UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended March 31, 2010

	OR

o	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. 1-32525

AMERIPRISE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		13-3180631
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1099 Ameriprise Financial Center, Minneapolis, Minnesota		55474
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (612) 671-3131

Former name, former address and former fiscal year, if changed since last report: Not Applicable

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 o

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 (§ 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 x No o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x		Accelerated Filer o

Non-Accelerated Filer o		Smaller reporting company o
(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 o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at April 23, 2010
Common Stock (par value $.01 per share)		257,513,353 shares

Table of Contents

AMERIPRISE FINANCIAL, INC.

FORM 10-Q

INDEX

Part I.	Financial Information:

	Item 1.	Financial Statements

		Consolidated Statements of Operations — Three months ended March 31, 2010 and 2009	3

		Consolidated Balance Sheets — March 31, 2010 and December 31, 2009	4

		Consolidated Statements of Cash Flows — Three months ended March 31, 2010 and 2009	5

		Consolidated Statements of Equity — Three months ended March 31, 2010 and 2009	7

		Notes to Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61

	Item 4.	Controls and Procedures	61

Part II.	Other Information:

	Item 1.	Legal Proceedings	62

	Item 1A.	Risk Factors	62

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62

	Item 6.	Exhibits	62

	Signatures		63

	Exhibit Index		E-1

Table of Contents

AMERIPRISE FINANCIAL, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share amounts)

	Three Months Ended March 31,
	2010			2009
Revenues
Management and financial advice fees	$	774		$	554
Distribution fees	391			311
Net investment income	590			418
Premiums	282			266
Other revenues	255			209
Total revenues	2,292			1,758
Banking and deposit interest expense	21			42
Total net revenues	2,271			1,716
Expenses
Distribution expenses	525			384
Interest credited to fixed accounts	228			205
Benefits, claims, losses and settlement expenses	354			100
Amortization of deferred acquisition costs	118			286
Interest and debt expense	64			26
General and administrative expense	621			581
Total expenses	1,910			1,582
Pretax income	361			134
Income tax provision	65			18
Net income	296			116
Less: Net income (loss) attributable to noncontrolling interests	82			(14		)
Net income attributable to Ameriprise Financial	$	214		$	130
Earnings per share attributable to Ameriprise Financial common shareholders
Basic	$	0.82		$	0.58
Diluted	0.81			0.58
Weighted average common shares outstanding
Basic	260.8			222.3
Diluted	265.0			223.5
Cash dividends paid per common share	$	0.17		$	0.17
Supplemental Disclosures:
Net investment income:
Net investment income before impairment losses on securities	$	620		$	453
Total other-than-temporary impairment losses on securities	(32		)	(25		)
Portion of loss recognized in other comprehensive income	2			(10		)
Net impairment losses recognized in net investment income	(30		)	(35		)
Net investment income	$	590		$	418

See Notes to Consolidated Financial Statements.

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AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

	March 31, 2010			December 31, 2009
	(unaudited)
Assets
Cash and cash equivalents	$	4,816		$	3,097
Investments	35,765			36,938
Separate account assets	60,326			58,129
Receivables	4,768			4,435
Deferred acquisition costs	4,243			4,334
Restricted and segregated cash	1,532			1,452
Other assets	4,011			4,290
Total assets before consolidated investment entities	115,461			112,675
Consolidated Investment Entities:
Cash	613			181
Investments, at fair value	5,349			36
Receivables (includes $39 and nil, respectively, at fair value)	80			49
Other assets, at fair value	874			833
Total assets of consolidated investment entities	6,916			1,099
Total assets	$	122,377		$	113,774
Liabilities and Equity
Liabilities:
Future policy benefits and claims	$	30,866		$	30,886
Separate account liabilities	60,326			58,129
Customer deposits	8,632			8,554
Debt	2,612			1,868
Accounts payable and accrued expenses	748			918
Other liabilities	2,743			3,093
Total liabilities before consolidated investment entities	105,927			103,448
Consolidated Investment Entities:
Debt (includes $5,144 and nil, respectively, at fair value)	5,502			381
Accounts payable and accrued expenses	17			28
Other liabilities (includes $214 and $30, respectively, at fair value)	231			41
Total liabilities of consolidated investment entities	5,750			450
Total liabilities	111,677			103,898
Equity:
Ameriprise Financial, Inc.:
Common shares ($.01 par value; shares authorized, 1,250,000,000; shares issued, 298,578,896 and 295,839,581, respectively)	3			3
Additional paid-in capital	5,819			5,748
Retained earnings	5,451			5,282
Appropriated retained earnings of consolidated investment entities	508			—
Treasury shares, at cost (41,173,408 and 40,744,090 shares, respectively)	(2,038		)	(2,023		)
Accumulated other comprehensive income, net of tax	365			263
Total Ameriprise Financial, Inc. shareholders’ equity	10,108			9,273
Noncontrolling interests	592			603
Total equity	10,700			9,876
Total liabilities and equity	$	122,377		$	113,774

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

	Three Months Ended March 31,
	2010			2009
Cash Flows from Operating Activities
Net income	$	296		$	116
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Capitalization of deferred acquisition and sales inducement costs	(119		)	(229		)
Amortization of deferred acquisition and sales inducement costs	130			335
Depreciation, amortization and accretion, net	22			56
Deferred income tax expense	437			82
Share-based compensation	39			40
Net realized investment gains	(32		)	(51		)
Other-than-temporary impairments and provision for loan losses	34			39
Net (income) loss attributable to noncontrolling interests	(82		)	14
Changes in operating assets and liabilities before consolidated investment entities:
Restricted and segregated cash	127			82
Trading securities and equity method investments, net	5			(336		)
Future policy benefits and claims, net	8			167
Receivables	(267		)	303
Brokerage deposits	8			(151		)
Accounts payable and accrued expenses	(161		)	(172		)
Derivatives collateral, net	(265		)	(625		)
Other, net	7			(229		)
Changes in operating assets and liabilities of consolidated investment entities	(56		)	(13		)
Net cash provided by (used in) operating activities	131			(572		)

Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	1,539			1,285
Maturities, sinking fund payments and calls	1,842			1,207
Purchases	(2,523		)	(4,561		)
Proceeds from sales and maturities of commercial mortgage loans	62			52
Funding of commercial mortgage loans	(49		)	(34		)
Proceeds from sales of other investments	36			11
Purchase of other investments	(21		)	(10		)
Purchase of investments by consolidated investment entities	(405		)	—
Proceeds from sales and maturities of investments by consolidated investment entities	454			—
Return of capital in investments of consolidated investment entities	1			—
Purchase of land, buildings, equipment and software	(21		)	(15		)
Change in policy and certificate loans, net	—			7
Change in consumer banking loans and credit card receivables, net	(75		)	(15		)
Other, net	(1		)	4
Net cash provided by (used in) investing activities	839			(2,069		)

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)

(in millions)

	Three Months Ended March 31,
	2010			2009
Cash Flows from Financing Activities
Investment certificates and banking time deposits:
Proceeds from additions	$	294		$	980
Maturities, withdrawals and cash surrenders	(607		)	(866		)
Change in other banking deposits	384			271
Policyholder and contractholder account values:
Consideration received	430			2,417
Net transfers (to) from separate accounts	(39		)	284
Surrenders and other benefits	(358		)	(770		)
Deferred premium options, net	(36		)	61
Issuances of debt, net of issuance costs	744			—
Repayments of debt	—			(113		)
Dividends paid to shareholders	(45		)	(37		)
Repurchase of common shares	(15		)	(9		)
Exercise of stock options	32			—
Excess tax benefits from share-based compensation	1			1
Borrowings of consolidated investment entities	—			9
Repayments of debt of consolidated investment entities	(1		)	—
Noncontrolling interests investments in subsidiaries	1			1
Distributions to noncontrolling interests	(23		)	(18		)
Other, net	(3		)	—
Net cash provided by financing activities	759			2,211

Effect of exchange rate changes on cash	(10		)	(2		)
Net increase (decrease) in cash and cash equivalents	1,719			(432		)
Cash and cash equivalents at beginning of period	3,097			6,228
Cash and cash equivalents at end of period	$	4,816		$	5,796
Supplemental Disclosures:
Interest paid on debt before consolidated investment entities	$	4		$	3
Income taxes paid (received), net	154			(1		)

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Three Months Ended March 31, 2010 and 2009

	Ameriprise Financial
	Number of Outstanding Shares		Common Shares		Additional Paid-In Capital		Retained Earnings			Appropriated Retained Earnings of Consolidated Investment Entities		Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests			Total
	(in millions, except share data)
Balances at January 1, 2009	216,510,699		$	3	$	4,688	$	4,592		$	—	$	(2,012	)	$	(1,093	)	$	289		$	6,467
Change in accounting principles, net of tax	—		—		—		132			—		—			(132		)	—			—
Comprehensive income:
Net income (loss)	—		—		—		130			—		—			—			(14		)	116
Other comprehensive income, net of tax:
Change in net unrealized securities losses	—		—		—		—			—		—			96			—			96
Change in noncredit related impairments on securities and net unrealized securities losses on previously impaired securities	—		—		—		—			—		—			(2		)	—			(2		)
Foreign currency translation adjustment	—		—		—		—			—		—			(3		)	(5		)	(8		)
Total comprehensive income																					202
Dividends paid to shareholders	—		—		—		(37		)	—		—			—			—			(37		)
Noncontrolling interests investments in subsidiaries	—		—		—		—			—		—			—			1			1
Distributions to noncontrolling interests	—		—		—		—			—		—			—			(18		)	(18		)
Repurchase of common shares	(509,778	)	—		—		—			—		(9		)	—			—			(9		)
Share-based compensation plans	3,136,459		—		31		—			—		—			—			—			31
Balances at March 31, 2009	219,137,380		$	3	$	4,719	$	4,817		$	—	$	(2,021	)	$	(1,134	)	$	253		$	6,637

Balances at January 1, 2010	255,095,491		$	3	$	5,748	$	5,282		$	—	$	(2,023	)	$	263		$	603		$	9,876
Change in accounting principles	—		—		—		—			473		—			—			—			473
Comprehensive income:
Net income	—		—		—		214			—		—			—			82			296
Net income reclassified to appropriated retained earnings	—		—		—		—			35		—			—			(35		)	—
Other comprehensive income, net of tax:
Change in net unrealized securities gains	—		—		—		—			—		—			164			—			164
Change in noncredit related impairments on securities and net unrealized securities losses on previously impaired securities	—		—		—		—			—		—			(24		)	—			(24		)
Change in net unrealized derivatives losses	—		—		—		—			—		—			(7		)	—			(7		)
Foreign currency translation adjustment	—		—		—		—			—		—			(31		)	(36		)	(67		)
Total comprehensive income																					362
Dividends paid to shareholders	—		—		—		(45		)	—		—			—			—			(45		)
Noncontrolling interests investments in subsidiaries	—		—		—		—			—		—			—			1			1
Distributions to noncontrolling interests	—		—		—		—			—		—			—			(23		)	(23		)
Repurchase of common shares	(429,318	)	—		—		—			—		(15		)	—			—			(15		)
Share-based compensation plans	2,739,315		—		71		—			—		—			—			—			71
Balances at March 31, 2010	257,405,488		$	3	$	5,819	$	5,451		$	508	$	(2,038	)	$	365		$	592		$	10,700

See Notes to Consolidated Financial Statements.

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

1. Basis of Presentation

Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning and products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. The Company’s foreign operations in the United Kingdom are conducted through its subsidiary, Threadneedle Asset Management Holdings Sàrl (“Threadneedle”).

The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). The income or loss generated by consolidated entities which will not be realized by the Company’s shareholders is attributed to noncontrolling interests in the Consolidated Statements of Operations. Noncontrolling interests are the ownership interests in subsidiaries not attributable, directly or indirectly, to Ameriprise Financial, Inc. and are classified as equity within the Consolidated Balance Sheets. The Company excluding noncontrolling interests is defined as Ameriprise Financial. All material intercompany transactions and balances have been eliminated in consolidation. See Note 3 for additional information related to the consolidated VIEs.

The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications of prior year amounts have been made to conform to the current presentation. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2010.

The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued.

2. Recent Accounting Pronouncements

Adoption of New Accounting Standards

Consolidation of Variable Interest Entities

In June 2009, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to the consolidation of VIEs. The standard amends the guidance on the determination of the primary beneficiary of a VIE from a quantitative model to a qualitative model and requires additional disclosures about an enterprise’s involvement in VIEs. Under the new qualitative model, the primary beneficiary must have both the power to direct the activities of the VIE and the obligation to absorb losses or the right to receive gains that could be potentially significant to the VIE. In February 2010, the FASB amended this guidance to defer application of the consolidation requirements for certain investment funds. The standards are effective for interim and annual reporting periods beginning after November 15, 2009. The Company adopted the standards effective January 1, 2010 and consolidated certain collateralized debt obligations (“CDOs”). As a result of the adoption, the Company recorded a cumulative effect increase of $473 million to appropriated retained earnings of consolidated investment entities, a $5.5 billion increase to assets and a $5.1 billion increase to liabilities. See Note 3 for additional information related to the application of the amended VIE consolidation model and the required disclosures.

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Subsequent Events

In February 2010, the FASB amended the accounting standards related to the recognition and disclosure of subsequent events. The amendments remove the requirement to disclose the date through which subsequent events are evaluated for SEC filers. The standard is effective upon issuance and shall be applied prospectively. The Company adopted the standard in the first quarter of 2010. The adoption did not have any effect on the Company’s consolidated results of operations and financial condition.

Fair Value

In January 2010, the FASB updated the accounting standards related to disclosures on 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 presents 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 on 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. The Company adopted the standard in the first quarter of 2010, except for the additional disclosures related to the Level 3 rollforward, which the Company will adopt in the first quarter of 2011. The adoption did not have any effect on the Company’s consolidated results of operations and financial condition.

Recognition and Presentation of Other-Than-Temporary Impairments (“OTTI”)

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-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 retained earnings with a corresponding adjustment to accumulated other comprehensive income (loss). The Company adopted the standard in the first quarter of 2009 and recorded a cumulative effect increase to the opening balance of retained earnings of $132 million, net of DAC and DSIC amortization, certain benefit reserves and income taxes, and a corresponding increase to accumulated other comprehensive loss, net of impacts to DAC and DSIC amortization, certain benefit reserves and income taxes. See Note 4 for the required disclosures.

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

3. Consolidated Investment Entities

The Company provides asset management services to various CDOs and other investment products (collectively, “investment entities”), which are sponsored by the Company for the investment of client assets in the normal course of business. Certain of these investment entities are considered to be VIEs while others are considered to be voting rights entities (“VREs”). The Company consolidates certain of these investment entities.

Variable Interest Entities

A VIE is an entity that either has equity investors that lack certain essential characteristics of a controlling financial interest (including substantive voting rights, the obligation to absorb the entity’s losses, or the rights to receive the entity’s returns) or has equity investors that do not provide sufficient financial resources for the entity to support its activities. A VIE is required to be assessed for consolidation under two models:

· If the VIE is a money market fund or is an investment company, or has the financial characteristics of an investment company, and the following is true:

(i) the entity does not have an explicit or implicit obligation to fund the investment company’s losses; and

(ii) the investment company is not a securitization entity, asset-backed financing entity, or an entity formally considered a qualifying special purpose entity,

then, the VIE will be consolidated by the entity that determines it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns. Examples of entities that are likely to be assessed for consolidation under this framework include hedge funds, property funds, private equity funds and venture capital funds.

· If the VIE does not meet the criteria above, the VIE will be consolidated by the entity that determines it has both:

(i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and

(ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s CDOs are generally assessed for consolidation under this framework.

When determining whether the Company stands to absorb the majority of the VIE’s expected losses or receive a majority of the VIE’s expected returns, it analyzes the design of the VIE to identify the variable interests it holds. Then the Company quantitatively determines whether its variable interests will absorb a majority of the VIE’s variability. If the Company determines it has control over the activities that most significantly impact the economic performance of the VIE and it will absorb a majority of the VIE’s expected variability, the Company consolidates the VIE. The calculation of variability is based on an analysis of projected probability-weighted cash flows based on the design of the particular VIE. When determining whether the Company has the power and the obligation to absorb losses or rights to receive benefits from the VIE that could potentially be significant, the Company qualitatively determines if its variable interests meet these criteria. If the Company consolidates a VIE under either scenario, it is referred to as the VIE’s primary beneficiary.

Investment Entities

Collateralized Debt Obligations

The Company provides collateral management services to CDOs which are considered VIEs. These CDOs are asset-backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CDO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CDOs are non-recourse to the Company. The CDO’s debt holders have recourse only to the assets of the CDO. The assets the CDOs collateralize cannot be used by the Company. Scheduled debt payments are based on the performance of the CDO’s collateral pool. The Company generally earns management fees from the CDOs based on the par value of outstanding debt and, in certain instances, may also receive performance-based fees. In the normal course of business, the Company has invested in certain CDOs, generally taking an insignificant portion of the unrated, junior subordinated debt.

For certain of the CDOs, the Company has determined that consolidation is required as it has power over the CDOs and holds a variable interest in the CDOs for which the Company has the potential to receive significant benefits or the potential obligation to absorb significant losses. For other CDOs managed by the Company, the Company has determined that consolidation is not required as the Company does not hold a variable interest in the CDOs.

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Other Investment Products

The Company provides investment advice and related services to private, pooled investment vehicles organized as limited partnerships, limited liability companies or foreign (non-U.S.) entities. Certain of these pooled investment vehicles are considered VIEs while others are VREs. For investment management services, the Company generally earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The Company provides seed money occasionally to certain of these funds. For certain of the pooled investment vehicles, the Company has determined that consolidation is required as the Company stands to absorb a majority of the entity’s expected losses or receive a majority of the entity’s expected residual returns. For other VIE pooled investment vehicles, the Company has determined that consolidation is not required because the Company is not expected to absorb the majority of the expected losses or receive the majority of the expected residual returns. For the pooled investment vehicles which are VREs, the Company consolidates the structure when it has a controlling financial interest.

The Company also provides investment advisory, distribution and other services to three families of mutual funds: the RiverSource, Seligman and Threadneedle mutual fund families. The Company has determined that consolidation is not required for these mutual funds.

In addition, the Company may invest in structured investments including VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, commercial mortgage backed securities, and residential mortgage backed securities. The Company includes these investments in Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to its relative size, position in the capital structure of these entities, and the Company’s lack of power over the structures. See Note 4 for additional information about these structured investments.

The Company’s maximum exposure to loss as a result of its investment in structured investments is limited to its carrying value. The Company has no obligation to provide further financial or other support to these structured investments nor has the Company provided any support to these structured investments.

The following tables reflect the impact of consolidated investment entities on the Consolidated Balance Sheets as of March 31, 2010 and the Consolidated Statements of Operations for the three months ended March 31, 2010:

	Before Consolidation		Consolidated Investment Entities		Eliminations			Total
	(in millions)
Total assets	$	115,553	$	6,916	$	(92	)	$	122,377

Total liabilities	105,927		5,750		—			111,677
Total Ameriprise Financial shareholders’ equity	9,626		574		(92		)	10,108
Noncontrolling interests equity	—		592		—			592
Total liabilities and equity	$	115,553	$	6,916	$	(92	)	$	122,377

	Before Consolidation		Consolidated Investment Entities		Eliminations			Total
	(in millions)
Total net revenues	$	2,144	$	136	$	(9	)	$	2,271
Total expenses	1,865		54		(9		)	1,910
Pretax income	279		82		—			361
Income tax provision	65		—		—			65
Net income	214		82		—			296
Net income attributable to noncontrolling interests	—		82		—			82
Net income attributable to Ameriprise Financial	$	214	$	—	$	—		$	214

Table of Contents

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table presents the balances of assets and liabilities held by consolidated investment entities at March 31, 2010 measured at fair value on a recurring basis:

	March 31, 2010
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments
Corporate debt securities	$	—	$	420	$	15	$	435
Common stocks	—		32		—		32
Other structured investments	—		33		6		39
Syndicated loans	—		4,798		—		4,798
Trading securities	—		45		—		45
Total investments	—		5,328		21		5,349
Receivables	—		39		—		39
Other assets	—		4		870		874
Total assets at fair value	$	—	$	5,371	$	891	$	6,262
Liabilities
Debt	$	—	$	—	$	5,144	$	5,144
Other liabilities	—		214		—		214
Total liabilities at fair value	$	—	$	214	$	5,144	$	5,358

	December 31, 2009
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Investments
Trading securities	$	—	$	36	$	—	$	36
Total investments	—		36		—		36
Other assets	—		2		831		833
Total assets at fair value	$	—	$	38	$	831	$	869
Liabilities
Other liabilities	$	—	$	30	$	—	$	30
Total liabilities at fair value	$	—	$	30	$	—	$	30

The following table provides a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis as of March 31:

	2010													2009
	Corporate Debt Securities		Other Structured Investments			Other Assets				Debt				Other Assets
	(in millions)
Balance, January 1	$	—	$	—			$	831		$	—		$		287
Cumulative effect of accounting change	15		5				—			(4,962		)	—
Total gains (losses) included in:
Net income	—		2		(1)		55		(2)	(183		)(1)	(19			)(2)
Comprehensive income	—		—				(50		)	—			(6			)
Purchases, sales, issuances and settlements, net	—		(1		)		34			1			—
Balance, March 31	$	15	$	6			$	870		$	(5,144	)	$		262

(1) Included in net investment income in the Consolidated Statements of Operations.

(2) Included in other revenues in the Consolidated Statements of Operations.

Table of Contents

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company has elected the fair value option within the consolidation standards issued June 2009 for the financial assets and liabilities of the consolidated CDOs. Management believes that the use of the fair value option eliminates certain timing differences and better matches the changes in fair value of assets and liabilities related to the CDOs.

For receivables, other assets and other liabilities of the consolidated CDOs, the carrying value approximates fair value as the nature of these assets and liabilities have historically been short term and the receivables have been collectible. The fair value of these assets and liabilities is classified as Level 2. The fair value of syndicated loans is obtained from nationally-recognized pricing services and is classified as Level 2. Other assets consist primarily of properties held in consolidated pooled investment vehicles managed by Threadneedle. The fair value of these properties is determined using discounted cash flows and market comparables. Inputs into the valuation of these properties include: rental cash flows, current occupancy, historical vacancy rates, tenant history and assumptions regarding how quickly the property can be occupied and at what rental rates. Given the significance of the unobservable inputs to these measurements, these assets are classified as Level 3. The fair value of the CDO’s debt is valued using a discounted cash flow methodology. Inputs used to determine the expected cash flows include assumptions about default and recovery rates of the CDO’s underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the CDO debt is classified as Level 3. Other liabilities consist primarily of short securities held in consolidated hedge funds. The fair value of these securities is obtained from nationally-recognized pricing services and is classified as Level 2. See Note 10 for a description of the Company’s determination of the fair value of investments.

The following table presents the fair value and unpaid principal balance of assets and liabilities carried at fair value under the fair value option as of March 31, 2010:

	(in millions)
Syndicated loans
Unpaid principal balance	$	5,221
Excess estimated unpaid principal over fair value	(423		)
Fair value	$	4,798

Fair value of loans more than 90 days past due	209
Fair value of loans in non-accrual status	184
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in non-accrual status or both	205
Debt
Unpaid principal balance	6,021
Excess estimated unpaid principal over fair value	(877		)
Carrying value at estimated fair value	$	5,144

Interest income from loans, bonds and structured investments is recorded based on contractual rates in net investment income. Gains and losses related to changes in the fair value of investments and gains and losses on sales of investments are recorded in net investment income. Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in net investment income.

Total gains and losses recognized in net investment income from fair value changes of financial assets and liabilities for which the fair value option was elected was $28 million at March 31, 2010. For syndicated loans and debt measured at fair value, the estimated amount of gains and losses included in earnings attributable to instrument-specific credit risk for the three months ended March 31, 2010 was $189 million and $(183) million, respectively. The instrument-specific credit risk gains were derived principally from the change in the observable or implied credit spread for these instruments. Credit spread is determined based on the market yield for these instruments less the applicable risk-free benchmark rate. The gains included in net investment income attributable to the narrowing of instrument-specific credit risk of debt is due to the overall tightening of credit spreads for higher yielding instruments.

Debt of the consolidated investment entities and the stated interest rates as of March 31, 2010 were as follows:

	Carrying Value		Stated Interest Rate
	(in millions)
Debt of consolidated CDOs due 2012-2021	$	5,144	1.0	%
Floating rate revolving credit borrowings due 2013	134		4.6
Floating rate revolving credit borrowings due 2014	186		5.9
Floating rate revolving credit borrowings due 2014	38		4.9
Total	$	5,502

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The debt of the consolidated CDOs have both fixed and floating interest rates. The stated interest rate of the debt of consolidated CDOs is a weighted average rate based on the principal and stated interest rate according to the terms of each CDO structure, which range from 0% to 14.1%. The carrying value of the debt of the consolidated CDOs represents the fair value of the aggregate debt as of March 31, 2010. The carrying value of the floating rate revolving credit borrowings represent the outstanding principal amount of debt of certain consolidated pooled investment vehicles managed by Threadneedle. The fair value of this debt was $358 million as of March 31, 2010.

At March 31, 2010, future maturities of debt were as follows:

	(in millions)
2011	$	—
2012	32
2013	301
2014	224
2015	356
Thereafter	5,466
Total future maturities	$	6,379

4. Investments

The following is a summary of Ameriprise Financial investments:

	March 31, 2010		December 31, 2009
	(in millions)
Available-for-Sale securities, at fair value	$	31,414	$	32,546
Commercial mortgage loans, net	2,643		2,663
Trading securities	544		556
Policy loans	720		720
Other investments	444		453
Total	$	35,765	$	36,938

Available-for-Sale securities distributed by type were as follows:

	March 31, 2010
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (1)
	(in millions)
Corporate debt securities	$	14,693	$	987	$	(51	)	$	15,629	$	16
Residential mortgage backed securities	7,502		255		(440		)	7,317		(160		)
Commercial mortgage backed securities	4,200		273		(6		)	4,467		—
Asset backed securities	1,937		80		(49		)	1,968		(17		)
State and municipal obligations	1,608		28		(67		)	1,569		—
U.S. government and agencies obligations	220		9		—			229		—
Foreign government bonds and obligations	93		15		—			108		—
Common and preferred stocks	53		2		(5		)	50		—
Other debt obligations	77		—		—			77		—
Total	$	30,383	$	1,649	$	(618	)	$	31,414	$	(161	)

Table of Contents

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

	December 31, 2009
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (1)
	(in millions)
Corporate debt securities	$	15,336	$	894	$	(107	)	$	16,123	$	12
Residential mortgage backed securities	8,050		218		(498		)	7,770		(152		)
Commercial mortgage backed securities	4,437		196		(20		)	4,613		—
Asset backed securities	1,984		72		(62		)	1,994		(18		)
State and municipal obligations	1,472		21		(76		)	1,417		—
U.S. government and agencies obligations	379		9		(1		)	387		—
Foreign government bonds and obligations	95		14		(1		)	108		—
Common and preferred stocks	52		1		(10		)	43		—
Other structured investments	22		36		—			58		21
Other debt obligations	33		—		—			33		—
Total	$	31,860	$	1,461	$	(775	)	$	32,546	$	(137	)

(1) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income. 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 the end of the period.

At March 31, 2010 and December 31, 2009, fixed maturity securities comprised approximately 88% of Ameriprise Financial 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 $1.2 billion of securities at March 31, 2010 and December 31, 2009, which were rated by the Company’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 by rating was as follows:

	March 31, 2010						December 31, 2009
Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	12,217	$	12,746	41	%	$	13,003	$	13,396	41	%
AA	1,567		1,586		5		1,616		1,601		5
A	4,455		4,626		15		4,778		4,910		15
BBB	10,001		10,679		34		10,261		10,802		33
Below investment grade	2,091		1,727		5		2,150		1,794		6
Total fixed maturities	$	30,331	$	31,364	100	%	$	31,808	$	32,503	100	%

At March 31, 2010 and December 31, 2009, approximately 33% and 34%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any other issuer were greater than 10% of shareholders’ equity.

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AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

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:

	March 31, 2010
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	113	$	717	$	(10	)	134	$	979	$	(41	)	247	$	1,696	$	(51	)
Residential mortgage backed securities	70	1,459		(35		)	174	903		(405		)	244	2,362		(440		)
Commercial mortgage backed securities	11	68		(1		)	19	178		(5		)	30	246		(6		)
Asset backed securities	12	136		(2		)	37	187		(47		)	49	323		(49		)
State and municipal obligations	69	263		(6		)	129	381		(61		)	198	644		(67		)
U.S. government and agencies obligations	4	94		—			—	—		—			4	94		—
Common and preferred stocks	3	—		—			3	45		(5		)	6	45		(5		)
Total	282	$	2,737	$	(54	)	496	$	2,673	$	(564	)	778	$	5,410	$	(618	)

	December 31, 2009
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	139	$	1,095	$	(18	)	193	$	1,368	$	(89	)	332	$	2,463	$	(107	)
Residential mortgage backed securities	80	1,566		(51		)	172	904		(447		)	252	2,470		(498		)
Commercial mortgage backed securities	37	373		(4		)	36	348		(16		)	73	721		(20		)
Asset backed securities	16	126		(3		)	38	207		(59		)	54	333		(62		)
State and municipal obligations	64	318		(10		)	135	389		(66		)	199	707		(76		)
U.S. government and agencies obligations	5	133		(1		)	—	—		—			5	133		(1		)
Foreign government bonds and obligations	—	—		—			2	4		(1		)	2	4		(1		)
Common and preferred stocks	2	—		—			3	39		(10		)	5	39		(10		)
Other structured investments	—	—		—			6	—		—			6	—		—
Total	343	$	3,611	$	(87	)	585	$	3,259	$	(688	)	928	$	6,870	$	(775	)

As part of Ameriprise Financial’s ongoing monitoring process, management determined that a majority of the gross unrealized losses on its Available-for-Sale securities are attributable to credit spreads. The primary driver of lower unrealized losses at March 31, 2010 was the tightening of credit spreads across sectors.

Table of Contents

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table presents a rollforward of the cumulative amounts recognized in the Consolidated 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):

	2010		2009
	(in millions)
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	$	263	$	258
Additional amount related to credit losses for which an other-than-temporary impairment was not previously recognized	15		8
Additional increases to the amount related to credit losses for which an other-than-temporary impairment was previously recognized	12		16
Ending balance of credit losses on securities held as of March 31 for which a portion of other-than-temporary impairment was recognized in other comprehensive income	$	290	$	282

The change in net unrealized securities gains (losses) in other comprehensive income includes three components, net of tax: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities; and (iii) other items primarily consisting of adjustments in asset and liability balances, such as DAC, DSIC, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates. 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 include other-than-temporary impairment losses on Available-for-Sale securities related to factors other than credit that were recognized in other comprehensive income 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 investment gains (losses) on Available-for-Sale securities included in accumulated other comprehensive income (loss):

		Accumulated Other
Net		Comprehensive Income
Unrealized		(Loss) Related to Net
Investment	Deferred	Unrealized Investment
Gains (Losses)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q

INDEX

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

CONSOLIDATED BALANCE SHEETS

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)

Table of Contents

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Three Months Ended March 31, 2010 and 2009

1. Basis of Presentation

2. Recent Accounting Pronouncements

Adoption of New Accounting Standards

Consolidation of Variable Interest Entities

Subsequent Events

Fair Value

3. Consolidated Investment Entities

Variable Interest Entities

· If the VIE is a money market fund or is an investment company, or has the financial characteristics of an investment company, and the following is true:

(i) the entity does not have an explicit or implicit obligation to fund the investment company’s losses; and

(ii) the investment company is not a securitization entity, asset-backed financing entity, or an entity formally considered a qualifying special purpose entity,

· If the VIE does not meet the criteria above, the VIE will be consolidated by the entity that determines it has both:

(i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and

(ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s CDOs are generally assessed for consolidation under this framework.

Investment Entities

4. Investments