant to General Instructions (I)(2)(c) of Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The Board of Directors of ACC, at the recommendation of its Audit Committee, has
appointed Ernst & Young LLP ("Ernst & Young") as independent registered public
accountants to audit the financial statements of ACC for the years ended
December 31, 2009 and 2008.
AUDIT FEES
The aggregate fees billed or to be billed by Ernst & Young for each of the last
two years for professional services rendered for the audit of ACC's annual
Financial Statements and services that were provided in connection with
statutory and regulatory filings were $149,000 for both 2009 and 2008.
16
<PAGE>
AUDIT-RELATED FEES
ACC was not billed by Ernst & Young for any fees for audit-related services for
2009 or 2008.
TAX FEES
ACC was not billed by Ernst & Young for any tax fees for 2009 or 2008.
ALL OTHER FEES
ACC was not billed by Ernst & Young for any other fees for 2009 or 2008.
POLICY ON PRE-APPROVAL OF SERVICES PROVIDED BY INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the terms of the
engagement of Ernst & Young are subject to the specific pre-approval of the
Audit Committee of Ameriprise Financial. All audit and permitted non-audit
services to be performed by Ernst & Young for ACC require pre-approval by the
Audit Committee of Ameriprise Financial in accordance with pre-approval
procedures established by the Audit Committee of Ameriprise Financial. The
procedures require all proposed engagements of Ernst & Young for services to ACC
of any kind to be directed to the General Auditor of Ameriprise Financial and
then submitted for approval to the Audit Committee of Ameriprise Financial prior
to the beginning of any services.
In addition, the charter of ACC's Audit Committee requires pre-approval of any
engagement, including the fees and other compensation, of Ernst & Young (1) to
provide any services to ACC and prohibits the performance of certain specified
non-audit services, and (2) to provide any non-audit services to Ameriprise
Financial or any affiliate of Ameriprise Financial that controls, is controlled
by, or under common control with Ameriprise Financial. Certain exceptions apply
to the pre-approval requirement.
In 2009 and 2008, 100% of the services provided by Ernst & Young for ACC were
pre-approved by the Audit Committee of Ameriprise Financial.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements:
See Index to Financial Statements and Schedules on page F-1 hereof.
2. Financial Statement Schedules:
See Index to Financial Statements and Schedules on page F-1 hereof.
3. Exhibits:
See Exhibit Index on page E-1 hereof.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
REGISTRANT AMERIPRISE CERTIFICATE COMPANY
BY /s/ William F. Truscott
--------------------------------------------
NAME AND TITLE William F. Truscott, Director, President and
Chief Executive Officer
(Principal Executive Officer)
DATE February 23, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacity and on the dates indicated.
BY /s/ William F. Truscott
--------------------------------------------
NAME AND TITLE William F. Truscott, Director, President and
Chief Executive Officer
(Principal Executive Officer)
DATE February 23, 2010
BY /s/ Ross P. Palacios
--------------------------------------------
NAME AND TITLE Ross P. Palacios, Vice President and Chief
Financial Officer
(Principal Financial Officer)
DATE February 23, 2010
BY /s/ David K. Stewart
--------------------------------------------
NAME AND TITLE David K. Stewart, Vice President, Controller
and Chief Accounting Officer
(Principal Accounting Officer)
DATE February 23, 2010
BY /s/ Rodney P. Burwell*
--------------------------------------------
NAME AND TITLE Rodney P. Burwell, Director
DATE February 23, 2010
BY /s/ Jean B. Keffeler*
--------------------------------------------
NAME AND TITLE Jean B. Keffeler, Director
DATE February 23, 2010
BY /s/ Karen M. Bohn*
--------------------------------------------
NAME AND TITLE Karen M. Bohn, Director
DATE February 23, 2010
*By /s/ William F. Truscott
--------------------------------
Name: William F. Truscott
Executed by William F. Truscott on behalf of those indicated pursuant to a Power
of Attorney, dated February 24, 2009, filed electronically on or about March 3,
2009 as Exhibit 24(a) to Registrant's Form 10-K.
18
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS:
<TABLE>
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Report of Independent Registered Public Accounting Firm............... F-2
Statements of Operations - Years ended December 31, 2009, 2008 and
2007............................................................... F-3
Balance Sheets - December 31, 2009 and 2008........................... F-4
Statements of Cash Flows - Years ended December 31, 2009, 2008 and
2007............................................................... F-6
Statements of Shareholder's Equity - Years ended December 31, 2009,
2008 and 2007...................................................... F-7
Notes to Financial Statements......................................... F-8
Part II.
SCHEDULE NO.:
Financial Schedules:
I Investments in Securities of Unaffiliated Issuers, December 31,
2009.............................................................. F-27
II Investments in and Advances to Affiliates and Income thereon,
December 31, 2009, 2008 and 2007.................................. F-39
III Mortgage Loans on Real Estate and Interest earned on Mortgages,
Year ended December 31, 2009...................................... F-40
V Qualified Assets on Deposit, December 31, 2009....................... F-42
VI Certificate Reserves, Year ended December 31, 2009................... F-43
VII Valuation and Qualifying Accounts, Years ended December 31, 2009,
2008 and 2007..................................................... F-55
</TABLE>
All other Schedules required by Article 6 of Regulation S-X are not required
under the related instructions or are inapplicable and therefore have been
omitted.
F-1
<PAGE>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholder of Ameriprise Certificate Company
We have audited the accompanying balance sheets of Ameriprise Certificate
Company, (a wholly owned subsidiary of Ameriprise Financial, Inc.) (the Company)
as of December 31, 2009 and 2008, and the related statements of operations,
shareholder equity, and cash flows for each of the three years in the period
ended December 31, 2009. Our audits also included the financial statement
schedules listed in the Index at Item 15(a). These financial statements and
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2009 and 2008, by
correspondence with the custodian. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ameriprise Certificate Company
at December 31, 2009 and 2008, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2009, in
conformity with U.S. generally accepted accounting principles. Also, in our
opinion, the related financial statement schedules, when considered in relation
to the basic financial statements taken as whole, present fairly in all material
respects the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, in 2009 the
Company adopted new accounting guidance related to the recognition and
presentation of other-than-temporary impairments. Also, in 2007 the Company
adopted new guidance related to the accounting for uncertainty in income taxes.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 23, 2010
F-2
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
2009 2008 2007
-------- --------- --------
<S> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME
Interest income from unaffiliated investments:
Available-for-Sale securities $202,943 $ 169,827 $182,109
Below investment grade syndicated bank loans and commercial
mortgage loans 17,415 22,296 25,497
Trading securities 1,062 11 --
Certificate loans 309 382 467
Dividends 1,249 1,371 1,541
Other 826 401 2,380
-------- --------- --------
Total investment income 223,804 194,288 211,994
-------- --------- --------
INVESTMENT EXPENSES
Ameriprise Financial and affiliated company fees:
Distribution 19,651 18,261 18,148
Investment advisory and services 10,927 9,569 9,880
Transfer agent 5,978 5,967 6,422
Depository 117 343 328
Other 335 1,505 1,171
-------- --------- --------
Total investment expenses 37,008 35,645 35,949
-------- --------- --------
NET INVESTMENT INCOME BEFORE PROVISION FOR
CERTIFICATE RESERVES AND INCOME TAX EXPENSE (BENEFIT) 186,796 158,643 176,045
-------- --------- --------
PROVISION FOR CERTIFICATE RESERVES
According to the terms of the certificates:
Provision for certificate reserves 2,713 4,578 6,228
Interest on additional credits 127 152 182
Interest on advance payments 4 6 9
Additional credits/interest authorized by ACC 120,010 150,728 171,122
-------- --------- --------
Total provision for certificate reserves before reserve recoveries 122,854 155,464 177,541
Reserve recoveries from terminations prior to maturity (1,382) (1,522) (1,352)
-------- --------- --------
Net provision for certificate reserves 121,472 153,942 176,189
-------- --------- --------
NET INVESTMENT INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 65,324 4,701 (144)
Income tax expense (benefit) 23,989 2,974 (902)
-------- --------- --------
Net investment income 41,335 1,727 758
-------- --------- --------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Securities of unaffiliated issuers before income tax expense (benefit) 3,259 (129,532) 872
Income tax expense (benefit) 1,141 (45,336) 305
-------- --------- --------
Net realized gain (loss) on investments 2,118 (84,196) 567
-------- --------- --------
NET INCOME (LOSS) $ 43,453 $ (82,469) $ 1,325
======== ========= ========
Supplemental Disclosures:
Net realized investment gains before income taxes:
Net realized investment gains before income taxes and impairment
losses on securities $ 13,245
--------
Total other-than-temporary impairment losses on securities (8,412)
Portion of loss recognized in other comprehensive income (1,574)
--------
Net impairment losses recognized in net realized investment
gains before income taxes (9,986)
--------
Total net realized investment gains before income taxes $ 3,259
========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
BALANCE SHEETS
DECEMBER 31, 2009 AND 2008
<TABLE>
<CAPTION>
2009 2008
---------- ----------
(IN THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C>
ASSETS
QUALIFIED ASSETS
Investments in unaffiliated issuers:
Cash equivalents $ 309,183 $1,164,484
Available-for-Sale:
Fixed maturities, at fair value (amortized cost: 2009,
$3,697,972; 2008, $3,501,504) 3,627,993 3,275,480
Common and preferred stocks, at fair value (cost: 2009,
$19,646; 2008,519,612) 15,765 10,923
Below investment grade syndicated bank loans and commercial
mortgage loans, at cost (less allowance for loan losses: 2009,
$15,602; 2008, $15,440) 309,459 357,863
Trading securities -- 16,618
Certificate loans -- secured by certificate reserves 5,136 6,601
Real estate owned 2,087 --
---------- ----------
Total investments 4,269,623 4,831,969
---------- ----------
Receivables:
Dividends and interest 27,873 34,247
Investment securities sold 11,757 5,232
---------- ----------
Total receivables 39,630 39,479
---------- ----------
Equity index options, purchased 166,392 23,693
---------- ----------
Total qualified assets 4,475,645 4,895,141
---------- ----------
OTHER ASSETS
Deferred taxes, net 70,793 136,172
Current taxes receivable from parent 62 9,578
Due from related party -- 2,848
---------- ----------
Total other assets 70,855 148,598
---------- ----------
Total assets $4,546,500 $5,043,739
========== ==========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
BALANCE SHEETS (CONTINUED)
DECEMBER 31, 2009 AND 2008
<TABLE>
<CAPTION>
2009 2008
---------- ----------
(IN THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES
Certificate reserves
Installment certificates:
Reserves to mature $ 40,650 $ 48,284
Additional credits and accrued interest 827 1,137
Advance payments and accrued interest 124 137
Fully paid certificates:
Reserves to mature 4,040,909 4,830,417
Additional credits and accrued interest 25,631 5,513
Due to unlocated certificate holders 131 101
---------- ----------
Total certificate reserves 4,108,272 4,885,589
---------- ----------
Accounts payable and accrued liabilities:
Due to related party 208 4,241
Current taxes payable to parent 18,117 3,205
Payable for investment securities purchased 1,207 26,332
Equity index options, written 140,996 18,681
Other liabilities 32,502 15,186
---------- ----------
Total accounts payable and accrued liabilities 193,030 67,645
---------- ----------
Total liabilities 4,301,302 4,953,234
---------- ----------
SHAREHOLDER'S EQUITY
Common shares ($10 par value, 150,000 shares authorized and issued) 1,500 1,500
Additional paid-in capital 297,964 322,964
Accumulated deficit:
Appropriated for pre-declared additional credits and interest -- 50
Appropriated for additional interest on advance payments 15 15
Unappropriated (6,373) (81,570)
Accumulated other comprehensive loss -- net of tax (47,908) (152,454)
---------- ----------
Total shareholder's equity 245,198 90,505
---------- ----------
Total liabilities and shareholder's equity $4,546,500 $5,043,739
========== ==========
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
<TABLE>
<CAPTION>
2009 2008 2007
----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 43,453 $ (82,469) $ 1,325
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Interest added to certificate loans (203) (243) (312)
Amortization of premiums, acccretion of discounts, net (8,843) 6,658 9,301
Deferred taxes, net (7,995) (33,146) 22,823
Net realized (gain) loss on Available-for-Sale investments (4,409) 118,935 828
Provision for loan loss 161 10,604 (1,700)
Changes in other operating assets and liabilities:
Trading securities, net 16,618 (16,618) --
Dividends and interest receivable 6,378 (7,672) 6,144
Certificate reserves, net 19,198 3,043 (9,328)
Due to (from) parent for income taxes 24,428 (21,283) (20,336)
Derivatives, net (20,384) 26,767 16,233
Derivatives collateral, net 15,556 (7,625) 7,625
Other, net 3,792 4,631 (31,888)
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 87,750 1,582 715
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-Sale securities:
Sales 250,119 45,152 209,956
Maturities and redemptions 1,870,983 1,051,474 727,996
Purchases (2,289,270) (1,246,655) (92,728)
Below investment grade syndicated bank loans and commercial mortgage
loans:
Sales 1,405 1,350 6,260
Maturities and redemptions 45,076 79,937 129,427
Purchases (229) (109,030) (68,016)
Certificate loans:
Payments 929 790 984
Fundings (549) (573) (990)
----------- ----------- -----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (121,536) (177,555) 912,889
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments from certificate owners 2,298,416 2,720,716 820,521
Certificate maturities and cash surrenders (3,094,931) (1,571,338) (1,762,293)
Capital contribution from parent 35,000 115,000 --
Dividend/return of capital to parent (60,000) -- (70,000)
----------- ----------- -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (821,515) 1,264,378 (1,011,772)
----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH EQUIVALENTS (855,301) 1,088,405 (98,168)
Cash equivalents at beginning of year 1,164,484 76,079 174,247
----------- ----------- -----------
CASH EQUIVALENTS AT END OF YEAR $ 309,183 $ 1,164,484 $ 76,079
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES INCLUDING NON-CASH TRANSACTIONS:
Cash paid (received) for income taxes $ 8,518 $ (14,524) $ (14,306)
Certificate maturities and surrenders through loan reductions 1,288 1,348 1,921
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
<TABLE>
<CAPTION>
RETAINED EARNINGS
(ACCUMULATED DEFICIT)
----------------------------------
APPROPRIATED APPROPRIATED
FOR FOR ACCUMULATED
PRE-DECLARED ADDITIONAL OTHER COMPRE
NUMBER OF ADDITIONAL ADDITIONAL INTEREST ON -HENSIVE
OUTSTANDING COMMON PAID-IN CREDITS AND ADVANCE UNAPPRO LOSS -
SHARES SHARES CAPITAL INTEREST PAYMENTS -PRIATED NET OF TAX TOTAL
----------- ------ ---------- ------------ ------------ -------- ------------ ---------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 2007 150,000 $1,500 $274,115 $ 3,473 $15 $ -- $ (49,592) $ 229,511
Comprehensive income:
Net income -- -- -- -- -- 1,325 -- 1,325
Other comprehensive
income, net of tax -- -- -- -- -- -- 15,788 15,788
---------
Total comprehensive income 17,113
Transfer to unappropriated/
from appropriated -- -- -- (2,524) -- 2,524 -- --
Dividend/return of capital to parent -- -- (66,151) -- -- (3,849) -- (70,000)
------- ------ -------- ------- --- -------- --------- ---------
BALANCE AT DECEMBER 31, 2007 150,000 1,500 207,964 949 15 -- (33,804) 176,624
Comprehensive income:
Net loss -- -- -- -- -- (82,469) -- (82,469)
Other comprehensive
loss, net of tax -- -- -- -- -- -- (118,650) (118,650)
---------
Total comprehensive loss (201,119)
Transfer to unappropriated/
from appropriated -- -- -- (899) -- 899 -- --
Receipt of capital from parent -- -- 115,000 -- -- -- -- 115,000
------- ------ -------- ------- --- -------- --------- ---------
BALANCE AT DECEMBER 31, 2008 150,000 1,500 322,964 50 15 (81,570) (152,454) 90,505
Change in accounting principle,
net of tax -- -- -- -- -- 31,694 (31,694) --
Comprehensive income:
Net income -- -- -- -- -- 43,453 -- 43,453
Other comprehensive
income, net of tax:
Change in net unrealized
securities losses -- -- -- -- -- -- 136,100 136,100
Change in noncredit related
impairments on securities and
net unrealized securities losses
on previously impaired securities -- -- -- -- -- -- 140 140
---------
Total comprehensive income 179,693
Transfer to unappropriated/
from appropriated -- -- -- (50) -- 50 -- --
Dividend/return of capital to parent -- -- (60,000) -- -- -- -- (60,000)
Receipt of capital from parent -- -- 35,000 -- -- -- -- 35,000
------- ------ -------- ------- --- -------- --------- ---------
BALANCE AT DECEMBER 31, 2009 150,000 $1,500 $297,964 $ -- $15 $ (6,373) $ (47,908) $ 245,198
======= ====== ======== ======= === ======== ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
F-7
<PAGE>
1. BASIS OF PRESENTATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Ameriprise Certificate Company ("ACC" or the "Company"), is a wholly owned
subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"). ACC is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act") and is in the business of issuing face-amount investment
certificates. Face-amount certificates issued by ACC entitle the certificate
owner to receive at maturity a stated amount of money and interest or credits
declared from time to time by ACC, at its discretion. The certificates issued by
ACC are not insured by any government agency. ACC's certificates are sold
primarily by Ameriprise Financial Services, Inc. ("AFSI"), an affiliate of ACC.
AFSI is registered as a broker-dealer in all 50 states, the District of Columbia
and Puerto Rico.
As of December 31, 2009, ACC offered four different certificate products to the
public. ACC is impacted by significant changes in interest rates as interest
crediting rates on certificate products generally reset at shorter intervals
than the change in the yield on ACC's investment portfolio. The specified
maturities of most of ACC's certificate products range from ten to twenty years.
Within that maturity period, most certificates have interest crediting rate
terms ranging from three to thirty-six months. Interest crediting rates are
subject to change and certificate product owners can surrender their
certificates without penalty at term end. In addition, two types of certificate
products have interest tied, in whole or in part, to a broad-based stock market
index. All of the certificates are available as qualified investments for
Individual Retirement Accounts, 401(k) plans and other qualified retirement
plans.
ACC evaluated events or transactions that may have occurred after the balance
sheet date for potential recognition or disclosure through February 23, 2010,
the date the financial statements were issued.
BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements are presented in accordance with U.S.
generally accepted accounting principles ("GAAP"). ACC uses the equity method of
accounting for its wholly owned unconsolidated subsidiary, Investors Syndicate
Development Corporation, as prescribed by the Securities and Exchange Commission
("SEC") for non-investment company subsidiaries.
Accounting estimates are an integral part of the financial statements. In part,
they are based upon assumptions concerning future events. Among the more
significant is investment securities valuation as discussed in Note 3. These
accounting estimates reflect the best judgment of management and actual results
could differ.
INTEREST INCOME
Interest income is accrued as earned using the effective interest method, which
makes an adjustment for security premiums and discounts, so that the related
security recognizes a constant rate of return on the outstanding balance
throughout its term.
PREFERRED STOCK DIVIDEND INCOME
ACC recognizes dividend income from cumulative redeemable preferred stocks with
fixed maturities on an accrual basis similar to that used for recognizing
interest income on debt securities. Dividend income from perpetual preferred
stock is recognized on an ex-dividend date basis.
CASH EQUIVALENTS
ACC has defined cash equivalents as highly liquid investments with original
maturities of 90 days or less.
AVAILABLE-FOR-SALE SECURITIES
Available-for-Sale securities are carried at fair value with unrealized gains
(losses) recorded in accumulated other comprehensive income (loss), net of
income tax provision (benefit). Gains and losses are recognized in the
consolidated results of operations upon disposition of the securities.
Effective January 1, 2009, ACC early adopted an accounting standard that
significantly changed ACC's accounting policy regarding the timing and amount of
other-than-temporary impairments for Available-for-Sale securities as follows.
When the fair value of an investment is less than its amortized cost, ACC
assesses whether or not (i) it has the intent to sell the security (made a
decision to sell) or (ii) it is more likely than not that ACC will be required
to sell the security before its anticipated recovery. If either of these
conditions is met, an other-than-temporary impairment is considered to have
occurred and ACC must recognize an other-than-temporary impairment for the
difference between the investment's amortized cost basis and its fair value
through earnings. For securities that do not meet the above criteria, and ACC
does not expect to recover a security's amortized cost basis, the security is
also considered other-than-temporarily impaired. For these securities, ACC
F-8
<PAGE>
separates the total impairment into the credit loss component and the amount of
the loss related to other factors. The amount of the total other-than-temporary
impairments related to credit loss is recognized in earnings. The amount of the
total other-than-temporary impairments related to other factors is recognized in
other comprehensive income (loss), net of income taxes. For Available-for-Sale
securities that have recognized an other-than-temporary impairment through
earnings, if through subsequent evaluation there is a significant increase in
the cash flow expected, the difference between the amortized cost basis and the
cash flows expected to be collected is accreted as interest income. Subsequent
increases and decreases in the fair value of Available-for-Sale securities are
included in other comprehensive income (loss). ACC's Statements of Shareholder's
Equity present all changes in other comprehensive income (loss) associated with
Available-for-Sale securities that have been other-than-temporarily impaired on
a separate line from fair value changes recorded in other comprehensive income
(loss) from all other securities.
ACC provides a supplemental disclosure on the face of its Statements of
Operations that presents (i) total other-than-temporary impairment losses
recognized during the period and (ii) the portion of other-than-temporary
impairment losses recognized in other comprehensive income (loss). The sum of
these amounts represents the credit-related portion of other-than-temporary
impairments that were recognized in earnings during the period. The portion of
other-than-temporary losses recognized in other comprehensive income (loss)
includes: (i) the portion of other-than-temporary impairment losses related to
factors other than credit recognized during the period and (ii)
reclassifications of other-than-temporary impairment losses previously
determined to be related to factors other than credit that are determined to be
credit-related in the current period. The amount presented on the Statements of
Operations as the portion of other-than-temporary losses recognized in other
comprehensive income (loss) excludes subsequent increases and decreases in the
fair value of these securities.
For all securities that are considered temporarily impaired, ACC does not intend
to sell these securities (has not made a decision to sell) and it is not more
likely than not that ACC will be required to sell the security before recovery
of its amortized cost basis. ACC believes that it will collect all principal and
interest due on all investments that have amortized cost in excess of fair value
that are considered only temporarily impaired.
Factors ACC considers in determining whether declines in the fair value of fixed
maturity securities are other-than-temporary include: (i) the extent to which
the market value is below amortized cost; (ii) the duration of time in which
there has been a significant decline in value; (iii) fundamental analysis of the
liquidity, business prospects and overall financial condition of the issuer; and
(iv) market events that could impact credit ratings, economic and business
climate, litigation and government actions, and similar external business
factors. In order to determine the amount of the credit loss component for
corporate debt securities considered other-than-temporarily impaired, a best
estimate of the present value of cash flows expected to be collected discounted
at the security's effective interest rate is compared to the amortized cost
basis of the security. The significant inputs to cash flow projections consider
potential debt restructuring terms, projected cash flows available to pay
creditors and ACC's position in the debtor's overall capital structure.
For structured investments (e.g., residential mortgage backed securities,
commercial mortgage backed securities, asset backed securities and other
structured investments), ACC also considers factors such as overall deal
structure and its position within the structure, quality of underlying
collateral, delinquencies and defaults, loss severities, recoveries, prepayments
and cumulative loss projections in assessing potential other-than-temporary
impairments of these investments. Based upon these factors, securities that have
indicators of potential other-than-temporary impairment are subject to detailed
review by management. Securities for which declines are considered temporary
continue to be carefully monitored by management. For the year ended December
31, 2009, certain non-agency residential mortgage backed securities were deemed
other-than-temporarily impaired. Generally, the credit loss component for the
non-agency residential mortgage backed securities is determined as the amount
the amortized cost basis exceeds the present value of the projected cash flows
expected to be collected. Significant inputs considered in these projections are
consistent with the factors considered in assessing potential
other-than-temporary impairment for these investments. Current contractual
interest rates considered in these cash flow projections are used to calculate
the discount rate used to determine the present value of the expected cash
flows.
BELOW INVESTMENT GRADE SYNDICATED BANK LOANS AND COMMERCIAL MORTGAGE LOANS
Below investment grade syndicated bank loans reflect amortized cost less
allowance for loan losses. Commercial mortgage loans reflect principal amounts
outstanding less allowance for loan losses. The allowance for loan losses is
primarily based on ACC's past loan loss experience, known and inherent risks in
the portfolio, composition of the loan portfolio, current economic conditions,
and other relevant factors. Loans in this portfolio are generally smaller
balance and homogeneous in nature and accordingly ACC follows accounting
guidance on contingencies when establishing necessary reserves for losses
inherent in the portfolio. For larger balance or restructured loans that are
collateral dependent the allowance is based on the fair value of collateral.
Management regularly evaluates the adequacy of the allowance for loan losses and
believes it is adequate to absorb estimated losses in the portfolio.
F-9
<PAGE>
ACC generally stops accruing interest on mortgage loans on real estate for which
interest payments are delinquent more than three months. Based on management's
judgment as to the ultimate collectability of principal, interest payments
received are either recognized as income or applied to the recorded investment
in the loan.
TRADING SECURITIES
Trading securities include trading bonds. Trading securities are carried at fair
value with unrealized and realized gains (losses) recorded within net realized
gain (loss) on investments.
REAL ESTATE OWNED
On December 12, 2009 ACC acquired a parcel of real estate through foreclosure
and took physical possession of the real estate collateral. ACC recorded the
underlying collateral as its own real estate, referred to as real estate owned
("REO"). This REO is recorded at fair value less cost to sell on ACC's Balance
Sheet for the year ended December 31, 2009 and is classified as held-for-sale.
CERTIFICATE RESERVES
Investment certificates may be purchased either with a lump-sum payment or by
installment payments. Certificate product owners are entitled to receive, at
maturity, a definite sum of money. Payments from certificate owners are credited
to investment certificate reserves. Investment certificate reserves accumulate
interest at specified percentage rates as declared by ACC. Reserves also are
maintained for advance payments made by certificate owners, accrued interest
thereon, and for additional credits in excess of minimum guaranteed rates and
accrued interest thereon. On certificates allowing for the deduction of a
surrender charge, the cash surrender values may be less than accumulated
investment certificate reserves prior to maturity dates. Cash surrender values
on certificates allowing for no surrender charge are equal to certificate
reserves. The payment distribution, reserve accumulation rates, cash surrender
values, reserve values and other matters are governed by the 1940 Act.
Certain certificates offer a return based on the relative change in a stock
market index. The certificates with an equity-based return contain embedded
derivatives, which are carried at fair value within investment certificate
reserves on the Balance Sheets. The fair values of these embedded derivatives
incorporate current market data inputs. Changes in fair value are reflected in
provision for certificate reserves within the Statements of Operations.
DERIVATIVES AND HEDGING ACTIVITIES
Derivative instruments, consisting of interest rate swaps and options and
futures contracts, if any, are classified in the Balance Sheets at fair value.
The fair value of ACC's derivative instruments is determined using either market
quotes or valuation models that are based upon the net present value of
estimated future cash flows and incorporate current market observable inputs to
the extent available. The accounting for the change in the fair value of the
derivative instrument depends on its intended use and the resulting hedge
designation, if any.
ACC's policy is to not offset fair value amounts recognized for derivatives and
collateral arrangements executed with the same counterparty under the same
master netting arrangement.
For derivative instruments that do not qualify for hedge accounting or are not
designated as hedges, changes in fair value are recognized in current period
earnings.
INCOME TAXES
ACC's taxable income is included in the consolidated federal income tax return
of Ameriprise Financial. ACC provides for income taxes on a separate return
basis, except that, under an agreement between Ameriprise Financial and ACC, tax
benefits are recognized for losses to the extent they can be used in the
consolidated return. It is the policy of Ameriprise Financial that it will
reimburse its subsidiaries for any tax benefits recorded.
ACC's provision for income taxes represents the net amount of income taxes that
ACC expects to pay or to receive from various taxing jurisdictions in connection
with its operations. ACC provides for income taxes based on amounts that ACC
believes it will ultimately owe, taking into account the recognition and
measurement for uncertain tax positions. Inherent in the provision for income
taxes are estimates and judgments regarding the tax treatment of certain items.
In connection with the provision for income taxes, ACC's Financial Statements
reflect certain amounts related to deferred tax assets and liabilities, which
result from temporary differences between the assets and liabilities measured
for financial statement purposes versus the assets and liabilities measured for
tax return purposes.
F-10
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS
ADOPTION OF NEW ACCOUNTING STANDARDS
Investments in Certain Entities That Calculate Net Asset Value per Share (or Its
Equivalent)
In September 2009, the Financial Accounting Standards Board ("FASB") updated the
accounting standards to allow for net asset value ("NAV") to be used as a
practical expedient in estimating the fair value of alternative investments
without readily determinable fair values. The standard also requires additional
disclosure by major category of investment related to restrictions on the
investor's ability to redeem the investment as of the measurement date, unfunded
commitments and the investment strategies of the investees. The disclosures are
required for all investments within the scope of the standard regardless of
whether the fair value of the investment is measured using the NAV or another
method. The standard is effective for interim and annual periods ending after
December 15, 2009, with early adoption permitted. ACC adopted the standard in
the fourth quarter of 2009. The adoption did not have a material effect on ACC's
results of operations and financial condition.
Measuring Liabilities at Fair Value
In August 2009, the FASB updated the accounting standards to provide additional
guidance on estimating the fair value of a liability. The standard is effective
for the first reporting period, including interim periods, beginning after
issuance. ACC adopted the standard in the fourth quarter of 2009. The adoption
did not have a material effect on ACC's results of operations and financial
condition.
The Hierarchy of GAAP
In June 2009, the FASB established the FASB Accounting Standards CodificationTM
("Codification") as the single source of authoritative accounting principles
recognized by the FASB in the preparation of financial statements in conformity
with GAAP. The Codification supersedes existing nongrandfathered, non-SEC
accounting and reporting standards. The Codification did not change GAAP but
rather organized it into a hierarchy where all guidance within the Codification
carries an equal level of authority. The Codification became effective on July
1, 2009. The Codification did not have a material effect on ACC's results of
operations and financial condition.
Subsequent Events
In May 2009, the FASB updated the accounting standards on the recognition and
disclosure of subsequent events. The standard also requires the disclosure of
the date through which subsequent events were evaluated. The standard is
effective for interim and annual reporting periods ending after June 15, 2009,
and shall be applied prospectively. ACC adopted the standard in the second
quarter of 2009. The adoption did not have a material effect on ACC's results of
operations and financial condition.
Fair Value
In April 2009, the FASB updated the accounting standards to provide guidance on
estimating the fair value of a financial asset or liability when the trade
volume and level of activity for the asset or liability have significantly
decreased relative to historical levels. The standard requires entities to
disclose the inputs and valuation techniques used to measure fair value and any
changes in valuation inputs or techniques. In addition, debt and equity
securities as defined by GAAP shall be disclosed by major category. This
standard is effective for interim and annual reporting periods ending after June
15, 2009, with early adoption permitted for periods ending after March 15, 2009,
and is to be applied prospectively. ACC early adopted the standard in the first
quarter of 2009. The adoption did not have a material effect on ACC's results of
operations and financial condition.
In September 2006, the FASB updated the accounting standards to define fair
value, establish a framework for measuring fair value and expand disclosures
about fair value measurements. ACC adopted the standard effective January 1,
2008. This adoption did not have a material impact on ACC's results of
operations and financial condition.
Recognition and Presentation of Other-Than-Temporary Impairment
In April 2009, the FASB updated the accounting standards for the recognition and
presentation of other-than-temporary impairments. The standard amends existing
guidance on other-than-temporary impairments for debt securities and requires
that the credit portion of other-than-temporary impairments be recorded in
earnings and the noncredit portion of losses be recorded in other comprehensive
income (loss) when the entity does not intend to sell the security and it is
more likely than not that the entity will not be required to sell the security
prior to recovery of its cost basis. The standard requires separate presentation
of both the credit and noncredit portions of other-than-temporary impairments on
the financial statements and additional disclosures. This standard is effective
for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. At the date of
adoption, the portion of previously recognized other-than-
F-11
<PAGE>
temporary impairments that represent the noncredit related loss component shall
be recognized as a cumulative effect of adoption with an adjustment to the
opening balance of accumulated deficit with a corresponding adjustment to
accumulated other comprehensive loss. ACC adopted the standard in the first
quarter of 2009 and recorded a cumulative effect decrease to the opening balance
of accumulated deficit of $32 million, net of income taxes, and a corresponding
increase to accumulated other comprehensive loss, net of income taxes. See Note
3 for the required disclosures.
Disclosures about Derivative Instruments and Hedging Activities
In March 2008, the FASB updated the accounting standards for disclosures about
derivative instruments and hedging activities. The standard intends to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures about their impact on an entity's financial
position, financial performance, and cash flows. The standard requires
disclosures regarding the objectives for using derivative instruments, the fair
value of derivative instruments and their related gains and losses, and the
accounting for derivatives and related hedged items. The standard is effective
for fiscal years and interim periods beginning after November 15, 2008, with
early adoption permitted. ACC applied the new disclosure requirements in the
first quarter of 2009. See Note 10 for the required disclosures.
Uncertainty in Income Taxes
In June 2006, the FASB updated the accounting standards related to uncertainty
in income taxes. The standard prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. The standard also
provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. ACC adopted the
standard as of January 1, 2007. The adoption did not have a material effect on
ACC's results of operations and financial condition.
FUTURE ADOPTION OF NEW ACCOUNTING STANDARDS
Fair Value
In January 2010, the FASB updated the accounting standards related to disclosure
about fair value measurements. The standard expands the current disclosure
requirements to include additional detail about significant transfers between
Levels 1 and 2 within the fair value hierarchy and presenting activity in the
rollforward of Level 3 activity on a gross basis. The standard also clarifies
existing disclosure requirements related to the level of disaggregation to be
used for assets and liabilities as well as disclosures about the inputs and
valuation techniques used to measure fair value. The standard is effective for
interim and annual reporting periods beginning after December 15, 2009, except
for the disclosure requirements related to the Level 3 rollforward, which are
effective for interim and annual periods beginning after December 15, 2010. ACC
will adopt the standard in the first quarter of 2010 except for the additional
disclosures related to the Level 3 rollforward, which ACC will adopt in the
first quarter of 2011. The adoption of the standard will not impact ACC's
results of operations and financial condition.
2. DEPOSIT OF ASSETS AND MAINTENANCE OF QUALIFIED ASSETS
Under the provisions of its certificates and the 1940 Act, ACC was required to
have Qualified Assets (as defined in Section 28(b) of the 1940 Act) in the
amount of $4.1 billion and $4.9 billion at December 31, 2009 and 2008,
respectively. ACC reported Qualified Assets of $4.5 billion and $5.1 billion at
December 31, 2009 and 2008, respectively. Qualified Assets exclude net
unrealized pretax losses on Available-for-Sale securities of $73.9 million and
$234.7 million at December 31, 2009 and 2008, respectively, and unsettled
investment purchases of $1.2 million and $26.3 million at December 31, 2009 and
2008, respectively.
Qualified Assets are valued in accordance with such provisions of Minnesota
Statutes as are applicable to investments of life insurance companies. These
values are the same as financial statement carrying values, except for debt
securities classified as Available-for-Sale and all marketable equity
securities, which are carried at fair value in the financial statements but are
valued at either amortized cost, market value or par value based on the state
requirements for qualified asset and deposit maintenance purposes.
F-12
<PAGE>
Pursuant to provisions of the certificates, the 1940 Act, the Central Depository
Agreement and requirements of various states, Qualified Assets (accounted for on
a trade date basis) of ACC were deposited as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 2009
----------------------------------
REQUIRED
DEPOSITS DEPOSITS EXCESS
---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Deposits to meet certificate liability requirements:
Pennsylvania (at market value) $ 162 $ 150 $ 12
Texas, Illinois, New Jersey (at par value) 223 215 8
Central Depository (at amortized cost) 4,428,558 4,102,809 325,749
---------- ---------- --------
Total $4,428,943 $4,103,174 $325,769
========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 2008
----------------------------------
REQUIRED
DEPOSITS DEPOSITS EXCESS
---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Deposits to meet certificate liability requirements:
Pennsylvania (at market value) $ 162 $ 150 $ 12
Texas, Illinois, New Jersey (at par value) 224 215 9
Central Depository (at amortized cost) 5,114,108 4,878,641 235,467
---------- ---------- --------
Total $5,114,494 $4,879,006 $235,488
========== ========== ========
</TABLE>
The assets on deposit with the Central Depository at December 31, 2009 and 2008
consisted of securities and other loans having a deposit value of $4.2 billion
and $4.9 billion, respectively, mortgage loans on real estate of $130.3 million
and $149.4 million, respectively, and other investments of $79.8 million and
$83.3 million, respectively. Additionally, these assets on deposit included
unsettled purchases of investments in the amount of $1.2 million and $26.3
million at December 31, 2009 and 2008, respectively.
Ameriprise Trust Company, the custodian for ACC, is the Central Depository. See
Note 7 for information on related party transactions.
3. INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES
Available-for-Sale securities distributed by type were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 2009
--------------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED NON-CREDIT
DESCRIPTION OF SECURITIES COST GAINS LOSSES FAIR VALUE OTTI (1)
- ------------------------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Residential mortgage backed securities $1,577,876 $20,736 $(138,277) $1,460,335 $(46,683)
Corporate debt securities 1,026,547 24,668 (976) 1,050,239 850
Commercial mortgage backed securities 538,714 13,247 (759) 551,202 --
Asset backed securities 420,016 17,245 (6,994) 430,267 (2,711)
U.S. government and agencies obligations 134,819 1,131 -- 135,950 --
Common and preferred stocks 19,646 82 (3,963) 15,765 --
State and municipal obligations -- -- -- -- --
---------- ------- --------- ---------- --------
Total $3,717,618 $77,109 $(150,969) $3,643,758 $(48,544)
========== ======= ========= ========== ========
</TABLE>
(1) Represents the amount of other-than-temporary impairment losses in
Accumulated Other Comprehensive Loss, which starting January 1, 2009, were
not included in earnings. Amount includes unrealized gains and losses on
impaired securities subsequent to the impairment measurement date. These
amounts are included in gross unrealized gains and losses as of December
31, 2009.
<TABLE>
<CAPTION>
DECEMBER 31, 2008
-------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
DESCRIPTION OF SECURITIES COST GAINS LOSSES FAIR VALUE
- ------------------------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Residential mortgage backed securities $1,348,369 $11,434 $(156,220) $1,203,583
Corporate debt securities 1,623,978 637 (49,426) 1,575,189
Commercial mortgage backed securities 273,099 590 (7,077) 266,612
Asset backed securities 247,159 376 (26,506) 221,029
U.S. government and agencies obligations 4,899 168 -- 5,067
Common and preferred stocks 19,612 -- (8,689) 10,923
State and municipal obligations 4,000 -- -- 4,000
---------- ------- --------- ----------
Total $3,521,116 $13,205 $(247,918) $3,286,403
========== ======= ========= ==========
</TABLE>
F-13
<PAGE>
At December 31, 2009 and 2008, fixed maturity securities comprised approximately
85% and 70%, respectively, of ACC's total investments. These securities were
rated by Moody's Investors Service ("Moody's"), Standard & Poor's Ratings
Services ("S&P"), and Fitch Ratings Ltd. ("Fitch"), except for approximately
$18.0 million and $65.8 million of securities at December 31, 2009 and 2008,
respectively, which were rated by ACC's internal analysts using criteria similar
to Moody's, S&P and Fitch. Ratings on fixed maturity securities are presented
using the median of ratings from Moody's, S&P and Fitch. If only two of the
ratings are available, the lower rating is used. A summary of fixed maturity
securities was as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 2009 DECEMBER 31, 2008
------------------------------------- -------------------------------------
PERCENT PERCENT
OF OF
TOTAL TOTAL
FAIR FAIR
RATINGS AMORTIZED COST FAIR VALUE VALUE AMORTIZED COST FAIR VALUE VALUE
- ------- -------------- ---------- ------- -------------- ---------- -------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C>
AAA $ 2,026,434 $2,062,670 57% $1,627,746 $1,495,970 46%
AA 189,891 177,780 5 246,614 223,318 7
A 346,183 342,573 9 339,662 327,926 10
BBB 782,389 780,706 22 1,176,153 1,140,420 34
Below investment grade 353,075 264,264 7 111,329 87,846 3
----------- ---------- --- ---------- ---------- ---
Total fixed maturities $ 3,697,972 $3,627,993 100% $3,501,504 $3,275,480 100%
=========== ========== === ========== ========== ===
</TABLE>
At December 31, 2009 and 2008, approximately 36% and 50%, respectively, of the
securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. The
following tables provide information about Available-for-Sale securities with
gross unrealized losses and the length of time that individual securities have
been in a continuous unrealized loss position:
<TABLE>
<CAPTION>
DECEMBER 31, 2009
---------------------------------------------------------------------------------------------------
LESS THAN 12 MONTHS 12 MONTHS OR MORE TOTAL
------------------------------- ------------------------------- -------------------------------
NUMBER NUMBER NUMBER
DESCRIPTION OF OF SEC- FAIR UNREALIZED OF SEC- FAIR UNREALIZED OF SEC- FAIR UNREALIZED
SECURITIES URITIES VALUE LOSSES URITIES VALUE LOSSES URITIES VALUE LOSSES
- -------------- ------- -------- ---------- ------- -------- ---------- ------- -------- ----------
(IN THOUSANDS, EXCEPT NUMBER OF SECURITIES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential mortgage
backed securities 22 $196,113 $ (9,618) 77 $320,859 $(128,659) 99 $516,972 $(138,277)
Corporate debt
securities 5 4,715 (117) 28 56,063 (859) 33 60,778 (976)
Commercial mortgage
backed securities 4 20,315 (321) 9 29,516 (438) 13 49,831 (759)
Asset backed
securities 7 34,629 (766) 11 47,960 (6,228) 18 82,589 (6,994)
Common and
preferred stocks -- -- -- 1 15,650 (3,963) 1 15,650 (3,963)
--- -------- -------- --- -------- --------- --- -------- ---------
Total 38 $255,772 $(10,822) 126 $470,048 $(140,147) 164 $725,820 $(150,969)
=== ======== ======== === ======== ========= === ======== =========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 2008
----------------------------------------------------------------------------------------------------------
LESS THAN 12 MONTHS 12 MONTHS OR MORE TOTAL
--------------------------------- -------------------------------- -----------------------------------
NUMBER NUMBER NUMBER
DESCRIPTION OF OF SEC- FAIR UNREALIZED OF SEC- FAIR UNREALIZED OF SEC- FAIR UNREALIZED
SECURITIES URITIES VALUE LOSSES URITIES VALUE LOSSES URITIES VALUE LOSSES
- -------------- ------- ---------- ---------- -------- -------- ---------- ------- -------- ------------
(IN THOUSANDS, EXCEPT NUMBER OF SECURITIES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential mortgage
backed securities 65 $ 250,733 $ (64,652) 58 $224,942 $ (91,568) 123 $ 475,675 $(156,220)
Corporate debt
securities 107 1,211,101 (24,142) 67 171,502 (25,284) 174 1,382,603 (49,426)
Commercial mortgage
backed securities 12 70,870 (2,424) 24 121,918 (4,653) 36 192,788 (7,077)
Asset backed
securities 21 165,128 (22,772) 8 32,421 (3,734) 29 197,549 (26,506)
Common and
preferred stocks -- -- -- 1 10,922 (8,689) 1 10,922 (8,689)
--- ---------- --------- --- -------- --------- --- ---------- ---------
Total 205 $1,697,832 $(113,990) 158 $561,705 $(133,928) 363 $2,259,537 $(247,918)
=== ========== ========= === ======== ========= === ========== =========
</TABLE>
F-14
<PAGE>
As part of ACC's ongoing monitoring process, management determined that a
majority of the gross unrealized losses on its Available-for-Sale securities are
attributable to changes in credit spreads across sectors. The primary driver of
lower unrealized losses in 2009 compared to 2008 was the tightening of credit
spreads across sectors, partially offset by higher interest rates. A portion of
the decrease in unrealized losses was offset by an increase due to the adoption
of a new accounting standard effective January 1, 2009. ACC recorded a
cumulative effect increase to the amortized cost of previously
other-than-temporarily impaired investments that increased the gross unrealized
losses on Available-for-Sale securities by $48.8 million. This impact is due to
impairment of Available-for-Sale securities recognized in other comprehensive
income (loss) previously recognized through earnings for factors other than
credit.
The following table presents a rollforward of the cumulative amounts recognized
in the Statements of Operations for other-than-temporary impairments related to
credit losses on securities for which a portion of the securities' total
other-than-temporary impairments was recognized in other comprehensive income
(loss):
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Beginning balance of credit losses on securities held as of January 1 for which
a portion of other-than-temporary impairment was recognized in other
comprehensive income (loss) $50,866
Additional amount related to credit losses for which an
other-than-temporary impairment was not previously recognized 276
Reductions for securities sold during the period (realized) (2,268)
Additional increases to the amount related to credit losses for which an
other-than-temporary impairment was previously recognized 8,572
-------
Ending balance of credit losses on securities held as of December 31, 2009 for
which a portion of other-than-temporary impairment was recognized in other
comprehensive income (loss) $57,446
=======
</TABLE>
The change in net unrealized securities losses in other comprehensive income
(loss) includes two components, net of tax: (i) unrealized gains (losses) that
arose from changes in the market value of securities that were held during the
period and (ii) (gains) losses that were previously unrealized, but have been
recognized in current period net income due to sales of Available-for-Sale
securities. As a result of the adoption of a new accounting standard effective
January 1, 2009, net unrealized investment gains (losses) arising during the
period also includes other-than-temporary impairment losses on
Available-for-Sale securities related to factors other than credit that were
recognized in other comprehensive income (loss) during the period. Additionally,
reclassification of (gains) losses included in net income contains noncredit
other-than-temporary impairment losses that were previously unrealized, but have
been recognized in current period net income due to their reclassification as
credit losses.
The following table presents a rollforward of the net unrealized securities
losses on Available-for-Sale securities included in accumulated other
comprehensive loss:
<TABLE>
<CAPTION>
ACCUMULATED OTHER
NET COMPREHENSIVE
UNREALIZED LOSS RELATED TO NET
INVESTMENT DEFERRED UNREALIZED INVESTMENT
GAINS (LOSSES) INCOME TAX GAINS (LOSSES)
--------------- ---------- ---------------------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at January 1, 2008 $ (52,006) $ 18,202 $ (33,804)
Net unrealized investment losses arising during the period (299,942) 104,137 (195,805)
Reclassification of losses included in net loss 118,700 (41,545) 77,155
--------- -------- ---------
Balance at December 31, 2008 (233,248) 80,794 (152,454)
Cumulative effect of accounting change (48,760)(1) 17,066 (31,694)
Net unrealized investment gains arising during the period 214,538 (75,088) 139,450
Reclassification of gains included in net income (4,938) 1,728 (3,210)
--------- -------- ---------
Balance at December 31, 2009 $ (72,408) $ 24,500 $ (47,908)(2)
========= ======== =========
</TABLE>
(1) Amount represents the cumulative effect of adopting a new accounting
standard on January 1, 2009. See Note 1 for additional information on the
adoption impact.
(2) At December 31, 2009, Accumulated Other Comprehensive Loss Related to Net
Unrealized Investment Losses included $31.7 million of noncredit related
impairments and net unrealized securities losses on previously impaired
securities.
F-15
<PAGE>
Net realized gains and losses on Available-for-Sale securities, determined using
the specific identification method, recognized in earnings were as follows:
<TABLE>
<CAPTION>
2009 2008 2007
------- --------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Gross realized gains from sales $18,100 $ 848 $ 1,427
Gross realized losses from sales (3,176) (5,313) (1,804)
Other-than-temporary impairments related to credit (9,986) (114,235) (455)
</TABLE>
The $10.0 million and $114.2 million of other-than-temporary impairments in 2009
and 2008, respectively, primarily related to credit-related losses in non-agency
residential mortgage backed securities and corporate debt securities. The $0.5
million of other-than-temporary impairments in 2007 related to two corporate
debt securities.
Available-for-Sale securities by contractual maturity as of December 31, 2009
were as follows:
<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Due within one year $ 567,329 $ 577,415
Due after one year through five years 571,215 585,868
Due after five years through 10 years 14,198 14,116
Due after 10 years 8,624 8,790
---------- ----------
1,161,366 1,186,189
Residential mortgage backed securities 1,577,876 1,460,335
Commercial mortgage backed securities 538,714 551,202
Asset backed securities 420,016 430,267
Common and preferred stocks 19,646 15,765
---------- ----------
Total $3,717,618 $3,643,758
========== ==========
</TABLE>
Actual maturities may differ from contractual maturities because issuers may
have the right to call or prepay obligations. Residential mortgage backed
securities, commercial mortgage backed securities, and asset backed securities
are not due at a single maturity date. As such, these securities, as well as
common and preferred stocks, were not included in the maturities distribution.
At December 31, 2009 and 2008, other than GNMA, FNMA and FHLMC, the only issuers
greater than 1% of the fair market value of ACC's total investment portfolio
were as follows:
<TABLE>
<CAPTION>
2009 2008
---- ----
<S> <C> <C>
Verizon Communications, Inc. 1.2% --%
Wells Fargo & Company --% 1.6%
</TABLE>
4. BELOW INVESTMENT GRADE SYNDICATED BANK LOANS AND COMMERCIAL MORTGAGE LOANS
The carrying amounts of below investment grade syndicated bank loans and
commercial mortgage loans at December 31 were as follows:
<TABLE>
<CAPTION>
2009 2008
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Below investment grade syndicated bank loans $193,281 $222,560
Commercial mortgage loans 131,780 150,743
Reserve for losses (15,602) (15,440)
-------- --------
Below investment grade syndicated bank loans
and commercial mortgage loans, net $309,459 $357,863
======== ========
</TABLE>
Also included in net realized gain (loss) on investments before income taxes for
the year ended December 31, 2009 was an increase of $0.2 million to the
allowance for loan losses on commercial mortgage loans and for the year ended
December 31, 2008 was an increase of $10.6 million to the allowance for loan
losses on below investment grade syndicated bank loans.
F-16
<PAGE>
At both December 31, 2009 and 2008, approximately 3% of ACC's invested assets
were commercial mortgage loans. Concentrations of credit risk of commercial
mortgage loans by region at December 31 were as follows:
<TABLE>
<CAPTION>
2009 2008
---- ----
<S> <C> <C>
Mortgage loans by U.S. region:
Atlantic 31% 29%
North Central 25 25
South Central 12 13
Mountain 11 13
Pacific 11 11
New England 10 9
--- ---
Total 100% 100%
=== ===
</TABLE>
Concentrations of credit risk of commercial mortgage loans by property type at
December 31 were as follows:
<TABLE>
<CAPTION>
2009 2008
---- ----
<S> <C> <C>
Mortgage loans by U.S. property type:
Office buildings 30% 32%
Apartments 23 21
Industrial buildings 17 18
Shopping centers and retail 19 18
Other 11 11
--- ---
Total 100% 100%
=== ===
</TABLE>
At December 31, 2009 and 2008, ACC had no commitments to fund commercial
mortgage loans. ACC holds the mortgage document, which gives ACC the right to
take possession of the property if the borrower fails to perform according to
the terms of the agreements. ACC employs policies and procedures to ensure the
creditworthiness of the borrowers and that funds will be available on the
funding date. ACC's commercial mortgage loans are restricted to 80% or less of
the market value of the real estate at the time of the loan funding.
5. CERTIFICATE RESERVES
Reserves maintained on outstanding certificates have been computed in accordance
with the provisions of the certificates and Section 28 of the 1940 Act. The
average rates of accumulation on certificate reserves at December 31, 2009 were
as follows:
<TABLE>
<CAPTION>
AVERAGE
AVERAGE GROSS ADDITIONAL
RESERVE BALANCE ACCUMULATION RATES CREDIT RATES
--------------- ------------------ ------------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Installment certificates:
Reserves to mature:
With guaranteed rates $1,498 3.90% 0.50%
Without guaranteed rates (a) 39,152 0.28% 0.28%
Additional credits and accrued interest:
With guaranteed rates 305 3.29% --
Without guaranteed rates (a) 522 N/A N/A
Advance payments and accrued interest (b) 124 3.42% --
Fully paid certificates:
Reserves to mature:
With guaranteed rates 47,068 3.20% 0.01%
Without guaranteed rates (a) 3,195,704 1.91% 1.91%
Equity indexed (c) 798,137 N/A N/A
Additional credits and accrued interest:
With guaranteed rates 3,559 3.10% --
Without guaranteed rates (a) 22,072 N/A N/A
Due to unlocated certificate holders 131 -- --
----------
Total $4,108,272
==========
</TABLE>
F-17
<PAGE>
The average rates of accumulation on certificate reserves at December 31, 2008
were as follows:
<TABLE>
<CAPTION>
AVERAGE
AVERAGE GROSS ADDITIONAL
RESERVE BALANCE ACCUMULATION RATES CREDIT RATES
--------------- ------------------ ------------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Installment certificates:
Reserves to mature:
With guaranteed rates $ 2,219 3.93% 0.50%
Without guaranteed rates (a) 46,065 0.77% 0.77%
Additional credits and accrued interest:
With guaranteed rates 462 3.33% --
Without guaranteed rates (a) 675 N/A N/A
Advance payments and accrued interest (b) 137 3.45% --
Fully paid certificates:
Reserves to mature:
With guaranteed rates 52,926 3.37% 0.19%
Without guaranteed rates (a) 3,923,762 3.49% 3.49%
Equity indexed (c) 853,729 N/A N/A
Additional credits and accrued interest:
With guaranteed rates 4,351 3.04% --
Without guaranteed rates (a) 1,162 N/A N/A
Due to unlocated certificate holders 101 -- --
----------
Total $4,885,589
==========
</TABLE>
N/A Not Applicable.
(a) There is no minimum rate of accrual on these reserves. Interest is declared
periodically, quarterly, or annually in accordance with the terms of the
separate series of certificates.
(b) Certain series of installment certificates guarantee accrual of interest on
advance payments at an average rate of 3.26%. ACC's rate of accrual is
currently set at 4.00%, which is in effect through April 2011.
(c) Ameriprise Stock Market Certificate and Ameriprise Market Strategy
Certificate enable the certificate owner to participate in any relative
rise in a major stock market index up to a cap without risking loss of
principal. Generally the certificates have a term of 52 weeks and may
continue for up to 20 years. The reserve balances on these certificates at
December 31, 2009 and 2008 were $878 million and $914 million,
respectively.
On certain series of single payment certificates, additional interest is
pre-declared for periods greater than one year. The retained earnings
appropriated for the pre-declared additional interest at December 31, 2009 and
2008 was nil and $0.1 million, respectively, which reflects the difference
between certificate reserves on these series, calculated on a statutory basis,
and the reserves maintained per books.
The carrying amounts of net certificate reserves at December 31, 2009 and 2008
consisted of the following:
<TABLE>
<CAPTION>
2009 2008
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Reserves with terms of one year or less $3,835,868 $4,580,682
Other 272,404 304,907
---------- ----------
Total certificate reserves 4,108,272 4,885,589
---------- ----------
Unapplied certificate transactions 502 1,331
Certificate loans and accrued interest (5,196) (6,681)
---------- ----------
Total $4,103,578 $4,880,239
========== ==========
</TABLE>
6. DIVIDEND RESTRICTION
Certain series of installment certificates outstanding provide that cash
dividends may be paid by ACC only in calendar years for which additional credits
of at least one-half of 1% on such series of certificates have been authorized
by ACC. This restriction has been satisfied for 2009 and 2008 by ACC's
declaration of additional credits.
ACC is required to maintain cash and "qualified assets" meeting the standards of
Section 28(b) of the 1940 Act, as modified by an order of the SEC. The amortized
cost of such investments must be at least equal to ACC's net liabilities on all
outstanding face-amount certificates plus $250,000. ACC's qualified assets
consist of cash equivalents, below investment grade syndicated bank loans,
commercial mortgage loans, U.S. government and government agency securities,
municipal bonds, corporate bonds, preferred stocks, equity index options and
other securities meeting specified standards. So long as ACC wishes to rely on
the SEC order, as a condition to the order, ACC has agreed to maintain an amount
of unappropriated retained earnings and capital equal to at least 5% of
certificate reserves (less outstanding certificate loans).
F-18
<PAGE>
To the extent that payment of a dividend would decrease the capital ratio below
the required 5%, payment of a dividend would be restricted. In determining
compliance with this condition, qualified assets are valued in accordance with
the provisions of Minnesota Statutes where such provisions are applicable.
ACC has also entered into a written understanding with the Minnesota Department
of Commerce, that ACC will maintain capital equal to 5% of the assets of ACC
(less outstanding certificate loans). To the extent that payment of a dividend
would decrease this ratio below the required 5%, payment of a dividend would be
restricted. When computing its capital for these purposes, ACC values its assets
on the basis of statutory accounting for insurance companies rather than GAAP.
ACC is subject to annual examination and supervision by the Minnesota Department
of Commerce (Banking Division).
On December 31, 2008, Ameriprise Financial infused $35.0 million of capital in
anticipation of the recognition of other-than-temporary impairments on ACC's
investment securities. The evaluation of ACC's December 31, 2008
other-than-temporary impairments was not completed until January 2009. Upon
finalizing the impact of other-than-temporary impairments, ACC's capital ratio
dropped to 4.61% and 4.97% per the Minnesota Department of Commerce and SEC
capital requirements, respectively. Ameriprise Financial promptly infused an
additional $25.0 million of capital on January 20, 2009, bringing capital back
above the 5% requirement. Ameriprise Financial and ACC entered into a Capital
Support Agreement on March 2, 2009, pursuant to which Ameriprise Financial
agrees to commit such capital to ACC as is necessary to satisfy applicable
minimum capital requirements, up to a maximum commitment of $115 million. As of
December 31, 2009, Ameriprise Financial has not infused additional capital to
ACC under this agreement.
7. RELATED PARTY TRANSACTIONS
DISTRIBUTION SERVICES
Fees payable to AFSI on sales of ACC's certificates are based upon terms of
agreements giving AFSI the right to distribute the certificates covered under
the agreements. The agreements provide for payment of fees over a period of
time.
From time to time, ACC may sponsor or participate in sales promotions involving
one or more of the certificates and their respective terms. These promotions may
offer a special interest rate to attract new clients or retain existing clients.
To cover the cost of these promotions, distribution fees paid to AFSI may be
lowered.
The aggregate fees payable under the agreements are $25 per $1,000 face amount
of installment certificates sold on or after April 30, 1997. The aggregate fees
payable for the first year is $2.50 per $1,000 face amount of installment
certificates and the remaining $22.50 is payable over nine subsequent years.
The previously offered Ameriprise Cash Reserve Certificates have contractual
distribution fee rates of 0.0625% of the purchase price at the time of issuance
and 0.0625% of the reserves maintained for these certificates at the beginning
of the second and subsequent quarters from issue date. Effective October 1,
2007, these fees are waived.
Effective April 26, 2000, the Ameriprise Flexible Savings Certificates have
contractual distribution fee rates of 0.08% of the purchase price at the time of
issuance and 0.08% of the reserves maintained for these certificates at the
beginning of the second and subsequent quarters from issue date. Since January
2, 2007, ACC has continuously offered 7 and 13 month Flexible Savings
Certificates. Since the continuous offering began, the distribution fee on 7
month Flexible Savings Certificates has been 0.08% of the initial payment and
0.08% of the reserves maintained for these certificates at the beginning of the
second and subsequent quarters after issuance. The distribution fee on the 13
month term has been 0.032% of the initial payment and 0.032% of the reserves
maintained for these certificates at the beginning of the second and subsequent
quarters after issuance. From April 9, 2008 through December 2, 2008, the client
interest rates on the 7 and 13 month certificates were set at promotional
levels. From December 24, 2008 through June 9, 2009, the client interest rates
on the 6 and 7 month certificates were set at promotional levels, and from
December 24, 2008 through June 23, 2009, the client interest rates on the 12 and
13 month certificates were set at promotional levels.
Effective April 28, 1999, the Ameriprise Stock Market Certificate, sold through
AFSI, and Ameriprise Market Strategy Certificates have contractual distribution
fee rates of 0.90% of the initial investment on the first day of the
certificate's term and 0.90% of the reserves maintained for these certificates
at the beginning of each subsequent term.
INVESTMENT ADVISORY, JOINT FACILITIES AND TECHNOLOGY SUPPORT
Effective December 31, 2006, the investment advisory and services agreement with
RiverSource Investments, LLC, provides for a graduated scale of fees equal on an
annual basis to 0.350% on the first $250 million of total book value of
investments of ACC, 0.300% on the next $250 million, 0.250% on the next $500
million and 0.200% on the amount in excess of $1 billion. The fee is payable
monthly in an amount equal to one-twelfth of each of the percentages set forth
above. Net invested assets for purposes of this computation are cash
equivalents, accounts receivable for interest and dividends and securities sold,
accounts payable for invested assets purchased, securities available-for-sale
(including any segregated assets), trading securities, purchased equity index
options, written equity index options and mortgages.
F-19
<PAGE>
The fee paid to RiverSource Investments, LLC, for managing and servicing bank
loans is equal to 0.35%. The fee is payable monthly and is equal to one-twelfth
of 0.35%, computed each month on the basis of book value of the loans as of the
close of business on the last full business day of the preceding month.
TRANSFER AGENT FEES
The basis of computing transfer agent fees paid or payable to RiverSource
Service Corporation is under a Transfer Agency Agreement effective December 31,
2006. RiverSource Service Corporation maintains certificate owner accounts and
records. ACC pays RiverSource Service Corporation a monthly fee of one-twelfth
of $20.00 per certificate owner account for this service in addition to certain
out-of-pocket expenses.
DEPOSITORY FEES
In December 2008, Ameriprise Trust Company entered into an agreement with a
subcustodian to provide depository services for ACC's assets. As a result, the
depository fees paid to Ameriprise Trust Company are now asset-based with
additional charges for transactional custody fees charged by the subcustodian.
Prior to the subcustodian agreement, the fees payable to Ameriprise Trust
Company were based on a maintenance charge per account of $0.05 per $1,000 of
assets on deposit as well as $20 per transaction.
8. INCOME TAXES
The components of income tax provision (benefit) were as follows:
<TABLE>
<CAPTION>
2009 2008 2007
------- -------- --------
<S> <C> <C> <C>
CURRENT INCOME TAX:
Federal $33,223 $ (9,284) $(22,829)
State and local (98) 68 (591)
------- -------- --------
Total current income tax 33,125 (9,216) (23,420)
------- -------- --------
DEFERRED INCOME TAX:
Federal (8,700) (34,060) 21,998
State and local 705 914 825
------- -------- --------
Total deferred income tax (7,995) (33,146) 22,823
------- -------- --------
TOTAL INCOME TAX PROVISION (BENEFIT) $25,130 $(42,362) $ (597)
======= ======== ========
</TABLE>
The principal reasons that the aggregate income tax provision is different from
that computed by using the U.S. statutory rate of 35% were as follows:
<TABLE>
<CAPTION>
2009 2008 2007
----- ---- ------
<S> <C> <C> <C>
Tax at U.S. statutory rate 35.0% 35.0% 35.0%
Dividend exclusion 0.4 0.3 (52.2)
State income tax, net 0.9 (0.8) 60.5
Taxes applicable to prior years 0.3 (0.6) (125.3)
---- ---- ------
Income tax provision (benefit) 36.6% 33.9% (82.0)%
==== ==== ======
</TABLE>
ACC's effective tax rate was 36.6% for the year ended December 31, 2009 compared
to 33.9% for the year ended December 31, 2008 and (82.0)% for the year ended
December 31, 2007. The effective tax rate for the year ended December 31, 2007
reflects the impact of a $0.9 million tax benefit related to the settlement of
taxes for capital losses in prior years and the level of current year tax
advantaged items relative to the level of pretax income.
Deferred income tax assets and liabilities result from temporary differences
between the assets and liabilities measured for GAAP reporting versus income tax
return purposes. The significant components of deferred tax assets and
liabilities at December 31, 2009 and 2008 were as follows:
<TABLE>
<CAPTION>
2009 2008
------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred income tax assets:
Certificate reserves $11,105 $ 1,658
Investments, including bond discounts and premiums 34,556 52,239
Investment unrealized losses, net 25,952 82,270
Other 83 83
------- --------
Total deferred income tax assets 71,696 136,250
------- --------
Deferred income tax liabilities:
Other 903 78
------- --------
Net deferred income tax assets $70,793 $136,172
======= ========
</TABLE>
F-20
<PAGE>
ACC is required to establish a valuation allowance for any portion of the
deferred tax assets that management believes will not be realized. Significant
judgment is required in determining if a valuation allowance should be
established, and the amount of such allowance if required. Factors used in
making this determination include estimates relating to the performance of the
business including the ability to generate capital gains. Consideration is given
to, among other things in making this determination, i) future taxable income
exclusive of reversing temporary differences and carryforwards, ii) future
reversals of existing taxable temporary differences, iii) taxable income in
prior carryback years, and iv) tax planning strategies. Based on analysis of
ACC's tax positions, management believes it is more likely than not that ACC's
results of future operations and implementation of tax planning strategies will
generate sufficient taxable income to enable ACC to utilize all of the deferred
tax assets. Accordingly, no valuation allowance for deferred tax assets has been
established as of December 31, 2009 and 2008.
A reconciliation of the beginning and ending amount of unrecognized tax benefits
is as follows:
<TABLE>
<CAPTION>
2009 2008 2007
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at January 1 $4,436 $3,969 $3,969
Additions based on tax positions related to the current year -- -- --
Additions for tax positions of prior years -- 467 --
Reductions for tax positions of prior years -- -- --
Settlements -- -- --
------ ------ ------
Balance at December 31 $4,436 $4,436 $3,969
====== ====== ======
</TABLE>
If recognized, approximately $1.2 million, net of federal tax benefits, of the
unrecognized tax benefits as of December 31, 2009 and 2008 and $0.8 million as
of December 31, 2007 would affect the effective tax rate.
ACC recognizes interest and penalties related to unrecognized tax benefits as a
component of the income tax provision. ACC recognized interest and penalties of
$0.2 million for the years ended December 31, 2009 and 2008 and $0.3 million for
the year ended December 31, 2007. ACC had $1.4 million and $1.2 million for the
payment of interest and penalties accrued at December 31, 2009 and 2008,
respectively.
It is not expected that the total amounts of unrecognized tax benefits will
change materially in the next 12 months.
ACC files income tax returns in the U.S. federal jurisdiction, and various state
jurisdictions. With few exceptions, ACC is no longer subject to U.S. federal or
state and local income tax examinations by tax authorities for years before
1997. In the fourth quarter of 2008, the Internal Revenue Service ("IRS")
commenced an examination of ACC's U.S. income tax returns for 2005 through 2007.
The IRS, as part of the overall examination of the American Express Company
consolidated return, completed its field examination of ACC's U.S. income tax
returns for 1997 through 2002 during 2008 and completed its field examination of
2003 through 2004 in the third quarter of 2009. However, for federal income tax
purposes these years continue to remain open as a consequence of certain issues
under appeal. ACC's state income tax returns are currently under examination by
various jurisdictions for years ranging from 1998 through 2006.
9. FAIR VALUES OF ASSETS AND LIABILITIES
GAAP defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date; that is, an exit price. The exit price
assumes the asset or liability is not exchanged subject to a forced liquidation
or distressed sale.
VALUATION HIERARCHY
ACC categorizes its fair value measurements according to a three-level
hierarchy. The hierarchy prioritizes the inputs used by ACC's valuation
techniques. A level is assigned to each fair value measurement based on the
lowest level input that is significant to the fair value measurement in its
entirety. The three levels of the fair value hierarchy are defined as follows:
Level 1 Unadjusted quoted prices for identical assets or liabilities in active
markets that are accessible at the measurement date.
Level 2 Prices or valuations based on observable inputs other than quoted
prices in active markets for identical assets and liabilities.
Level 3 Prices or valuations that require inputs that are both significant to
the fair value measurement and unobservable.
F-21
<PAGE>
DETERMINATION OF FAIR VALUE
ACC uses valuation techniques consistent with the market and income approaches
to measure the fair value of its assets and liabilities. ACC's market approach
uses prices and other relevant information generated by market transactions
involving identical or comparable assets or liabilities. ACC's income approach
uses valuation techniques to convert future projected cash flows to a single
discounted present value amount. When applying either approach, ACC maximizes
the use of observable inputs and minimizes the use of unobservable inputs.
The following is a description of the valuation techniques used to measure fair
value and the general classification of these instruments pursuant to the fair
value hierarchy.
ASSETS
Cash Equivalents
Cash equivalents include highly liquid investments with original maturities of
90 days or less. ACC's cash equivalents are classified as Level 2 and are
measured at amortized cost, which is a reasonable estimate of fair value because
of the short time between the purchase of the instrument and its expected
realization.
Investments in Unaffiliated Issuers (Available-for-Sale Securities)
When available, the fair value of securities is based on quoted prices in active
markets. If quoted prices are not available, fair values are obtained from
nationally-recognized pricing services, broker quotes, or other model-based
valuation techniques such as the present value of cash flows. Level 1 securities
include U.S. Treasuries. Level 2 securities include agency residential mortgage
backed securities and commercial mortgage backed securities, asset backed
securities, municipal and corporate bonds and U.S. agency securities. Level 3
securities include asset backed securities and corporate bonds.
Through ACC's own experience transacting in the marketplace and through
discussions with its pricing vendors, ACC believes that the market for certain
non-agency residential mortgage backed securities is inactive. Indicators of
inactive markets include: pricing services' reliance on brokers or discounted
cash flow analyses to provide prices, an increase in the disparity between
prices provided by different pricing services for the same security,
unreasonably large bid-offer spreads and a significant decrease in the volume of
trades relative to historical levels. In certain cases, this market inactivity
has resulted in ACC applying valuation techniques that rely more on an income
approach (discounted cash flows using market rates) than on a market approach
(prices from pricing services). ACC considers market observable yields for other
asset classes it considers to be of similar risk which includes nonperformance
and liquidity for individual securities to set the discount rate for applying
the income approach to certain non-agency residential mortgage backed
securities.
Derivatives (Equity Index Options, Purchased and Written)
The fair values of derivatives that are traded in certain over-the-counter
markets are measured using pricing models with market observable inputs such as
interest rates and equity index levels. These measurements are classified as
Level 2 within the fair value hierarchy.
LIABILITIES
Certificate Reserves
ACC uses various Black-Scholes calculations to determine the fair value of the
embedded derivative liability associated with the provisions of its stock market
certificates. The inputs to these calculations are primarily market observable.
As a result, these measurements are classified as Level 2.
F-22
<PAGE>
The following tables present the balances of assets and liabilities measured at
fair value on a recurring basis:
<TABLE>
<CAPTION>
DECEMBER 31, 2009
--------------------------------------------
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- ---------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Assets
Cash equivalents $ -- $ 309,183 $ -- $ 309,183
Available-for-Sale securities:
Residential mortgage backed securities -- 714,702 745,633 1,460,335
Corporate debt securities -- 1,038,135 12,104 1,050,239
Commercial mortgage backed securities -- 551,202 -- 551,202
Asset backed securities -- 299,683 130,584 430,267
U.S. government and agencies obligations 398 135,552 -- 135,950
Common and preferred stocks -- 15,765 -- 15,765
---- ---------- -------- ----------
Total Available-for-Sale securities 398 2,755,039 888,321 3,643,758
Equity index options, purchased -- 166,392 -- 166,392
---- ---------- -------- ----------
Total assets at fair value $398 $3,230,614 $888,321 $4,119,333
==== ========== ======== ==========
Liabilities
Certificate reserves $ -- $ 25,796 $ -- $ 25,796
Equity index options, written -- 140,996 -- 140,996
---- ---------- -------- ----------
Total liabilities at fair value $ -- $ 166,792 $ -- $ 166,792
==== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 2008
--------------------------------------------
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- ---------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Assets
Cash equivalents $-- $1,164,484 $ -- $1,164,484
Available-for-Sale securities:
Residential mortgage backed securities -- 738,349 465,234 1,203,583
Corporate debt securities -- 1,541,536 33,653 1,575,189
Commercial mortgage backed securities -- 266,612 -- 266,612
Asset backed securities -- 153,477 67,552 221,029
U.S. government and agencies obligations 458 4,609 -- 5,067
Common and preferred stocks -- 10,923 -- 10,923
State and municipal obligations -- 4,000 -- 4,000
---- ---------- -------- ----------
Total Available-for-Sale securities 458 2,719,506 566,439 3,286,403
Trading securities -- 16,618 -- 16,618
Equity index options, purchased -- 23,693 -- 23,693
---- ---------- -------- ----------
Total assets at fair value $458 $3,924,301 $566,439 $4,491,198
==== ========== ======== ==========
Liabilities
Certificate reserves $-- $ 5,007 $ -- $ 5,007
Equity index options, written -- 18,681 -- 18,681
---- ---------- -------- ----------
Total liabilities at fair value $-- $ 23,688 $ -- $ 23,688
==== ========== ======== ==========
</TABLE>
F-23
<PAGE>
During the reporting periods, there were no material assets or liabilities
measured at fair value on a nonrecurring basis.
The following tables provide a summary of changes in Level 3 assets and
liabilities measured at fair value on a recurring basis:
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE SECURITIES
--------------------------------------------------------------------
RESIDENTIAL
MORTGAGE CORPORATE ASSET OTHER
BACKED DEBT BACKED STRUCTURED
SECURITIES SECURITIES SECURITIES INVESTMENTS TOTAL
------------ ----------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 2009 $465,234 $ 33,653 $ 67,552 $-- $566,439
Total gains (losses) included in:
Net income (3,264)(1) -- 7,913(2) 8(5) 4,657
Other comprehensive income 63,229 1,724 6,953 -- 71,906
Purchases, sales, issuances and
settlements, net 220,434 (23,273) 48,166 (8) 245,319
Transfers in and/or out of Level 3 -- -- -- -- --
-------- -------- -------- --- --------
Balance, December 31, 2009 $745,633 $ 12,104 $130,584 $-- $888,321
======== ======== ======== === ========
Change in unrealized gains (losses) included
in net income relating to Level 3 assets
held at December 31, 2009 $ (2,888)(3) $ -- $ 7,412(4) $-- $ 4,524
</TABLE>
(1) Represents a $8,310 loss included in net realized gain (loss) on
investments and $5,046 income included in investment income in the
Statements of Operations.
(2) Represents a $202 gain included in net realized gain (loss) on investments
and $7,711 income included in investment income in the Statements of
Operations.
(3) Represents a $8,132 loss included in net realized gain (loss) on
investments and $5,244 income included in investment income in the
Statements of Operations.
(4) Represents a $276 loss included in net realized gain (loss) on investments
and $7,688 income included in investment income in the Statements of
Operations.
(5) Included in net realized gain (loss) on investments in the Statements of
Operations.
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE SECURITIES
--------------------------------------------------------------------
RESIDENTIAL
MORTGAGE CORPORATE ASSET OTHER
BACKED DEBT BACKED STRUCTURED
SECURITIES SECURITIES SECURITIES INVESTMENTS TOTAL
------------ ----------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 2008 $ 359,316 $ 67,797 $ 42,927 $-- $470,040
Total gains (losses) included in:
Net loss (96,039)(1) -- 4,757(3) -- (91,282)
Other comprehensive loss (86,346) (227) (10,830) -- (97,403)
Purchases, sales, issuances and
settlements, net (31,635) (33,917) 30,698 (34,854)
Transfers in and/or out of Level 3 319,938(4) -- -- -- 319,938
--------- -------- -------- --- --------
Balance, December 31, 2008 $ 465,234 $ 33,653 $ 67,552 $-- $566,439
========= ======== ======== === ========
Change in unrealized gains (losses) included
in net loss relating to Level 3 assets
held at December 31, 2008 $ (96,071)(2) $ -- $ 4,757(3) $-- $(91,314)
</TABLE>
(1) Represents a $97,857 loss included in net realized gain (loss) on
investments and $1,818 income included in investment income in the
Statements of Operations.
(2) Represents a $97,857 loss included in net realized gain (loss) on
investments and $1,786 income included in investment income in the
Statements of Operations.
(3) Included in investment income in the Statements of Operations.
(4) Represents prime non-agency residential mortgage backed securities
previously classified as Level 2 for which management believes the market
for these prime quality assets is now inactive.
F-24
<PAGE>
The following table provides the carrying value and the estimated fair value of
financial instruments that are not reported at fair value as of December 31,
2009 and 2008. All other financial instruments that are reported at fair value
have been included above in the table with balances of assets and liabilities
measured at fair value on a recurring basis.
<TABLE>
<CAPTION>
DECEMBER 31, 2009 DECEMBER 31, 2008
--------------------------- ---------------------------
CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE
-------------- ---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
FINANCIAL ASSETS
Below investment grade
syndicated bank loans $ 179,176 $ 179,579 $ 208,456 $ 152,225
Commercial mortgage loans 130,283 133,442 149,407 137,176
Certificate loans 5,136 5,136 6,601 6,601
FINANCIAL LIABILITIES
Certificate reserves $4,082,476 $4,052,657 $4,880,582 $4,798,076
</TABLE>
Investments in unaffiliated issuers
The fair value of commercial mortgage loans, except those with significant
credit deterioration, has been determined by discounting contractual cash flows
using discount rates that reflect current pricing for loans with similar
remaining maturities and characteristics including loan-to-value ratio,
occupancy rate, refinance risk, debt-service coverage, location, and property
condition. For commercial mortgage loans with significant credit deterioration,
fair value is determined using the same adjustments as above with an additional
adjustment for ACC's estimate of the amount recoverable on the loan.
Below investment grade syndicated bank loans fair value is determined using
broker quotes.
Certificate reserves
The fair value of investment certificate reserves is determined by discounting
cash flows using discount rates that reflect current pricing for assets with
similar terms and characteristics, with adjustments for early withdrawal
behavior, penalty fees, expense margin and ACC's nonperformance risk specific to
these liabilities.
10. DERIVATIVES AND HEDGING ACTIVITIES
Derivative instruments enable ACC to manage its exposure to various market
risks. The value of such instruments is derived from an underlying variable or
multiple variables, including equity and interest rate indices or prices. ACC
enters into derivative agreements for risk management purposes related to ACC's
products and operations.
ACC uses derivatives as economic hedges of equity and interest rate risk related
to various products and transactions of ACC. ACC does not designate any
derivatives for hedge accounting. The following table presents the balance sheet
location and the gross fair value of derivative instruments, including embedded
derivatives, at December 31, 2009:
<TABLE>
<CAPTION>
FAIR VALUE
----------------------------------------------------------------------
DERIVATIVES NOT DESIGNATED AS
HEDGING INSTRUMENTS BALANCE SHEET LOCATION ASSET BALANCE SHEET LOCATION LIABILITY
- ----------------------------- ---------------------- -------- ---------------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
EQUITY CONTRACTS
Stock market certificates Equity index options, Equity index options,
purchased $166,392 written $140,996
Stock market certificates
embedded derivatives -- Certificate reserves 25,796
-------- --------
Total $166,392 $166,792
======== ========
</TABLE>
See note 9 for additional information regarding ACC's fair value measurement of
derivative instruments.
F-25
<PAGE>
The following table presents a summary of the impact of derivatives not
designated as hedging instruments on the Statements of Operations for the year
ended December 31, 2009:
<TABLE>
<CAPTION>
DERIVATIVES NOT DESIGNATED AS LOCATION OF GAIN (LOSS) ON AMOUNT OF GAIN (LOSS) ON
HEDGING INSTRUMENTS DERIVATIVES RECOGNIZED IN INCOME DERIVATIVES RECOGNIZED IN INCOME
- ----------------------------- -------------------------------- --------------------------------
(IN THOUSANDS)
<S> <C> <C>
EQUITY CONTRACTS
Stock market certificates Net provision for certificate
reserves $14,542
Stock market certificates embedded derivatives Net provision for certificate
reserves (20,789)
-------
Total $(6,247)
=======
</TABLE>
Ameriprise Stock Market Certificates ("SMC") offer a return based upon the
relative change in a major stock market index between the beginning and end of
the SMC's term. The SMC product contains an embedded derivative. The equity
based return of the certificate must be separated from the host contract and
accounted for as a derivative instrument. As a result of fluctuations in equity
markets, and the corresponding changes in value of the embedded derivative, the
amount of expenses incurred by ACC related to the SMC product will positively or
negatively impact reported earnings. As a means of hedging its obligations under
the provisions for these certificates, ACC purchases and writes call options on
the S&P 500 Index. ACC views this strategy as a prudent management of equity
market sensitivity, such that earnings are not exposed to undue risk presented
by changes in equity market levels. The gross notional amount of these
derivative contracts was $1.5 billion at December 31, 2009. ACC also purchases
futures on the S&P 500 Index to economically hedge its obligations. The futures
are marked-to-market daily and exchange traded, exposing ACC to no counterparty
risk. At December 31, 2009, ACC had no futures contracts outstanding.
CREDIT RISK
Credit risk associated with ACC's derivatives is the risk that a derivative
counterparty will not perform in accordance with the terms of the applicable
derivative contract. To mitigate such risk, ACC has established guidelines and
oversight of credit risk through a comprehensive enterprise risk management
program that includes members of senior management. Key components of this
program are to require preapproval of counterparties and the use of master
netting arrangements and collateral arrangements wherever practical. As of
December 31, 2009, ACC held $15.6 million in cash and recorded a corresponding
liability in accounts payable and accrued liabilities for collateral ACC is
obligated to return to counterparties. As of December 31, 2009, ACC's maximum
credit exposure related to derivative assets after considering netting
arrangements with counterparties and collateral arrangements was approximately
$9.9 million.
F-26
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Annual Report:
<TABLE>
<CAPTION>
Exhibit Description
- -------------- ---------------------------------------------------------------
<S> <C>
3(a) Amended and Restated Certificate of Incorporation of American
Express Certificate Company, dated Aug. 1, 2005, filed
electronically on or about March 10, 2006 as Exhibit 3(a) to
Registrant's Form 10-K is incorporated by reference.
3(b) Current By-Laws, filed electronically as Exhibit 3(e) to
Post-Effective Amendment No. 19 to Registration Statement No.
33-26844, are incorporated herein by reference.
4 through 9 None or not applicable.
10(a) Investment Advisory and Services Agreement, dated Dec. 31,
2006, between Registrant and RiverSource Investments, LLC filed
electronically on or about Feb 26, 2007 as Exhibit 10(a) to
Post-Effective Amendment No. 35 to Registration Statement No.
2-95577 for Ameriprise Flexible Savings Certificate is
incorporated herein by reference.
10(b) Distribution Agreement, dated Dec. 31, 2006, between Registrant
and Ameriprise Financial Services, Inc. filed electronically on
or about Feb. 26, 2007 as Exhibit 1 to Post-Effective Amendment
No. 35 to Registration Statement No. 2-95577 for Ameriprise
Flexible Savings Certificate is incorporated herein by
reference.
10(c) Depositary and Custodial Agreement, dated Dec. 31, 2006,
between Registrant and Ameriprise Trust Company, filed
electronically on or about Feb. 26, 2007 as Exhibit 10(c) to
Post-Effective Amendment No. 35 to Registration Statement No.
2-95577 for Ameriprise Flexible Savings Certificate is
incorporated herein by reference.
10(d) Transfer Agent Agreement, dated Dec. 31, 2006 between
Registrant and RiverSource Client Service Corporation filed
electronically on or about Feb. 26, 2007 as Exhibit 10(e) to
Post-Effective Amendment No. 35 to Registration Statement No.
2-95577 for Ameriprise Flexible Savings Certificate is
incorporated herein by reference.
10(e) Administration and Services Agreement, dated October 1, 2005
between RiverSource Investments, LLC and Ameriprise Financial,
Inc. filed electronically on or about March 10, 2006 as Exhibit
10(s) to Registrant's Form 10-K is incorporated by reference.
10(f) Capital Support Agreement by and between Ameriprise Financial,
Inc. and Ameriprise Certificate Company, dated as of March 2,
2009, filed electronically on or about March 3, 2009 as Exhibit
10(f) to Registrant's Form 10-K is incorporated by reference.
11 through 13 None or not applicable.
14(a) Code of Ethics under rule 17j-1 for Ameriprise Certificate
Company, filed electronically as Exhibit 10 (p)(1) to
Pre-Effective Amendment No. 1 to Registration Statement No.
333-34982, is incorporated herein by reference.
*14(b) Code of Ethics adopted under Rule 17j-1 for Registrant's
principal underwriter, dated April 2008, is filed
electronically herewith as Exhibit (14)(b) to Registrant's Form
10-K.
14(c) Code of Ethics adopted under Rule 17j-1 for Registrant's
investment adviser, dated Nov. 15, 2009, is filed
electronically herewith as Exhibit (14)(c) to Registrant's Form
10-K.
15 through 23 None or not applicable.
24(a) Directors' Power of Attorney, dated Feb. 24, 2009, filed
electronically on or about March 3, 2009 as Exhibit 24 (a) to
Registrant's Form 10-K is incorporated by reference.
24(b) Officers' Power of Attorney, dated Feb. 24, 2009, filed
electronically on or about March 3, 2009 as Exhibit 24 (b) to
Registrant's Form 10-K is incorporated by reference.
24(c) Director's and Officer's Power of Attorney, dated Feb. 24,
2009, filed electronically on or about March 3, 2009 as Exhibit
24 (c) to Registrant's Form 10-K is incorporated by reference.
25 through 30 None or not applicable.
*31.1 Certification of William F. Truscott pursuant to Rule 13a-14(a)
promulgated under the Securities Exchange Act of 1934, as
amended.
*31.2 Certification of Ross P. Palacios pursuant to Rule 13a-14(a)
promulgated under the Securities Exchange Act of 1934, as
amended.
*32.1 Certification of William F. Truscott and Ross P. Palacios
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
33 through 100 None or not applicable.
</TABLE>
* Filed electronically herewith
E-1
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS
AT DECEMBER 31, 2009
<TABLE>
<CAPTION>
BALANCE AT 12/31/2009 VALUE AT
PRINCIPAL AMT OF BONDS & COST 12/31/2009
ISSUER NAME AND ISSUER TITLE NOTES OR # OF SHARES (NOTES a & c) (NOTE a)
- ---------------------------- ------------------------ ------------- ----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT BOND
FREDDIE MAC 2012 2.25% 21,100 21,063 21,206
FEDERAL HOME LOAN BANK 2012 2.30% 50,700 50,663 50,804
FANNIE MAE 2011 6.25% 25,000 25,754 26,264
FANNIE MAE 2012 4.45% 3,871 3,871 4,094
FANNIE MAE 2012 2.38% 8,075 8,083 8,135
FANNIE MAE 2012 2.24% 25,000 25,000 25,048
UNITED STATES TREASURY 2028 5.25% 200 216 217
UNITED STATES TREASURY 2014 4.75% 165 169 182
--------- --------- ---------
TOTAL - GOVERNMENT BOND 134,111 134,819 135,950
--------- --------- ---------
GOVERNMENT AGENCY MTG-BACKED
FREDDIE MAC GOLD 2010 7.00% 17 17 17
FREDDIE MAC GOLD 2014 6.50% 323 320 342
FREDDIE MAC GOLD 2015 7.00% 134 133 143
FREDDIE MAC GOLD 2016 5.00% 2,451 2,425 2,583
FREDDIE MAC GOLD 2017 5.00% 3,796 3,799 4,001
FREDDIE MAC 2022 3.13% 95 99 96
FREDDIE MAC 2023 3.07% 78 80 78
FREDDIE MAC 2024 3.50% 347 352 355
FREDDIE MAC 2023 3.24% 583 601 595
FREDDIE MAC 2024 3.28% 437 444 450
FREDDIE MAC 2029 3.48% 170 174 174
FREDDIE MAC 2025 4.23% 109 111 111
FREDDIE MAC GOLD 2023 5.50% 4,781 4,944 5,062
FREDDIE MAC GOLD 2014 6.50% 560 554 597
FREDDIE MAC GOLD 2014 6.50% 48 47 51
FREDDIE MAC GOLD 2017 6.00% 862 890 923
FREDDIE MAC GOLD 2017 6.00% 2,216 2,284 2,373
FREDDIE MAC GOLD 2017 5.00% 4,138 4,141 4,363
FREDDIE MAC GOLD 2012 5.00% 1,068 1,078 1,100
FREDDIE MAC GOLD 2012 5.00% 4,199 4,256 4,326
FREDDIE MAC GOLD 2013 4.50% 8,952 9,090 9,251
FREDDIE MAC GOLD 2018 5.00% 3,704 3,797 3,904
FREDDIE MAC GOLD 2013 4.50% 1,317 1,337 1,355
FREDDIE MAC GOLD 2013 4.50% 2,762 2,803 2,841
FREDDIE MAC GOLD 2018 5.00% 5,383 5,508 5,673
FREDDIE MAC 2037 5.72% 14,519 15,120 15,134
FREDDIE MAC 2022 3.13% 75 78 76
FREDDIE MAC GOLD 2010 7.00% 38 38 39
FREDDIE MAC GOLD 2010 7.00% 29 28 29
FREDDIE MAC GOLD 2017 6.00% 4,185 4,292 4,493
FREDDIE MAC 2031 3.18% 174 172 179
FREDDIE MAC GOLD 2022 5.50% 1,758 1,746 1,862
FREDDIE MAC GOLD 2022 5.50% 1,003 997 1,062
FREDDIE MAC 2031 5.91% 723 717 736
FHLMC_2382 2030 5.50% 710 707 720
FREDDIE MAC 2033 4.51% 3,419 3,324 3,528
FREDDIE MAC 2033 5.03% 5,564 5,704 5,789
FREDDIE MAC 2019 3.02% 19 19 19
FREDDIE MAC 2018 2.87% 92 92 94
FREDDIE MAC 2019 3.13% 9 9 9
FREDDIE MAC 2019 3.13% 78 77 78
FREDDIE MAC 2019 3.13% 38 38 39
FREDDIE MAC 2019 2.96% 83 83 83
FREDDIE MAC 2019 3.49% 36 37 37
FREDDIE MAC 2019 3.45% 74 75 76
FREDDIE MAC 2019 2.89% 97 97 99
FREDDIE MAC 2018 3.66% 183 182 184
FREDDIE MAC 2019 3.14% 85 86 86
FREDDIE MAC 2019 3.15% 86 85 88
FREDDIE MAC 2019 2.68% 80 81 81
</TABLE>
F-27
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
FREDDIE MAC 2017 2.60% 98 98 100
FREDDIE MAC 2017 2.89% 130 130 132
FREDDIE MAC 2017 2.80% 220 219 222
FREDDIE MAC 2019 2.76% 94 94 95
FREDDIE MAC 2019 2.58% 397 398 401
FREDDIE MAC 2025 4.08% 189 191 192
FREDDIE MAC 2026 3.25% 82 82 83
FREDDIE MAC 2018 4.62% 250 253 264
FREDDIE MAC 2033 4.51% 3,197 3,167 3,327
FREDDIE MAC 2034 5.12% 20,123 20,357 21,100
FANNIE MAE FNMA_99-8 2014 6.00% 1,287 1,279 1,361
FANNIE MAE 2016 9.00% 6 6 6
FANNIE MAE 2017 3.08% 23 23 23
FANNIE MAE 2017 2.58% 82 82 82
FANNIE MAE 2020 5.77% 89 92 91
FANNIE MAE 2019 6.46% 218 221 222
FANNIE MAE 2019 2.71% 261 265 264
FANNIE MAE 2033 4.83% 477 487 488
FANNIE MAE 2024 3.75% 395 400 402
FANNIE MAE 2011 7.00% 53 53 55
FANNIE MAE 2011 7.50% 146 145 152
FANNIE MAE 2012 7.00% 137 137 143
FANNIE MAE 2014 5.50% 19 18 20
FANNIE MAE 2014 5.50% 1,302 1,282 1,363
FANNIE MAE 2014 5.50% 1,276 1,255 1,356
FANNIE MAE 2012 5.00% 2,720 2,743 2,798
FANNIE MAE 2012 5.00% 4,455 4,482 4,586
FANNIE MAE 2013 5.00% 7,092 7,163 7,305
FANNIE MAE 2018 5.00% 10,818 10,874 11,401
FANNIE MAE 2018 5.50% 5,733 5,879 6,105
FANNIE MAE 2013 5.00% 1,037 1,043 1,068
FANNIE MAE 2025 2.88% 349 358 357
FANNIE MAE 2024 6.00% 1,737 1,716 1,845
FANNIE MAE 2011 7.00% 74 74 76
FANNIE MAE 2012 8.00% 144 144 152
FANNIE MAE 2013 6.00% 39 39 41
FANNIE MAE 2014 6.50% 790 779 851
FANNIE MAE 2014 6.00% 384 381 410
FANNIE MAE 2012 7.00% 112 111 118
FANNIE MAE 2014 6.50% 340 337 367
FANNIE MAE 2022 5.50% 1,458 1,444 1,542
FANNIE MAE 2016 5.50% 3,074 3,080 3,269
FANNIE MAE 2016 5.00% 4,652 4,602 4,898
FANNIE MAE 2032 5.49% 1,046 1,050 1,089
FANNIE MAE 2031 2.84% 761 761 772
FANNIE MAE 2031 2.86% 572 570 587
FANNIE MAE 2016 6.00% 717 712 768
FANNIE MAE 2016 5.50% 2,780 2,787 2,956
FANNIE MAE 2016 5.00% 2,849 2,808 3,000
FANNIE MAE 2017 5.00% 2,685 2,658 2,827
FANNIE MAE 2032 2.65% 759 752 774
FANNIE MAE 2016 5.50% 2,508 2,483 2,667
FANNIE MAE 2017 5.00% 3,797 3,786 3,998
FANNIE MAE 2017 5.00% 4,879 4,865 5,142
FANNIE MAE 2032 3.29% 548 549 559
FANNIE MAE 2032 2.29% 1,004 1,007 1,020
FANNIE MAE 2032 2.27% 2,134 2,135 2,167
FANNIE MAE 2032 3.35% 787 788 804
FANNIE MAE 2032 3.24% 1,200 1,198 1,229
FANNIE MAE 2032 3.10% 498 500 510
FANNIE MAE 2032 2.61% 332 333 336
FANNIE MAE 2032 2.60% 983 987 1,001
FANNIE MAE 2032 2.90% 308 309 313
FANNIE MAE 2032 3.04% 555 557 567
FANNIE MAE 2032 5.29% 2,238 2,246 2,373
FANNIE MAE 2032 5.17% 2,718 2,724 2,879
FANNIE MAE 2032 4.30% 1,693 1,701 1,694
FANNIE MAE 2032 5.07% 1,866 1,868 1,976
FANNIE MAE 2032 4.55% 1,829 1,839 1,863
FHLMC_2478 2021 5.25% 17 17 17
</TABLE>
F-28
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
FANNIE MAE FNMA_03-28 2022 5.00% 3,257 3,282 3,364
FREDDIE MAC FHLMC_2542 2022 5.50% 4,579 4,643 4,754
FREDDIE MAC FHLMC_2558 2022 5.50% 4,759 4,806 4,955
FREDDIE MAC FHLMC_2548 2022 5.50% 10,638 10,718 11,027
FREDDIE MAC FHLMC_2550 2022 5.50% 3,637 3,678 3,791
FREDDIE MAC FHLMC_2556 2022 5.50% 11,603 11,690 11,920
FREDDIE MAC FHLMC_2574 2022 5.00% 3,927 3,979 4,097
FREDDIE MAC FHLMC_2586 2023 5.50% 5,433 5,537 5,710
FREDDIE MAC FHLMC_2597 2022 5.50% 13,853 14,035 14,396
FREDDIE MAC FHLMC_2595 2022 5.50% 28,801 29,111 29,799
FREDDIE MAC FHLMC_2603 2022 5.50% 8,581 8,651 8,787
FHLMC_2619 2022 5.00% 8,221 8,313 8,570
FNMA_04-81 2020 4.35% 5,600 5,592 5,747
FNMA_04-89 2022 4.50% 5,020 4,999 5,191
FANNIE MAE FNMA_05-40 2030 5.00% 4,858 4,859 5,009
FREDDIE MAC FHLMC_2770 2032 3.75% 5,321 5,307 5,471
FHLMC_2835 2032 4.50% 6,299 6,290 6,536
FHLMC_2872 2022 4.50% 6,783 6,781 7,048
FHLMC_2907 2019 4.50% 3,791 3,787 3,946
FHLMC_2901 2033 4.50% 1,504 1,502 1,558
FREDDIE MAC FHR_2931-QA 2015 4.50% 164 164 164
FSPC_T-76 2037 4.72% 22,882 23,374 22,337
FANNIE MAE 2033 4.93% 2,431 2,472 2,545
FANNIE MAE 2018 4.50% 20,478 21,063 21,344
FANNIE MAE 2018 5.00% 4,945 5,065 5,210
FANNIE MAE 2018 5.00% 3,523 3,608 3,712
FANNIE MAE 2033 4.37% 8,352 8,367 8,930
FANNIE MAE 2034 4.56% 2,119 2,099 2,208
FANNIE MAE 2033 4.85% 5,243 5,222 5,447
FANNIE MAE 2034 4.74% 3,162 3,100 3,337
FANNIE MAE 2033 3.93% 7,350 7,061 7,607
FANNIE MAE 2035 4.63% 23,890 24,659 24,839
FANNIE MAE 2033 5.03% 1,668 1,673 1,752
FANNIE MAE 2033 4.51% 4,540 4,477 4,734
FANNIE MAE 2033 4.74% 1,411 1,413 1,477
FANNIE MAE 2033 4.46% 3,337 3,300 3,478
FANNIE MAE 2034 4.75% 2,241 2,267 2,347
FANNIE MAE 2034 5.18% 5,563 5,633 5,837
FANNIE MAE 2034 5.03% 2,930 2,980 3,074
FANNIE MAE 2034 4.97% 5,399 5,426 5,690
FANNIE MAE 2034 2.71% 2,731 2,738 2,813
FANNIE MAE 2035 3.25% 9,557 9,648 9,866
FANNIE MAE 2035 4.90% 4,718 4,752 4,935
FANNIE MAE 2035 4.91% 5,545 5,577 5,792
FANNIE MAE 2018 4.50% 20,577 21,177 21,480
FANNIE MAE 2036 3.97% 20,691 21,068 21,377
FANNIE MAE 2036 4.29% 15,598 16,003 16,246
FANNIE MAE 2038 5.43% 30,363 32,023 32,110
FANNIE MAE 2023 4.50% 40,496 41,508 41,741
FANNIE MAE 2035 4.78% 17,380 17,798 18,100
FANNIE MAE 2037 5.45% 16,061 16,657 16,693
FANNIE MAE 2037 5.77% 19,617 20,708 20,822
FANNIE MAE 2019 4.00% 23,311 23,662 23,846
GNMA II 2023 4.38% 247 251 254
GNMA II 2017 4.38% 105 104 108
GNMA II 2017 3.63% 60 59 61
GNMA II 2017 3.63% 5 5 5
GNMA II 2017 4.13% 208 206 213
GNMA II 2017 4.13% 22 22 23
GNMA II 2017 4.13% 43 42 44
GNMA II 2018 4.38% 85 83 87
GNMA II 2018 4.38% 8 8 8
GNMA II 2018 4.38% 107 104 110
GNMA II 2018 3.63% 41 40 42
GNMA II 2018 4.13% 15 15 16
GNMA II 2018 4.13% 66 65 68
GNMA II 2025 4.38% 224 225 230
GNMA_04-19 2034 4.50% 3,684 3,687 3,795
--------- --------- ---------
TOTAL - GOVERNMENT AGENCY MTG-BACKED 708,967 720,359 737,035
--------- --------- ---------
</TABLE>
F-29
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
NON-GOVERNMENT AGENCY MTG-BACKED
ARMT_2004-2 2035 3.25% 2,131 2,162 1,509
BCAP_09-RR1 2037 5.75% 9,090 8,985 9,181
BCAP_09-RR1 2034 3.17% 10,342 9,614 9,644(d)
BCAP_09-RR1 2035 3.46% 35,932 33,402 33,466(d)
BCAP_09-RR1 2035 3.79% 20,034 18,623 18,643(d)
BCAP_09-RR1 2037 6.00% 30,554 30,291 30,554(d)
BCAP LLC TRUST BCAP_09-RR8 2037 5.50% 22,717 22,398 21,287(d)
BCAP LLC TRUST BCAP_09-RR10 2035 5.26% 25,437 25,437 24,735(d)
BAFC_05-G 2035 5.24% 11,849 11,142 9,716(d)
BANC OF AMERICA FUNDING CORP B 2035 5.29% 5,456 5,488 3,530
BAA_2003-1 2033 5.00% 1,942 1,950 1,804
BOAMS_04-B 2034 4.56% 5,752 5,734 2,540
BOAMS_04-5 2019 5.00% 4,369 4,456 4,391
BOAMS_03-I 2033 3.72% 7,313 7,289 6,721
BOAMS_2004-E 2034 4.16% 15,000 14,921 12,659
BOAMS_2004-E 2034 4.13% 4,282 4,113 1,812
BOAMS_04G 2034 3.97% 6,159 6,053 2,594
BOAMS_2004-H 2034 3.75% 3,374 3,337 1,028
BOAMS_06-B 2046 6.03% 4,534 4,145 3,257
BALTA_05-2 2035 4.62% 5,871 5,858 3,981
BALTA_05-2 2035 4.08% 4,205 4,227 1,000
BSMF_06-AR5 2046 0.44% 13,536 6,016 3,763
BVMBS_05-1 2035 4.44% 8,393 8,368 6,520(e)
CSMC_09-9R 2037 5.50% 11,336 11,110 11,336
CWA_2004-33 2034 3.57% 1,116 1,127 794(d)
CWALT_05-27 2035 2.15% 5,741 5,789 2,771
CWALT_05-24 2035 1.94% 4,307 4,344 2,513
CWALT_06-OA19 2047 0.48% 17,978 6,184 4,718
CWHL_05-HYB7 2035 5.63% 14,017 13,500 9,164(e)
CWHL_04-12 2034 3.97% 5,167 3,525 1,404(e)
CHASE_03-S7 2018 0.63% 7,383 6,467 6,559(e)
CFLX_07-M1 2037 0.38% 22,066 20,315 13,996
CMLTI_05-3 2035 4.64% 5,390 5,364 4,269(e)
CMLTI_09-3 2035 5.25% 13,826 13,628 13,687
CMLTI_09-3 2034 4.67% 3,034 2,951 2,913(d)
CMLTI_09-3 2033 2.82% 12,204 11,741 11,808(d)
CMLTI_09-9 2034 4.91% 26,935 27,070 25,599(d)
CMLTI_09-9 2035 5.41% 9,399 9,445 8,833(d)
DBALT_06-AR6 2037 0.40% 24,300 17,287 13,943(d)
DBALT_07-AR1 2047 0.39% 22,051 19,717 9,678(e)
DBALT_07-OA1 2047 0.38% 6,478 6,478 3,224(e)
DEUTSCHE MORTGAGE SECURITIES I 2037 6.00% 8,716 8,629 8,344
GSR_05-AR5 2035 5.16% 10,702 10,701 8,293(d)
GSR MORTGAGE LOAN TRUST GSR_05 2035 4.55% 7,584 7,150 6,278
FHAT_2004-A4 2034 2.87% 2,564 2,604 1,622
FHAMS_04-AA7 2035 3.27% 1,528 1,541 1,025
FHAMS_05-AA2 2035 3.05% 2,832 2,879 1,811
FHAMS_05-AA3 2035 5.33% 7,188 7,248 4,607
GMHE_2004-AR2 2034 4.36% 2,820 2,828 2,682
GMHE_2004-AR2 2034 5.22% 5,636 5,646 5,284
GSR_05-AR3 2035 5.02% 7,281 7,310 5,636
GSR_04-10F 2019 4.50% 1,327 1,327 1,332
GSR_05-AR1 2035 3.38% 7,939 7,976 6,121
GS MORTGAGE SECURITIES CORPORA 2035 3.27% 8,460 7,505 7,706
GS MORTGAGE SECURITIES CORPORA 2035 3.75% 4,881 4,330 4,437(d)
GPMF_05-AR5 2045 2.63% 8,542 8,306 4,974(d)
HARBORVIEW MORTGAGE LOAN TRUST 2034 4.77% 5,550 5,595 5,125(e)
HVML_2004-4 2034 0.99% 232 230 148
HVMLT_2004-6 2034 4.66% 2,768 2,748 1,966
HVMLT_04-7 2034 2.90% 4,277 4,244 3,302
HVMLT_2004-10 2035 3.28% 2,174 2,196 1,756
HVMLT_05-8 2035 2.13% 4,123 4,159 2,429
HVMLT_05-15 2045 2.63% 10,700 10,141 6,213
HVMLT_06-14 2047 0.43% 12,464 6,077 4,053(e)
INDX_05-AR1 2035 4.40% 147 148 136(e)
INDYMAC INDX MORTGAGE LOAN TRU 2035 5.01% 6,618 6,650 4,300
JEFFERIES & CO JMAC_09-R12 2035 4.38% 22,952 22,093 22,264
JEFFERIES & CO JMAC_09-R12 2035 3.49% 9,489 9,134 9,270(d)
JMAC_09-R3 2035 5.29% 16,463 14,281 15,093(d)
</TABLE>
F-30
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
JMAC_09-R11 2035 5.27% 19,082 18,891 17,995(d)
LVII_09-1 2037 5.95% 21,658 21,496 21,495(d)
LUMINENT MORTGAGE TRUST LUM_06 2046 0.47% 5,182 2,786 1,589(d)
LUMINENT MORTGAGE TRUST LUM_07 2037 0.42% 7,981 4,069 2,559(e)
MARM_05-1 2035 4.38% 4,623 4,685 3,212(e)
MERRILL LYNCH MOR INVEST INC M 2033 3.56% 5,517 5,504 5,048
MLCC_2004-1 2034 2.89% 1,871 1,875 1,675
MLMI_05-A1 2034 3.12% 3,986 3,996 3,462
MLMI_05-A2 2035 4.26% 7,323 7,323 6,277
MSM_2004-6AR 2034 3.99% 5,148 3,407 1,310
MSM_2004-10AR 2034 3.43% 862 870 702(e)
MSM_2004-10AR 2034 3.23% 3,296 3,341 2,747
RBSSP_09-8 2035 1.20% 20,071 17,430 17,261
RALI_07-Q 2047 0.42% 11,709 5,722 3,144(d)
RFMSI_03-QS2 2033 4.50% 1,952 1,935 1,743(e)
RALI_04-QR1 2034 5.25% 2,688 2,696 2,542
RALI_05-QA2 2035 4.73% 6,528 6,588 4,335
RALI_04-QS5 2034 4.75% 2,166 2,158 2,054
RALI_05-Q 2035 5.58% 2,596 756 620
RFMSI_05-SA2 2035 5.13% 14,349 14,376 11,370(e)
SASC_2003-24A 2033 5.58% 2,042 2,076 1,905
STRUCTURED ADJUSTABLE RATE MOR 2034 3.26% 5,816 5,921 2,320
WASHINGTON MUTUAL WAMU_05-AR4 2035 4.65% 10,000 9,961 8,145
WASHINGTON MUTUAL WAMU_04-S3 2034 5.50% 9,982 10,025 10,048
WASHINGTON MUTUAL WAMU_05-AR10 2035 4.82% 10,000 9,998 7,128
WAMU_04-AR10 2044 0.67% 2,288 2,296 1,181
WAMU_05-AR3 2035 4.61% 7,128 7,153 6,098
WFMBS_04-0 2034 4.86% 4,139 4,102 4,045
WFMBS_04-P 2034 3.06% 6,621 6,484 3,108
WFMBS_04-W 2034 2.99% 20,000 20,052 18,061
WFMBS_03-16 2018 4.75% 9,917 9,418 9,777
WFMBS_03-14 2018 4.75% 7,263 6,990 7,161
WFMBS_04-CC 2035 4.96% 4,198 4,213 3,917
WFMBS_05-AR2 2035 4.32% 2,450 2,458 2,174
WFMBS_05-AR2 2035 4.91% 7,715 7,656 7,016
WFMBS_04-DD 2035 3.20% 5,761 5,762 4,356
WFMBS_05-AR12 2035 3.42% 10,000 9,320 7,968
ACCR_05-4 2035 0.44% 4,948 4,591 4,553
AMXCA_06-2 2014 5.35% 10,000 10,312 10,579
AMCAR_06-RM 2011 5.42% 2,953 2,928 2,994
ABSHE_05-HE2 2035 0.68% 6,758 5,440 6,075
CBASS_05-RP2 2035 6.09% 2,021 1,840 1,824
CLI FUNDING LLC CLIF_06-1 2021 0.41% 6,051 3,466 4,331(d)
CWL_05-7 2035 0.64% 7,249 6,919 7,072(d)
CWHEL_04-K 2034 0.53% 763 764 348
CWL_05-4 2035 0.69% 19,000 16,378 16,737
CARAT_07-1SN 2011 0.33% 9,143 9,128 9,137
CAPITAL AUTO RECEIVABLES ASSET 2011 1.26% 15,000 14,843 15,030
CARAT_07-4A 2014 5.30% 10,640 10,650 11,213(d)
COMET_06-A5 2016 0.29% 30,000 26,107 29,299
AESOP_05-4 2010 4.40% 18,000 17,999 18,002
CDTIM_05-1A 2017 4.67% 1,303 1,303 1,139(d)
COLLE_02-2 2042 1.75% 10,000 7,236 7,800(d)
CROWN CASTLE TOWERS LLC CCI_05 2035 0.61% 15,000 14,894 14,731(d)
DB MASTER FINANCE DBMF_06-1 2031 5.78% 15,000 14,328 14,462(d)
DCMT_05-4 2015 0.32% 15,000 12,867 14,580(d)
DCENT_07-A2 2015 0.59% 16,010 13,970 15,702
FMIC_04-3 2034 2.08% 7,994 6,889 6,769
FORDO_09-B 2014 4.50% 10,000 9,999 10,503
FREMONT HOME LOAN TRUST FHLT_0 2035 0.71% 7,164 6,380 6,465
GOAL CAPITAL FUNDING TRUST GOA 2021 0.27% 3,560 3,450 3,537
HERTZ VEHICLE FINANCING LLC HE 2011 0.48% 10,000 9,703 9,861
JPMAC_06-HE2 2036 0.33% 6,475 6,244 6,047(d)
NEW YORK CITY TAX LIEN NYCTL_0 2018 4.78% 276 276 276
OOMLT_07-HL1 2038 0.35% 6,978 6,313 6,240(d)
POPLR_05-3 2035 4.44% 4,408 4,401 3,988
RASC_05-KS12 2036 0.48% 7,010 6,303 6,290
RAMC_05-3 2035 4.81% 5,204 5,195 4,650
RFMSI_04-KS9 2034 4.62% 9,112 8,836 6,124
RAMP_06-EFC1 2036 0.43% 2,803 2,557 2,450(e)
</TABLE>
F-31
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
RESTRUCTURED ASSET SECURITIES 2030 4.00% 3,103 3,092 3,213
SLMA_06-3 2019 0.36% 15,000 14,260 14,748(d)
SLMA_03-A 2020 0.69% 10,522 8,355 8,756
SLMA_05-A 2020 0.39% 14,033 10,083 12,751
SLMA_05-B 2023 0.43% 20,000 16,544 16,591
SBAP_05-10D 2015 4.51% 2,654 2,654 2,760
SVHE_06-EQ1 2036 0.34% 4,961 4,883 4,600
VWALT_09-A 2012 3.41% 10,000 10,000 10,253
LIFT - LEASE INVESTMENT FLIGHT 2016 0.66% 1,513 1,513 1,097
AMCAR_06-BG 2013 5.21% 14,352 14,210 14,749
AMCAR_07-DF 2012 5.49% 5,957 5,953 6,020
CMLTI_09-6 2037 0.31% 7,222 6,987 6,680
CMLTI_09-7 2037 0.33% 12,737 11,534 11,591(d)
UPFCA_07-A 2013 5.53% 6,225 6,016 6,393(d)
CENTEX HOME EQUITY CHECK_03-A 2031 3.75% 1,707 1,692 1,317
EQUITY ONE EQABS_2004-3 2034 5.10% 8,046 8,150 7,514
CITIBANK CREDIT CARD ISSUANCE 2013 5.45% 15,000 15,097 15,796
US SMALL BUSINESS ADMINISTRATI 2022 4.75% 2,359 2,395 2,451
US SMALL BUSINESS ADMINISTRATI 2013 3.90% 1,157 1,164 1,188
US SMALL BUSINESS ADMINISTRATI 2014 3.87% 2,911 2,927 2,989
CDCSC_02-FX1 2019 5.25% 1,123 1,122 1,126
COMM_04-LNB3 2037 4.71% 2,208 2,217 2,208
FMGT_03-T5 2013 4.06% 3,398 3,398 3,494
GFCM_03-1 2035 5.25% 5,438 5,174 5,508
GECCMC_04-C2 2040 4.12% 5,758 5,742 5,480(d)
GNMA_04-10 2031 4.04% 7,668 7,642 7,906
GNMA_02-81 2025 3.82% 7,299 7,273 7,493
BACM_03-1 2036 3.88% 3,635 3,625 3,676
BACM_05-4 2045 4.76% 20,559 20,109 20,601
BACM_2004-5 2041 4.18% 241 241 241
BACM_2004-5 2041 4.56% 14,866 14,835 14,961
BSCMS_2004-PWR5 2042 4.25% 3,795 3,793 3,759
CSFBMSC_04-C2 2036 3.82% 16,305 16,347 16,097
FANNIE MAE 2019 6.08% 5,985 6,057 6,517
GMACCMSI_2004-C3 2041 4.21% 2,574 2,566 2,554
GSMS_2004-GG2 2038 4.60% 7,558 7,588 7,552
GSMS_05-GG4 2039 4.68% 4,200 4,078 4,218
GSMS_07-EOP 2020 0.32% 4,690 4,530 4,461
GNMA_05-02 2019 4.12% 4,993 4,993 5,048(d)
GNMA_05-10 2021 4.03% 5,305 5,305 5,408
GCCF_03-C2 2036 4.02% 1,371 1,372 1,380
JPMCC_02-CIB5 2037 4.37% 1,781 1,785 1,813
JPMCC_06-LDP6 2043 5.16% 3,554 3,547 3,600
JPMCCMSC_05-LDP4 2042 4.79% 10,288 10,288 10,308
LB-UBS COMMERCIAL MORTGAGE TRU 2039 5.23% 6,791 6,707 6,897
LBUBS_05-C1 2030 4.31% 11,423 11,375 11,435
LBUBSCMT_04-C4 2029 4.57% 4,208 4,208 4,213
MLMT_05-CIP1 2038 4.96% 10,690 10,397 10,722
MSC 2004-IQ8 A3 2040 4.50% 2,407 2,405 2,344
MSCI_04-HQ4 2040 4.22% 4,287 4,290 4,283
WBCMT_05-C19 2043 6.85% 4,567 4,616 4,738
BSCMS_05-PWR7 2041 4.95% 5,185 5,140 5,188
BSCMS_03-TOP10 2040 4.00% 2,793 2,795 2,818
BSCMS_07-PW16 2040 5.59% 16,347 15,455 16,883
CGCMT_05-EMG 2051 4.52% 10,000 9,855 10,065
GCCFC_07-GG9 2039 5.23% 3,909 3,956 3,971(d)
GCCFC_07-GG11 2049 5.36% 27,325 26,358 27,999
CSFBMSC_02-CKS4 2036 4.49% 7,823 7,786 7,959
CSFBMSC_03-C3 2038 3.94% 6,190 6,046 6,092
DLJCMC_00-CKP1 2033 7.18% 23,750 23,903 24,193
FUNBCMT_01-C4 2033 6.22% 6,190 6,226 6,481
GMACC_05-C1 2043 4.47% 6,147 6,123 6,152
GMACCMSC_00-C3 2035 6.96% 8,404 8,476 8,647
GMACC_02-C3 2039 4.15% 6,818 6,707 6,920
GMACC_03-C2 2040 5.48% 7,000 7,028 7,240
GECMC_05-C3 2045 5.05% 2,382 2,393 2,392
GNMA_09-63 2038 3.40% 24,810 24,609 24,770
GNMA_2004-XX 2020 2.91% 5,430 5,398 5,469
GNMA_2004-45 2021 4.02% 5,610 5,592 5,672
GNMA_2004-23 2027 3.63% 8,612 8,605 8,792
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
GNMA_2004-60 2018 4.10% 124 124 124
GNMA_04-77 2020 4.59% 1,843 1,843 1,856
JPMCMFC_03-LN1 2037 4.13% 5,548 5,363 5,561
JPMCC_05-LDP1 2046 4.85% 8,926 9,012 9,072
LBUBS_05-C2 2030 4.82% 18,865 18,641 18,892
LBUBSCMT_05-C5 2030 4.74% 2,293 2,292 2,296
LB-UBS COMM MORT TRUST LBUBSCM 2026 4.07% 2,278 2,280 2,323
LBUBSCMT_2004-C8 2029 4.20% 9,584 9,579 9,581
LB-UBS COMM MORT TRUST LBUBSCM 2027 4.06% 5,581 5,580 5,613
LB-UBS COMM MORT TRUST LBUBSCM 2027 4.21% 1,523 1,522 1,511
LBUBS_05-C7 2030 5.10% 19,004 18,218 19,111
JPMC_00-C10 2032 7.37% 4,628 4,625 4,627
MORGAN STANLEY CAPITAL I MSDWC 2040 3.27% 973 973 975
MSDWCI_04-T13 2045 3.94% 5,326 5,307 5,322
MSDWCI_02-TOP7 2039 5.38% 361 361 366
MSC_07-HQ13 2044 5.36% 31,759 31,204 32,552
PCMT_03-PWR1 2036 3.67% 2,755 2,722 2,778
JPMCC_01-CIB2 2035 6.43% 23,390 23,282 24,361
BACM_02-2 2043 5.12% 10,835 10,629 11,216
JPMCCMSC_03-CIBC6 2037 4.39% 4,523 4,498 4,581
PSSF_00-C1 2032 7.73% 6,096 6,091 6,093
BALL_01-FM 2016 6.12% 977 977 1,000
WBCMT_05-C17 2042 5.04% 3,580 3,514 3,650(d)
--------- --------- ---------
TOTAL - NON-GOVERNMENT AGENCY MTG-BACKED 1,930,609 1,816,247 1,704,769
--------- --------- ---------
CORPORATE DEBT SECURITIES
CORPORATE - FINANCE
BANK OF AMERICA CORP 2010 7.80% 5,000 5,020 5,036
CROWN AMERICAS INC 2013 7.63% 487 487 503
CROWN AMERICAS INC 2013 7.63% 10 10 10
CROWN AMERICAS INC 2015 7.75% 330 335 342
CROWN AMERICAS INC 2015 7.75% 495 503 512
CROWN AMERICAS INC 2015 7.75% 320 326 331
HERTZ CORPORATION - THE 2014 8.88% 1,115 1,115 1,140
HERTZ CORPORATION - THE 2014 8.88% 325 327 332
HERTZ CORPORATION - THE 2014 8.88% 205 208 210
ING SECURITY LIFE INSTITUTIONA 2010 4.25% 15,000 15,000 14,986
ING SECURITY LIFE INSTITUTIONA 2010 4.25% 5,000 5,000 4,995(d)
ING SECURITY LIFE INSTITUTIONA 2010 4.25% 3,750 3,750 3,747(d)
LEHMAN BROTHERS HOLDINGS INC 2010 0.00% 2,500 319 488(d)
LEHMAN BROTHERS HOLDINGS INC 2010 0.00% 6,000 765 1,170(e)
LEHMAN BROTHERS HOLDINGS INC 2010 0.00% 5,000 625 975(e)
MERRILL LYNCH & CO INC 2010 4.50% 2,000 2,001 2,056(e)
METROPOLITAN LIFE GLOBAL FUNDI 2010 4.50% 20,000 19,996 20,179
PRICOA GLOBAL FUNDING I 2010 4.20% 2,480 2,480 2,481(d)
SUNGARD DATA 2014 4.88% 370 345 345(d)
SUNTRUST BANK 2011 6.38% 3,500 3,595 3,638
US BANK NA 2011 6.38% 1,455 1,503 1,564
WELLS FARGO BANK NA 2011 6.45% 4,000 4,082 4,224
WELLS FARGO BANK NA 2011 6.45% 10,000 10,238 10,560
WELLS FARGO BANK NA 2011 6.45% 2,500 2,557 2,640
WELLS FARGO BANK NA 2011 6.45% 1,750 1,789 1,848
--------- --------- ---------
TOTAL - CORPORATE - FINANCE 93,592 82,376 84,312
--------- --------- ---------
CORPORATE - INDUSTRIAL
AMERISOURCEBERGEN CORP 2015 5.88% 400 399 436
AMERISOURCEBERGEN CORP 2015 5.88% 555 553 605
BALL CORP 2012 6.88% 500 503 507
BALL CORP 2012 6.88% 1,500 1,508 1,521
BOISE CASCADE LLC 2014 7.13% 299 306 269
BOYD GAMING CORP 2014 6.75% 250 251 225
BOYD GAMING CORP 2014 6.75% 250 245 225
BOYD GAMING CORP 2014 6.75% 250 254 225
BOYD GAMING CORP 2014 6.75% 250 250 225
BRISTOW GROUP INC 2013 6.13% 500 490 494
BURLINGTON NORTHERN SANTA FE C 2012 4.26% 3,787 3,787 3,835
BURLINGTON NORTHERN SANTA FE C 2012 4.26% 2,241 2,241 2,287(d)
BURLINGTON NORTHERN SANTA FE C 2010 7.13% 5,000 5,124 5,307(d)
BURLINGTON NORTHERN SANTA FE C 2010 7.13% 10,000 10,167 10,614
BURLINGTON NORTHERN SANTA FE C 2010 7.13% 3,113 3,158 3,304
</TABLE>
F-33
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
BURLINGTON RESOURCES - CANADA 2011 6.50% 9,100 9,756 9,960
CALIFORNIA STEEL INDUSTRIES 2014 6.13% 500 499 469
CALIFORNIA STEEL INDUSTRIES 2014 6.13% 500 499 469
CALIFORNIA STEEL INDUSTRIES 2014 6.13% 500 498 469
CHURCH & DWIGHT CO INC 2012 6.00% 55 55 56
CHURCH & DWIGHT CO INC 2012 6.00% 1,000 1,002 1,018
CHURCH & DWIGHT CO INC 2012 6.00% 200 200 204
CHURCH & DWIGHT CO INC 2012 6.00% 245 245 249
CHURCH & DWIGHT CO INC 2012 6.00% 250 248 254
CLOROX CO 2010 4.20% 15,000 15,000 15,014
CLOROX CO 2010 4.20% 5,065 5,065 5,070
CLOROX CO 2010 4.20% 2,530 2,530 2,532
CLOROX CO 2010 4.20% 5,065 5,065 5,070
CLOROX CO 2010 4.20% 1,000 1,000 1,001
CLOROX CO 2010 4.20% 2,825 2,824 2,828
CLOROX CO 2010 4.20% 4,000 3,999 4,004
COMCAST CORP 2011 5.50% 2,500 2,530 2,612
COMCAST CORP 2011 5.50% 5,000 5,059 5,223
COMCAST CORP 2011 5.50% 10,000 10,092 10,446
COMCAST CORP 2010 5.45% 10,000 9,915 10,335
COMCAST HOLDINGS CORP 2012 10.63% 2,250 2,648 2,655
CONAGRA FOODS INC 2010 7.88% 1,158 1,170 1,212
CSC HOLDINGS INC 2012 6.75% 64 65 66
CSX CORP 2011 6.75% 10,000 10,056 10,621
DAVITA INC 2013 6.63% 1,000 999 1,003
DEL MONTE FOODS CORP 2015 6.75% 1,500 1,505 1,530
DENBURY RESOURCES INC 2013 7.50% 500 504 503
DENBURY RESOURCES INC 2013 7.50% 165 166 166
DR HORTON INC 2012 5.38% 445 444 445
DR HORTON INC 2012 5.38% 440 440 440
DR HORTON INC 2012 5.38% 885 885 885
ECHOSTAR DBS CORP 2011 6.38% 1,000 1,000 1,033
ENCORE ACQUISITION CO 2014 6.25% 500 487 500
ENCORE ACQUISITION CO 2014 6.25% 500 486 500
ENCORE ACQUISITION CO 2015 6.00% 160 154 160
FLEXTRONICS INTERNATIONAL LTD 2013 6.50% 500 501 501
FLEXTRONICS INTERNATIONAL LTD 2013 6.50% 300 301 301
FLEXTRONICS INTERNATIONAL LTD 2013 6.50% 250 251 251
GARDNER DENVER INC 2013 8.00% 250 250 243
GIBRALTAR INDUSTRIES 2015 8.00% 125 125 121
GIBRALTAR INDUSTRIES 2015 8.00% 125 125 121
HOSPIRA INC 2012 5.55% 1,000 1,050 1,066
HOSPIRA INC 2012 5.55% 1,300 1,366 1,386
HOST HOTELS & RESORTS LP 2013 7.13% 1,000 1,000 1,016
HOST HOTELS & RESORTS LP 2013 7.13% 500 511 508
HOST HOTELS & RESORTS LP 2013 7.13% 500 509 508
KB HOME 2014 5.75% 750 749 705
KB HOME 2014 5.75% 500 498 470
KB HOME 2014 5.75% 410 408 385
KB HOME 2015 5.88% 750 742 694
KB HOME 2015 5.88% 665 666 615
KB HOME 2015 5.88% 620 621 574
KRAFT FOODS INC 2011 5.63% 9,250 9,375 9,843
KRAFT FOODS INC 2011 5.63% 13,222 13,598 14,069
KRAFT FOODS INC 2010 0.77% 7,650 7,477 7,649
L-3 COMMUNICATIONS CORP 2013 6.13% 1,330 1,327 1,343
L-3 COMMUNICATIONS CORP 2013 6.13% 170 169 172
L-3 COMMUNICATIONS CORP 2013 6.13% 600 599 606
L-3 COMMUNICATIONS CORP 2013 6.13% 400 400 404
L-3 COMMUNICATIONS CORP 2013 6.13% 250 253 253
L-3 COMMUNICATIONS CORP 2015 5.88% 1,000 1,000 999
LIN TELEVISION CORP 2013 6.50% 125 124 121
LIN TELEVISION CORP 2013 6.50% 500 500 483
MARATHON OIL CANADA CORP 2012 8.38% 2,000 2,209 2,239
MARATHON OIL CANADA CORP 2012 8.38% 2,180 2,439 2,440
MERITAGE HOMES CORP 2015 6.25% 250 251 230
MERITAGE HOMES CORP 2015 6.25% 325 304 299
MERITAGE HOMES CORP 2015 6.25% 270 256 248
MIRANT NORTH AMERICA LLC 2013 7.38% 490 492 484
MIRANT NORTH AMERICA LLC 2013 7.38% 485 488 480
</TABLE>
F-34
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 5,000 5,017 5,151
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 10,000 10,038 10,302
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 12,000 11,915 12,363
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 1,470 1,475 1,514
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 310 311 319
MOLSON COORS CAPITAL FINANCE U 2010 4.85% 1,840 1,864 1,896
MOOG INC 2015 6.25% 500 502 473
MOOG INC 2015 6.25% 450 452 426
MOOG INC 2015 6.25% 200 201 189
MOOG INC 2015 6.25% 100 100 95
MOOG INC 2015 6.25% 250 251 237
NEWFIELD EXPLORATION CO 2011 7.63% 1,000 1,000 1,033
NEWFIELD EXPLORATION CO 2011 7.63% 1,500 1,517 1,549
NEWFIELD EXPLORATION CO 2014 6.63% 200 204 202
NEWS AMERICA INC 2010 4.75% 2,000 2,002 2,005
NEWS AMERICA INC 2010 4.75% 3,000 3,003 3,007
NEWS AMERICA INC 2010 4.75% 1,558 1,559 1,562
NEWS AMERICA INC 2010 4.75% 8,715 8,720 8,736
NEWS AMERICA INC 2038 6.75% 8,000 8,139 8,299
NEWS AMERICA INC 2038 6.75% 265 269 275
NORFOLK SOUTHERN CORP 2010 8.63% 7,000 7,106 7,209
NORTHROP GRUMMAN CORP 2011 7.13% 2,500 2,560 2,646
NORTHROP GRUMMAN CORP 2011 7.13% 2,500 2,560 2,646
NOVA CHEMICALS CORPORATION 2012 6.50% 500 504 503
NOVA CHEMICALS CORPORATION 2012 6.50% 800 814 804
NOVA CHEMICALS CORPORATION 2012 6.50% 500 509 503
OMNICARE INC 2013 6.13% 1,000 1,007 970
OMNICARE INC 2013 6.13% 300 300 291
OMNICARE INC 2013 6.13% 450 450 437
OMNICARE INC 2015 6.88% 245 247 238
OMNICARE INC 2015 6.88% 330 333 321
PACIFIC ENERGY PARTNERS L.P. 2015 6.25% 250 251 257
PEABODY ENERGY CORP 2013 6.88% 1,000 1,004 1,011
PEABODY ENERGY CORP 2013 6.88% 1,500 1,515 1,517
PEABODY ENERGY CORP 2013 6.88% 300 303 303
PEABODY ENERGY CORP 2016 5.88% 500 502 488
PEABODY ENERGY CORP 2016 5.88% 500 501 488
PHILLIPS PETROLEUM COMPANY 2011 9.38% 10,000 10,521 10,821
ROGERS COMMUNICATIONS INC 2013 6.25% 920 927 1,008
ROGERS COMMUNICATIONS INC 2013 6.25% 380 382 416
ROGERS COMMUNICATIONS INC 2013 6.25% 200 201 219
SABMILLER PLC 2011 6.20% 5,100 5,151 5,397
SILGAN HOLDINGS INC 2013 6.75% 500 500 505(d)
SILGAN HOLDINGS INC 2013 6.75% 500 500 505
SPEEDWAY MOTORSPORTS INC 2013 6.75% 1,000 1,003 995
STATION CASINOS INC 2012 0.00% 1,000 200 151
STATION CASINOS INC 2012 0.00% 500 100 76(e)
STATION CASINOS INC 2012 0.00% 160 32 24(e)
TIME WARNER INC 2012 6.88% 9,410 10,185 10,302(e)
TIME WARNER INC 2012 6.88% 4,731 5,122 5,179
TRANSDIGM INC 2014 7.75% 720 720 729
TTX COMPANY 2010 4.50% 2,000 2,001 2,025
UNION PACIFIC CORP 2010 3.63% 3,000 2,999 3,036(d)
UNION PACIFIC CORP 2010 3.63% 5,740 5,726 5,809
UNION PACIFIC CORP 2010 3.63% 6,750 6,736 6,831
UNION PACIFIC CORP 2010 3.63% 666 662 674
UNION PACIFIC RAILROAD COMPANY 2012 3.86% 5,855 5,855 5,982
UNITED RENTALS - NORTH AMERICA 2012 6.50% 415 415 414(d)
UNITED RENTALS - NORTH AMERICA 2012 6.50% 250 249 249
UNITED RENTALS - NORTH AMERICA 2012 6.50% 250 250 249
VAIL RESORTS INC 2014 6.75% 500 503 496
VAIL RESORTS INC 2014 6.75% 150 150 149
VALMONT INDUSTRIES INC 2014 6.88% 230 230 236
VALMONT INDUSTRIES INC 2014 6.88% 255 255 262
VALMONT INDUSTRIES INC 2014 6.88% 785 786 807
VALMONT INDUSTRIES INC 2014 6.88% 230 230 236
VIDEOTRON - LE GRPE LTD 2014 6.88% 1,000 1,007 1,005
WABTEC CORP 2013 6.88% 1,000 1,008 1,010
WABTEC CORP 2013 6.88% 360 362 364
WASHINGTON MUTUAL BANK FA 2011 0.00% 1,500 0 8
</TABLE>
F-35
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
WASTE MANAGEMENT INC 2010 7.38% 3,430 3,447 3,553(e)
WASTE MANAGEMENT INC 2010 7.38% 5,215 5,241 5,402
WASTE MANAGEMENT INC 2010 7.38% 20,000 20,116 20,717
WASTE MANAGEMENT INC 2010 7.38% 3,330 3,362 3,449
WASTE MANAGEMENT INC 2010 7.38% 3,000 3,025 3,108
WEATHERFORD INTERNATIONAL LTD 2013 5.15% 12,000 12,452 12,567
WEATHERFORD INTL INC 2011 6.63% 789 847 844
WELLPOINT INC 2011 5.00% 8,000 8,005 8,272
WELLPOINT INC 2012 6.80% 3,700 3,854 4,082
YUM! BRANDS INC 2011 8.88% 6,432 6,710 6,960
YUM! BRANDS INC 2011 8.88% 1,000 1,042 1,082
YUM! BRANDS INC 2011 8.88% 5,597 5,835 6,056
YUM! BRANDS INC 2011 8.88% 4,000 4,174 4,328
YUM! BRANDS INC 2011 8.88% 3,000 3,131 3,246
YUM! BRANDS INC 2011 8.88% 4,000 4,170 4,328
YUM! BRANDS INC 2011 8.88% 2,000 2,085 2,164
YUM! BRANDS INC 2011 8.88% 5,625 5,864 6,087
YUM! BRANDS INC 2011 8.88% 3,500 3,780 3,787
--------- --------- ---------
TOTAL - CORPORATE - INDUSTRIAL 414,047 418,373 427,374
--------- --------- ---------
CORPORATE - UTILITY
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 5,013 5,020 5,059
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 8,375 8,385 8,451
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 1,000 1,001 1,009
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 5,000 5,003 5,045
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 12,690 12,704 12,805
AMERICAN ELECTRIC POWER CO INC 2010 5.38% 2,230 2,229 2,250
ANADARKO FINANCE 2011 6.75% 9,874 9,930 10,434
ARIZONA PUB SERVICE 2012 6.50% 1,300 1,375 1,397
ARIZONA PUB SERVICE 2012 6.50% 1,000 1,057 1,075
ARIZONA PUB SERVICE 2012 6.50% 6,000 6,333 6,449
ARIZONA PUB SERVICE 2011 6.38% 4,225 4,209 4,523
ARIZONA PUB SERVICE 2011 6.38% 1,000 990 1,070
CENTERPOINT ENERGY RESOURCES C 2011 7.75% 5,000 5,122 5,288
CENTERPOINT ENERGY RESOURCES C 2011 7.75% 1,000 1,026 1,058
CENTERPOINT ENERGY RESOURCES C 2011 7.75% 1,030 1,055 1,089
CENTERPOINT ENERGY RESOURCES C 2011 7.75% 3,122 3,197 3,302
CENTERPOINT ENERGY RESOURCES C 2011 7.75% 1,304 1,360 1,379
CHESAPEAKE ENERGY CORP 2014 7.50% 1,000 1,009 1,020
CHESAPEAKE ENERGY CORP 2013 7.50% 1,000 1,013 1,018
CHESAPEAKE ENERGY CORP 2013 7.50% 500 510 509
CHESAPEAKE ENERGY CORP 2015 6.38% 300 302 294
CHESAPEAKE ENERGY CORP 2017 6.50% 210 208 206
CONSUMERS ENERGY COMPANY 2010 4.00% 7,500 7,496 7,581
CONSUMERS ENERGY COMPANY 2010 4.00% 18,554 18,554 18,755
DETROIT EDISON 2010 6.13% 5,000 5,041 5,196
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 750 763 775
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 3,500 3,562 3,617
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 4,000 4,076 4,134
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 7,500 7,648 7,751
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 8,000 8,127 8,267
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 10,000 10,157 10,334
DEUTSCHE TELEKOM INTERNATIONAL 2010 8.50% 900 919 930
DIRECTV HOLDINGS LLC 2015 6.38% 1,000 994 1,039
DIRECTV HOLDINGS LLC 2015 6.38% 500 498 519
DIRECTV HOLDINGS LLC 2015 6.38% 485 479 504
DOMINION RESOURCES INC/VA 2010 1.30% 5,500 5,372 5,524
DOMINION RESOURCES INC/VA 2010 1.30% 4,000 3,910 4,017
DTE ENERGY CO 2011 7.05% 4,000 4,048 4,238
DTE ENERGY CO 2011 7.05% 2,000 2,016 2,119
DTE ENERGY CO 2011 7.05% 3,000 3,024 3,178
DTE ENERGY CO 2011 7.05% 5,000 5,050 5,297
DUKE ENERGY CAROLINAS LLC 2010 7.38% 8,384 8,431 8,471
DUKE ENERGY CAROLINAS LLC 2010 7.38% 5,000 5,024 5,052
DUKE ENERGY CAROLINAS LLC 2010 7.38% 1,915 1,925 1,935
EXELON CORP 2010 4.45% 10,000 9,985 10,165
FIRSTENERGY CORP 2011 6.45% 889 892 963
KERR-MCGEE CORP 2011 6.88% 5,000 4,999 5,382
KERR-MCGEE CORP 2011 6.88% 3,640 3,684 3,918
NEVADA POWER COMPANY 2012 6.50% 2,522 2,735 2,704
</TABLE>
F-36
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
NISOURCE FINANCE CORPORATION 2010 7.88% 5,000 5,137 5,242
NISOURCE FINANCE CORPORATION 2010 7.88% 2,500 2,568 2,621
NISOURCE FINANCE CORPORATION 2010 7.88% 6,125 6,188 6,421
OHIO POWER CO 2010 0.46% 3,000 2,960 3,000
PACIFIC GAS AND ELECTRIC COMPA 2010 1.21% 25,000 25,000 25,100
PROGRESS ENERGY INC 2011 7.10% 5,000 5,081 5,292
PROGRESS ENERGY INC 2011 7.10% 15,721 16,007 16,638
RRI ENERGY INC 2014 6.75% 267 269 272
RRI ENERGY INC 2014 6.75% 825 831 842
SPRINT CAPITAL CORP 2011 7.63% 10,000 10,270 10,237
SBC COMMUNICATIONS INC 2011 6.25% 2,000 2,036 2,118
SBC COMMUNICATIONS INC 2011 6.25% 5,000 5,088 5,295
TELECOM ITALIA CAPITAL 2010 4.00% 15,000 14,998 15,011
TELEFONICA EUROPE 2010 7.75% 5,000 5,097 5,231
TELEFONICA EUROPE 2010 7.75% 5,000 5,103 5,231
TELEFONICA EUROPE 2010 7.75% 10,000 10,209 10,461
TELEFONICA EUROPE 2010 7.75% 10,000 10,210 10,461
TELEFONICA EUROPE 2010 7.75% 2,000 2,005 2,091
TELUS CORP 2011 8.00% 5,000 5,210 5,413
TELUS CORP 2011 8.00% 2,900 3,022 3,140
TELUS CORP 2011 8.00% 2,000 2,084 2,165
TELUS CORP 2011 8.00% 10,000 10,180 10,825
TELUS CORP 2011 8.00% 5,881 5,987 6,367
TRANS CONTINENTAL GAS PIPELINE 2011 7.00% 250 255 269
TRANS CONTINENTAL GAS PIPELINE 2011 7.00% 250 255 269
TRANS CONTINENTAL GAS PIPELINE 2011 7.00% 250 252 269
TRANS CONTINENTAL GAS PIPELINE 2011 7.00% 4,000 4,021 4,302
TRANS CONTINENTAL GAS PIPELINE 2011 7.00% 500 519 538
TRANSCANADA PIPELINES LTD 2010 6.13% 12,750 12,776 12,834
US WEST COMMUNICATIONS INC 2015 7.63% 510 513 528
VERIZON COMMUNICATIONS INC 2010 7.25% 10,000 10,244 10,567
VERIZON COMMUNICATIONS INC 2010 7.25% 10,500 10,763 11,095
VERIZON NEW YORK INC 2012 6.88% 4,000 4,134 4,352
VERIZON PENNSYLVANIA 2011 5.65% 12,250 12,409 13,018
VERIZON PENNSYLVANIA 2011 5.65% 12,000 12,540 12,752
VIRGINIA ELEC & PWR CO 2012 5.10% 10,405 10,903 11,237
VODAFONE GROUP PLC 2010 7.75% 3,500 3,514 3,526
VODAFONE GROUP PLC 2010 7.75% 5,250 5,270 5,289
VODAFONE GROUP PLC 2010 7.75% 4,500 4,517 4,534
VODAFONE GROUP PLC 2010 7.75% 3,760 3,775 3,788
VODAFONE GROUP PLC 2010 7.75% 10,000 10,039 10,075
VODAFONE GROUP PLC 2010 7.75% 7,000 7,026 7,052
WISCONSIN ENERGY CORP 2011 6.50% 11,985 12,264 12,677
XCEL ENERGY INC 2010 7.00% 5,500 5,601 5,790
XCEL ENERGY INC 2010 7.00% 2,955 3,008 3,111
XTO ENERGY INC 2014 4.90% 1,000 997 1,075
XTO ENERGY INC 2010 5.00% 20,000 19,999 20,520
XTO ENERGY INC 2010 5.00% 10,000 10,011 10,260
XTO ENERGY INC 2010 5.00% 2,200 2,206 2,257
--------- --------- ---------
TOTAL - CORPORATE - UTILITY 519,246 525,798 538,553
--------- --------- ---------
TOTAL - CORPORATE DEBT SECURITIES 1,026,885 1,026,547 1,050,239
--------- --------- ---------
FIXED INCOME - TRADING 0 0 0
--------- --------- ---------
TOTAL BONDS AND NOTES 3,800,572 3,697,973 3,627,993
--------- --------- ---------
PREFERRED STOCKS
UBS PREFERRED FUNDING TRUST 6.24% 20,000 19,612 15,650
--------- --------- ---------
TOTAL - PREFERRED STOCK 20,000 19,612 15,650
--------- --------- ---------
COMMON STOCKS
Corporate - Finance
NPF XII INC - ABS 10,000 0 0
--------- --------- ---------
TOTAL - CORPORATE - FINANCE 10,000 0 0
--------- --------- ---------
AUTO MFG/VEH PARTS
MARK IV INDUSTRIES 10 34 115
TOTAL - AUTO MFG/VEH PARTS 10 34 115
--------- --------- ---------
TOTAL - COMMON STOCKS 10,010 34 115
--------- --------- ---------
</TABLE>
F-37
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS 3,830,582 3,717,618 3,643,758
--------- --------- ---------
</TABLE>
NOTES:
a) See Notes 1 and 3 to the financial statements regarding determination of
cost and fair values. All available for sale securities are carried at fair
value on the balance sheet.
b) In the absence of market quotations, securities are valued by Amerprise
Certificate Company at fair value
c) Aggregate cost of investment in securities of unaffiliated issuers for
federal income tax purposes was $4.3 billion.
d) Securities acquired in private negotiation which may require registration
under federal securities law if they were to be publicly sold. Also see
note 3b to financial statements
e) Non-income producing securities
F-38
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE II
INVESTMENTS IN AND ADVANCES TO AFFILIATES AND INCOME THEREON
DECEMBER 31, 2009, 2008 AND 2007
($ IN THOUSANDS)
<TABLE>
<CAPTION>
Balance December 31, 2009 Interest
------------------------------- Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
- --------------------------------- ------------- ---- -------- ---------
<S> <C> <C> <C> <C>
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development Corporation:
Capital Stock................................ 100 $0 $0 $0
====
Investors Syndicate Development Corporation:
Undistributed Net Income..................... $ 0 0 0 0
====
Other Affiliates (as defined in Sec. 2(a)(3) of the
Investment Company Act of 1940)................. $ 0 0 0 0
==== --- --- ---
Total affiliates................................ $0 $0 $0
=== === ===
</TABLE>
<TABLE>
<CAPTION>
Balance December 31, 2008 Interest
------------------------------- Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
- --------------------------------- ------------- ---- -------- ---------
<S> <C> <C> <C> <C>
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development Corporation:
Capital Stock................................ 100 $0 $0 $0
====
Investors Syndicate Development Corporation:
Undistributed Net Income..................... $ 0 0 0 0
====
Other Affiliates (as defined in Sec. 2(a)(3) of the
Investment Company Act of 1940)................. $ 0 0 0 0
==== --- --- ---
Total affiliates................................ $0 $0 $0
=== === ===
</TABLE>
<TABLE>
<CAPTION>
Balance December 31, 2007 Interest
------------------------------- Dividends
Principal Carrying Credited
Amount or Cost Value to Income
Name of Issuer and Title of Issue No. of Shares (a) (b) (c)
- --------------------------------- ------------- ---- -------- ---------
<S> <C> <C> <C> <C>
Wholly Owned Subsidiary (b):
Real Estate Investment Company:
Investors Syndicate Development Corporation:
Capital Stock................................ 100 $0 $0 $0
====
Other Controlled Companies:
$ 0 0 0 0
====
Other Affiliates (as defined in Sec. 2(a)(3) of the $ 0 0 0 0
Investment Company Act of 1940)................. ==== --- --- ---
$0 $0 $0
Total affiliates................................ === === ===
</TABLE>
NOTES:
(a) The aggregate cost for federal income tax purposes was nil at December 31,
2009, 2008 and 2007, subject to possible adjustment in certain
circumstances under consolidated income tax return regulations.
(b) Investments in stocks of wholly owned subsidiaries are carried at cost
adjusted for equity in undistributed net income since organization or
acquisition of the subsidiaries.
(c) There were no dividends or interest earned which were not credited to
income.
F-39
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE III
MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES
YEAR ENDED DECEMBER 31, 2009
(THOUSANDS)
<TABLE>
<CAPTION>
PART 2 - INTEREST
MORTGAGE LOANS EARNED
PART 1 - ON REAL ESTATE AT END OF PERIOD ON MORTGAGES
-------- --------------------------------------------- --------------------
AMOUNT OF AVERAGE
PRINCIPAL UNPAID GROSS
AT END OF PERIOD RATE OF
------------------- INTEREST INTEREST
SUBJECT AMOUNT DUE AND ON
TO OF ACCRUED MORTGAGES
NUMBER PRIOR CARRYING DELINQUENT MORTGAGES AT END HELD AT
PROPERTY OF LIENS AMOUNT OF INTEREST BEING OF PERIOD END OF
LOAN NO. DESCRIPTION (a) LOCATION LOANS (b) MORTGAGES (c), TOTAL (d) FORECLOSED (e) PERIOD (f)
- ------------------------- -------- -------- ----- -------------- -------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First mortgages:
Insured by Federal
Housing
Administration -
liens on:
Residential -
under $100 0 $ 0 $ 0 $0 $0 0.000%
Apartment and
business - under
$100 0 0 0 0 0 0.000%
--- -------- -------- --- --- -----
Total 0 0 0 0 0 0.000%
--- -------- -------- --- --- -----
Partially guaranteed
under Serviceman's
Readjustment Act of
1944, as amended -
liens on:
Residential -
under $100 0 0 0 0 0 0.000%
Apartment and
business -
under $100 0 0 0 0 0 0.000%
--- -------- --- --- --- -----
Total 0 0 0 0 0 0.000%
--- -------- --- --- --- -----
Other - liens on:
Residential 0 0 0 0 0 0.000%
--- -------- -------- --- --- -----
Apartment and business:
Under $100 III-4 -- -- -- -- -- 0.000%
$100 to $150 -- -- -- -- -- 0.000%
$150 to $200 -- -- -- -- -- 0.000%
$200 to $250 -- -- -- -- -- 0.000%
$250 to $300 -- -- -- -- -- 0.000%
$300 to $350 -- -- -- -- -- 0.000%
$350 to $400
121047273 Rapid City SD 1 -- 380 380 -- -- 6.850%
$400 to $450 -- -- -- -- --
121047298 Rock Hill SC 1 -- 406 406 -- -- 7.250%
121047256 Rapid City SD 1 -- 447 447 -- -- 6.750%
$450 to $500
OVER $500: III-3
121047157 Tampa FL 1 -- 1,168 1,168 -- -- 7.650%
121047195 Pharr TX 1 -- 1,439 1,439 -- -- 5.680%
121047196 Pharr TX 1 -- 3,221 3,221 -- -- 5.680%
121047197 Alamo TX 1 -- 738 738 -- -- 5.680%
121047205 Tucson AZ 1 -- 3,089 3,089 -- -- 6.330%
121047210 West Haven CT 1 -- 5,699 5,699 -- -- 5.980%
121047214 Plymouth MN 1 -- 8,699 8,699 -- -- 5.480%
121047215 Urbandale IA 1 -- 2,159 2,159 -- -- 5.550%
121047216 Urbandale IA 1 -- 1,700 1,700 -- -- 5.550%
121047224 Plano TX 1 -- 2,014 2,014 -- -- 6.000%
121047226 Austin TX 1 -- 1,995 1,995 -- -- 5.500%
121047230 Houston TX 1 -- 1,753 1,753 -- -- 5.110%
121047255 Forest Lake MN 1 -- 2,219 2,219 -- -- 6.830%
121047262 Fargo ND 1 -- 4,845 4,845 -- -- 5.820%
121047268 Sebring FL 1 -- 7,721 7,721 -- -- 6.650%
121047269 Spokane WA 1 -- 1,813 1,813 -- -- 7.150%
121047281 Shaker Heights OH 1 -- 1,751 1,751 -- -- 4.000%
121047285 Fort Myers FL 1 -- 1,924 1,924 -- -- 6.750%
121047287 Rogers MN 1 -- 2,647 2,647 -- -- 7.300%
121047289 Newport News VA 1 -- 1,182 1,182 -- -- 6.900%
121047294 Hope Mills NC 1 -- 712 712 -- -- 7.000%
121047295 Concord NC 1 -- 563 563 -- -- 7.000%
121047308 Clearwater FL 1 -- 5,201 5,201 -- -- 6.000%
121047318 Silverdale WA 1 -- 2,131 2,131 -- -- 4.410%
121047320 Kirkland WA 1 -- 2,824 2,824 -- -- 6.150%
121047329 Omaha NE 1 -- 1,015 1,015 -- -- 6.750%
121047336 Burr Ridge IL 1 -- 3,462 3,462 -- -- 5.180%
121047338 Santa Fe NM 1 -- 2,488 2,488 -- -- 5.420%
121047342 Tucson AZ 1 -- 2,760 2,760 -- -- 5.800%
121087167 Ruskin FL 1 -- 4,206 4,206 -- -- 5.650%
121087168 Riverview FL 1 -- 2,210 2,210 -- -- 5.650%
121087187 Mebane NC 1 -- 3,334 3,334 -- -- 5.690%
121087245 Southport CT 1 -- 3,343 3,343 -- -- 5.750%
121087290 Doraville GA 1 -- 2,236 2,236 -- -- 5.770%
121087313 Orchard Park NY 1 -- 3,506 3,506 -- -- 5.460%
121087325 Austin TX 1 -- 3,455 3,455 -- -- 5.850%
121087327 Marietta GA 1 -- 2,187 2,187 -- -- 6.500%
121087330 Meriden CT 1 -- 4,300 4,300 -- -- 5.390%
121087333 Broken Arrow OK 1 -- 1,422 1,422 -- -- 5.130%
121087335 Blue Ash OH 1 -- 3,176 3,176 -- -- 8.000%
121087337 Issaquah WA 1 -- 7,438 7,438 -- -- 5.330%
121087343 Durham NC 1 -- 2,075 2,075 -- -- 6.300%
121087344 Norcross GA 1 -- 1,893 1,893 -- -- 6.220%
121087345 Henderson NV 1 -- 6,834 6,834 -- -- 6.250%
--- --- -------- -------- --- --- -----
Total Other 47 -- 131,780 131,780 -- -- 5.943%
--- --- -------- -------- --- --- -----
Unallocated Reserve for
Losses (Acct # 1218300090) 1,497
--------
Total First Mortgage Loans
on Real Estate 47 $130,283 $131,780 $0 $0
=== ======== ======== === ===
</TABLE>
F-40
<PAGE>
AMERIPRISE CERTIFICATE COMPANY
MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES SCHEDULE III
YEAR ENDED DECEMBER 31, 2009
(THOUSANDS)
PART 3 - LOCATION OF MORTGAGED PROPERTIES
<TABLE>
<CAPTION>
AMOUNT OF
PRINCIPAL
UNPAID AT END OF
PERIOD
------------------
SUBJECT
CARRYING TO AMOUNT OF
STATE IN NUMBER PRIOR AMOUNT OF DELINQUENT MORTGAGES
WHICH MORTGAGED OF LIENS MORTGAGES INTEREST BEING
PROPERTY IS LOCATED LOANS (b) (c) TOTAL (d) FORECLOSED
------------------- ------ ----- --------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Arizona AZ 2 5,849 5,849 -- --
Connecticut CT 3 13,343 13,343 -- --
Florida FL 6 22,429 22,429 -- --
Georgia GA 3 6,317 6,317 -- --
Iowa IA 2 3,859 3,859 -- --
Illinois IL 1 3,462 3,462 -- --
Minnesota MN 3 13,564 13,564 -- --
North Carolina NC 4 6,684 6,684 -- --
North Dakota ND 1 4,845 4,845 -- --
New England NE 1 1,015 1,015 -- --
New Mexico NM 1 2,488 2,488 -- --
Nevada NV 1 6,834 6,834 -- --
New York NY 1 3,506 3,506 -- --
Ohio OH 2 4,927 4,927 -- --
Oklahoma OK 1 1,422 1,422 -- --
South Carolina SC 1 406 406 -- --
South Dakota SD 2 827 827 -- --
Texas TX 7 14,615 14,615 -- --
Virginia VA 1 1,182 1,182 -- --
Washington WA 4 14,206 14,206 -- --
--- -------- -------- --- ---
TOTAL 47 131,780 131,780 -- --
Unallocated Reserve for Losses 1,497
--------
(Acct #1218300090)
--- -------- -------- --- ---
TOTAL 47 $130,283 $131,780 $ 0 $ 0
=== ======== ======== === ===
</TABLE>
NOTES:
(a) The classification "residential" includes single dwellings only.
Residential multiple dwellings are included in "apartment and business".
(b) Real estate taxes and easements, which in the opinion of the Company are
not undue burden on the properties, have been excluded from the
determination of "prior liens".
(c) In this schedule III, carrying amount of mortgage loans represents unpaid
principal balances plus unamortized premiums less unamortized discounts and
reserve for loss.
(d) Interest in arrears for less than three months has been disregarded in
computing the total amount of principal subject to delinquent interest. The
amounts of mortgage loans being foreclosed are also included in amounts
subject to delinquent interest.
(e) Information as to interest due and accrued for the various classes within
the types of mortgage loans is not readily available and the obtaining
thereof would involve unreasonable effort and expense.
The Company does not accrue interest on loans which are over three months
delinquent.
(f) Information as to interest income by type and class of loan has been
omitted because it is not readily available and the obtaining thereof would
involve unreasonable effort and expense. In lieu thereof, the average gross
interest rates (exclusive of amortization of discounts and premiums) on
mortgage loans held at December 31, 2009 are shown by type and class of
loan.
The average gross interest rates on mortgage loans held at December 31,
2009, 2008 and 2007 are summarized as follows:
<TABLE>
<CAPTION>
2009 2008 2007
-------- -------- --------
<S> <C> <C> <C>
FIRST MORTGAGES:
Insured by Federal Housing Administration 0.000% 0.000% 0.000%
Partially guaranteed under Servicemen's
Readjustment Act of 1944, as amended 0.000 0.000 0.000
Other 5.943% 5.863% 6.003%
----- ----- -----
COMBINED AVERAGE 5.943% 5.863% 6.003%
===== ===== =====
</TABLE>
(g) Following is a reconciliation of the carrying amount of mortgage loans for
the years ended December 31, 2009, 2008 and 2007.
<TABLE>
<CAPTION>
2009 2008 2007
-------- -------- --------
<S> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD $149,407 $205,823 $265,526
New loans acquired:
Nonaffiliated companies -- -- 6,636
Reserve for loss reversal -- -- 1,700
-------- -------- --------
TOTAL ADDITIONS -- -- 8,336
-------- -------- --------
149,407 205,823 273,862
-------- -------- --------
DEDUCTIONS DURING PERIOD:
Collections of principal 14,304 56,416 68,039
Transfers 2,120
Reserve for loss 2,700 -- --
-------- -------- --------
TOTAL DEDUCTIONS 19,124 56,416 68,039
-------- -------- --------
BALANCE AT END OF PERIOD $130,283 $149,407 $205,823
======== ======== ========
</TABLE>
(h) The aggregate cost of mortgage loans for federal income tax purposes at
December 31, 2009 was $131,780.
(i) At December 31, 2009, an unallocated reserve for loss on first mortgage
loans of $1,497 is recorded.
F-41
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE V
QUALIFIED ASSETS ON DEPOSIT
December 31, 2009
<TABLE>
<CAPTION>
INVESTMENT
SECURITIES
--------------------
BONDS AND MORTGAGE
NOTES STOCKS LOANS OTHER
NAME OF DEPOSITARY (a) (b) (c) (d) TOTAL
- ------------------ ---------- ------- -------- ------- -----------
<S> <C> <C> <C> <C> <C>
Deposits with states or their
depositories to meet
requirements of statutes and
agreements:
Illinois - Secretary of
State of Illinois $ 51 $ 0 $ 0 $ 0 $ 51
New Jersey - Commissioner
of Banking and Insurance
of New Jersey 54 0 0 0 54
Pennsylvania - Treasurer
of the State of
Pennsylvania 162 0 0 0 162
Texas - Treasurer of the
State of Texas 118 0 0 0 118
---------- ------- -------- ------- ----------
TOTAL STATE DEPOSITS
to meet requirements
of statues
and agreements $ 385 $ 0 $ 0 $ 0 $ 385
---------- ------- -------- ------- ----------
TOTAL CENTRAL DEPOSITORY -
Ameriprise Trust Company 4,200,050 19,646 130,283 78,579 4,428,558
---------- ------- -------- ------- ----------
TOTAL DEPOSITS $4,200,435 $19,646 $130,283 $78,579 $4,428,943
---------- ------- -------- ------- ----------
</TABLE>
Notes:
(a) Represents amortized cost of bonds and notes.
(b) Represents average cost of individual issues of stocks.
(c) Represents unpaid principal balance of mortgage loans less unamortized
discounts and reserve for losses.
(d) Represents cost of purchased call options and accounts payable purchased.
F-42
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities
15, " " " 2.40 Inst/2.50 Ext. 0 0 0 0 0 0
20, " " " 2.52 Inst/2.50 Ext. 0 0 0 0 0 0
15A, " " " 2.66 Inst/3.04 Ext. 0 0 0 0 0 0
22A, " " " 3.09 9 452 426 12 0 8
I-76, " " " 3.35 76 1,950 1,793 47 26 2
Reserve Plus Flex Payment (note a) 1 6 3 0 0 0
IC-Q-Installment (note a) 0 0 0 0 0 0
IC-Q-Ins (note a) 42 416 167 0 19 0
IC-Q-Ins Emp (note a) 1 6 1 0 1 0
IC-I (note a) 71 967 671 0 47 4
IC-I-Emp (note a) 6 216 523 0 109 3
Inst 0 6,771 0 42,644 0 11,873 155
Inst-E 0 35 0 181 0 81 0
RP-Q-Installment (note a) 8 76 70 0 0 0
RP-Q-Flexible Payment (note a) 2 32 12 0 0 0
RP-Q-Ins (note a) 3 24 3 0 0 0
RP-Q-Ins Emp (note a) 0 0 0 0 0 0
RP-I (note a) 0 0 0 0 0 0
RP-I-EMP (note a) 279 33,010 0 0 0 0
Inst-R & RP I95 0 6 655 1,760 0 816 7
Inst-R-E 0 0 0 20 0 5 0
------- --------- --------- ------- --------- -------
Total 0 7,310 37,810 48,274 59 12,977 179
------- --------- --------- ------- --------- -------
Payments made in advance of certificate
year requirements and accrued
interest thereon:
15, includes ext maturities 2 0 0 0 0 0 0
20, " " " 2 0 0 0 0 0 0
15A, " " " 3 0 0 0 0 0 0
22A, " " " 3 0 0 27 0.67464 -0.02 0
I-76, " " " 3.5 0 0 110 3.70382 2.8089 0
------- --------- --------- ------- --------- -------
Total 0 0 137 4 3 0
------- --------- --------- ------- --------- -------
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Installment certificates:
Reserves to mature:
Series 15, includes extended maturities
15, " " " 0 0 0 0 0 0
20, " " " 0 0 0 0 0 0
15A, " " " 0 0 0 0 0 0
22A, " " " (15) 0 0 8 437 431
I-76, " " " (431) (342) (29) 40 1,126 1,066
Reserve Plus Flex Payment 0 0 0 1 6 3
IC-Q-Installment 0 0 0 0 0 0
IC-Q-Ins (2) (42) 0 31 302 142
IC-Q-Ins Emp 0 (1) 0 1 6 1
IC-I (87) (376) 0 33 415 259
IC-I-Emp 0 (325) 0 6 216 310
Inst (2,682) (15,723) 0 5,922 0 36,267
Inst-E (1) (120) 0 37 0 141
RP-Q-Installment 0 (41) 0 6 54 29
RP-Q-Flexible Payment 0 (1) 0 1 12 11
RP-Q-Ins 0 (0) 0 3 24 3
RP-Q-Ins Emp 0 0 0 0 0 0
RP-I 0 0 0 0 0 0
RP-I-EMP 0 0 0 0 1 0
Inst-R & RP I95 (58) (554) 0 303 30,399 1,971
Inst-R-E (9) (0) 0 5 648 16
------- ---------- -------- ------- --------- ---------
Total (3,285) (17,525) (29) 6,397 33,646 40,650
------- ---------- -------- ------- --------- ---------
Payments made in advance of certificate
year requirements and accrued
interest thereon:
15, includes ext maturities 0 0 0 0 0 -0.00074
20, " " " 0 0 0 0 0 0.00074
15A, " " " 0 0 0 0 0 0.00175
22A, " " " -0.00061 0 -7.85642 0 0 20.18966
I-76, " " " -8.78762 -1.63401 -1.69411 0 0 104.28862
------- ---------- -------- ------- --------- ---------
Total (9) (1) (10) 0 0 124
------- ---------- -------- ------- --------- ---------
</TABLE>
F-43
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Additional credits and accrued interest
thereon:
" 15, includes ext mat 2.5 0 0 0 0 0 0
" 20, " " " 2.5 0 0 (1) 0 0 0
" 15A, " " " 3 0 0 (0) 0 0 0
" 22A, " " " 3 0 0 85 2 0 2
" I-76, " " " 3.5 0 0 372 10 0 6
" Res Plus Flex Pay 0 0 0 0 0 0
" IC-Q-Installment 0 0 0 0 0 0
" IC-Q-Ins 0 0 (0) 0 0 0
" IC-Q-Ins Emp 0 0 0 0 0 0
" IC-I 0 0 1 4 0 0
" IC-I-Emp 0 0 0 3 0 0
" Inst 0 0 14 146 0 0
" Inst-E 0 0 0 0 0 0
" RP-Q-Installment 0 0 0 0 0 0
" RP-Q-Flexible Pay 0 0 (0) 0 0 0
" RP-Q-Ins 0 0 (0) 0 0 0
" RP-Q-Ins Emp 0 0 (0) 0 0 0
" RP-I 0 0 1 0 0 0
" RP-I-EMP 0 0 0 0 0 0
" Inst-R 0 0 0 6 0 0
" Inst-R-E 0 0 0 0 0 0
------- --------- --------- ------- --------- -------
Total 0 0 472 171 0 8
------- --------- --------- ------- --------- -------
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additional credits and accrued interest
thereon:
" 15, includes ext mat 0 0 0 0 0 0
" 20, " " " 0 0 0 0 0 (1)
" 15A, " " " 0 0 0 0 0 (0)
" 22A, " " " (3) 0 0 0 0 86
" I-76, " " " (97) (70) (7) 0 0 214
" Res Plus Flex Pay 0 0 (0) 0 0 0
" IC-Q-Installment 0 0 0 0 0 0
" IC-Q-Ins 0 0 (0) 0 0 (0)
" IC-Q-Ins Emp 0 0 (0) 0 0 0
" IC-I 0 0 (4) 0 0 1
" IC-I-Emp 0 0 (3) 0 0 0
" Inst 0 0 (155) 0 0 5
" Inst-E 0 0 (0) 0 0 0
" RP-Q-Installment 0 0 (0) 0 0 0
" RP-Q-Flexible Pay 0 0 (0) 0 0 (0)
" RP-Q-Ins 0 0 (0) 0 0 (0)
" RP-Q-Ins Emp 0 0 0 0 0 (0)
" RP-I 0 0 0 0 0 1
" RP-I-EMP 0 0 0 0 0 0
" Inst-R 0 0 (7) 0 0 (1)
" Inst-R-E 0 0 (0) 0 0 0
------- ---------- -------- ------- --------- ---------
Total (100) (70) (176) 0 0 305
------- ---------- -------- ------- --------- ---------
</TABLE>
F-44
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Res for accrued 3rd year 2113 -
Installment Prod only. 0 0 675 440 (594) 0
Res for accrued 6th year 2114 0 0 (0) 0 0 0
Acc int - default I-76 2003/2025 3.5 0 0 0 2 0 0
Res for add'l credits to be allowed 0 0 0 0 0 0
Installment Cert-Special Add'l 0 0 0 0 0 0
Credits I-76 (2105) 0 0 0 0 0 0
Accrued for add'l credits to 0 0 0 0 0 0
be allowed at next anni (2102) 0 0 0 7 0 0
Reserve for death & disab (2111) 0 0 0 0 0 0
Res for reconversion (2104) 0 0 0 0 0 0
0 0 0 0
Total 0 0 675 449 (594) 0
------- --------- --------- ------- --------- -------
TOTAL INSTALLMENT CERTIFICATES 7,310 37,810 49,558 683 12,386 187
------- --------- --------- ------- --------- -------
Fully paid certificates:
Single-Payment certificates:
SP 74 (C2740-10 Prod 40) 3.5 0 0 0 0 0 0
SP 75 - 50 3.5 0 0 0 0 0 0
SP 76 - 60 3.5 0 0 0 0 0 0
SP 77 - 70 3.5 0 0 0 0 0 0
SP 78 - 80 3.5 0 0 (0) 0 0 0
SP 79 - 90 3.5 0 0 0 0 0 0
SP 80 - 100 3.5 0 0 0 0 0 0
SP 81A - 110 3.5 0 0 0 0 0 0
SP 82A - 111 3.5 1 2 2 0 0 0
SP 82B - 112 3.5 0 0 0 0 0 0
SP 83A - 113 3.5 0 0 0 0 0 0
SP 83B - 114 3.5 0 0 0 0 0 0
IC-2-84 - 115, 116,117,118,119 3.5 3 12 12 0 0 0
IC-2-85 - 120,121,122,123.124,125,
126,127,128,129,130 3.5 2 20 22 0 0 0
IC-2-86 - 131 3.5 1 2 3 0 0 0
IC-2-87 - 132 3.5 2 24 31 0 0 0
IC-2-88 - 133 3.5 73 1,070 1,471 0 0 49
Reserve Plus Single Payment - 150 4 17 19 0 0 0
Cash Reserve Single Payment - 160 0 0 0 0 0 0
IC-Flexible Savings (Variable
Term) - 165 131,998 2,270,553 2,406,534 0 1,272,957 61,525
IC-Flexible Savings Emp (VT) - 166 223 2,611 3,809 0 46 84
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Res for accrued 3rd year 2113 -
Installment Prod only. 0 0 0 0 0 521
Res for accrued 6th year 2114 0 0 0 0 0 (0)
Acc int - default I-76 2003/2025 0 (0) (1) 0 0 1
Res for add'l credits to be allowed 0 0 0 0 0 0
Installment Cert-Special Add'l 0 0 0 0 0 0
Credits I-76 (2105) 0 0 0 0 0 0
Accrued for add'l credits to 0 0 0 0 0 0
be allowed at next anni (2102) 0 0 (7) 0 0 0
Reserve for death & disab (2111) 0 0 0 0 0 0
Res for reconversion (2104) 0 0 0 0 0 0
0 0 0 0 0
Total 0 (0) (8) 0 0 522
------- ---------- -------- ------- --------- ---------
TOTAL INSTALLMENT CERTIFICATES (3,394) (17,596) (223) 6,397 33,646 41,601
------- ---------- -------- ------- --------- ---------
Fully paid certificates:
Single-Payment certificates:
SP 74 (C2740-10 Prod 40) 0 0 0 0 0 0
SP 75 - 50 0 0 0 0 0 0
SP 76 - 60 0 0 0 0 0 0
SP 77 - 70 0 0 0 0 0 0
SP 78 - 80 0 0 0 0 0 (0)
SP 79 - 90 0 0 0 0 0 0
SP 80 - 100 0 0 0 0 0 0
SP 81A - 110 0 0 0 0 0 0
SP 82A - 111 0 0 0 1 2 2
SP 82B - 112 0 0 0 0 0 0
SP 83A - 113 0 0 0 0 0 0
SP 83B - 114 0 0 0 0 0 0
IC-2-84 - 115, 116,117,118,119 0 0 0 3 12 12
IC-2-85 - 120,121,122,123.124,125,
126,127,128,129,130 0 0 0 2 20 22
IC-2-86 - 131 0 0 0 1 2 3
IC-2-87 - 132 (26) 0 0 1 4 5
IC-2-88 - 133 (747) (132) (506) 15 119 135
Reserve Plus Single Payment - 150 0 0 0 4 17 19
Cash Reserve Single Payment - 160 0 0 0 0 0 0
IC-Flexible Savings (Variable
Term) - 165 (4,026) (1,780,127) 0 119,152 1,826,625 1,956,863
IC-Flexible Savings Emp (VT) - 166 (224) (970) 0 175 1,847 2,745
</TABLE>
F-45
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
IC-Preferred Investors - 250 4 1,849 1,857 0 3,954 37
IC-Investors - 201, 202,203 0 0 0 0 0 0
IC-Special Deposits U.K. - 204 0 0 0 0 0 0
IC-Special Deposits HONG KONG - 205 0 0 0 0 0 0
IC-1-84 - 170, 171,172,173,174 1 1 4 0 0 0
Cash Reserve Variable Payment - 660 0 0 0 0 0 0
Cash Reserve Variable PMT-3mo. - 662 21,293 115,125 123,081 (0) 46,259 1,042
IC-Future Value - 155 2 4 4 0 0 0
IC-Future Value Emp - 156 0 0 0 0 0 0
IC-Stock Market - 180 48,150 280,635 329,279 0 83,308 3,990
IC-MSC - 181 20,691 327,600 362,516 0 40,623 3,987
IC-EISC - 185 0 0 0 0 0 0
IC-AEBI Stock Market - 301, 302,
303,304,305 0 0 0 0 0 0
------- --------- --------- ------- --------- -------
Total 222,448 2,999,525 3,228,644 (0) 1,447,147 70,714
------- --------- --------- ------- --------- -------
Additional credits and accrued interest
thereon:
SP 74 (2030/1 4022) 3.5 0 0 (0) (1) 0 0
SP 75 3.5 0 0 0 0 0 0
SP 76 3.5 0 0 0 0 0 0
SP 77 3.5 0 0 0 0 0 0
SP 78 3.5 0 0 0 0 0 0
SP 79 3.5 0 0 0 0 0 0
SP 80 3.5 0 0 (0) 0 0 0
SP 81A 3.5 0 0 (0) 0 0 0
SP 82A 3.5 0 0 2 0 0 0
SP 82B 3.5 0 0 (0) 0 0 0
SP 83A 3.5 0 0 (0) 0 0 0
SP 83B 3.5 0 0 (0) 0 0 0
IC-2-84 3.5 0 0 7 0 0 0
IC-2-85 3.5 0 0 0 0 0 0
IC-2-86 3.5 0 0 (0) 0 0 0
IC-2-87 3.5 0 0 0 0 0 0
IC-2-88 3.5 0 0 29 25 0 0
Reserve Plus SP 2004-4061 0 0 0 0 0 0
Cash Reserve SP 0 0 (0) 0 0 0
IC-Flexible Savings 0 0 3,448 62,956 0 0
IC-Preferred Investors 0 0 2 56 0 0
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
IC-Preferred Investors - 250 0 (1,450) 0 4 4,385 4,398
IC-Investors - 201, 202,203 0 0 0 0 0 0
IC-Special Deposits U.K. - 204 0 0 0 0 0 0
IC-Special Deposits HONG KONG - 205 0 0 0 0 0 0
IC-1-84 - 170, 171,172,173,174 0 0 0 1 1 4
Cash Reserve Variable Payment - 660 0 0 0 0 0 0
Cash Reserve Variable PMT-3mo. - 662 (1,888) (71,173) 0 17,372 92,162 97,321
IC-Future Value - 155 0 0 0 2 4 4
IC-Future Value Emp - 156 0 0 0 0 0 0
IC-Stock Market - 180 (3,479) (99,170) 0 43,547 277,554 313,928
IC-MSC - 181 0 (82,141) 0 19,060 296,916 324,985
IC-EISC - 185 0 0 0 0 0 0
IC-AEBI Stock Market - 301, 302,
303,304,305 0 0 0 0 0 0
------- ---------- -------- ------- --------- ---------
Total (10,390) (2,035,163) (506) 199,340 2,499,669 2,700,446
------- ---------- -------- ------- --------- ---------
Additional credits and accrued interest
thereon:
SP 74 (2030/1 4022) 0 0 0 0 0 (1)
SP 75 0 0 0 0 0 0
SP 76 0 0 0 0 0 0
SP 77 0 0 0 0 0 0
SP 78 0 0 0 0 0 0
SP 79 0 0 0 0 0 0
SP 80 0 0 0 0 0 (0)
SP 81A 0 0 0 0 0 (0)
SP 82A 0 0 0 0 0 2
SP 82B 0 0 0 0 0 (0)
SP 83A 0 0 0 0 0 (0)
SP 83B 0 0 0 0 0 (0)
IC-2-84 0 0 0 0 0 7
IC-2-85 0 0 0 0 0 0
IC-2-86 0 0 0 0 0 (0)
IC-2-87 0 0 0 0 0 0
IC-2-88 0 (1) (49) 0 0 4
Reserve Plus SP 2004-4061 0 0 (0) 0 0 0
Cash Reserve SP 0 0 0 0 0 (0)
IC-Flexible Savings 0 (3,246) (61,570) 0 0 1,588
IC-Preferred Investors 0 (19) (37) 0 0 2
</TABLE>
F-46
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
IC-FS-EMP 0 0 5 98 0 0
IC-Investors 0 0 (0) 0 0 0
IC-Special Deposits U.K. 0 0 (0) 0 0 0
IC-Special Deposits HONG KONG 0 0 0 0 0 0
IC-1-84 - 2013-4061 0 0 0 0 0 0
Cash Reserve VP 2004-4061 0 0 0 0 0 0
Cash Reserve Variable Payment-3mo. 0 0 335 1,325 (400) 0
IC-Future Value 0 0 7 1 0 0
IC-Future Value Emp 0 0 0 0 0 0
IC-Stk Mkt, 2004/16/31-4000/16 0 0 519 410 (0) 0
IC-MSC 0 0 155 422 0 0
IC - EISC 0 0 (0) 0 0 0
IC-AEBI Stk Mkt 2004/31/19-4000/16 0 0 0 0 0 0
------- --------- --------- ------- --------- -------
Total 0 0 4,509 65,292 (400) 0
------- --------- --------- ------- --------- -------
Accrued for additional credits to be
allowed at next anniversaries:
SP 74 (2102-4070) 0 0 0 0 0 0
SP 75 0 0 (1) 0 0 0
SP 76 0 0 0 0 0 0
SP 77 0 0 (0) 0 0 0
SP 78 0 0 (0) 0 0 0
SP 79 0 0 0 0 0 0
SP 80 0 0 0 0 0 0
SP 81A 0 0 0 0 0 0
SP 82A 0 0 0 0 0 0
SP 82B 0 0 (0) 0 0 0
SP 83A 0 0 (0) 0 0 0
SP 83B 0 0 (0) 0 0 0
IC-2-84 - 2019-4061 0 0 1 0 0 0
IC-2-85 0 0 0 0 0 0
IC-2-86 0 0 (0) 0 0 0
IC-2-87 0 0 (0) 0 0 0
IC-2-88 0 0 0 0 0 0
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
IC-FS-EMP 0 (18) (84) 0 0 1
IC-Investors 0 0 0 0 0 (0)
IC-Special Deposits U.K. 0 0 0 0 0 (0)
IC-Special Deposits HONG KONG 0 0 0 0 0 0
IC-1-84 - 2013-4061 0 0 (0) 0 0 0
Cash Reserve VP 2004-4061 0 0 0 0 0 0
Cash Reserve Variable Payment-3mo. 0 (11) (1,043) 0 0 206
IC-Future Value 0 0 0 0 0 8
IC-Future Value Emp 0 0 0 0 0 0
IC-Stk Mkt, 2004/16/31-4000/16 0 (38) (675) 0 0 216
IC-MSC 0 (7) (501) 0 0 69
IC - EISC 0 0 0 0 0 (0)
IC-AEBI Stk Mkt 2004/31/19-4000/16 0 0 0 0 0 0
------- ---------- -------- ------- --------- ---------
Total 0 (3,340) (63,959) 0 0 2,102
------- ---------- -------- ------- --------- ---------
Accrued for additional credits to be
allowed at next anniversaries:
SP 74 (2102-4070) 0 0 0 0 0 0
SP 75 0 0 0 0 0 (1)
SP 76 0 0 0 0 0 0
SP 77 0 0 0 0 0 (0)
SP 78 0 0 0 0 0 (0)
SP 79 0 0 0 0 0 0
SP 80 0 0 0 0 0 0
SP 81A 0 0 0 0 0 0
SP 82A 0 0 0 0 0 0
SP 82B 0 0 0 0 0 (0)
SP 83A 0 0 0 0 0 (0)
SP 83B 0 0 0 0 0 (0)
IC-2-84 - 2019-4061 0 0 0 0 0 1
IC-2-85 0 0 0 0 0 0
IC-2-86 0 0 0 0 0 (0)
IC-2-87 0 0 0 0 0 (0)
IC-2-88 0 0 (0) 0 0 0
</TABLE>
F-47
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
IC-Stock Mkt - 2019/31-4061 SEC 5
from C2785-81 0 0 (0) 0 0 0
IC-Market Strategy Certificate (SEC
5 from c2785-81) 0 0 (0) 0 0 0
IC-EISC 0 0 1,194 13,043 0 0
IC-AEBI Stock Market 0 0 1,226 12,384 0 0
0 0 0 0 0 0
0 0 (0) 0 0 0
Total 0 0 2,420 25,427 0 0
------- --------- --------- ------- --------- -------
TOTAL SINGLE PAYMENT - NON
QUALIFIED 222,448 2,999,525 3,235,573 90,719 1,446,747 70,714
------- --------- --------- ------- --------- -------
R Series Single-Payment certificates:
R-76 - 900 3.5 1 2 2 0 0 0
R-77 - 910 3.5 9 34 41 0 0 1
R-78 - 911 3.5 17 109 127 0 0 4
R-79 - 912 3.5 27 148 163 0 0 6
R-80 - 913 3.5 17 112 114 0 0 4
R-81 - 914 3.5 9 55 50 0 0 1
R-82A - 915 3.5 48 251 209 0 0 17
RP-Q - 916 89 128 373 0 0 3
R-II - 920 3.5 30 209 135 0 0 5
RP-2-84 - 921,922,923,924,925 3.5 2 16 9 0 0 0
RP-2-85 - 926,927,928,929,930,931,
932,933,934,935,936 3.5 0 0 0 0 0 0
RP-2-86 - 937 3.5 0 0 0 0 0 0
RP-2-87 - 938 3.5 0 0 0 0 0 0
RP-2-88 - 939 3.5 15 81 96 0 0 3
Cash Reserve RP - 970 0 0 0 0 0 0
RP-Flexible Savings - 971 52,569 1,246,068 1,294,596 0 774,449 35,389
RP-Preferred Investors - 950 1 440 590 0 0 0
Cash Reserve RP-3 mo. - 972 3,046 19,163 20,711 0 3,558 185
RP-Flexible Savings Emp - 973 96 979 1,475 0 8 44
RP-Future Value - 975 0 0 0 0 0 0
RP-Future Value Emp - 976 0 0 0 0 0 0
RP-Stock Market - 960 10,016 105,143 117,949 (9) 45,015 1,491
Market Strategy Cert - 961 (section
1-6 from Report
2785-81-RP-STOCK-VB 2001) 3,820 100,306 108,901 0 16,130 1,165
D-1 - sum of SERIES D on Summary
page - 400 + 990-993 54 4,166 5,640 0 201 97
Total 69,866 1,477,410 1,551,181 (9) 839,361 38,415
------- --------- --------- ------- --------- -------
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
IC-Stock Mkt - 2019/31-4061 SEC 5
from C2785-81 0 0 0 0 0 (0)
IC-Market Strategy Certificate (SEC
5 from c2785-81) 0 0 0 0 0 (0)
IC-EISC 0 (53) (3,320) 0 0 10,864
IC-AEBI Stock Market 0 (121) (3,490) 0 0 9,999
0 0 0 0 0 0
0 0 0 0 0 (0)
Total 0 (174) (6,810) 0 0 20,863
------- ---------- -------- ------- --------- ---------
TOTAL SINGLE PAYMENT - NON
QUALIFIED (10,390) (2,038,677) (71,275) 199,340 2,499,669 2,723,411
------- ---------- -------- ------- --------- ---------
R Series Single-Payment certificates:
R-76 - 900 0 (2) 0 0 0 0
R-77 - 910 0 (7) 0 8 28 35
R-78 - 911 0 (12) 0 16 101 119
R-79 - 912 0 (6) 0 23 143 163
R-80 - 913 0 (13) 0 16 20 105
R-81 - 914 0 (9) 0 7 45 42
R-82A - 915 0 (111) 0 26 135 115
RP-Q - 916 0 (21) 0 82 123 355
R-II - 920 0 (6) 0 29 207 134
RP-2-84 - 921,922,923,924,925 0 (6) 0 1 4 3
RP-2-85 - 926,927,928,929,930,931,
932,933,934,935,936 0 0 0 0 0 0
RP-2-86 - 937 0 0 0 0 0 0
RP-2-87 - 938 0 0 0 0 0 0
RP-2-88 - 939 (80) (10) (9) 0 0 0
Cash Reserve RP - 970 0 0 0 0 0 0
RP-Flexible Savings - 971 (1,040) (1,050,433) 0 50,023 997,000 1,052,961
RP-Preferred Investors - 950 0 (592) 0 0 0 (2)
Cash Reserve RP-3 mo. - 972 (218) (8,812) 0 2,509 14,471 15,424
RP-Flexible Savings Emp - 973 (16) (481) 0 74 744 1,030
RP-Future Value - 975 0 0 0 0 0 0
RP-Future Value Emp - 976 0 0 0 0 0 0
RP-Stock Market - 960 (307) (42,640) 0 10,161 112,835 121,499
Market Strategy Cert - 961 (section
1-6 from Report
2785-81-RP-STOCK-VB 2001) 0 (28,260) 0 3,642 91,607 97,936
D-1 - sum of SERIES D on Summary
page - 400 + 990-993 (214) (1,486) 0 47 3,341 4,238
Total (1,875) (1,132,907) (9) 66,664 1,220,804 1,294,157
------- ---------- -------- ------- --------- ---------
</TABLE>
F-48
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Additional Interest on R-Series Single
Payment Reserves:
R-76 3.5 0 0 0 0 0 0
R-77 3.5 0 0 1 1 0 0
R-78 3.5 0 0 3 4 0 0
R-79 3.5 0 0 4 6 0 0
R-80 3.5 0 0 3 4 0 0
R-81 3.5 0 0 1 2 0 0
R-82A 3.5 0 0 6 15 0 0
RP-Q 0 0 0 3 0 0
R-II 3.5 0 0 3 5 0 0
RP-2-84 3.5 0 0 0 0 0 0
RP-2-85 3.5 0 0 (0) 0 0 0
RP-2-86 3.5 0 0 (0) 0 0 0
RP-2-87 3.5 0 0 (0) 0 0 0
RP-2-88 3.5 0 0 2 2 0 0
Cash Reserve RP 0 0 (0) 0 0 0
RP-Flexible Savings 0 0 1,854 35,325 0 0
RP-Preferred Investors 0 0 1 3 0 0
Cash Reserve RP-3 mo. Plus 0 0 56 242 (79) 0
RP-Flexible Savings Emp 0 0 2 43 0 0
RP-Future Value 0 0 0 0 0 0
RP-Future Value Emp 0 0 0 0 0 0
RP-Stock Market 0 0 160 126 0 0
Market Strategy Cert (2785-81
RP-STOCK VB 2004/4000 &
2016/2031/4016) 0 0 61 146 0 0
D-1 - 400 19 53 0 117 0 0
Total 19 53 2,157 36,044 (79) 0
------- --------- --------- ------- --------- -------
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additional Interest on R-Series Single
Payment Reserves:
R-76 0 0 (0) 0 0 0
R-77 0 (0) (1) 0 0 1
R-78 0 (0) (4) 0 0 3
R-79 0 (0) (6) 0 0 4
R-80 0 (0) (4) 0 0 3
R-81 0 (0) (1) 0 0 2
R-82A 0 (1) (17) 0 0 3
RP-Q 0 0 (3) 0 0 0
R-II 0 (0) (5) 0 0 3
RP-2-84 0 0 0 0 0 0
RP-2-85 0 0 0 0 0 (0)
RP-2-86 0 0 0 0 0 (0)
RP-2-87 0 0 0 0 0 (0)
RP-2-88 0 (0) (3) 0 0 1
Cash Reserve RP 0 0 0 0 0 (0)
RP-Flexible Savings 0 (936) (35,389) 0 0 854
RP-Preferred Investors 0 (0) (4) 0 0 0
Cash Reserve RP-3 mo. Plus 0 (2) (185) 0 0 32
RP-Flexible Savings Emp 0 (0) (44) 0 0 1
RP-Future Value 0 0 0 0 0 0
RP-Future Value Emp 0 0 0 0 0 0
RP-Stock Market 0 (11) (206) 0 0 69
Market Strategy Cert (2785-81
RP-STOCK VB 2004/4000 &
2016/2031/4016) 0 (0) (171) 0 0 36
D-1 - 400 0 (21) (97) 17 51 (1)
Total 0 (971) (36,140) 17 51 1,011
------- ---------- -------- ------- --------- ---------
</TABLE>
F-49
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Accrued for additional credits to be
allowed at next anniversaries:
RP-Stock Market 0 414 5,142 0 0
Market Strategy Cert (C2785-81
2019/2102/4061) 0 0 349 3,677 0 0
Total 0 0 763 8,818 0 0
------- --------- --------- ------- --------- -------
TOTAL SINGLE PAYMENT -
QUALIFIED 69,885 1,477,463 1,554,101 44,854 839,282 38,415
------- --------- --------- ------- --------- -------
Paid-up certificates:
Series 15 and 20 3.25 0 0 (0) 0 0 0
" 15A and 22A 3.5 0 0 66 2 0 0
" I-76 - 640 3.5 0 (0) 1,148 33 0 37
Total 0 0 1,214 35 0 37
------- --------- --------- ------- --------- -------
Additional credits and accrued interest
thereon:
Series 15 and 20 2.5 0 0 0 0 0 0
" 15A and 22A 3 9 0 1 0 0 0
" I-76 3.5 235 1,193 107 3 0 0
Total 244 1,193 108 3 0 0
------- --------- --------- ------- --------- -------
Accrued for additional credits to be
allowed at next anniversaries 0 0 0 0 0 0
------- --------- --------- ------- --------- -------
Total paid-up 244 1,193 1,322 38 0 37
------- --------- --------- ------- --------- -------
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Accrued for additional credits to be
allowed at next anniversaries:
RP-Stock Market 0 (20) (1,285) 0 4,251
Market Strategy Cert (C2785-81
2019/2102/4061) 0 (31) (994) 0 0 3,001
Total 0 (51) (2,278) 0 0 7,252
------- ---------- -------- ------- --------- ---------
TOTAL SINGLE PAYMENT -
QUALIFIED (1,875) (1,133,929) (38,428) 66,681 1,220,855 1,302,420
------- ---------- -------- ------- --------- ---------
Paid-up certificates:
Series 15 and 20 0 0 0 0 0 (0)
" 15A and 22A 0 (33) 0 0 0 35
" I-76 - 640 (246) (156) 0 0 0 816
Total (246) (189) 0 0 0 851
------- ---------- -------- ------- --------- ---------
Additional credits and accrued interest
thereon:
Series 15 and 20 0 0 0 0 0 0
" 15A and 22A 0 (1) 0 8 35 (0)
" I-76 (31) (12) 0 159 858 67
Total (31) (13) 0 167 893 67
------- ---------- -------- ------- --------- ---------
Accrued for additional credits to be
allowed at next anniversaries 0 0 (0) 0 0 0
------- ---------- -------- ------- --------- ---------
Total paid-up (277) (202) (0) 167 893 918
------- ---------- -------- ------- --------- ---------
</TABLE>
F-50
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI
Certificate Reserves
Part 1 - Summary of Changes
Year ended December 31, 2009
(Thousands)
<TABLE>
<CAPTION>
Balance at beginning of period Additions
------------------------------ --------------------------------
Number
of Charged
Yield accounts Amount Charged Reserve to other
to maturity with of Amount to profit payments by accounts
on an annual security maturity of and loss certificate (per
Description payment basis holders value reserves or income holders part 2)
----------- ----------------------- -------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Optional settlement certificates:
Series IST&G 3 0 0 0 0 0 0
Other series and conversions from Single Source 2740-10: Options 0 0 0 0 0 0
Payment certificates 2.5-3-3-3.5 0 0 49,144 1,457 (0) 769
Series R-76 thru R-82A - Prod 900 3 0 0 1 0 0 0
Series R-II & RP-2-84 thru 88 - Prod 921 3.5 0 0 49 2 0 9
Reserve Plus Single-Payment (Prod 150) 0 0 85 1 0 0
Reserve Plus Flex-Pay & IC-Q-Inst (Prod
650, 651, 652) 0 0 14 0 0 0
Series R-Installment (Prod 980, 981,982) 0 0 32 0 0 0
Series R-Single-Payment (Prod 133) 0 0 (0) 0 0 0
Add'l credits and accrued int. thereon 2.5-3 0 0 4,183 112 0 90
Add'l credits and accrued int.
thereon-IST&G 2.5-3 0 0 0 0 0 0
Accrued for additional credits to be
allowed 0 0 51 43 0 0
at next anniversaries 0 0 0 0 0 0
Accrued for additional credits to be
allowed 0 0 (0) 0 0 0
at next anniversaries-R-76-R-82A & R-II 0 0 0 0 0 0
Accrued for additional credits to be
allowed at next anniversaries-IST&G 0 0 0 0 0 0
------- --------- --------- ------- --------- -------
Total optional settlement 0 0 53,559 1,615 (0) 868
------- --------- --------- ------- --------- -------
Due to unlocated cert holders 0 0 101 1 0 48
------- --------- --------- ------- --------- -------
Total certificate reserves 299,887 4,515,991 4,894,214 137,910 2,298,415 110,269
<CAPTION>
Deductions Balance at close of period
--------------------------------- ------------------------------
Number
Credited of
Cash to other accounts Amount
surrenders accounts with of Amount
prior to (per security maturity of
Description Maturities maturity part 2) holders value reserves
----------- ---------- ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Optional settlement certificates:
Series IST&G (0) 0 0 0 0 0
Other series and conversions from Single 0 0 0 0 0 0
Payment certificates (2,579) (3,528) 0 0 0 45,263
Series R-76 thru R-82A - Prod 900 (1) 0 0 0 0 0
Series R-II & RP-2-84 thru 88 - Prod 921 (2) (0) 0 0 0 58
Reserve Plus Single-Payment (Prod 150) (1) (11) 0 0 0 74
Reserve Plus Flex-Pay & IC-Q-Inst (Prod
650, 651, 652) 0 (1) 0 0 0 13
Series R-Installment (Prod 980, 981,982) (3) (5) 0 0 0 24
Series R-Single-Payment (Prod 133) 0 0 0 0 0 (0)
Add'l credits and accrued int. thereon (303) (340) (259) 0 0 3,483
Add'l credits and accrued int.
thereon-IST&G (0) 0 0 0 0 0
Accrued for additional credits to be
allowed (0) (0) (91) 0 0 3
at next anniversaries 0 0 0 0 0 0
Accrued for additional credits to be
allowed (0) 0 (0) 0 0 (0)
at next anniversaries-R-76-R-82A & R-II 0 0 0 0 0 0
Accrued for additional credits to be
allowed at next anniversaries-IST&G 0 0 (0) 0 0 0
------- ---------- -------- ------- --------- ---------
Total optional settlement (2,889) (3,885) (350) 0 0 48,918
------- ---------- -------- ------- --------- ---------
Due to unlocated cert holders 0 (1) (18) 0 0 131
------- ---------- -------- ------- --------- ---------
Total certificate reserves (18,825) (3,194,290) (110,294) 272,585 3,755,063 4,117,399
</TABLE>
F-51
<PAGE>
Certificate Reserves
(In thousands)
December 31, 2009
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
<TABLE>
<S> <C>
Additional credits on installment certificates and accrued interest thereon:
Other additions represent:
Transfers from accruals for additional credits to be allowed at next anniversaries $ 8
Reconversions of paid-up certificates-charged to paid-up reserves 10
Transfers from maturities to extended maturities, additional credits/interest
and advance payments 169
--------
$ 187
========
Other deductions represent:
Transfers to reserves on a quarterly basis for Reserve Plus Flexible-
Payment, IC-Q-Installment and R-Flexible-Payment $ 169
Conversions to optional settlement certificates-credited to optional
settlement reserves 0
Conversions to paid-up certificates-credited to paid-up reserves 36
Transfers to extended maturities at maturity 0
--------
$ 205
========
Accrual for additional credits to be allowed on installment
certificates at next anniversaries:
Other deductions represent:
Transfers to reserves for additional credits on installment certificates $ 6
========
Reserve for death and disability refund options:
Other deductions represent:
Payments, in excess of installment reserves, made to certificate holders
who exercised the death and disability refund options. $ 0
========
Reserve for reconversions of paid-up certificates:
The amount shown as charged to profit and loss has been deducted from
reserve recoveries in the accompanying Statement of Operations $ 0
========
Other deductions represent:
Amounts credited to installment certificate reserves to mature, on
reconversions of paid-up certificates. $ 10
========
Paid-up certificates:
Other additions represent:
Conversions from installment certificates (charged to installment reserves
less surrender charges) $ 37
Transfers from accrual for additional credits to be allowed at next
anniversaries 0
--------
$ 37
========
Other deductions represent:
Transfers credited to installment reserves on reconversions to installment
certificates $ 0
Transfers for accrual for additional credits and accrued interest thereon 0
Transfers to settlement options 0
--------
$ 0
========
</TABLE>
Certificate Reserves
(In thousands)
December 31, 2009
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
<TABLE>
<S> <C>
Default interest on installment certificates:
Other additions represent:
Reconversions of paid-up certificates charged to paid-up reserves $ 0
========
Other deductions represent:
Conversions to paid-up certificates - credited to paid-up reserves $ 0
Transfers to advance payments as late payments are credited to certificates (1)
--------
$ (1)
========
Optional settlement certificates:
Other additions represent:
Transfers from installment certificate reserves (less surrender charges),
single-payment and Series D certificate reserves upon election of
optional settlement privileges $ 777
Transfers from paid-up certificate reserves 0
Transfers from accruals for additional credits to be allowed at next anniversaries 91
--------
$ 868
========
Other deductions represent:
Transfers to reserve for additional credits and accrued interest thereon $ 91
Transfers to optional settlement reserves 263
--------
$ 354
========
Single-Payment certificates:
Other additions represent:
Transfers from accruals for additional credits to be allowed at next anniversaries $ 0
Transfers from accruals on a quarterly basis on: 0
Reserve Plus Single-Payment 0
Cash Reserve Single-Payment 0
Flexible Savings 61,525
Flexible Savings-Emp 84
Preferred Investors 37
Investors 0
Special Deposits 0
Cash Reserve 0
Cash Reserve-3mo 1,042
Future Value 0
Stock Market 3,990
Market Strategy 3,987
AEBI Stock Market 0
Equity Index Stock Certificate 0
RP-Q 3
Cash Reserve-RP 0
Cash Reserve-RP-3mo 185
Flexible Saving-RP 35,389
Flexible Savings-RP-Emp 44
Preferred Investors-RP 0
Stock Market-RP 1,491
Market Strategy-RP 1,165
Transfers from accruals at anniversaries maintained in a separate
reserve account. 187
--------
$109,129
========
</TABLE>
Certificate Reserves
(In thousands)
December 31, 2009
Part 2 - Descriptions of Additions to Reserves Charged to Other
Accounts and Deductions from Reserves Credited to Other Accounts
<TABLE>
<S> <C>
Single-Payment certificates continued:
Other deductions represent:
Transfers to optional settlement reserves:
Single-Payment $ 8,937
R Single-Payment 9
Transfers to reserves for additional credits and accrued interest thereon (187)
Transfers to a separate reserve account from the accrual account. 0
Transfers to reserves on a quarterly basis:
Reserve Plus Single-Payment 0
Cash Reserve Single-Payment 0
Flexible Savings 61,616
Flexible Savings-Emp 0
Preferred Investors 37
Investors 0
Special Deposits 0
Cash Reserve 0
Cash Reserve-3mo 1,044
Stock Market 680
AEBI Stock Market 501
RP-Q 3
Cash Reserve-RP 0
Cash Reserve-RP-3mo 185
Flexible Saving-RP 35,389
Flexible Savings-RP-Emp 44
Preferred Investors-RP 4
Stock Market-RP 1,491
Transfers to Federal tax withholding (51)
--------
$109,702
========
Due to unlocated certificate holders:
Other additions represent:
Amounts equivalent to payments due certificate holders who could
not be located $ 48
========
Other deductions represent:
Payments to certificate holders credited to cash $ 18
========
</TABLE>
F-52
<PAGE>
<TABLE>
<CAPTION>
AMERIPRISE CERTIFICATE COMPANY, INC. CERTIFICATE RESERVES SCHEDULE VI BALANCE TO BALANCE TO
SEC SEC
SOURCES: C2790-70, C2790-20, C2790-21, C2790-26, C2740-10 -- TIE TO C2785-10 5 ON PART 1 6 ON PART 1
DECEMBER 2009 2790-70 2790-70
DATE PRINTED
02/15/10 SOURCE: 2790-70, UNLESS SPECIFIED. SEC 5 SEC 6
PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES
DEDUCTION
TOTALS MUST AGREE TO PART 1 NUMBER OF ACCOUNTS AMOUNT OF FROM RESERVES
WITH CERTIFICATE MATURITY AMOUNT OF CASH SURRENDERS
HOLDERS VALUE RESERVES PRIOR TO MATURITY
------------------ ------------------------- ------------------------- ---------------------
CERT SERIES MOS. PAID DECEMBER 31, 2009 DECEMBER 31, 2009 DECEMBER 31, 2009 SURRENDER OTHER
- --------------------------- --------- ------------------ ------------------------- ------------------------- ---------------------
2008 2009 2008 2009 2008 2009 2009 2009
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 INC EXT
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
20 INC EXT
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
15 A INC EXT
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
22A INC EXT 157-168 0.00000 0.00000 0.00000 0.00000
169-180
181-192
193-204
205-216
217-228
229-240 0.00000 0.00000 0.00000 0.00000
241-252 1.00000 0 15.00000 0.00000 13.75820 0.00000
253-264 1.00000 1 15.00000 15.00000 14.83493 14.7160
265-276
277-288
289-300
301-312
313-324 0.00000 0.00000 0.00000
325-336 1.00000 0 16.23870 0.00000 13.18569 0.00000
337-348 0.00000 1 0.00000 16.23870 0.00000 13.89888
349-360 1.00000 0 19.48644 0.00000 17.43112 0.00000
361-372 4.00000 1 373.49010 19.48644 353.57253 18.33450
373-384 1.00000 5 12.99096 386.48106 12.99096 384.52978
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 9 8 452.2062 437.20620 425.77343 431.47917 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
I-76 265-276 0.00000 0.00000 0.00000
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
277-288 2.00000 0 39.98033 0.00000 27.37785 0.00000 0.00000
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
289-300 1 24.60328 17.64586 11.33212
301-312 0.00000 0.00000 0.00000
313-324 2.00000 0 61.50820 0.00000 51.38709 0.00000 39.03840 0.00000
325-336 19.00000 1 522.81970 15.37705 456.98422 13.51471 37.82454 10.91618
337-348 26.00000 16 716.57053 467.46232 663.44120 432.16502 23.05688 0.00000
349-360 27.00000 22 608.93118 618.15741 593.77002 602.47018 230.56546 18.28701
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 76 40 1,949.81 1,125.60006 1,792.96038 1,065.79577 341.81740 29.20319
=========== ====== ============ ============ ============ ============ ============ ========
RES+FP 289-300 0.00000 0.00000 0.00000
301-312 1.00000 0 6.00000 0.00000 2.83669 0.00000
NEW LINE 313-324 1 6.00000 2.84983
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 1 1 6.00000 6.00000 2.83669 2.84983 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-Q-INST
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-Q-IN 181-192 0.00000 0.00000 0.00000
193-204 5.00000 0 48.00000 0.00000 18.69602 0.00000 0.00000
205-216 16.00000 5 158.40000 48.00000 66.28175 19.72712 1.40000
217-228 7.00000 10 48.00000 104.40000 31.88326 45.61720 29.67144
229-240 8.00000 7 114.00000 48.00000 11.48908 35.18391 0.85000
241-252 5.00000 4 42.00000 66.00000 33.12645 8.56272 2.65935
253-264 1.00000 4 6.00000 30.00000 5.43144 27.20877 7.88137
NEW LINE 265-276 1 6.00000 5.44299
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 42 31 416.40000 302.40000 166.90800 141.74271 42.46216 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-IN-EMP 205-216 0.00000 0.00000 0.00000
217-228 1.00000 0 6.00000 0.00000 0.89163 0.00000 0.00000
NEW LINE 229-240 1 6.00000 0.59672 0.90000
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 1 1 6.00000 6.00000 0.89163 0.59672 0.90000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-I 25-36 0.00000 0.00000 0.00000
37-48 4.00000 0 49.20000 0.00000 25.29003 0.00000
49-60 2.00000 3 24.97100 43.20000 2.87728 28.23562 2.55090
61-72 1.00000 2 21.00000 24.97100 8.95011 2.81877 0.00000
73-84 1.84916
85-96
97-108 0.00000 0.00000 0.00000
109-120 2.00000 0 18.00000 0.00000 25.04704 0.00000 0.00000
121-132 0.00000 0.00000 0.00000
133-144 8.00000 0 118.08000 0.00000 65.02444 0.00000
145-156 8.00000 3 150.00000 30.00000 118.99948 23.32006 41.04140
157-168 13.00000 2 220.75200 36.00000 148.65800 19.32708 76.35817
169-180 12.00000 7 174.00000 100.75200 84.27798 70.84077 40.06355
181-192 10.00000 8 90.00000 108.00000 98.33941 48.44713 12.71553
193-204 11.00000 6 101.40000 60.00000 93.64014 56.67770 39.42426
NEW LINE 205-216 2 12.00000 9.11443 68.49399
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 71 33 967.40300 414.92300 671.10391 258.78156 282.49696 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-I-EMP 1-12
13-24 0.00000 0.00000 0.00000
25-36 1.00000 0 6.00000 0.00000 3.97019 0.00000
37-48 1 6.00000 5.43586
49-60
61-72
73-84
85-96
97-108
109-120
121-132
133-144 0.00000 0.00000 0.00000
145-156 2.00000 0 72.24000 0.00000 22.93904 0.00000
157-168 0.00000 2 0.00000 72.24000 0.00000 23.09643
169-180 2.00000 0 18.00000 0.00000 9.78252 0.00000
181-192 0.00000 2 0.00000 18.00000 0.00000 9.34167
193-204 1.00000 0 120.00000 0.00000 485.48809 0.00000
NEW LINE 205-216 1 120.00000 271.87199
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 6 6 216.24000 216.24000 522.17984 309.74595 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-I95 1-12 807.00000 828 1,269.14584 2,007.78792 120.77211
13-24 502.00000 621 1,453.01105 1,982.18791 139.50641
25-36 552.00000 448 2,565.52997 1,933.55262 148.12430
37-48 777.00000 484 4,802.13745 3,095.90363 294.29430
49-60 1,121.00000 707 8,013.70853 5,379.29281 325.32106
61-72 1,098.00000 954 9,635.74172 7,546.26867 1,012.08259
73-84 684.00000 765 5,692.10506 6,016.78453 3,656.89174
85-96 400.00000 519 3,072.37629 4,057.57201 1,522.02103
97-108 362.00000 317 2,722.27902 2,384.76880 667.49708
109-120 460.00000 274 3,381.64762 1,832.35618 710.91238
121-132 4.00000 2 28.01811 7.82101 711.02241
133-144 4.00000 2 8.89503 22.37665 7.81028
NEW LINE 145-156 1 1.48764 6.76631
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 6,771 5,922 0.00000 0.00000 42,644.59569 36,268.16038 9,323.02200 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
IC-I95-E 1-12 7.00000 8 5.76329 23.32703 5.85048
13-24 3.00000 7 13.00209 8.45029 0.00000
25-36 3.00000 3 7.82519 28.53217 0.00000
37-48 4.00000 3 14.16983 11.77608
49-60 12.00000 4 107.63879 18.56114 0.00000
61-72 2.00000 10 8.96017 47.16142 37.66556
73-84 1.00000 1 1.68343 1.47559 8.63237
85-96 0.00000 1 0.00000 1.73432
97-108 1.00000 0 6.19187 0.00000 0.00000
109-120 2.00000 0 15.88291 0.00000 6.42028
NEW LINE 121-132 13.73036
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 35 37 0.00000 0.00000 181.11757 141.01804 72.29905 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
RP-Q-INST 253-264
265-276 0.00000 0.00000 0.00000
277-288 5.00000 0 52.20000 0.00000 23.29712 0.00000 0.00000
289-300 0.00000 4 0.00000 42.00000 0.00000 21.33165 1.99302
301-312 2.00000 0 12.00000 0.00000 7.96444 0.00000 0.00000
313-324 1.00000 2 12.00000 12.00000 38.32248 7.98227
NEW LINE 325-336 38.41834
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 8 6 76.20000 54.00000 69.58404 29.31392 40.41136 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
</TABLE>
PG 41
F-53
<PAGE>
<TABLE>
<CAPTION>
AMERIPRISE CERTIFICATE COMPANY, INC. CERTIFICATE RESERVES SCHEDULE VI BALANCE TO BALANCE TO
SEC SEC
SOURCES: C2790-70, C2790-20, C2790-21, C2790-26, C2740-10 -- TIE TO C2785-10 5 ON PART 1 6 ON PART 1
DECEMBER 2009 2790-70 2790-70
DATE PRINTED
02/15/10 SOURCE: 2790-70, UNLESS SPECIFIED. SEC 5 SEC 6
PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES
DEDUCTION
TOTALS MUST AGREE TO PART 1 NUMBER OF ACCOUNTS AMOUNT OF FROM RESERVES
WITH CERTIFICATE MATURITY AMOUNT OF CASH SURRENDERS
HOLDERS VALUE RESERVES PRIOR TO MATURITY
------------------ ------------------------- ------------------------- ---------------------
CERT SERIES MOS. PAID DECEMBER 31, 2009 DECEMBER 31, 2009 DECEMBER 31, 2009 SURRENDER OTHER
- --------------------------- --------- ------------------ ------------------------- ------------------------- ---------------------
2008 2009 2008 2009 2008 2009 2009 2009
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RP-Q-FP 241-252
253-264 0.00000 0.00000 0.00000
265-276 2.00000 0 31.80000 0.00000 11.86819 0.00000
New Line 277-288 1 12.00000 10.83746 0.84816
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 2 1 31.80000 12.00000 11.86819 10.83746 0.84816 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
RP-Q-IN
205-216 0.00000 0.00000 0.00000
217-228 2.00000 0 12.00000 0.00000 2.39298 0.00000
229-240 1.00000 2 12.00000 12.00000 0.41235 2.37907
New Line 241-252 1 12.00000 0.41649
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 3 3 24.00000 24.00000 2.80533 2.79556 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
RP-IN-EMP
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
RP-I
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 0 0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
RP-I-EMP - Use C2790-26
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL (Don't include in
Part 1) 0.0 0.0 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
Inst-R (RP-I95) 1-12 80.00000 98 18,072.44520 13,914.51480 228.94446 289.98108 21.32722
Note: Use C2790-26 13-24 22.00000 53 763.57440 3,455.29680 100.93630 125.53665 94.56657
25-36 16.00000 15 483.00000 703.49040 100.78332 66.50967 4.20092
37-48 39.00000 14 2,226.92160 471.00000 227.33396 139.41679 4.31416
49-60 37.00000 36 1,555.61520 2,205.99840 265.22279 256.81884 3.44757
61-72 48.00000 35 8,290.76040 1,129.61520 548.58372 310.86000 7.05199
73-84 30.00000 33 1,135.29480 7,953.56040 250.54412 630.48680 147.93494
85-96 6.00000 19 422.07240 565.85160 33.14535 152.02085 88.50452
97-108 1.00000 0 59.99760 0.00000 5.97552 0.00000 6.69815
109-120 0 0.00000 36.07403
121-132 10.80080
ACC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 279 303 33,009.68160 30,399.32760 1,761.46954 1,971.63068 424.92087 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
Inst-R-E - Use C2790-26 1-12 0 0.00000 0.00000
(Install R) 13-24 2.00000 0 30.00000 0.00000 10.36531 0.00000
25-36 2.00000 1 12.00000 24.00000 2.74951 1.61307
37-48 2.00000 2 612.00000 12.00000 6.91708 4.20962
49-60 2 612.00000 9.76637
61-72 0.00000 0.00000 0.00000
73-84
85-96
AECC Maturity Value & Count
----------- ------ ------------ ------------ ------------ ------------ ------------ --------
TOTAL 6 5 654.00000 648.00000 20.03190 15.58906 0.00000 0.00000
=========== ====== ============ ============ ============ ============ ============ ========
TOTAL - ALL SERIES 7,310 6,397 37,809.74074 33,645.69686 48,274.12614 40,650.33681 10,529.17796 29.20319
=========== ====== ============ ============ ============ ============ ============ ========
Check
</TABLE>
PG 42
F-54
<PAGE>
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VII
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
($ THOUSANDS)
YEAR ENDED DECEMBER 31, 2009
<TABLE>
<CAPTION>
Additions
---------------
Reserves Balance Charged Balance
deducted from at to costs Change in at
assets to beginning and reserves/writedowns end
which they apply of period expenses Other From 2008 to 2009 of period
---------------- --------- -------- ----- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Allowance for losses:
Conventional first
mortgage loans
and other loans 15,440 0 0 (162) 15,602
</TABLE>
YEAR ENDED DECEMBER 31, 2008
<TABLE>
<CAPTION>
Additions
---------------
Reserves Balance Charged Balance
deducted from at to costs Change in at
assets to beginning and reserves/writedowns end
which they apply of period expenses Other From 2007 to 2008 of period
---------------- --------- -------- ----- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Allowance for losses:
Conventional first
mortgage loans 4,836 0 0 (10,604) 15,440
</TABLE>
YEAR ENDED DECEMBER 31, 2007
<TABLE>
<CAPTION>
Additions
---------------
Reserves Balance Charged Balance
deducted from at to costs Change in at
assets to beginning and reserves/writedowns end
which they apply of period expenses Other From 2006 to 2007 of period
---------------- --------- -------- ----- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Allowance for losses:
Conventional first
mortgage loans
and other loans 6,536 0 0 1700 4,836
</TABLE>
F-55
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14.B
<SEQUENCE>2
<FILENAME>c56392exv14wb.txt
<DESCRIPTION>EX-14.B
<TEXT>
<PAGE>
EXHIBIT 14(b)
INVESTMENT ADVISER CODE OF ETHICS
FOR
RETAIL ACCESS PERSONS:
- EMPLOYEES, INCLUDING P1 & FSC ADVISORS
- P2 ADVISORS AND EMPLOYEES/CONTRACTORS OF P2 ADVISORS
AMERIPRISE FINANCIAL, INC. AND ITS
AFFILIATES
APRIL 2008
IA Code of Ethics for Retail Access Persons 1
<PAGE>
INVESTMENT ADVISER CODE OF ETHICS
AMERIPRISE FINANCIAL, INC. AND ITS AFFILIATES
<TABLE>
<S> <C>
OVERVIEW................................................................... 3
Required Standards of Business Conduct.................................. 4
General Policy on Accepting Gifts....................................... 5
Fiduciary Principles.................................................... 5
DEFINITIONS................................................................ 7
PERSONAL TRADING RULES FRAMEWORK........................................... 8
Applicability........................................................... 8
General Rules........................................................... 9
Basis for Rules......................................................... 11
REPORTING REQUIREMENTS FOR RETAIL ACCESS PERSONS........................... 12
Securities Activities Which Must Be Reported............................ 12
How To Comply........................................................... 12
Exceptions to Limited Choice............................................ 13
Securities Reporting for Retail Access Persons.......................... 14
ADDITIONAL RULES & REPORTING REQUIREMENTS.................................. 16
Limited Offerings (Private Placement) Preclearance - Equity and Fixed
Income............................................................... 16
Initial Holdings Disclosure............................................. 17
Annual Certification and Annual Holdings Disclosure..................... 17
Quarterly Reporting and Certification................................... 17
Investment Clubs........................................................ 18
Sanctions............................................................... 19
Unusual Trading Activity................................................ 19
RESPONSIBILITIES OF THE CHIEF COMPLIANCE OFFICER........................... 20
AMERIPRISE FINANCIAL INSIDER TRADING POLICY................................ 21
A. General.............................................................. 21
B. What is "Material Non-Public Information"?........................... 21
C. Criminal and Civil Penalties and Regulatory Sanctions for Insider
Trading.............................................................. 23
D. Prohibitions Regarding Misuse of Material Non-Public Information..... 24
</TABLE>
Appendix A: Initial Personal Account and Holdings Disclosure
Appendix B: Brokerage Account Notification Form
Appendix C: Limited Choice Exception Request
Appendix D: Investment Club Client Disclosure Form
IA Code of Ethics for Retail Access Persons 2
<PAGE>
OVERVIEW
AS A CONDITION OF YOUR CONTINUED EMPLOYMENT OR ASSOCIATION WITH AMERIPRISE
FINANCIAL, INC. OR ITS AFFILIATES ("AMERIPRISE FINANCIAL"), YOU ARE REQUIRED TO
READ, UNDERSTAND, AND FULLY COMPLY WITH THIS CODE OF ETHICS. THE CODE OF ETHICS
ALSO INCORPORATES INTO ITS TERMS AND REQUIREMENTS THE PROVISIONS OF OTHER
IMPORTANT DOCUMENTS TO WHICH YOU ARE SUBJECT; NAMELY, THE AMERIPRISE FINANCIAL
CODE OF CONDUCT AND, FOR FINANCIAL ADVISORS AND THEIR EMPLOYEES, THE POLICIES
AND PROCEDURES CONTAINED IN THE REGULATORY INFORMATION CENTER.
It is your personal responsibility and accountability to avoid any conduct that
could create a conflict, or even the appearance of a conflict, with our clients'
interests, or do anything that could damage or erode the trust our clients place
in Ameriprise Financial. This is the spirit of the Code of Ethics. Every person
has the absolute obligation to comply with both the letter and the spirit of the
Code. Failure to comply with its spirit is just as much a violation as a failure
to comply with the written provisions of the Code. In this regard, you should
also be aware that it is impossible for the Code of Ethics to cover every
situation you may encounter. In situations that are not specifically covered by
the Code we must follow the spirit of the Code. If you are uncertain as to the
appropriate course of action, you should seek immediate assistance from your
leader, Personal Trade Compliance, the Chief Compliance Officer, or by calling
the Employee Relations Group Service Center at 877-267-HR4U, option 2. If the
Code of Ethics is silent on a particular matter, it does not authorize conduct
that violates the spirit of the Code.
The Code covers not only the activities you perform on a day-to-day basis, but
also your personal securities transactions as well as those of certain of your
family members and entities (such as corporations, trusts, or partnerships) that
you may be deemed to control or influence.
Appropriate sanctions will be imposed for violations of the Code of Ethics.
Sanctions may include bans on personal trading, financial penalties,
disgorgement of trading profits, suspension of employment, and/or termination of
employment or association with Ameriprise Financial. Repeat violations of the
Code will result in progressively stronger sanctions. Self-reporting a violation
of the Code will be considered in determining the appropriate sanction for the
violation.
This Code will be provided to all individuals who are subject to its terms.
AFTER YOU RECEIVE AND REVIEW THE CODE, YOU MUST CERTIFY THAT YOU HAVE RECEIVED,
READ AND UNDERSTAND THE DOCUMENT AND AGREE THAT YOU ARE SUBJECT TO IT AND WILL
COMPLY WITH IT. You are also required to provide similar certifications when the
Code is amended. On an annual basis you must certify that you have complied with
the Code during the past year and will continue to do so going forward.
IA Code of Ethics for Retail Access Persons 3
<PAGE>
REQUIRED STANDARDS OF BUSINESS CONDUCT
UNDER THIS CODE OF ETHICS ALL SUPERVISED PERSONS OF AMERIPRISE FINANCIAL MUST
COMPLY WITH AMERIPRISE FINANCIAL'S STANDARDS OF BUSINESS CONDUCT. THESE
STANDARDS ARE THE FOLLOWING:
- COMPLIANCE WITH ALL APPLICABLE LAWS AND REGULATIONS, INCLUDING THE
FEDERAL SECURITIES LAWS AND OUR FIDUCIARY OBLIGATIONS;
- COMPLIANCE WITH THIS CODE OF ETHICS;
- COMPLIANCE WITH THE AMERIPRISE FINANCIAL CODE OF CONDUCT;
- COMPLIANCE WITH ALL OTHER POLICIES AND PROCEDURES APPLICABLE TO YOUR
POSITION AND ASSIGNED RESPONSIBILITIES, INCLUDING ANY SPECIFIC GIFT
POLICIES;
- FINANCIAL ADVISORS AND THEIR EMPLOYEES MUST ALSO COMPLY WITH THE
POLICIES AND PROCEDURES CONTAINED IN THE REGULATORY INFORMATION
CENTER.
THESE STANDARDS APPLY TO ALL INDIVIDUALS, AT ALL LEVELS OF THE ORGANIZATION.
COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS IS MANDATORY FOR EVERYONE AND IS
NOT SUBJECT TO BUSINESS PRIORITIES OR INDIVIDUAL DISCRETION. IF AT ANY TIME YOU
HAVE A QUESTION ABOUT THE LEGALITY OF A COURSE OF ACTION YOU SHOULD CONSULT WITH
THE GENERAL COUNSEL'S OFFICE BEFORE PROCEEDING.
The Investment Advisers Act of 1940 imposes a fiduciary duty on an investment
adviser to act in utmost good faith with respect to its clients, and to provide
full and fair disclosure of all material facts, particularly where the adviser's
interests may conflict with the client's. The Adviser has a duty to deal fairly
and act in the best interests of its clients at all times.
All employees and certain other associated persons of Ameriprise Financial must
also comply with the Ameriprise Financial Code of Conduct. The Code of Conduct
deals with issues covering, among other things, the acceptance of gifts, service
on the boards of public companies and other outside activities. For specific
guidance on these and other topics that may not be specifically covered by the
Code of Ethics you should refer to the Code of Conduct and the Regulatory
Information Center.
All financial advisors and their employees associated with Ameriprise Financial
must comply with the policies and procedures contained in the Regulatory
Information Center. The provisions of the Code of Ethics and the Regulatory
Information Center should not conflict. In the event the provisions of the Code
of Ethics or the Regulatory Information Center conflict or appear to conflict
with those contained in the Code of Conduct you should follow the guidance
contained in the Code of Ethics or the Regulatory Information Center. If at any
time you feel there is ambiguity as to what the appropriate course of action
should be in a particular situation you should immediately seek assistance from
the General Counsel's Office or the Compliance Department before you act.
You are also subject to compliance policies and procedures and other policies
and procedures adopted by the organization. You are responsible for being
familiar with and complying with these policies and procedures. If you are
uncertain as to these additional policies and procedures to which you are
subject, speak with your leader.
As described in greater detail below, the Code of Ethics also addresses personal
securities trading activities in an effort to detect and prevent illegal or
improper transactions.
Under this Code of Ethics you have a duty to promptly report any violation or
apparent violation of the Code of Ethics (including the Code of Conduct and the
Regulatory Information Center) to the Chief Compliance Officer or Personal Trade
Compliance. You can also report violations or
IA Code of Ethics for Retail Access Persons 4
<PAGE>
possible violations through the Employee Relations Group Service Center at
877-267-HR4U, option 2, or anonymously via Ethicspoint(R) at 800-963-6395. This
duty exists whether the violation or apparent violation is yours or that of
another associated person of Ameriprise Financial. All such reports will be
treated confidentially to the extent permitted by law and will be investigated
promptly and appropriately. Ameriprise Financial prohibits retaliation against
individuals who report violations or apparent violations of the Code in good
faith and will treat any such retaliation as a further violation of the Code.
However, it must be understood that associated persons of Ameriprise Financial
who violate the Code are subject to sanctions for the violation even if they
report the violation.
GENERAL POLICY ON ACCEPTING GIFTS
Instances may arise in the course of business where a person or organization
offers you a gift. When being offered a gift, you will need to determine whether
or not the gift can be accepted. The Ameriprise Financial Code of Conduct
provides general guidance. More specific information can be located within each
business entity's gift policy:
- Employees of Ameriprise Financial Services, Inc. (AFSI) should
reference the company intranet site Inside for their Gifts &
Entertainment policy
- Employees of American Enterprise Investment Services (AEIS) should
reference the company intranet site Inside for their Gifts &
Entertainment policy
WHEN RECEIVING A GIFT, IT IS IMPERATIVE TO AVOID EVEN THE APPEARANCE OF A
CONFLICT OF INTEREST, REGARDLESS OF THE VALUE OF THE GIFT. Sometimes a situation
may be unclear. If you are unsure whether to accept a gift, talk with your
leader. If your leader is unsure, or feels an exception should be made, he or
she should contact the unit's Business Unit Compliance Officer (BUCO) for
guidance. Above all, the decision should comply with the spirit of the Code of
Conduct and this Code of Ethics.
IA Code of Ethics for Retail Access Persons 5
<PAGE>
FIDUCIARY PRINCIPLES
The following general fiduciary principles shall govern your activities and the
interpretation and administration of these rules:
- The interests of our advised and sub-advised account clients
(including Mutual Fund shareholders) must be placed first at all
times.
- All personal trading transactions must be conducted consistent with
the rules contained in this Code and in such a manner as to avoid any
actual or potential conflict of interest or any abuse of an
individual's position of trust and responsibility.
- You should never use your position with the company, or information
acquired during your employment, in your personal trading in a manner
that may create a conflict - or the appearance of a conflict - between
your personal interests and the interest of the company or its
customers and clients. If such a conflict or potential conflict
arises, you must report it immediately to Personal Trade Compliance.
- Company personnel should not take inappropriate advantage of their
positions.
In connection with providing investment management services to clients, this
includes prohibiting any activity which directly or indirectly:
- Defrauds a client in any manner;
- Misleads a client, including any statement that omits material facts;
- Operates or would operate as a fraud or deceit on a client;
- Functions as a manipulative practice with respect to a client; and
- Functions as a manipulative practice with respect to securities.
These rules do not identify all possible conflicts of interest, and literal
compliance with each of the specific provisions of this Code of Ethics will not
shield company personnel from liability for personal trading or other conduct
that is designed to circumvent its restrictions or violates a fiduciary duty to
our clients.
IA Code of Ethics for Retail Access Persons 6
<PAGE>
DEFINITIONS
This Investment Adviser Code of Ethics for Retail Access Persons applies to all
associated persons of Ameriprise Financial other than Investment Access Persons
or certain others who receive notice that a different Code of Ethics applies to
them.
ACCESS PERSONS: supervised persons and other persons who are employees or
associated persons of Ameriprise Financial, who have access to nonpublic
information regarding clients' purchase or sale of securities or non public
information regarding the portfolio holdings of Proprietary Funds, are involved
in making securities recommendations to clients, or who have access to
recommendations that are nonpublic.
RETAIL ACCESS PERSONS: Access Persons who have access only to Ameriprise
Financial retail client information.
INVESTMENT ACCESS PERSONS: Access Persons who have access to Ameriprise
Financial / RiverSource institutional client information. Investment Access
Persons are also subject to rule 17j-1 under the Investment Company Act of
1940.
BROKERAGE ACCOUNT: A Brokerage Account is an account held at a licensed
brokerage firm in which securities are bought and sold (e.g., stocks, bonds,
futures, options, Mutual Funds). This includes employer-sponsored incentive
savings plans.
COVERED MUTUAL FUNDS: Mutual Funds for which RiverSource Investments or Kenwood
Capital Management serves as an investment adviser or for which an affiliate of
RiverSource Investments or Kenwood Capital Management serves as principal
underwriter. As of January 1, 2008, Covered Mutual Funds include:
- RiverSource Mutual Funds (both retail and variable portfolio funds)
- John Hancock Funds (John Hancock Investment Services, LLC)
- Diversified Investors Portfolios (Diversified Investment Advisors,
Inc.)
- Calvert/Ameritas Funds (Calvert Asset Management Company, Inc.)
- Nationwide Funds (Nationwide Fund Advisors)
INITIAL PUBLIC OFFERING (IPO): a corporation's first offering of stock to the
public. Purchases of initial public offerings are prohibited.
LIMITED OFFERINGS (PRIVATE PLACEMENTS): an offering of securities exempt from
registration due to certain exemptions such as the size of the offering and the
number of purchasers. You are not allowed to invest in Limited Offerings
(Private Placements) without preclearance - see page 16.
SUPERVISED PERSON: any partner, officer, director (or other person occupying a
similar status or performing similar functions), or an employee of an investment
adviser, or other person who provides investment advice on behalf of the
investment adviser and is subject to the supervision and control of the
investment adviser.
MUTUAL FUNDS: U.S. registered open-end investment companies the shares of which
are redeemable on any business day at the net asset value, including Mutual
Funds that underlie variable annuity and variable life insurance contracts.
IA Code of Ethics for Retail Access Persons 7
<PAGE>
PERSONAL TRADING RULES FRAMEWORK
APPLICABILITY
These rules apply to securities trading in which you have a beneficial
ownership. Beneficial ownership includes accounts held in the name of any of the
following individuals:
- - You
- - Your spouse/partner
- - Financially dependent members of your household
In addition, these rules apply to the following types of accounts if any of the
individuals listed above:
- - Is a trustee or custodian for an account (e.g., for a child or parent)
- - Exercises discretion over an account via a power of attorney arrangement or
as an executor of an estate after death
- - Owns an IRA
- - Participates in an investment club
- - Has another arrangement where they give advice and also have a direct or
indirect ownership.
IA Code of Ethics for Retail Access Persons 8
<PAGE>
GENERAL RULES
THESE GENERAL RULES, ALONG WITH THE PROCEDURES CONTAINED IN THE REST OF THIS
DOCUMENT, MUST ALWAYS BE FOLLOWED:
1. No use of inside information (refer to "Ameriprise Financial Insider
Trading Policy" on page 21).
2. No front-running. This involves an individual taking advantage of
non-public information about imminent trading activity in our Mutual
Funds or other advised accounts by trading in a security before the
fund or advised account does. YOU ARE NOT ALLOWED TO TRADE IN A
PARTICULAR SECURITY AHEAD OF, OR AT THE SAME TIME AS, YOUR CLIENTS'
ACCOUNTS.
3. No misuse of material non-public information relating to Mutual Funds,
including information relating to portfolio holdings or pricing.
4. No Access Person shall divulge to any person any client holdings, any
recommendation made to a client, or any contemplated or completed
securities transactions or trading strategies of a client, except as
required in the performance of his or her duties and only to the
extent such other person has a need to know such information to
perform his or her duties. Disclosures of any past, current or
contemplated client holdings must be consistent with the Portfolio
Holdings Disclosure policy.
5. No market timing (short-term trading) in shares of Mutual Funds. This
prohibition applies across all accounts in which you have a beneficial
interest (so that you cannot buy shares of a Mutual Fund in one
account and sell them from another account in market timing
transactions), including the Ameriprise Financial 401(k) Plan and
Mutual Funds underlying a variable annuity and variable life insurance
contracts.
This prohibition also applies to investments through pooled investment
vehicles, such as hedge funds, that may engage in market timing. You
are responsible for ensuring that no pooled investment vehicle in
which you invest engages in market timing.
If you invest in a hedge fund whose offering document does not state
whether the hedge fund engages in market timing of Mutual Funds, you
should obtain written assurance from the hedge fund that it does not
engage in market timing of Mutual Funds.
6. No purchasing of initial public offerings.
7. No preferential treatment from other brokerage firms due to the
purchaser's employment by or association with Ameriprise Financial.
8. No direct trades with broker/dealers' trading desks.
9. No non-retail relationships with broker/dealers.
IA Code of Ethics for Retail Access Persons 9
<PAGE>
10. No use of Ameriprise Financial's name (or the name of any of its
subsidiaries) to obtain a better price from a broker who is a market
maker in the security being traded.
11. No speculative trading of Ameriprise Financial stock, which is
characterized by transactions in "put" or "call" options, or short
sales or similar derivative transactions. Ameriprise Financial
discourages short-term trading in its own stock. This includes
soliciting speculative trades in Ameriprise Financial securities. You
should not solicit or offer an opinion on Ameriprise Financial stock.
(Subject to the Ameriprise Financial Insider Trading Policies, you are
allowed to exercise any Ameriprise Financial stock options you have
received as a result of your employment with the Company. Members of
the Executive Leadership Team, however, must preclear these trades
through the Corporate Secretary's office.)
12. No stopping stock. This is defined as a guarantee by a specialist that
an order placed by a Floor Broker will be executed at the best bid or
offer price then in the Specialist's book unless it can be executed at
a better price within a specified period of time.
13. When engaging in a personal securities transaction, an Access Person
shall always place the interests of clients first and avoid any actual
or potential conflict of interest or abuse of his or her position.
14. Required forms must be filled out completely, accurately and on a
timely basis. This includes quarter end reports. Violations of the
Code, including late filing of periodic reports will be reported to
Senior Management and the RiverSource Investments, LLC Funds Board of
Directors.
15. Required forms must be filled out completely, accurately and on a
timely basis. This includes annual and quarter end reports.
IA Code of Ethics for Retail Access Persons 10
<PAGE>
IMPORTANT:
- OBLIGATION TO REPORT VIOLATIONS: Any person who discovers that he or
she or another person has violated or apparently violated these
general rules or other provisions of this Code must promptly report
the matter to the Chief Compliance Officer, Personal Trade Compliance
or your leader.
- PERSONAL TRADING RECORDS SUBJECT TO REVIEW BY REGULATORS: The SEC and
FINRA have the authority to review individuals' personal trading
records. It is not unusual in the course of regulatory exams for the
examiners to interview individuals about their trading activity or
violations of the Code of Ethics.
- Even if you receive preclearance, you cannot be ensured that you have
not violated the Code. Receiving preclearance does not exclude you
from other personal trading rules included in this Code.
- The Compliance Department has the authority to review records and
request additional information.
- The privacy of your reported information is extremely important and
will be held in the utmost confidence but is subject to review and
action by appropriate personnel such as Personal Trade Compliance
personnel.
BASIS FOR RULES
The rules and procedures that apply to personal trading for Retail Access
Persons are derived from:
Securities and investment laws
- Securities Act of 1933
- Securities Exchange Act of 1934
- Investment Company Act of 1940 (Rule 17j-1)
- Investment Advisers Act of 1940 (Rule 204A-1)
- Insider Trading and Securities Fraud Enforcement Act of 1988
Rules, regulations and corporate policies
- Securities and Exchange Commission (SEC)
- Financial Industry Regulatory Authority (FINRA)
- Ameriprise Financial Insider Trading Policy
- Ameriprise Financial Code of Conduct
Investment Company Institute (ICI) Guidelines to Industry on Personal
Investing
IA Code of Ethics for Retail Access Persons 11
<PAGE>
REPORTING REQUIREMENTS FOR RETAIL ACCESS PERSONS
SECURITIES ACTIVITIES WHICH MUST BE REPORTED
All personal securities trading activities (e.g., stocks, options, bonds,
Covered Fund shares), whether bought or sold, must be reported, with the
exception of such things as money market mutual funds and certificates of
deposit. See "How to Comply" section below for more information. A chart
indicating which transactions must be reported is located on pages 14-15. You
must report activity involving securities trading in which you have a BENEFICIAL
OWNERSHIP. This includes accounts held in the name of any of the following
individuals:
- - You
- - Your spouse/partner
- - Financially dependent members of your household
In addition, these rules apply to the following types of accounts if any of the
individuals listed above:
- - Is a trustee or custodian for an account (e.g., for a child or parent)
- - Exercises discretion over an account via a power of attorney arrangement or
as an executor of an estate after death
- - Owns an IRA
- - Participates in an investment club
- - Has another arrangement where you give advice and also have a direct or
indirect ownership.
HOW TO COMPLY
Limited Choice Policy: Unless you have an exception approved by Personal Trade
Compliance, your personal securities must be held and trading must be conducted
through one of three brokers - Ameriprise Financial Brokerage, Charles Schwab,
or Merrill Lynch. See page 14-15 for a complete list of securities subject to
this limited choice policy.
You must report any new accounts opened by immediately completing the following
steps:
- - Complete the Brokerage Account Notification Form in Appendix B and return
it to Personal Trade Compliance, H26/1880.
- - Notify your broker of your association with Ameriprise Financial. You are
responsible for notifying your broker that you work for Ameriprise
Financial, a broker/dealer, and ensuring that Personal Trade Compliance is
provided with duplicate statements and confirmations for your account(s).
NOTE: Accounts owned solely by spouses/domestic partners and other financial
dependants of NON-LICENSED employees of P2 advisors are not required to be
transferred to one of the three limited choice brokers. THESE ACCOUNTS MUST
STILL BE REPORTED ON REQUIRED CERTIFICATION FORMS.
Accounts owned directly by non-licensed employees of P2 advisors must be held at
one of the three limited choice brokers.
NOTE FOR P2 ADVISORS, PARAPLANNERS, AFAS AND EMPLOYEES OF P2 ADVISORS: Based on
activities you or your employing P2 advisor conducts in client accounts, you may
be required to conduct all of your personal trading activity at Ameriprise
Financial.
FAILURE TO COMPLY WITH THE LIMITED CHOICE POLICY AND FAILURE TO DISCLOSE ALL
COVERED MUTUAL FUND ACCOUNTS AND APPLICABLE BROKERAGE ACCOUNTS AND SECURITIES
ARE VIOLATIONS OF THE CODE AND MAY RESULT IN A SANCTION, WHICH INCLUDES POSSIBLE
TERMINATION.
IA Code of Ethics for Retail Access Persons 12
<PAGE>
WHAT TYPES OF INVESTMENTS MUST BE TRANSFERRED TO OR HELD AT ONE OF THE LIMITED
CHOICE FIRMS?
- - Stocks -- common (including Ameriprise Financial), preferred, convertible
preferred, short sales, rights, or warrants
- - Corporate bonds (including convertible and foreign)
- - State and local municipal bonds
- - Derivatives, including futures, options and index securities
- - Limited partnerships (if purchased through a Brokerage Account)
- - Unit Investment Trusts (UITs), American Depository Receipts (ADRs) and Real
Estate Investment Trusts (REITs), Exchange Traded Funds and closed-end
funds.
- - Managed or wrap accounts in which individual securities are held and the
investor has the ability to exercise trading discretion
- - RiverSource Mutual Funds must be held through Ameriprise Brokerage,
Ameriprise Financial 401(k) Plan, "at fund" (directly with the Mutual
Fund), or underlying a variable annuity or variable life insurance contract
from IDS Life Insurance Company or another affiliate of Ameriprise
Financial
WHAT INVESTMENTS ARE NOT SUBJECT TO THIS LIMITED CHOICE POLICY?
Some investments are not subject to this policy, and therefore, do not need to
be transferred. You may continue to hold the following investments in accounts
at other firms:
- - Open-end Mutual Funds other than RiverSource Mutual Funds
- - Annuities
- - Certificates of Deposit, savings certificates, checking and savings
accounts and money market accounts
- - Commercial paper
- - Dividend reinvestment plans
- - Employer sponsored incentive savings plans
- - US Government bonds (U.S. Treasury notes, bills, bonds, STRIPS, savings
bonds)
- - Church bonds
- - Limited Offerings / Private Placements (These transactions require specific
preclearance-see page 16)
- - Managed or wrap accounts that do not include individual securities
EXCEPTIONS TO LIMITED CHOICE
Exceptions to the limited choice policy of conducting personal trading through
one of the three authorized brokers - Ameriprise Financial Brokerage, Charles
Schwab, or Merrill Lynch - will be rare. If you believe your situation warrants
an exception, print and complete the Exception Request Form found in Appendix C.
Note that if you are granted an exception for a managed account where you have
no trading discretion, you and your broker will be required to re-certify to
this annually in order to maintain that exception.
If you are granted an exception, you are responsible for ensuring that Personal
Trade Compliance receives duplicate confirmations and statements.
An exception to the limited choice policy does not eliminate the need to comply
with the rest of this Investment Adviser Code of Ethics.
IA Code of Ethics for Retail Access Persons 13
<PAGE>
SECURITIES REPORTING LIST FOR RETAIL ACCESS PERSONS
<TABLE>
<CAPTION>
This chart lists which securities are subject to LIMITED CHOICE* and IS REPORTING REQUIRED & SUBJECT TO LIMITED
must be reported on your initial and annual certification. CHOICE*?
- -------------------------------------------------------------------- ------------------------------------------
<S> <C>
American Depository Receipts/Shares/Units (ADRs/ADSs/ADUs) Yes
Annuities - Fixed No
(other than market value adjusted annuities)
Annuities - Variable and market value adjusted annuities Yes
Report underlying Covered Mutual Funds
American Express Stock Yes
(Options on) American Express Stock (i.e., puts and calls) Yes
American Express employee stock options (Obtained as a part of an Yes
incentive plan. This also includes other company employee stock option
plans)
Ameriprise Financial Stock Yes
Executive Leadership Team must preclear
trades with the Corporate Secretary's
office
(Options on) Ameriprise Financial Stock (i.e., puts and calls) Prohibited
Ameriprise Financial employee stock options (obtained as a part of an Yes
incentive plan)** Executive Leadership Team must preclear
trades with the Corporate Secretary's
office
Bonds and other debt instruments, including but not limited to: Yes
- Corporate
- U.S. Guaranteed or of federally sponsored enterprises
(FHLMC, FNMA, GNMA, etc.)
- Municipal
- Closely held
Bonds and other direct debt instruments of the U.S. Government: No
(e.g., Treasury notes, bills, bonds or STRIPS)
Bonds - convertible Yes
Bank certificates of deposit, Savings Certificates, checking and No
savings accounts and money market accounts, bankers' acceptances,
commercial paper and high quality short-term debt instruments,
including repurchase agreements.
Currency Accounts No
Derivatives (DECS, ELKS, PRIDES, etc.) Yes
Futures: commodity, currency, financial, or stock index Yes
Index Securities - (e.g., S&P 500, SPDRS/SPY, Diamonds/DIA, Yes
Cubes/QQQ, Exchange Traded Funds, Holders Trusts)
Life Insurance (variable) Yes
Report underlying Covered Mutual Funds
Limited Offerings / Private Placements - Equity and Fixed Income Yes
(see page 16)
Limited Partnerships Yes
Managed or wrap accounts:
- - If individual securities held and investor has ability to Yes
exercise trading discretion
- - If individual securities held and investor does not have ability Yes
to exercise trading discretion
</TABLE>
IA Code of Ethics for Retail Access Persons 14
<PAGE>
<TABLE>
<CAPTION>
This chart lists which securities are subject to LIMITED CHOICE* and IS REPORTING REQUIRED & SUBJECT TO LIMITED
must be reported on your initial and annual certification. CHOICE*?
- -------------------------------------------------------------------- ------------------------------------------
<S> <C>
- - If individual securities not held Yes
Money market mutual funds No
Mutual Funds: Open-end Mutual Funds that are "Covered Mutual Funds" Yes
(these are Mutual Funds other than money market mutual funds that are
advised or sub-advised by RiverSource Investments or Kenwood Capital
Management or for which an affiliate of RiverSource Investments or
Kenwood Capital Management serves as principal underwriter.
As of January 1, 2008, Covered Mutual Funds include RiverSource Mutual
Funds, John Hancock Funds, Diversified Investors Portfolios,
Calvert/Ameritas Funds and Nationwide Funds.)
Mutual Funds (including money market mutual funds): Open-end mutual No
funds that are not "Covered Mutual Funds"
Mutal Funds: Closed-end funds Yes
Options on stocks Yes
Options: exercise of option to buy or sell underlying stock Yes
Options on futures and indices (currency, financial, or stock index) Yes
REITS (Real Estate Investment Trusts) Yes
Stocks: common or preferred Yes
Stocks: convertible preferred Yes
Stocks: short sales (short sales prohibited on Ameriprise Financial Yes
stock)
Stocks (owned) - exchanges, swaps, mergers, tender offers Yes
Stocks - public offerings (initial OR secondary) Prohibited
Stocks - Rights or warrants acquired separately Yes
Treasury Inflation Protected Securities (TIPS) No
Unit Investment Trusts (UITs) Yes
</TABLE>
* LIMITED CHOICE: The Limited Choice policy requires that securities subject
to the policy in the preceding table must be held/traded at one of the
three Limited Choice brokers--Ameriprise Brokerage, Merrill Lynch or
Schwab.
SPECIAL NOTE FOR 401(K)S: reporting is required for any 401(k) or an
employer-sponsored incentive savings plan that holds a security that is subject
to the reporting requirements in the above table.
SPECIAL NOTE FOR AUTOMATIC INVESTMENT PLANS: you do not need to report
transactions that are made as part of a regular periodic purchase (or
withdrawal). For example: payroll deduction, bank authorizations etc.
IA Code of Ethics for Retail Access Persons 15
<PAGE>
ADDITIONAL RULES & REPORTING REQUIREMENTS
LIMITED OFFERINGS (PRIVATE PLACEMENT) PRECLEARANCE - EQUITY AND FIXED INCOME
ALL ACCESS PERSONS need to obtain approval to invest in any Limited Offerings
(private placements), i.e., a security not offered to the public. Approvals must
be obtained in writing from your immediate leader or registered principal, and
Personal Trade Compliance PRIOR to investing.
Limited Offerings include all hedge funds.
HOW TO OBTAIN APPROVAL - Write an explanation of the investment and submit the
request to your leader or registered principal. Required information you must
include in your request:
- - the nature of the investment
- - how you were solicited
- - approximate dollar amount you are planning to invest
- - whether or not the opportunity was being offered to any client accounts
- - whether the security is likely to be purchased by a client account in the
future
In considering whether to make a request, consider whether your investment might
create a conflict with a business interest of Ameriprise Financial. See the
Ameriprise Financial Code of Conduct and the Regulatory Information Center.
HOW LIMITED OFFERINGS/PRIVATE PLACEMENTS ARE APPROVED - Your leader or
registered principal will approve or reject your request, and return the request
to you. If approval is granted, send the request via Lotus Notes message to
Private Placement Preclearance. YOU CANNOT ENTER INTO THE PROPOSED TRANSACTION
WITHOUT APPROVAL FROM PERSONAL TRADE COMPLIANCE.
Personal Trade Compliance will respond to you requesting any additional
information or further documentation needed to make a decision. Upon receipt of
all necessary documentation, Personal Trade Compliance will then confirm in
writing whether you may invest. If your preclearance request is approved, if you
are an employee Band 50 or above, you must report the investment on the
quarterly reporting form, which will be provided to you near the beginning of
each calendar quarter.
If you have questions about how the private placement approval process applies
to a transaction you are considering, PLEASE CONTACT PERSONAL TRADE COMPLIANCE
BY SENDING A LOTUS NOTES MESSAGE TO PERSONAL TRADING OR CALL THE PERSONAL TRADE
HOTLINE AT 612-671-5196 BEFORE YOU INVEST.
IA Code of Ethics for Retail Access Persons 16
<PAGE>
FAILURE TO COMPLETELY AND ACCURATELY DISCLOSE APPLICABLE BROKERAGE & COVERED
MUTUAL FUND ACCOUNTS, HOLDINGS AND QUARTERLY NON-BROKERAGE ACTIVITY BY THE TIME
FRAMES SPECIFIED BY PERSONAL TRADE COMPLIANCE IS A VIOLATION OF THE CODE AND MAY
RESULT IN A SANCTION, WHICH INCLUDES POSSIBLE TERMINATION.
INITIAL HOLDINGS DISCLOSURE
New Access Persons must disclose certain accounts and securities holdings in
which they have a beneficial interest, as indicated in the chart on pages 14-15
of this Code. You also must disclose all of the holdings in those accounts. All
new Investment Access Persons will receive a copy of the Code of Ethics that
applies to them and that includes an Initial Personal Account and Holdings
Disclosure form. This document must be returned to Personal Trade Compliance
H26/1880 within 10 days. An example of this form is located in Appendix A.
IF YOU MAINTAIN A BROKERAGE ACCOUNT OUTSIDE OF THE LIMITED CHOICE BROKERS
(AMERIPRISE FINANCIAL, MERRILL LYNCH, OR SCHWAB) THAT HOLDS SECURITIES SUBJECT
TO THE LIMITED CHOICE POLICY, YOU MUST TRANSFER YOUR ACCOUNT(S) TO ONE OF
LIMITED CHOICE BROKERS WITHIN 45 CALENDAR DAYS.
ANNUAL CERTIFICATION AND ANNUAL HOLDINGS DISCLOSURE
In addition to reporting requirements already outlined, every Access Person must
submit an annual certification form. If you are new to the company, you will
receive a form and instructions when you attend your orientation session. If you
do not attend this orientation session, please contact Personal Trade Compliance
at 612-671-5196 for the information.
All Access Persons must also disclose annually certain accounts and securities
holdings in which they have a beneficial interest, as indicated in the chart on
pages 15-16. Failure to disclose annual holdings by the time frames specified by
Personal Trade Compliance may result in a sanction, which includes possible
termination. Additionally, on an annual basis you must certify that you have
complied with the Code during the past year and will continue doing so going
forward.
All Access Persons will receive a form on an annual basis from Personal Trade
Compliance. You must document your account(s) certification and holdings
disclosures on this form.
QUARTERLY REPORTING AND CERTIFICATION
All access persons must disclose on a quarterly basis if they executed
securities transactions outside of a broker-dealer account or engaged in
transactions in Covered Mutual Funds as identified on the quarterly reporting
form.
Reporting forms will be available on Inside (for home office employees) and
Advisor Compass (for field members) during the certification period. Those
persons with reportable activity must return their forms to Personal Trade
Compliance by the due date given.
Employees Band 50 and above will be sent a separate form which also requires
reporting of Limited Offering (Private Placement) transactions during the
quarter.
IA Code of Ethics for Retail Access Persons 17
<PAGE>
INVESTMENT CLUBS
There is no prohibition against joining an investment club. However, the account
must be held at one of the limited choice brokers, Ameriprise Brokerage, Schwab
or Merrill Lynch, unless the club has been granted an exception from Personal
Trade Compliance. When FORMING OR JOINING AN INVESTMENT CLUB, provide the
following to Personal Trade Compliance:
- a copy of the Brokerage Account Notification Form (see Appendix B)
- a copy of your investment club's bylaws
- a list of the members in the club and an indication if any members are
employees, independent contractors or associated persons of Ameriprise
Financial. Please include the individual's employee, Advisor, or
contractor identification number.
- the contact person for the club in case of questions
ADVISORS
YOU MAY NOT SOLICIT CLIENTS OF AMERIPRISE FINANCIAL TO BECOME INVESTMENT CLUB
MEMBERS, DUE TO POSSIBLE CONFLICTS OF INTEREST. If an existing member of your
investment club later becomes your client, you must obtain a written and signed
disclaimer from him/her immediately. A sample copy of the disclaimer is attached
in Appendix D.1, titled Investment Club Client Disclosure Form. This disclaimer
must state the investment club relationship was pre-existing and entered into
freely, and the client understands Ameriprise Financial in no way endorses,
approves, or guarantees any activity undertaken by the club. Furthermore, the
client/club members understand Ameriprise Financial has no responsibility for
the financial results due to his/her participation in the club. A completed copy
of the Client Disclosure Form must be routed to Personal Trade Compliance
immediately.
IA Code of Ethics for Retail Access Persons 18
<PAGE>
SANCTIONS
Sanctions will be imposed for violations of this Code or Ameriprise Financial,
SEC, or FINRA rules or policies. These sanctions are communicated via violation
letters and may vary depending on the severity of the violation, if a record of
previous violations exists and/or the violation was self-reported. Examples of
potential sanctions include (but are not limited to):
- - a written reminder about the rules (with a copy to the individual's
manager)
- - notification to your broker to freeze your account from any buy-side
trading. This is a typical sanction if you fail to move your account(s) to
one of the three limited choice brokers - Ameriprise Financial Brokerage,
Schwab, or Merrill Lynch. The account could then be used only for transfers
and liquidations.
- - prohibition against personal trading for a specific period of time
- - forfeiture of trading profits
- - monetary fine
- - negative impact on the individual's bonus or other compensation and or
performance rating
- - termination
A written record of each violation and sanction is maintained by Personal Trade
Compliance.
UNUSUAL TRADING ACTIVITY
The Personal Trade Committee and your department head review your personal
trading activity regularly. We may ask to review specific transactions with you
or your broker if clarification is necessary. You may also be asked to supply
Personal Trade Compliance with an explanation of your personal trade(s).
Examples of situations that may require explanation include, but are not limited
to:
- - violations of personal trading rules
- - trades in a security shortly before our Investment Department trades in the
same security on behalf of a client
- - patterns of personal trading that are similar to your clients' trading
- - significant changes in trading volume or consistently excessive trading
volume
- - patterns of short-term, in and out trading
- - significant positions in illiquid securities
- - a number of associated persons trading in the same security in the same
time frame
IA Code of Ethics for Retail Access Persons 19
<PAGE>
RESPONSIBILITIES OF THE CHIEF COMPLIANCE OFFICER, OR THEIR DELEGATE,
RELATED TO PERSONAL TRADING
PROCESS AND RESPONSIBILITY
The Chief Compliance Officer, or their delegate (i.e. Personal Trade
Compliance), has primary responsibility for enforcing the Code. The Personal
Trade Committee (PTC) reviews all alleged personal trading violations and any
sanctions applied. If the alleged violator is the Chief Compliance Officer, the
matter must also be reported to the General Counsel of the firm.
OPPORTUNITY TO RESPOND
A person charged with a violation of the Code shall have the opportunity to
appear before the person or persons enforcing the Code and to respond to all
charges, orally or in writing.
INITIAL HOLDINGS REPORT; ANNUAL HOLDINGS REPORT
The Chief Compliance Officer, or their delegate, shall review and maintain the
initial and annual holdings reports. Completion of the review shall involve such
considerations as the Chief Compliance Officer, or their delegate, deems
necessary to enforce the provisions and intent of this Code.
QUARTERLY PERSONAL TRADING REPORTS
The Chief Compliance Officer, or their delegate, shall review and maintain the
quarterly transaction reports. Completion of the review shall involve such
considerations as the Chief Compliance Officer, or their delegate deems
necessary to enforce the provisions and intent of this Code.
PRE-CLEARANCE
The Chief Compliance Officer, or their delegate, shall review and approve or
disapprove the Access Person requests to pre-clear securities transactions. Such
review shall involve such considerations as the Chief Compliance Officer, or
their delegate, deems necessary to enforce the provisions and intent of this
Code.
VIOLATIONS OR SUSPECTED VIOLATIONS
If the Chief Compliance Officer or their delegate becomes aware of a violation
or suspected violation of the Code as a result of such review, the Chief
Compliance Officer, or their delegate, shall take whatever steps deemed
necessary to enforce the provisions of the Code, including consulting with
outside counsel.
RECORD RETENTION
Records are required to be kept for seven years (a minimum of two years on
site).
IA Code of Ethics for Retail Access Persons 20
<PAGE>
AMERIPRISE FINANCIAL INSIDER TRADING POLICY
AMERIPRISE FINANCIAL'S
STATEMENT OF POLICY AND PROCEDURES WITH RESPECT TO THE
RECEIPT AND USE OF MATERIAL NON-PUBLIC INFORMATION
This statement represents the policy of Ameriprise Financial with regard to the
receipt and use of material non-public information. If you have any questions or
comments about this policy, please contact either the General Counsel's Office
(the "GCO") or the Compliance Department. For Investment Access Persons, this
policy is supplemented by the Policy and Business Procedures Regarding Insider
Trading, Restricted List and Information Walls.
A. GENERAL
Ameriprise Financial prohibits any associated person from trading on the basis
of or otherwise misusing material non-public ("inside") information. Section
10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5
make it unlawful for any person or corporate insider, while in the possession of
material non-public ("inside") information, to trade or to recommend trading in
securities, or to communicate the material non-public information to others.
In light of the above and in compliance with the requirements of Section 204A of
the Investment Advisers Act of 1940 (the "Advisers Act'), Rule 206(4)-7 enacted
thereunder and the Insider Trading & Securities Fraud Enforcement Act of 1988
(the "Enforcement Act"), Ameriprise Financial has consistently maintained the
policy that associated persons possessing material nonpublic information must
not (a) use such information to obtain profits, mitigate losses or otherwise
secure benefits for Ameriprise Financial, any of its affiliates or clients,
themselves or others, (b) engage in transactions or make recommendations on the
basis of such information, or (c) disclose such information to others.
B. WHAT IS "MATERIAL NON-PUBLIC INFORMATION"?
Generally, it includes material information about an issuer (including a
government entity) or the market for the issuer's securities that has not been
disclosed generally to the marketplace. In addition to coming from the issuer,
material non-public information can come from persons with access to the
information, including not only the issuer's officers, directors and other
employees, but also among others its auditors, investment bankers and attorneys.
Material non-public information may also be obtained by happenstance, e.g., from
social situations, business gatherings, overheard conversations, misplaced
documents and tips from insiders or other third parties.
1. Material Information. Information is "material" if its dissemination is
likely to affect the market price of any of the company's or other issuers'
securities or is likely to be considered important by reasonable investors,
including reasonable speculative investors, in determining whether to trade in
such securities. Information may or may not be material, depending on its
specificity, its magnitude, its reliability and the extent to which it differs
from information previously publicly disseminated.
IA Code of Ethics for Retail Access Persons 21
<PAGE>
Though there is no precise, generally accepted definition of materiality,
information is likely to be material if it relates to significant changes
affecting matters such as:
- Dividend or earnings expectations;
- Changes in previously released earnings estimates;
- Write-downs or write-offs of assets;
- Additions to reserves or bad debts or contingent liabilities;
- A significant increase or decrease in orders;
- Expansion or curtailment of company or major division operations;
- Proposals or agreements involving a joint venture, merger,
acquisition, divestiture;
- A purchase or sale of substantial assets;
- New products or services;
- Exploratory, discovery or research development;
- Criminal indictments, civil litigation or government
investigation;
- Disputes with major suppliers or customers;
- Labor disputes including strikes or lock-outs;
- Substantial changes in accounting methods;
- Debt service or liquidity problems;
- Extraordinary borrowings;
- Bankruptcy or insolvency;
- Extraordinary management developments;
- Public offerings or private sales of debt or equity securities;
- Calls, redemptions or purchases of the company's own stock;
- Issuer tender offers;
- Recapitalizations;
- Competitive developments within the marketplace.
2. Non-public Information. Non-public information is information that has
not been made available to investors generally. It includes information received
in circumstances indicating that it is not yet in general circulation. It also
includes situations in which the recipient knows or should know that the
information could only have been provided directly or indirectly by the issuer
or its insiders. For example, personnel at Ameriprise Financial may temporarily
become insiders when an external source, such as a company or officer of a
company, entrusts material non-public information in connection with a
commercial relationship or transaction to an associated person of Ameriprise
Financial with the expectation that the information will remain confidential. In
order for non-public information to become public, it must be disseminated
through recognized channels of distribution designed to reach the securities
marketplace.
To show that material information is public, you should be able to point to some
fact verifying that the information has become generally available. For example,
disclosure in a national business and financial wire service, by a news service,
or in a publicly disseminated disclosure document would all be sufficient to
consider the information generally available. The circulation of rumors or "talk
on the street," even if accurate and widespread does not constitute the
requisite public disclosure.
Material information disclosed only to institutional investors or to a fund
analyst or a favored group of analysts generally may retain its status as
non-public information and must not be disclosed or otherwise misused.
Similarly, partial disclosure does not constitute public dissemination. As long
as any material component of the inside information has yet to be publicly
disclosed, the information is non-public and a trade based on, or sharing of
such information is prohibited.
IA Code of Ethics for Retail Access Persons 22
<PAGE>
3. Information Disclosed in Breach of a Duty (Tipper and Tippee Liability).
Associated persons of Ameriprise Financial must be wary of material non-public
information disclosed in breach of a corporate insider's fiduciary duty. Even
when there is no expectation of confidentiality, you may become an insider upon
receiving material non-public information in circumstances in which you know or
should know that a corporate insider is disclosing information in breach of the
fiduciary duty he or she owes his or her company and its shareholders. Whether
the disclosure is an improper "tip" that renders the recipient a "tippee"
depends on whether the corporate insider expects to benefit personally, either
directly or indirectly, from the disclosure. In the context of an improper
disclosure by the corporate insider, the requisite "personal benefit" is not
limited to a business or future monetary gain. Rather, a prohibited personal
benefit may include a reputational benefit, an expectation of a quid pro quo
from the recipient or the recipient's employer, or an intention to benefit the
recipient or the recipient's employer by sharing the material non-public
information.
Given the potentially severe regulatory, civil and criminal sanctions to which
you, Ameriprise Financial and other associated persons of Ameriprise Financial
could be subject, if uncertain as to whether the information you possess is
material non-public information, you should immediately contact Legal or
Compliance. Pending a final determination in consultation with Legal and/or
Compliance, the information should be treated as material non-public information
that cannot otherwise be communicated to any other person or misused.
C. CRIMINAL AND CIVIL PENALTIES AND REGULATORY SANCTIONS FOR INSIDER TRADING
Penalties for misusing material non-public information are severe. Depending on
the circumstances and the adequacy of the relevant procedures, the associated
person involved, his or her supervisor, Ameriprise Financial's principals,
officers, directors and other supervisory personnel could all face substantial
regulatory, civil and criminal sanctions.
For example, associated persons of Ameriprise Financial who either trade on
inside information or become subject to tipper or tippee liability are subject
to the following penalties:
1. A civil penalty of up to three times the profit gained or loss avoided;
2. A criminal fine of up to $5,000,000; and
3. A jail term of up to 20 years.
Furthermore, Ameriprise Financial and its supervisory personnel, if they fail to
take appropriate steps to prevent insider trading, are subject to the following
penalties:
1. A civil penalty of up to $1,000,000 or, if greater, three times the profit
gained or loss avoided as a result of the associated person's violation;
and
2. A criminal penalty of up to $2,500,000 for individuals and up to
$25,000,000 for Ameriprise Financial.
Finally, violations of insider trading laws could result in civil injunctions
and a suspension or permanent bar from the securities industry. In addition to
the criminal, civil and regulatory penalties described above, any associated
person who is found to have violated these rules or who is found to have
violated a federal or state securities law or regulation related to the misuse
of material non-public information will be subject to serious sanctions by
Ameriprise Financial, including termination of employment.
IA Code of Ethics for Retail Access Persons 23
<PAGE>
D. PROHIBITIONS REGARDING MISUSE OF MATERIAL NON-PUBLIC INFORMATION
Listed below are certain prohibitions regarding the misuse of material
non-public information. Anyone who knows or has reason to suspect that these
prohibitions have been violated must bring such actual or potential violation to
the immediate attention of Compliance. These prohibitions are not intended to be
exhaustive, but instead are listed to provide examples of the types of
situations likely to raise significant issues with respect to the misuse of
inside information. No director, officer, principal or associated person of
Ameriprise Financial shall do any of the following:
- Purchase or sell or recommend or direct the purchase or sale of a
security for any client or any client's account managed by Ameriprise
Financial (including accounts owned by Ameriprise Financial) or for
any other person while in possession of material non-public
information relevant to that security.
- Take advantage of material non-public information to purchase or sell
or recommend or direct the purchase or sale of any security for his or
her own account, for any account over which he or she has a direct or
indirect beneficial interest (including an account held by or for any
family member or family-related trust).
- Subject to relevant procedures (including this Personal Trading Code
of Ethics and the Policy and Business Procedures Regarding Restricted
List and Information Walls), disclose material non-public information
to any person, unless such disclosure is both authorized and necessary
to effectively carry out the project or transaction for which
Ameriprise Financial has been approached or engaged.
- Engage in tipping or recommending, whether formally, informally,
orally or in writing, the purchase or sale of any security based on
material non-public information relevant to that security.
- Give consideration to any material non-public information furnished by
any broker-dealer when recommending the allocation of brokerage to any
broker-dealer.
- Trade for his or her personal account with the expectation that an
account managed by Ameriprise Financial will soon trade in the same
security (otherwise known as front-running).
IA Code of Ethics for Retail Access Persons 24
<PAGE>
APPENDIX A: INITIAL PERSONAL ACCOUNT AND HOLDINGS DISCLOSURE
INITIAL PERSONAL ACCOUNT AND HOLDINGS DISCLOSURE COMPLETION INSTRUCTIONS
RETAIL ACCESS PERSONS
BELOW ARE THE STEPS FOR COMPLETING THE INITIAL PERSONAL ACCOUNT AND HOLDINGS
DISCLOSURE ("INITIAL CERTIFICATION") FORM FOUND ON PAGES A.2 AND A.3:
1. Write your NAME, SOCIAL SECURITY NUMBER, ID NUMBER, and ROUTING NUMBER (or
Area Office if you are in the field) on the top portion of the form. PLEASE
WRITE LEGIBLY.
2. SECTION 1: Disclose accounts and investments required to be reported--see
pages 14-15 of the Code of Ethics for a list of investments required to be
reported. If you have no investments required to be reported, please write
NONE in Section 1. If you have an account that only contains holdings that
are not required to be reported (e.g., a money market), you do not need to
report that account.
Complete all columns/fields. Include name, account number, and type of
ownership (Individual, Jt, IRA, Roth, Trust etc.). If securities are held
outside of a Brokerage Account (i.e. physical stock certificate), write in
physical certificate or where they are held in the firm name field.
3. SECTION 2: Sign and date you form.
4. Return pages A.2 and A.3 to Personal Trade Compliance (H26/1880) within 5
business days. This is important due to regulatory timing obligations.
YOU MUST COMPLETE AND RETURN THIS FORM EVEN IF YOU HAVE NO ACCOUNTS OR HOLDINGS
TO DISCLOSE.
ADDITIONAL INFORMATION
- - BROKERAGE ACCOUNTS: You must disclose all Brokerage Accounts you own or in
which you have a BENEFICIAL INTEREST (see below for definition of
beneficial interest) that contain securities listed on page 14-15. This
includes Ameriprise Brokerage and accounts held with any other broker.
- - COVERED MUTUAL FUNDS: You must disclose all Covered Mutual Funds held
direct-at-fund, including variable annuities and variable life insurance.
COVERED MUTUAL FUNDS are those Mutual Funds for which RiverSource
Investments or Kenwood Capital Management serves as an investment adviser
or for which an affiliate of RiverSource Investments or Kenwood Capital
Management serves as principal underwriter. As of January 1, 2008, Covered
Mutual Funds include the RiverSource Mutual Funds (both retail and variable
portfolio funds), John Hancock Funds (John Hancock Investment Services,
LLC), Diversified Investors Portfolios (Diversified Investment Advisors,
Inc.), Calvert/Ameritas Funds (Calvert Asset Management Company, Inc.) and
Nationwide Funds (Nationwide Fund Advisors). For a current list of Covered
Mutual Funds, please see contact Personal Trade Compliance.
- - 401(K)S: Reporting is required for any 401(k), 403(b), or
employer-sponsored incentive savings plan only if the plan contains a
Covered Mutual Fund or stock.
- - BENEFICIAL INTEREST: You must disclose accounts in which you have a
beneficial interest. This includes accounts held in the name of YOU, YOUR
SPOUSE/PARTNER, OR ANY FINANCIALLY DEPENDENT MEMBER OF YOUR HOUSEHOLD.
Additionally, beneficial interest extends to the following types of
accounts if you, your spouse/partner or financially dependent member of
your household:
- Is a trustee or custodian for an account (e.g., for a child or
parent)
- Exercises discretion over an account via a power of attorney
arrangement, as an executor of an estate after death, or through
providing investment advice for compensation
- Owns an IRA
- Participates in an investment club
- Has another arrangement substantially equivalent to direct or
indirect ownership.
NOTE: If none of the above beneficial interest situations apply and
you are solely the beneficiary on an account, you do not need to
disclose that account.
FOR QUESTIONS ABOUT SECURITIES THAT YOU ARE RESPONSIBLE FOR DISCLOSING, SEE
PAGES 14-15 OF THE INVESTMENT ADVISER CODE OF ETHICS FOR RETAIL ACCESS PERSONS.
Initial Personal Account and Holdings Disclosure Appendix A.1
<PAGE>
INITIAL PERSONAL ACCOUNT AND HOLDINGS DISCLOSURE FORM
RETAIL ACCESS PERSONS
NAME: __________________ SOCIAL SECURITY #: _______________________
ID NUMBER: _____________ ROUTING OR AREA OFFICE #: ________________
PLEASE DISCLOSE ACCOUNTS AND HOLDINGS THAT YOU OR ANY MEMBER OF YOUR HOUSEHOLD
(SPOUSE/PARTNER AND FINANCIAL DEPENDENTS) OWN. A LIST OF INVESTMENTS TO BE
DISCLOSED CAN BE FOUND ON PAGE 14-15 OF THE CODE OF ETHICS.
IF YOU OWN AN ACCOUNT THAT ONLY CONTAINS HOLDINGS THAT ARE NOT REQUIRED TO BE
REPORTED (E.G., A MONEY MARKET), YOU DO NOT NEED TO REPORT THAT ACCOUNT.
If you do not have any investments to report, please write NONE in Section 1 or
leave the section blank.
SECTION 1
ACCOUNT/HOLDINGS DETAIL
- - Please complete all columns.
- - If submitting electronically, please initial Section 2 and send via email
to personal.trading@ampf.com.
- - If submitting a paper copy, please sign Section 2 and send to Personal
Trade Compliance, H26/1880.
- - PLEASE RETURN THIS FORM TO PERSONAL TRADE COMPLIANCE WITHIN 5 DAYS DUE TO
REGULATORY TIMING OBLIGATIONS.
<TABLE>
<CAPTION>
BROKERAGE FIRM NAME OR OWNERSHIP TYPE* / SSN
INSTITUTION NAME where (*INDIVIDUAL, JOINT, IRA,
securities are held. If SECURITY DESCRIPTION: UGMA, SPOUSAL IRA, ETC.) QUANTITY
securities are not held in an Name or ticker symbol ACCOUNT NOTE: Only input the SSN if Shares or
account, list where held (or CUSIP) of Security NUMBER different from your own amount
- ----------------------------- ---------------------- ------- --------------------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
* E.G. INDIVIDUAL, JOINT, IRA, UTMA/UGMA, SPOUSAL IRA, ETC.
IF MORE SPACE IS NEEDED, ATTACH THE ADDITIONAL INFORMATION ON A SEPARATE PAGE.
PLEASE SIGN AND DATE ANY ATTACHED SHEETS.
Initial Personal Account and Holdings Disclosure Appendix A.2
<PAGE>
SECTION 2
By signing this document, I am certifying that:
- - The accounts listed above are the only accounts in which I have a direct or
indirect beneficial interest at this time.
- - I understand that failure to completely disclose all of my Brokerage
Accounts and Covered Mutual Fund accounts to Personal Trade Compliance may
result in sanctions, which could lead to termination.
- - The securities listed above are the holdings I have at this time. I
understand that failure to completely disclose all of my holdings to
Personal Trade Compliance may result in sanctions, which could include
termination.
- - If I have one or more managed accounts, I do not have trading discretion
for the accounts.
- - I have completely filled out this certification form so a letter
authorizing duplicate confirmations and statements can be sent to my broker
until my accounts have been transferred to one of the three limited choice
brokerage firms.
- - I understand that failure to completely disclose all of my security
holdings to Personal Trade Compliance or failure to complete this form by
the required due date may result in sanctions, which could include
termination.
- - I will not participate in market timing of any Mutual Fund or other pooled
vehicle.
- - If I open any new Brokerage Accounts I will notify Personal Trade
Compliance in writing by filling out a Brokerage Account Notification form
BEFORE THE FIRST TRADE IS CONDUCTED.
- - I HAVE READ AND UNDERSTAND THE AMERIPRISE FINANCIAL INSIDER TRADING POLICY
AND INVESTMENT ADVISER CODE OF ETHICS DOCUMENT AND WILL ABIDE BY THEM.
- ------------------------------------- --------------------
Signature Date
RETURN TO: PERSONAL TRADE COMPLIANCE-- H26/1880
Initial Personal Account and Holdings Disclosure Appendix A.3
<PAGE>
APPENDIX B: BROKERAGE ACCOUNT NOTIFICATION FORM
BROKERAGE ACCOUNT NOTIFICATION FORM PROCESS
On the following page is the Brokerage Account Notification Form that is
REQUIRED to be completed if you--or an immediate family member--maintains an
external Brokerage Account. The brokers other than Ameriprise Financial
Brokerage that are allowed at this time are Schwab or Merrill Lynch only.
Please be sure to:
- - Fill out the Personal Information Section.
- - Fill out the Brokerage Account Information Section.
REMINDER: PLEASE SUBMIT THIS FORM PRIOR TO ANY TRADING
If you have questions, please send a Lotus Notes message to PERSONAL TRADING or
call the Personal Trade Hotline at 612-671-5196.
Brokerage Account Notification Form Appendix B.1
<PAGE>
***THIS IS NOT AN ACCOUNT TRANSFER FORM AND
WILL NOT CAUSE YOUR SECURITIES TO MOVE***
BROKERAGE ACCOUNT NOTIFICATION FORM
WHEN TO USE THIS FORM: Complete this form when opening any new Brokerage
Account (including new accounts opened to support an account transfer).
STEP 1: COMPLETE PERSONAL INFORMATION SECTION
<TABLE>
<S> <C>
ID Number (eg., E12345) / Position / - Corporate Office - Advisor - Field Employee
Social Security Number
Field or Corporate Office Routing
</TABLE>
STEP 2: COMPLETE BROKERAGE ACCOUNT INFORMATION SECTION
<TABLE>
<CAPTION>
BROKER DEALER (choose one)
------------------------------
AMERIPRISE
FINANCIAL CHARLES MERRILL
NAME ON ACCOUNT ACCOUNT NUMBER SOCIAL SECURITY NUMBER OWNERSHIP * BROKERAGE SCHWAB LYNCH
- --------------- -------------- ---------------------- ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
* E.G. INDIVIDUAL, JOINT, IRA, UTMA/UGMA, SPOUSAL IRA, ETC.
STEP 3: SUBMIT COMPLETED FORM TO PERSONAL TRADE COMPLIANCE
A. To submit via Interoffice mail, send to PERSONAL TRADE COMPLIANCE, H26 /
1880.
B. To submit via Lotus Notes message, attach completed form and send to
PERSONAL TRADING.
Brokerage Account Notification Form Appendix B.2
<PAGE>
APPENDIX C: LIMITED CHOICE EXCEPTION REQUEST
LIMITED CHOICE EXCEPTION REQUEST
COMPLETE THIS FORM IF ONE OF THE SITUATIONS DESCRIBED BELOW APPLIES TO YOU
AND YOU WISH TO REQUEST AN EXCEPTION TO THE LIMITED CHOICE POLICY OF
CONDUCTING TRADING THROUGH ONE OF THE THREE AUTHORIZED FIRMS.
Exception Policy - The typical kinds of situations for which Personal Trade
Compliance expects exception requests include:
A. spouse accounts where your spouse works for a broker/dealer firm that
prohibits outside accounts (supporting documentation to include copy of
other firm's policy)
B. non-transferable limited partnership interests held prior to implementation
of limited choice policy (supporting documentation to include copies of
statements reflecting these holdings) Note: Other holdings and trading
would remain subject to limited choice.
C. managed accounts where, e.g., you have authorized broker to exercise
investment discretion on your behalf and you have no discretion over what
specific securities are traded in account (supporting documentation to
include: power of attorney document signed by you and written
representations from you and from broker that you have no trading
discretion.) You will be required to re-certify annually.
SECTION 1. REQUEST FOR EXCEPTION (COMPLETED BY YOU, PLEASE PRINT)
YOUR NAME: ______________ ID NUMBER: ____________ ROUTING:_________________
- - CORPORATE OFFICE - ADVISOR - FIELD EMPLOYEE
EXCEPTION TYPE DESCRIBED ABOVE (ALSO ATTACH SUPPORTING DOCUMENTATION):
[ ] A
[ ] B
[ ] C
[ ] Other - explain in sufficient detail on an attachment
Broker Name: Account #
- --------------------------------------------------------------------------------
Account Ownership (Name on Account):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Your Signature Social Security # Date
SECTION 2. EXCEPTION REVIEW (COMPLETED BY PERSONAL TRADE COMPLIANCE)
[ ] Request on hold, more documentation needed - PLEASE PROVIDE:
[ ] Request Denied
[ ] Request Approved
- --------------------------------------------------------------------------------
1st Level Approval Date
- --------------------------------------------------------------------------------
2nd Level Approval Date
RETURN THIS FORM AND SUPPORTING DOCUMENTATION TO PERSONAL TRADE COMPLIANCE VIA
FAX AT 612-678-0150 OR INTERNAL ROUTING AT H26/1880.
Limited Choice Exception Request Appendix C.1
<PAGE>
APPENDIX D: INVESTMENT CLUB CLIENT DISCLOSURE FORM
INVESTMENT CLUB CLIENT DISCLOSURE FORM
I was a member of the ____________________________ Investment Club before
(Club name)
becoming a client of Ameriprise Financial, Inc. or its affiliates. I understand
that ___________________________________ is a financial advisor with
(Financial Advisor name)
Ameriprise Financial Services, but is not acting in his/her capacity as a
financial advisor with Ameriprise Financial Services through his/her
participation in this club.
I also understand Ameriprise Financial, Inc. and its affiliates do not endorse,
approve, or guarantee any activity undertaken by this club. Furthermore, I
understand Ameriprise Financial, Inc. and its affiliates are not responsible for
this club's investment performance, investment results, and/or any other direct
or indirect financial impact to me as a result of my participation in this club.
- ------------------------------------- --------------
Client signature Date
- ------------------------------------- --------------
Financial Advisor signature Date
Send to PERSONAL TRADE COMPLIANCE - H26/1880.
Investment Club Client Disclosure Form Appendix D.1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>c56392exv31w1.txt
<DESCRIPTION>EX-31.1
<TEXT>
<PAGE>
EXHIBIT 31.1
CERTIFICATION
I, William F. Truscott, certify that:
1. I have reviewed this annual report on Form 10-K of Ameriprise
Certificate Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures, and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weakness in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: February 23, 2010
/s/ William F. Truscott
----------------------------------------
William F. Truscott
Chief Executive Officer
(Principal Executive Officer)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>c56392exv31w2.txt
<DESCRIPTION>EX-31.2
<TEXT>
<PAGE>
EXHIBIT 31.2
CERTIFICATION
I, Ross P. Palacios, certify that:
1. I have reviewed this annual report on Form 10-K of Ameriprise
Certificate Company;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures, and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or person performing the equivalent
functions):
(a) All significant deficiencies and material weakness in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls over financial reporting.
Date: February 23, 2010
/s/ Ross P. Palacios
----------------------------------------
Ross P. Palacios
Chief Financial Officer
(Principal Financial Officer)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>c56392exv32w1.txt
<DESCRIPTION>EX-32.1
<TEXT>
<PAGE>
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Ameriprise Certificate
Company (the "Company") for the fiscal year ended December 31, 2009, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
William F. Truscott, as Chief Executive Officer of the Company and Ross P.
Palacios, as Principal and Chief Financial Officer of the Company, each hereby
certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements of 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ William F. Truscott
- -------------------------------------
Name: William F. Truscott
Title: Chief Executive Officer
(Principal Executive Officer)
Date: February 23, 2010
/s/ Ross P. Palacios
- -------------------------------------
Name: Ross P. Palacios
Title: Chief Financial Officer
(Principal Financial Officer)
Date: February 23, 2010
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002,
and is not being "filed" as part of the Form 10-K or as a separate disclosure
document for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to liability under that
section. This certification shall not be deemed to be incorporated by reference
into any filing under the Securities Act of 1933, as amended, or the Exchange
Act except to the extent that this Exhibit 32.1 is expressly and specifically
incorporated by reference in any such filing.
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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