UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-K

Commission file number 1-32525

AMERIPRISE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

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

Securities registered pursuant to Section 12(b) of the Act:

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.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

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.

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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The aggregate market value, as of February 28, 2006, of voting shares held by non-affiliates of the registrant was approximately $11.4 billion. (The registrant’s shares were not publicly traded on June 30, 2005, the last business day of the registrant’s most recently completed second fiscal quarter.) Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

Parts I, II and IV: Portions of the registrant’s 2005 Annual Report to Shareholders (“2005 Annual Report to Shareholders”).

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2005

OR

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

For the Transition Period from to

Delaware

13-3180631 (State or other jurisdiction of (I.R.S. Employer

Incorporation or organization)

Identification No.)

55 Ameriprise Financial Center

Minneapolis, Minnesota

55474 (Address of principal executive offices) (Zip Code)

Title of each class

Name of each exchange on which registeredCommon Stock, par value $.01 per share The New York Stock Exchange, Inc.

Yes No

Yes No

Yes No

Large accelerated filer Accelerated filer

Non-accelerated filer

Yes No

Class

Outstanding at February 28, 2006Common Stock, par value $.01 per share

250,648,428 shares

Part III: Portions of the registrant’s Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Shareholders to be held on April 26, 2006, which will be filed not later than April 30, 2006 (i.e., within 120 days after the close of the registrant’s last fiscal year, pursuant to Regulation 14A) (“Proxy Statement”).

AMERIPRISE FINANCIAL, INC.

FORM 10-K

INDEX

Page No.Part I.

Item 1. Business 1

Item 1A. Risk Factors 31

Item 1B. Unresolved Staff Comments 42

Item 2. Properties 42

Item 3. Legal Proceedings 43

Item 4. Submission of Matters to a Vote of Security Holders 45 Part II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45

Item 6. Selected Financial Data 45

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 45

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45

Item 8. Financial Statements and Supplementary Data 45

Consolidated Statements of Income – Years ended December 31, 2005, 2004 and 2003

Consolidated Balance Sheets – December 31, 2005 and 2004

Consolidated Statements of Cash Flows – Years ended December 31, 2005, 2004 and 2003

Consolidated Statements of Shareholders’ Equity – Years ended December 31, 2005, 2004 and 2003

Notes to Consolidated Financial Statements

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 45

Item 9A. Controls and Procedures 45

Item 9B. Other Information 46

Part III.

Item 10. Directors and Executive Officers of the Registrant 46

Item 11. Executive Compensation 47

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 47

Item 13. Certain Relationships and Related Transactions 48

Item 14. Principal Accountant Fees and Services 48 Part IV.

Item 15. Exhibits and Financial Statement Schedules 48

Signatures 49

Index to Financial Statements F-1

Exhibit Index E-1

PART I. Item 1. Business. Overview

We are engaged in providing financial planning, products and services that are designed to offer solutions for our clients’ asset accumulation, income and protection needs. As of December 31, 2005, we had 2.8 million individual, business and institutional clients and a network of over 12,000 financial advisors and registered representatives (“financial advisors”), including those affiliated with our Securities America Financial Corporation subsidiary (“SAFC”) through its brokerage and advisory subsidiary Securities America, Inc. (“SAI”), who provide personalized financial planning, advisory, brokerage and other services. As a holding company, we primarily engage in business through our subsidiaries. Accordingly, references below to “we,” “us,” and “our” may refer to Ameriprise Financial, Inc., exclusively, to our entire family of companies or to one or more of our subsidiaries.

We strive to deliver financial solutions to our clients through a tailored approach focused on building a long-term personal

relationship through, when appropriate, financial planning and advice that is responsive to our clients’ evolving needs. The financial solutions we offer include both our own products and services and products of other companies. Our financial planning and advisory process is designed to provide comprehensive advice for our clients’ asset accumulation, income management and protection needs. We believe that our focus on personal relationships, together with our strengths in financial planning and product development, allows us to better address our clients’ financial needs, including the financial needs of our target market segment, the mass affluent, which we define as households with income above $50,000 and investable assets between $100,000 and $1,000,000. This focus also puts us in a strong position to capitalize on significant demographic and market trends, which we believe will continue to drive increased demand for financial planning and the other financial services we provide, particularly among the mass affluent.

Our nationwide network of financial advisors is the means by which we develop personal relationships with our clients. We

refer to the financial advisors who use our brand name (who numbered over 10,500 at December 31, 2005) as our branded advisors. Our branded advisor network is also the primary distribution channel through which we offer our asset accumulation and income products and services, as well as a range of insurance protection products. We offer our branded advisors training, tools, leadership, marketing programs and other centralized support to assist them in delivering tailored solutions to our clients, including products and services designed to meet our clients’ needs. We believe that the integration of our financial advisors and the financial solutions we offer through our financial planning model not only improves the products and services we provide to our clients, but also allows us to reinvest in enhanced services for our clients and support available to our financial advisors. This integrated model also affords us a better understanding of our client base, which allows us to better manage the risk profile of our businesses. We believe our focus on meeting our clients’ needs through financial planning results in more satisfied clients with deeper, longer lasting relationships with our company and strong retention of experienced financial advisors.

We have two main operating segments aligned with the financial solutions we offer to address our clients’ needs: • Asset Accumulation and Income, and • Protection.

Our Asset Accumulation and Income segment offers our own and other companies’ mutual funds, as well as our own annuities and other asset accumulation and income management products and services to retail clients through our financial advisor network. We also offer our annuity products and, to a limited extent, our investment management products, through outside distribution channels. This operating segment also serves institutional clients in the separately managed account, sub-advisory and 401(k) markets, among others. We earn revenues in our Asset Accumulation and Income segment primarily through fees we receive based on managed and administered assets and on separate accounts, the net investment income we earn on assets on our balance sheet related to this segment and distribution fees we earn on sales of mutual funds and other products. Our Protection segment offers various life insurance, disability income and brokered insurance products through our financial advisor network. We also offer personal auto and home insurance products on a direct basis to retail clients principally through our strategic marketing alliances. We earn revenues in this operating segment primarily through premiums and fees that we receive to assume insurance-related risk, fees we receive on the funds underlying our variable products and net investment income we earn on assets on our balance sheet related to this segment.

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We also have a “Corporate and Other” segment, which consists of income derived from corporate level assets and

unallocated corporate expenses, primarily costs from the separation of our company from American Express Company, as well as the results of our subsidiary SAFC, which operates its own independent separately branded distribution network. SAFC’s principal operating subsidiary, SAI, distributes mutual funds, annuities and insurance products and provides securities brokerage, investment advisory and support services to its clients through its brokerage subsidiaries. SAI does not operate under the Ameriprise Financial brand. We consider its over 1,700 financial advisors (at December 31, 2005) as part of our network of over 12,000 financial advisors.

In 2005, we generated $7,484 million in total revenues, $745 million in income before income tax provision, discontinued

operations and accounting change and $574 million in net income. As of December 31, 2005, we had over $428 billion in assets owned, managed and administered worldwide.

We were formerly a wholly-owned subsidiary of American Express Company. On February 1, 2005, American Express

Company announced its intention to pursue the disposition of 100% of its shareholdings in us through a tax-free distribution to American Express Company’s shareholders. Effective as of the close of business on September 30, 2005, American Express Company completed the distribution of our common shares to American Express Company’s shareholders (the “Distribution”). The Distribution was effectuated through a pro-rata dividend to American Express Company’s shareholders consisting of one share of our common stock for every 5 shares of American Express Company common stock owned by American Express Company’s shareholders on September 19, 2005, the record date for the Distribution. In connection with the separation from American Express Company, we agreed to sell our subsidiary AMEX Assurance Company (“AMEX Assurance”) to American Express Company as described further below under the caption “Our Relationship with American Express Company – Reinsurance and Purchase Agreements” and, effective August 1, 2005 we transferred to American Express Company our 50% ownership interest in American Express International Deposit Company (a joint venture with another subsidiary of American Express Company). Prior to August 1, 2005, we were referred to as American Express Financial Corporation (“AEFC”).

We are incorporated in Delaware and our headquarters are located at 55 Ameriprise Financial Center, Minneapolis,

Minnesota 55474. We also maintain executive offices in New York, New York.

Our Strengths

We believe our company is positioned to be the provider of choice to a growing base of mass affluent consumers, particularly as many of them reach their retirement phase of life. These strengths include our:

• Strong heritage with established position in the financial services industry. Over our more than 110-year history, we

have established ourselves as a leading provider of solutions designed to help clients plan for and achieve their financial objectives, built on a foundation of personal relationships and a tailored approach. We further reinforced these traits during our 21-year tenure as a subsidiary of American Express Company. We are investing in and building on our heritage as we have re-established ourselves as an independent company with a new brand identity. As of December 31, 2005, we had over $428 billion in owned, managed and administered assets and a sales force of over 12,000 financial advisors, and our variable annuity products ranked 11th in new sales of variable annuities (according to VARDS®). For the year ended December 31, 2005, our variable universal life insurance ranked first in sales based on total premiums (according to Tillinghast-Towers Perrin Value™ survey), and for the nine months ended September 30, 2005 our individual disability income insurance ranked eighth in sales based on total premiums (according to LIMRA International®).

• Longstanding and deep client relationships. We believe that our financial planning approach helps to meet our clients’

financial needs and fosters deep and long-term client relationships. We estimate that, of our clients with a financial plan, over 75% of those clients have been with us for three or more years, with an attrition rate of less than 2% per year. Our clients with more than $100,000 in assets with our company have been with us, on average, more than 12 years. More than 60% of these longstanding clients have a financial plan and these clients hold an average of at least four products.

• Personal financial planning, investment advisory and brokerage relationships targeted to fast-growing mass affluent

market segment. We offer our clients personalized financial planning and other advisory services as well as brokerage services through our financial advisor network. Our branded advisor network included the largest number of CERTIFIED FINANCIAL PLANNER™ practitioners of any retail advisory force in 2004 (according to the Certified Financial Planner Board of Standards, Inc.). We believe our focus on financial planning positions us well to capitalize on the demographic trends in our target mass affluent market segment,

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particularly as they prepare for retirement. The mass affluent market segment accounts for about half of the $17 trillion of U.S. investable assets (according to the MacroMonitor 2004-2005 consumer survey prepared by SRI Consulting Business Intelligence). We have found that more than half of consumers in our target segment are willing to pay a knowledgeable advisor for financial advice to address their immediate and long-term needs in the context of their entire financial situation (MacroMonitor 2004-2005 survey prepared by SRI Consulting Business Intelligence). We believe the planning process not only helps us develop a better understanding of the demographics and trends among our clients, but also helps us to develop more tailored solutions designed to address our clients’ financial needs. We believe our approach results in increased client satisfaction, longer-term relationships with our clients and better risk profiles in our Protection segment. Our experience has shown that by helping our clients meet their needs through our financial planning approach, clients with an implemented personalized financial planning relationship hold approximately three times more invested assets with our company than clients without a financial plan.

• Large, well-trained sales force with a nationwide presence. At December 31, 2005, we had a nationwide network that

included over 10,500 branded advisors and over 1,700 financial advisors of SAI. According to the 2005-2006 Securities Industry Association Yearbook, we had the fourth largest sales force in 2005 among Securities Industry Association members (based on the number of our branded advisors). Most of our branded advisors started their careers as financial planners with our company. They begin as employee financial advisors and go through training designed to instill the financial knowledge, personalized client focus and tools necessary to help deliver a consistent, disciplined financial planning experience to clients as well as our varied product and service offerings. We believe that the grounding of our branded advisors in our financial planning model, as well as the resources that our integrated business model provides them, enhances our ability to hire and retain financial advisors. As of December 31, 2005, over 60% of our branded advisors had been with our company for more than four years and within that group, they have an average tenure of slightly more than 12 years.

• Broad product development capability and diversified range of products and services. We develop and manage a broad

range of asset accumulation, income management and insurance protection products. In addition to our RiverSourceSM and ThreadneedleSM families of mutual funds, we are a leading producer of variable annuity and variable life products and also develop fixed annuities, face-amount certificates and banking products and a host of insurance protection products such as life, disability income and personal auto and home insurance. Complementing our product offerings, we also provide access to a wide range of other companies’ products and securities, and offer a number of services to help our clients achieve their financial goals. The diversity among our product and service offerings not only assists our financial advisor network in addressing the varied needs of our clients, but also provides our company with diversification among its sources of revenues and earnings.

• Strong balance sheet and ratings and comprehensive risk management process. We believe our size, ratings and

capital strength provide us with a sound basis for competing in the marketplace. Our strong balance sheet, sound risk management and financial discipline have helped us maintain strong ratings, as well as client and financial advisor confidence in our business. We have a high quality investment portfolio, with approximately 7% rated below investment grade as of December 31, 2005. In addition, we apply risk management tools to prudently manage the risk profile of our company.

• Experienced management team with sound business and decision-making capabilities. Our senior management team

has an average of over 21 years of experience in the financial services industry. We have instilled a performance- and execution-oriented corporate culture. We utilize a consistent decision-making framework to evaluate our existing products and businesses, as well as to prioritize growth opportunities and the associated trade-offs for our company. This framework takes into account four key elements: client needs and behavior, competitor positioning and strategies, our capabilities, and risk-return financial metrics.

Our Strategy

As a financial planning and financial services company with a nationwide presence, a diverse set of asset accumulation, income and insurance protection products and services and an industry leading reputation for financial planning, we believe we are well positioned to further strengthen our offerings to existing and new clients and deliver profitable growth to our shareholders. Our five strategic objectives include:

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• Growing our mass affluent client base. We intend to grow our mass affluent client base by building our brand

awareness, deepening existing client relationships and developing new client relationships.

• Building brand awareness. We are investing substantial resources to develop and build awareness of our new brands, based on our position as a financial planning and financial services company with a more than 110-year history of personal client relationships and a strong nationwide presence. We continue to utilize our relationship with American Express Company, and our other alliance arrangements, to expand awareness of our new brands, support financial advisor recruitment and client acquisition efforts and define our advantages for prospective new clients and distribution partners. For more information on our alliances, see “Our Relationship with American Express Company,” “Asset Accumulation and Income—U.S. Retail Products and Solutions—Strategic Alliances and Other Marketing Channels—Strategic Alliances and Other Marketing Arrangements” and “Protection—Distribution and Marketing Channels.” We believe having strong brand recognition, built on a consistent message of shaping financial solutions for a lifetime through tailored financial advice, will help us grow as an independent company. In addition, we intend to continue focusing a large portion of our marketing and advertising efforts on our ability to address the retirement needs of our core market.

• Deepening existing client relationships. To address the changing needs of our clients, we continue to

develop methods for our branded advisors to introduce, when appropriate, non-financial plan clients to the financial planning process and to assist financial planning clients to more fully implement plans they have in place. We have also created segmented service offerings, such as our Ameriprise Gold Financial ServicesSM and Ameriprise Platinum Financial ServicesSM offerings, to provide recognition, added special benefits and higher levels of service to our highest value clients. In addition, through the centralized support we provide our branded advisor network, such as market research about our existing client base, we identify opportunities for our financial advisors to build deeper relationships with clients by addressing potentially underserved needs. We believe that deeper, longer-term relationships with our clients foster, among other things, increased satisfaction among our clients and financial advisors and greater owned, managed and administered assets.

• Developing new client relationships. We intend to continue to grow our client base, with particular

focus on the large and growing mass affluent market segment. With our tailored approach and diverse range of financial solutions, we believe we are well positioned to address the needs of the mass affluent—particularly as they approach retirement, typically a time with heightened needs for comprehensive financial planning. We provide support for a wide range of corporate and locally defined client acquisition programs. In addition, according to the U.S. census bureau, between 2000 and 2020, the 45-64 age group—typically the prime financial and asset accumulation years for retirement—is projected to grow by 34%, with most of that growth occurring by 2010.

• Strengthening our lead in financial planning and advice. We have a range of strategies including introducing new

retirement focused planning and advice approaches to increase client engagement, such as our recently launched Dream BookSM, a powerful new guide designed to help individuals envision and define their dreams. We plan to encourage even greater levels of financial advisor engagement, through increasing linkages between planning and financial advisor compensation. Finally, we will continue to strengthen our tools and processes that support our financial advisors in financial planning and advice.

• Delivering profitable growth and improved productivity in our financial advisor network. We intend to continue to

enhance the productivity and growth of our branded advisor network by providing financial advisors with strong centralized support to help them build their practices, and by seeking to engage or hire quality individuals, offering a choice of affiliation (employee or franchisee). Our intention is to continue to enhance the centralized support available to our branded advisors in areas such as leadership, technology, training, marketing support, financial planning support, and products/services. We believe this centralized support helps our branded advisors acquire more mass affluent clients and deliver a more consistent experience with a wider range of products and services. We are continuing our targeted recruitment efforts through our traditional channel of recruiting individuals who are new to the industry, as well as enhancing recruitment of experienced financial advisors. Our branded advisor network model provides flexibility to our branded advisors in building

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and managing their individual practices, which we believe leads to better hiring, franchise offers and retention. We continuously evaluate ways in which to improve our branded advisor network model and believe a larger branded advisor force will assist in growing our client base. We designed our compensation plans, including our recently implemented equity compensation plans for employee and franchisee financial advisors, to foster, among other things, greater levels of financial advisor productivity and retention.

• Growing assets by continuing to enhance our mix of products and solutions, and by extending our distribution reach

with alternative channels. We have a range of strategies to achieve this objective, including:

Expanding our product and service solutions. We plan to continue developing and deploying new products and services designed to address the financial and retirement needs of mass affluent clients while delivering growth and margin improvement for our company. Examples of recent product and service launches include our RiverSourceSM Portfolio Builder Series and RiverSourceSM Income Builder Series as well as our Portfolio Navigator asset allocation program under our variable annuities, which permits clients to balance their risk-return profiles with simple, pre-defined solution sets. Through Threadneedle Asset Management Holdings Ltd., our U.K.-based investment management group (“Threadneedle Investments” or “Threadneedle”), we have strengthened our international investment product and service offerings and will continue to expand our international offerings.

Improving our investment performance. Our strategy for improving investment performance includes

better leveraging our top talent and selectively growing our investment management talent pool. We intend to grow our talent pool by organic means (through strengthening of our investment management teams), by external means (through continuing to recruit individual and teams of investment professionals with strong track records, and potentially making opportunistic acquisitions of well-performing boutique investment management firms) and through the addition of sub-advisors as appropriate. We intend to continue investing in tools and resources to assist both our fixed income and equity investment management teams to improve performance while managing risk effectively through the consistent application of risk management processes. We have implemented BlackRock Solutions®, a leading portfolio management, trading and risk management tool, to assist our fixed-income investment management teams in better analyzing, and isolating, the effects of specific factors affecting performance of fixed income portfolios. In equities, we have implemented a boutique approach using small, highly-accountable investment management teams with dedicated analytical and equity trading resources. Each team focuses on particular investment strategies that are accessible through multiple distribution channels. In equities, we are also in the process of implementing the Charles River equity trading and compliance system, a leading tool that will enable us to further enhance our equity trading and compliance monitoring capabilities. We believe that improving and maintaining consistent investment performance will positively impact our managed assets.

Extending our distribution reach. Our marketing and sales efforts focus on enhancing our existing

wholesaling capabilities and local client referral-based programs for our branded advisors, as well as forging new alliances, expanding our work-site program and exploring additional distribution channels for our products and services. We have successfully formed marketing alliances with major companies, such as Costco Wholesale Corporation (“Costco”), Delta Loyalty Management Services, Inc. (“Delta”) and Ford Motor Credit Company (“Ford”) to create programs to acquire and serve new clients and distribute our own products. In addition, we recently entered into an alliance arrangement with American Express Company to cross-sell our products and services to its cardmembers. Through our work-site program, Financial Education and Planning Services, we will continue to provide corporate clients with personal financial planning services for their employees. For more information about these alliances, see “Asset Accumulation and Income—U.S. Retail Products and Solutions—Strategic Alliances and Other Marketing Channels—Strategic Alliances and Other Marketing Arrangements” and “Protection—Distribution and Marketing Channels.” We intend to further expand distribution of our products and services through institutional and third party retail channels, including continuing to expand distribution of Threadneedle products and services through both our own channels in the United States and third party retail and institutional channels elsewhere. Through these efforts, we believe we can grow our client base and increase the volume of products and services that we provide.

• Ensuring an increasingly strong and efficient operating platform. This includes enhancing the requisite technology

infrastructure, seeking to ensure compliant business practices, fostering organizational effectiveness 5

and employee satisfaction, focusing our use of capital and expanding operating margins. In these last two, our strategies include:

• Focusing use of capital. We continually seek opportunities to deploy capital more efficiently to support

our business, while maintaining our ratings and capital position. Using our risk management decision-making framework, we regularly review our product pricing and overall risk positioning to properly account for capital requirements and make strategic adjustments to our product mix, pricing and features. All decisions about capital allocation and new product development include an evaluation of efficiency, growth prospects and margin improvement.

• Expanding operating margins through reengineering. During the period when we were part of American

Express Company, we had a history of producing cost savings in our businesses through a three-pronged re-engineering process focused on process improvements, identifying untapped operating synergies and continually reviewing third party costs, including consolidating or outsourcing some operations. This experience has assisted us in managing the increased operating costs incurred as a result of our separation from American Express Company. We continue to seek opportunities to re-engineer our processes and strive to improve distribution effectiveness and operating efficiency. We believe that improved efficiencies resulting from cost savings will enable us to expand operating margins and free up capital to invest in new growth opportunities.

History and Development

Our company has more than 110 years of history of providing financial solutions designed to help our clients plan for and achieve their financial objectives. Our earliest predecessor company, Investors Syndicate, was founded in 1894 to provide face-amount certificates to consumers with a need for conservative investments. By 1937, Investors Syndicate had expanded its product offerings through Federal Housing Authority mortgages, and later, mutual funds, by establishing Investors Mutual, one of the pioneers in the mutual fund industry. In 1949, Investors Syndicate was renamed Investors Diversified Services, Inc., or IDS. In 1957, IDS added life insurance products, and later, annuity products, through IDS Life Insurance Company (“IDS Life”). In the 1970s, IDS Life introduced its comprehensive financial planning process to clients, integrating the identification of client needs with the products and services to address those needs, and introduced its fee-based planning service in the 1980s.

In 1972, IDS began to expand its distribution network by delivering investment products directly to clients of financial

institutions. In 1979, IDS became a wholly-owned subsidiary of Alleghany Corporation pursuant to a merger. In 1983, our company was formed as a Delaware corporation in connection with American Express Company’s 1984 acquisition of IDS Financial Services from Alleghany Corporation. We changed our name to “American Express Financial Corporation” and began selling our products and services under the American Express brand in 1994. To provide retail clients with a more comprehensive set of solutions, in the late 1990s we began significantly expanding our offering of mutual funds of other companies. We continued to expand our investment product offerings in 2002 with the acquisition of our Cambridge, Massachusetts-based quantitative investment management office and the establishment of our Boston equity investment management office. In 2003 we acquired Threadneedle Investments. On September 30, 2005 the Distribution was consummated and we became an independent publicly-traded company, with the shares of our common stock no longer owned by American Express Company.

Our Relationship with American Express Company

In connection with the separation from American Express Company, we entered into certain agreements with American Express Company. The key terms of the principal agreements that continue to be operative are summarized below.

Separation and Distribution Agreement. We entered into a separation and distribution agreement that generally requires us

and American Express Company to indemnify each other and each other’s representatives and affiliates against certain liabilities. The separation and distribution agreement also contains certain covenants regarding cooperation to effect the transactions contemplated by the Distribution. The agreement also governs rights both we and American Express Company have to access certain of each other’s information following the Distribution. We also entered into an employee benefits agreement relating to certain compensation and employee benefit obligations with respect to our current and former employees.

Tax Allocation Agreement. In connection with the Distribution, we entered into a tax allocation agreement with American

Express Company. This agreement governs the allocation of consolidated U.S. federal and applicable combined or 6

unitary state and local income tax liability as between American Express Company and us, and provides for certain restrictions and indemnities in connection with the tax treatment of the Distribution and addresses other tax-related matters. To avoid the Distribution being taxable to American Express Company and its shareholders, we are prohibited, except under certain circumstances, for a period of two years following the Distribution, from (i) consenting to certain acquisitions of significant amounts of our stock; (ii) transferring significant amounts of our assets; (iii) merging or consolidating with any other person; (iv) liquidating or partially liquidating; (v) reacquiring our stock; (vi) taking any action affecting the relative voting rights of any separate classes of our stock; or (vii) taking any other action that would be reasonably likely to jeopardize the tax free status of the Distribution. We currently do not believe these prohibitions impose a significant constraint on our ability to execute against a two million share repurchase authorization that we announced in January 2006. In addition, we have undertaken to maintain our fund management business as an active business for a period of two years following the Distribution. We have an obligation to indemnify American Express Company for corporate level taxes and related losses suffered by both American Express Company and its shareholders if, due to any of our representations or undertakings being incorrect or violated, the Distribution is determined to be taxable for other reasons.

We currently estimate that the indemnification obligation to American Express Company for taxes due in the event of a 50%

or greater change in our stock ownership could exceed $1.5 billion. This estimate, which does not take into account related losses such as interest, penalties, and other additions to tax, depends upon several factors that are beyond our control. As a consequence, the indemnity to American Express Company could vary substantially from the estimate. Furthermore, the estimate does not address the potential indemnification obligation to both American Express Company and its shareholders in the event that, due to our representations or undertakings being incorrect or violated, the Distribution is determined to be taxable for other reasons. In that event, the total indemnification obligation would likely be much greater.

Transition Services Agreement. We entered into a transition services agreement with American Express Company under

which we and American Express Company will provide certain specified services to each other on an interim basis, including finance and financial operations services, human resources services, information technology services and service delivery network services, including call center services.

Marketing and Branding Agreement. We entered into a marketing and branding agreement with American Express Company

under which we have the right to use the “American Express” brand name and logo in a limited capacity for up to two years from the Distribution date in conjunction with our brand name and logo and, for a transitional period, in the names of certain of our products, services and subsidiaries. We also continue to have access to American Express Company partners, cardmembers and users of the americanexpress.com website for the purpose of marketing our products and services that is similar to the access that we had prior to the Distribution. In addition, the American Express Card continues to be the exclusive charge card that we offer to clients of our Ameriprise Gold Financial Services, Ameriprise Platinum Financial Services and Ameriprise ONESM Financial Account during the term of the agreement. We also entered into an intellectual property license and transfer agreement with American Express Company and certain of its subsidiaries. Under the agreement, the parties assigned to one another a limited number of patents, trademarks, copyrights and other intellectual property.

Reinsurance and Purchase Agreements. In connection with the separation from American Express Company, AMEX

Assurance relinquished all risks and rewards of the travel and other card insurance business of American Express Travel Related Services Company through a reinsurance agreement with Amexco Insurance Company (“Amexco”), a captive insurance company subsidiary of American Express Company. The reinsurance agreement is a quota share reinsurance agreement. Quota share reinsurance is a type of pro rata reinsurance in which the ceding company cedes a proportional part (a percentage) of risks to the reinsurer, and in turn, will recover from the reinsurer the same percentage of all losses on those risks. Under the agreement, AMEX Assurance ceded 100% of the travel insurance and card related business to Amexco in return for arm’s length ceding, and Amexco acquired the deferred acquisition costs related to the ceded business for cash. As of September 30, 2005, we entered into an agreement to sell the AMEX Assurance legal entity to a subsidiary of American Express Company within two years after the Distribution for a fixed price equal to the net book value of AMEX Assurance as of the Distribution date, which approximates $115 million. The closing of the sale of AMEX Assurance was deferred primarily in order for us to secure regulatory filings and other approvals in the interim. Accordingly, we deconsolidated AMEX Assurance as of September 30, 2005 for purposes of U.S. generally accepted accounting principles although it continues to appear in our statutory reporting and will do so until the closing of the sale. For further information, see Note 4 to our consolidated financial statements included in our 2005 Annual Report to Shareholders.

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Our New Brands

In 2005, in connection with the separation from American Express Company, we launched two new brand names for our businesses. We believe this dual brand strategy will provide greater flexibility in achieving our growth-related goals, in particular, our strategic objective of extending our distribution reach in alternative channels.

We are using Ameriprise Financial as our holding company brand, as well as the name of our branded distribution network

and certain of our retail products and services. Our branded advisors began doing business as the Personal Advisors of Ameriprise Financial in early August 2005. In addition, we associate our Ameriprise Financial brand with products that we market directly to clients, including our personal auto and home insurance protection products, 401(k) products and services, wrap accounts and retail brokerage services, as well as our face-amount certificates. We expect that the transition of our banking products and services to the Ameriprise Financial brand will be completed in the first half of 2006, when our new banking subsidiary is expected to have received all necessary regulatory approvals. See “Asset Accumulation and Income—Banking Products” below for additional information on our plans to establish a banking subsidiary.

We began marketing our mutual funds, institutional asset management products, annuities and insurance protection products

(other than personal auto and home) under the RiverSource brand in October 2005. We believe that using a separate brand for these products, including our retail mutual funds, will permit more effective differentiation from our branded advisor network. The transition of our institutional and retail asset management products to the RiverSource brand occurred in the fourth quarter of 2005. We expect the transition of our annuity and insurance protection products to the RiverSource brand to be completed by the end of 2006.

As part of our re-branding to RiverSource, we will streamline the organizational structure of our insurance business by

consolidating certain of our insurance subsidiaries. This reorganization will incorporate the new branding strategy into the names of our insurance subsidiaries that issue our annuity and insurance protection products and is expected to result in certain expense and capital-deployment efficiencies. It is expected that the formal legal entity consolidation and legal entity name changes with respect to our annuity and insurance protection products will not be complete until year-end 2006 due to the time required to obtain all necessary state regulatory approvals. In addition, corporate and legal entity name changes of our mutual funds have been approved by mutual fund shareholders and are expected to become effective during the second quarter of 2006.

Our Financial Advisor Platform

We provide our clients financial planning and brokerage services through our nationwide network of over 12,000 financial advisors. Our network currently includes over 10,500 financial advisors who operate under our brand name, of which over 3,000 are employees of our company. Our network also includes over 1,700 non-employee financial advisors of SAI. According to the 2005-2006 Securities Industry Association Yearbook, we had the fourth largest sales force in 2005 among Securities Industry Association members (based on the number of our branded advisors).

Advisors who use our brand name can affiliate with our company in two different ways. Each affiliation offers different

levels of support and compensation from our company, with the rate of commission we pay to each financial advisor determined by a schedule that takes into account the type of service or product provided, the type of financial advisor affiliation and other criteria. The affiliation options are:

• Employee Advisors. Under this affiliation, a financial advisor is an employee of our company, and we pay compensation

as a draw against commissions and other fees. We also provide our employee advisors a high level of support in exchange for a lower commission payout rate than our branded franchisee advisors.

• Branded Franchisee Advisors. Under this affiliation, a financial advisor is an independent contractor who affiliates with

our company and has the right to use our brand name. We offer our branded franchisee advisors centralized support, including leadership tools and technology platforms, training, national advertising and marketing campaigns and local marketing referral programs. We pay our branded franchisee advisors a higher payout rate than employee advisors, but they are responsible for paying their own business expenses, such as overhead and any compensation of staff they may employ. In addition, our branded franchisee advisors pay us a franchise association fee and other fees in exchange for some of the centralized support described above and the right to associate with our brand name.

Most of our branded advisors started their careers with our company as employee advisors. We continue to benefit from

strong financial advisor retention. As of December 31, 2005, over 60% of our total branded advisors had been with our 8

company for more than four years, with an average tenure among these branded advisors of slightly more than 12 years. Among branded advisors who have been with our company for more than four years, we have an over 90% retention rate. We believe this success is driven by the choice we offer branded advisors about how to affiliate with our company, together with our competitive payout schemes and centralized support that helps them build their practices. As financial advisors of our branded retail brokerage subsidiary or of SAI, our financial advisors provide our clients access to our diversified set of asset accumulation, income management and insurance protection products and services, as well as a selection of products of other companies. The asset accumulation and income management products we offer are described in more detail under “Asset Accumulation and Income” below, and the insurance protection products we offer are described in more detail under “Protection” below. The compensation we pay our financial advisors consists of, among others, a significant portion of the revenues received in the form of financial planning fees, wrap account fees, commissions, sales charges and 12b-1 distribution and servicing-related fees.

Asset Accumulation and Income

We offer a broad array of asset and income management products and services to help retail and institutional clients address their identified financial objectives. We also offer a wide range of investment management products and services to retail and institutional clients outside the United States through Threadneedle Investments, as well as a variety of services to 401(k) and other qualified and non-qualified employee retirement plans, and to individuals and small- and mid-sized businesses.

In 2005, approximately 67% of our revenues and 87% of our income before income tax provision, discontinued operations

and accounting change after separation costs (62% before separation costs) were attributable to our Asset Accumulation and Income business. Our Asset Accumulation and Income segment primarily derives revenues from the fees we receive from asset management, financial planning and product distribution, as well as mortality and expense risk fees and other fees generally paid for supplemental benefits to our variable annuities (including optional living and death benefits, such as guaranteed minimum income benefit and guaranteed minimum death benefit provisions) and marketing support payments made by outside fund companies. We also derive revenues from the net investment and interest income earned on assets supporting our fixed annuities (and the fixed accounts within variable annuities) and certificates. Because most fees that we receive for asset management and related services are based on managed assets, market appreciation will generally result in increased revenues, and inversely, market depreciation will generally depress revenues. Revenues will also fluctuate due to net inflows or outflows of assets.

At December 31, 2005, we had $428.2 billion in owned, managed and administered assets worldwide compared to

approximately $408.2 billion as of December 31, 2004 as follows:

Owned assets include certain assets on our balance sheet, such as investments in the general accounts and the separate

accounts of our life insurance subsidiaries, as well as cash and cash equivalents, restricted and segregated cash and receivables. Managed assets include client assets for which we provide investment management and other services, such as the assets of the RiverSource family of mutual funds, assets of institutional clients and assets held in our wrap accounts (retail accounts for which we receive a fee based on assets held in the account). Managed assets also include assets managed by sub-advisors selected by us. Administered assets include assets for which we provide administrative services, such as assets of our clients invested in other companies’ products that we offer outside of our wrap accounts. Our in-house investment management teams manage over 62% of our owned, managed and administered assets.

For additional details regarding our owned, managed and administered assets, see “Management’s Discussion and Analysis”

contained in our 2005 Annual Report to Shareholders. Our Investment Management Capabilities Our asset management subsidiaries’ investment management teams manage the majority of assets in our RiverSource and

Threadneedle families of mutual funds, as well as the assets we manage for institutional clients in separately 9

As of December 31,

Asset Category

2005 2004

(in billions)

Owned

$ 86.9 $ 81.2

Managed

264.0 257.0

Administered 77.3 70.0

Total

$ 428.2 $ 408.2

managed accounts, the general and separate accounts of insurance companies (including our insurance subsidiaries) and the assets of our face-amount certificate company. These investment management teams also manage assets under sub-advisory arrangements.

We believe that improving and maintaining consistent and strong investment performance will positively impact our assets

under management by increasing the competitiveness and attractiveness of many of our asset accumulation and income management products. We strive to improve investment performance, both through continuing to grow our fixed income and equity management teams and through continuing to invest in the tools and resources to assist them in their investment management activities. We have implemented different approaches to investment management depending on whether the investments in our portfolio are fixed income or equity.

• Fixed Income. In the United States, our fixed-income investment management teams are primarily centralized in

Minneapolis. The teams within fixed income are organized by sector. They utilize valuation models with both quantitative and qualitative inputs to drive duration, yield curve and credit decisioning. This sector-based approach creates focused teams organized by expertise and accountable for performance. Portfolio performance is measured in such a way that client interests are optimized and asset managers are incentivized to collaborate, employ best practices, identify and execute opportunistically.

• Equity. We have implemented a boutique approach to equity asset management using individual, highly accountable

investment management teams with dedicated analytical and equity trading resources. Each team focuses on particular investment strategies and product sets. We have investment management teams located in Boston, Cambridge and Minneapolis as well as at our affiliates Kenwood Capital Management LLC (“Kenwood”) and Threadneedle Investments.

Kenwood is an investment management joint venture we established in 1998. Our wholly-owned asset management

subsidiary owns 47.7% of Kenwood and Kenwood’s investment management principals own 47.5% of the firm, with the remainder held by associate portfolio managers employed by Kenwood. Kenwood investment management services are focused on the small- and mid-cap segments of the U.S. equity market.

Since 2001, we have taken some major steps to improve investment performance by enhancing investment management

leadership, talent and infrastructure. • In September 2001, we hired our current Chief Investment Officer, who has 23 years of experience in the financial

services industry. • In the first quarter of 2002, we formed our Boston investment management team through the strategic hiring of analysts

and portfolio managers with substantial experience in the financial services and asset management industries. This investment team is focused on management of twelve of our own large-cap and sector mutual funds using fundamental research as a money management technique, and assumed management of eight of these funds in 2002.

• In the third quarter of 2002, we hired a new head of our fixed income investment management team who has 20 years of

experience in the asset management industry. • In August 2002, we formed our Cambridge investment team following the acquisition of the assets of Dynamic Ideas

LLC. Our Cambridge team uses proprietary investment management and asset allocation models to manage money and proprietary optimization techniques to control risk, lower turnover and control costs. Our Cambridge team also developed our proprietary financial planning tool Lifetime Optimizer with our financial advice services personnel, which is included in the customized Morningstar® workstations used by our branded advisors. Our Cambridge team manages two retail mutual funds, portions of three other equity funds and co-manages three funds-of-funds.

• In the first quarter of 2003, we reorganized our fixed income investment management team around the sector-based

approach described above. • In September 2003, we acquired Threadneedle Investments, one of the U.K.’s leading investment management groups.

Threadneedle Investments currently has over 100 investment professionals based in London. We restructured our international investment management teams located in London, Singapore and Tokyo and transferred management of our RiverSource global and international equity portfolios to Threadneedle

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Investments through a sub-advisory arrangement. Threadneedle Investments has performed strongly since our September 2003 acquisition and has increased its managed assets over the period from approximately $81.1 billion at September 30, 2003 to over $113.6 billion at December 31, 2005.

• In 2003, we reorganized our Minneapolis-based resources to provide better support to our deep value equity investment

team. • In 2004, we implemented BlackRock Solutions, a leading fixed income portfolio management platform. The platform

provides assistance in both pre-and post-trade compliance, as well as scenario analytics, and allows our U.S.-based fixed income management teams to better analyze the effects of specific factors affecting performance. The platform also helps our fixed income portfolio managers identify and manage risk according to a multitude of factors on a real-time basis.

• In 2005, we expanded the role of our head of fixed income to include a broad set of our Minneapolis investment teams,

including both equity and fixed income. We also closed our San Diego Growth platform, allowing us to leverage resources and talent more effectively by focusing our U.S. equity portfolio management and research efforts on our three other U.S. equity platforms.

We have seen improvements in our overall fixed income performance beginning in 2003, most notably in taxable portfolios.

In equities, we have seen improved investment performance for many funds, including strong overall equity results in 2005. In addition to our existing products, we are seeking to take advantage of the improvements in our investment performance by

creating new retail and institutional investment products, including 18 new mutual funds currently targeted for launch in 2006. We have begun to provide seed money to certain of our investment management teams to develop new products for our institutional clients, which we expect to market in the future. In addition, Threadneedle Investments is leading our efforts to develop investment strategies in emerging markets.

U.S. Retail Products and Solutions We offer our retail clients financial planning and other financial services through our nationwide network of financial

advisors. We also offer individual clients solutions designed to address their identified cash management, fixed income and equity needs. These products include mutual funds, variable and fixed annuities, investment advisory wrap accounts and face-amount certificates and brokerage and other services, as well as banking products and personal trust services. In addition to marketing our own products and services to retail clients through our nationwide network of financial advisors, we also market our own products and services to retail clients through strategic marketing alliances and local marketing programs for our branded advisors, and to employees of our corporate clients in on-site workshops through our Financial Education and Planning Services.

Financial Planning and Advice Services

We strive to deliver financial solutions to our clients through a tailored approach focused on building long-term personal

relationships through financial planning that is responsive to our clients’ evolving needs. The financial solutions we offer to help our clients implement their financial plans include both our own products and services as well as products and services of other companies. In our client relationships involving financial plans, we utilize the Certified Financial Planner Board of Standards, Inc.’s defined financial planning process. This process involves gathering relevant financial information, setting life goals, examining our clients’ current financial status and determining a strategy or plan for helping our clients meet their goals given their current situation and future plans. Once we have identified a financial planning client’s objectives in asset accumulation, income management and protection, we then recommend a comprehensive personalized solution set intended to address those needs. Our experience has shown that personalized financial planning relationships with our clients are characterized by an ability to better understand clients’ specific needs leading to being able to better help our clients meet those needs, higher overall client satisfaction, more products held and higher assets under management.

Our financial planning clients pay a flat fee, an hourly rate or a combination of the two for the receipt of financial planning

services. This fee is not based on, or related to, performance. If clients elect to implement their financial plan with our company, we and our financial advisors generally receive a sales commission and/or sales load and other revenues for the products that clients purchase. These commissions, sales loads and other revenues are separate from and in addition to financial planning fees the financial advisors may receive. We achieved record financial planning sales and fee revenue in 2005 of $171 million, a 23% increase over 2004. In addition, sales of financial plans increased in 2005, and now

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approximately 44% of our retail clients have received a financial plan or have entered into an agreement to receive and have paid for a financial plan, up from approximately 42% in 2004. Product sales to clients with a financial plan accounted for a majority of total financial advisor sales in 2005.

Mutual Funds We offer our retail clients both our own mutual funds and retail mutual funds of other companies. RiverSource Family of Mutual Funds Our RiverSource family of mutual funds consist of two groups of funds: (1) the RiverSource Funds, a group of retail mutual

funds, and (2) the RiverSource Variable Portfolio Funds (“VP Funds”), a series of variable product portfolios. We offer the RiverSource Funds primarily through our financial advisor network and as part of our institutional 401(k) plans. The VP Funds are generally available only as underlying investment options in our own variable annuity and variable life products. Both the RiverSource Funds and the VP Funds include domestic and international equity, fixed income, cash management and balanced funds with a variety of investment objectives. We refer to the RiverSource Funds and the VP Funds, together, as the RiverSource family of mutual funds.

At December 31, 2005, the RiverSource family of mutual funds consisted of 90 funds with $76.6 billion in managed assets

compared to 89 funds with $83.5 billion at December 31, 2004. The RiverSource Funds had total managed assets at December 31, 2005 of $58.1 billion in 66 funds compared to $65.3 billion at December 31, 2004 in 66 funds. The VP Funds had total managed assets at December 31, 2005 of $18.6 billion in 24 funds compared to $18.2 billion at December 31, 2004 in 23 funds.

We launched one new RiverSource Fund in 2005, RiverSourceSM Variable Portfolio – Mid Cap Value Fund (“VP-Mid Cap

Value”). VP-Mid Cap Value is an equity fund that seeks to provide shareholders with long-term growth of capital by investing at least 80% of its net assets in equity securities of medium-sized companies.

Ameriprise Financial Services, Inc., our primary retail brokerage subsidiary (“AMPF”), acts as the principal underwriter

(distributor of shares) for the RiverSource family of mutual funds. In addition, RiverSource Investments, LLC (“RiverSource Investments”), one of our wholly-owned subsidiaries, acts as investment manager, and several of our subsidiaries perform various services for the funds, including accounting, administrative, transfer agency and custodial services. RiverSource Investments performs investment management services pursuant to contracts with the mutual funds that are subject to renewal by the mutual fund boards within two years after initial implementation, and thereafter, on an annual basis.

RiverSource Investments earns management fees for managing the assets of the RiverSource family of mutual funds based on

the underlying asset values. We also earn fees by providing other services to the RiverSource family of mutual funds. RiverSource Funds that are equity or balanced funds have a performance incentive adjustment that adjusts the level of management fees received, upward or downward, based on the fund’s performance as measured against a designated external index of peers. This has a corresponding impact on management fee revenue. In 2005, revenues were adjusted downward by approximately $7 million due to performance incentive adjustments. A few large RiverSource equity funds, including RiverSourceSM New Dimensions® Fund, have experienced relatively poor investment performance over the last few years. We earn commissions for distributing the RiverSource Funds through sales charges (front-end or back-end loads) on certain classes of shares and distribution and servicing-related (12b-1) fees based on a percentage of fund assets, and receive intercompany allocation payments. This revenue is impacted by our overall asset levels, and overall the RiverSource Funds have experienced significant net asset outflows since 2000.

The RiverSource family of mutual funds have increased their use of sub-advisors over the last few years to diversify and

enhance investment management expertise. Since the end of 2003, Threadneedle personnel have provided investment management services to the global and international equity funds within the RiverSource family of mutual funds. Kenwood, another of our affiliates, also provides subadvisory services to one small-cap RiverSource Fund and one small-cap VP Fund. In addition to Threadneedle Investments and Kenwood, 16 unaffiliated subadvisors provide investment management services to certain RiverSource Funds.

Non-Proprietary Mutual Funds We offer more than 2,000 mutual funds from more than 200 other mutual fund families on a stand-alone basis and as part of

our wrap accounts (which are described below) and 401(k) plans to provide our clients a broad choice of investment

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products. In 2005, our retail sales of other companies’ mutual funds accounted for a substantial portion of our total retail mutual fund sales. Client assets held in mutual funds of other companies on a stand-alone basis generally produce lower revenues than client assets held in our own mutual funds.

Mutual fund families of other companies generally pay us by sharing a portion of the revenue generated from the sales of

those funds and from the ongoing management of fund assets attributable to our clients’ ownership of shares of those funds. In exchange for these payments, the mutual fund families of other companies are generally made available through our financial advisors and through our online brokerage platform. See Item 3 of this Annual Report on Form 10-K—“Legal Proceedings” for information on certain regulatory matters concerning revenue sharing practices. We also receive administrative services fees from most mutual funds sold through our distribution network.

Fee-based Investment Advisory Accounts In addition to purchases of proprietary and non-proprietary mutual funds and other securities on a stand-alone basis, clients

may purchase mutual funds, among other securities, in connection with investment advisory fee-based “wrap account” programs or services, and pay fees based on a percentage of their assets. We currently offer both discretionary and non-discretionary investment advisory wrap accounts. In a discretionary wrap account, an unaffiliated investment advisor, we or one of our subsidiaries chooses the underlying investments in the portfolio on behalf of the client, whereas in a non-discretionary wrap account, the client chooses the underlying investments in the portfolio based, to the extent the client elects, on the recommendations of their financial advisor. Investors in discretionary and non-discretionary wrap accounts generally pay an asset-based fee that is based on the assets held in their wrap accounts as well as any related fees or costs included in the underlying securities held in that account (e.g., underlying mutual fund operating expenses, Rule 12b-1 fees, etc.). In 2005, a portion of our proprietary mutual fund sales were made through wrap accounts. Client assets held in mutual funds in a non-discretionary or other wrap account generally produce higher revenues than client assets held in mutual funds on a stand-alone basis because, as noted above, we receive a fee based on the asset values of the assets held in a wrap account in addition to revenues we normally receive for sales of the funds included in the account.

We provide the above-referenced discretionary and non-discretionary wrap accounts as part of the AmeripriseSM Premier

Portfolio Services, which is a service that allows customers to receive consolidated reporting and information on one or more of their fee-based investment advisory accounts. The largest wrap program we sponsor within the Ameriprise Premier Portfolio Services service is AmeripriseSM Strategic Portfolio Service Advantage, a non-discretionary wrap account. The Strategic Portfolio Service Advantage wrap program had total client assets valued at $47.6 billion at December 31, 2005 compared to $35.3 billion at December 31, 2004. We also provide other fee-based investment advisory services as part of the Ameriprise Premier Portfolio Services, including a fund of hedge funds investment advisory account service and the Separately Managed Account program, a discretionary wrap account service. The Premier Portfolio Services Separately Managed Account program had total client managed assets of approximately $2.1 billion at December 31, 2005 compared to $1.9 billion at December 31, 2004.

Brokerage and Other Products and Services We also offer our retail clients a variety of brokerage and other products and services. We provide securities execution and

clearing services for our retail and institutional clients through our registered broker-dealer subsidiaries. As of December 31, 2005, we administered $77.3 billion in assets for clients, an increase of $7.3 billion from December 31, 2004. Our online brokerage service allows clients to purchase and sell securities online, obtain independent research and information about a wide variety of securities, use self-directed asset allocation and other financial planning tools, contact a financial advisor, as well as have access to mutual funds, among other services.

Our Ameriprise ONE Financial Account is a single integrated financial management account that combines a client’s

investment, banking and lending relationships. The Ameriprise ONE Financial Account enables clients to access a single cash account to fund a variety of financial transactions, including investments in mutual funds, individual securities, cash products and margin lending. Additional features of the Ameriprise ONE Financial Account include unlimited check writing with overdraft protection, an American Express® Gold or Platinum Card (subject to certain eligibility requirements), online bill payments, ATM access and a savings account.

We also offer a My Financial Accounts data aggregation service, which is an online capability that enables clients to view

and manage their entire Ameriprise Financial relationship (i.e., brokerage, 401(k), banking and financial advisor credit cards) in one place via the Internet. Our My Financial Accounts data aggregation service also allows clients to add third party account information, providing a consolidated view of their financial services account relationships.

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In May 2004, we began the nationwide rollout of Ameriprise Gold Financial Services to offer special benefits to recognize

and reward our clients with more than $100,000 invested with our company or, starting in 2005, with at least a $1 million face-amount estate series life insurance policy. Clients with over $500,000 invested with our company or a $5 million face-amount estate series life insurance policy may qualify for Ameriprise Platinum Financial Services. Clients must meet detailed eligibility and maintenance rules to qualify for and retain Gold or Platinum status. Special benefits may include items such as annual fee waivers on IRA rollovers, quarterly fee waivers on the Ameriprise ONE Financial Account or a fee-waived American Express® Preferred Rewards Gold or Platinum Card, as applicable. Financial planning services are available for a separate fee as described above under “—Financial Planning and Advice Services.” We have plans to rebrand and refresh our client recognition and loyalty programs in 2006 to enhance client recognition and foster greater participation among clients in the benefits available to them when they achieve the required criteria.

We also offer shares in public, non-exchange traded Real Estate Investment Trusts (“REITs”) issued by other companies.

We believe that we are one of the largest distributors of public non-exchange traded REITs in the United States. In addition, we service, but do not sell, managed futures limited partnerships engaged in the trading of commodity interests, including futures contracts, in which one of our subsidiaries is a co-general partner. These products subject us to regulation by the Commodity Futures Trading Commission (“CFTC”).

Face-Amount Certificates We issue five different types of face-amount certificates, a type of investment product, through Ameriprise Certificate

Company, a wholly-owned subsidiary that is registered as an investment company under the Investment Company Act of 1940. Owners of our certificates invest funds and are entitled to receive, at maturity or the end of a stated term, a determinable amount of money equal to their aggregate investments in the certificate plus interest at rates we declare from time to time, less any withdrawals and early withdrawal penalties. For two types of certificate products, 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 our discretion for prospective terms.

At December 31, 2005, we had approximately $5.6 billion in total certificate reserves underlying our certificate products.

Our earnings are based upon the spread between the interest rates credited to certificate holders and the interest earned on the certificate assets invested. A portion of these earnings is used to compensate the various affiliated and unaffiliated entities that provide management, administrative and other services to our company for these products. The certificates compete with many other investments offered by banks, savings and loan associations, credit unions, mutual funds, insurance companies and similar financial institutions, which may be viewed by potential customers as offering a comparable or superior combination of safety and return on investment. In times of weak performance in the equity markets, certificate sales are generally stronger.

Annuities We offer both variable and fixed annuity products issued almost exclusively through IDS Life and its insurance subsidiaries.

We refer to IDS Life and its insurance subsidiaries as the “IDS Life companies.” Our products include deferred variable and fixed annuities, in which assets accumulate until the contract is surrendered, the contractholder (or in some contracts, annuitant) dies or the contractholder or annuitant begins receiving benefits under an annuity payout option. We also offer immediate variable and fixed annuities, in which payments begin within one year of issue and continue for life or for a fixed period of time. In addition to the revenues we generate on these products, which are described below, we also receive fees charged on assets allocated to our separate accounts to cover administrative costs, and a portion of the management fees from the underlying investment accounts in which assets are invested, as discussed below under “ —Variable Annuities.” Investment management performance is critical to the profitability of our annuity business.

Our branded advisors do not offer annuity products of our competitors, except for annuities specifically designed for use in

the small employer 401(k) market that are issued by two unaffiliated insurance companies. IDS Life serves as the distributor for variable annuities that it issues, while another of our subsidiaries serves as the distributor of variable annuities issued by IDS Life’s subsidiaries. We also distribute annuities through third party channels such as banks and broker-dealer networks.

IDS Life is one of the largest issuers of annuities in the United States. For the year ended December 31, 2005, on a

consolidated basis, our variable annuity products ranked 11th in new sales of variable annuities according to VARDS. We continue to expand distribution by delivering annuity products issued by the IDS Life companies through non-affiliated representatives and agents of third party distributors.

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We had fixed and variable annuity cash sales in 2005 of $7.6 billion, up from 2004 as a result of a 41% increase in variable

annuities, partially offset by a decrease in fixed annuities. The relative proportion between fixed and variable annuity sales is generally driven by the relative performance of the equity and fixed income markets. In times of lackluster performance in equity markets, fixed sales are generally stronger. In times of superior performance in equity markets, variable sales are generally stronger. The relative proportion between fixed and variable annuity sales is also influenced by product design and other factors.

Variable Annuities A variable annuity provides a contract owner with investment returns linked to underlying investment accounts of the

contract owner’s choice. These underlying investment options may include the VP Funds discussed above as well as mutual funds of other companies. Most variable annuity products in-force offer a fixed account investment option with guaranteed minimum interest crediting rates ranging up to 4% at December 31, 2005.

Our Portfolio Navigator asset allocation program is available under our variable annuities. The Portfolio Navigator program

is designed to help a contract purchaser select an asset allocation model portfolio from the choices available under the program, based on the purchaser’s stated investment time horizon, risk tolerance and investment goals. We believe the benefits of the Portfolio Navigator asset allocation program may include a well-diversified annuity portfolio, disciplined, professionally created asset allocation models, simplicity and ease of use, access to multiple well-known money managers within each model portfolio and automatic rebalancing of the client’s contract value on a quarterly basis. The model portfolios under the Portfolio Navigator asset allocation program are designed and periodically updated by our investment management subsidiary RiverSource Investments, based on recommendations from Morningstar Associates, LLC.

Contract purchasers can choose to add various optional benefit provisions to their contracts to meet their needs. These

include enhanced guaranteed minimum death benefit provisions, guaranteed minimum withdrawal benefit provisions, guaranteed minimum accumulation benefit provisions and guaranteed minimum income benefit provisions. In general, these features can help protect contract owners and beneficiaries from a shortfall in death or living benefits due to a decline in the value of their underlying investment accounts.

The general account assets of each IDS Life company support the contractual obligations under the guaranteed benefit

provisions the company issues (see “—Institutional Products and Services—Insurance Company General and Separate Accounts” section below). As a result, IDS Life bears the risk that protracted under-performance of the financial markets could result in guaranteed benefit payments being higher than what current account values would support. IDS Life’s exposure to risk from guaranteed benefits generally will increase when equity markets decline.

Variable annuities provide us with fee-based revenue in the form of mortality and expense risk charges and fees charged for

optional features elected by the contract owner and other contract charges. We and our affiliates receive asset management fees for managing the VP Funds underlying our variable annuity products as well as 12b-1 distribution and servicing-related fees from the VP Funds and the underlying funds of other companies. In addition, we also receive marketing support payments from the affiliates of other companies’ funds included as investment options in our variable annuity products.

Fixed Annuities Our fixed annuity products provide a contract owner with cash value that increases by a fixed or indexed interest rate. Fixed

rates are periodically reset at our discretion subject to certain policy terms establishing minimum guaranteed interest crediting rates. Our earnings from fixed annuities are based upon the spread between rates earned on assets purchased with fixed annuity deposits and the rates at which interest is credited to our fixed annuity contracts.

Our fixed annuity contracts in-force provide guaranteed minimum interest crediting rates ranging from 1.5% to 5% at

December 31, 2005. In 2003, and in response to a declining interest rate environment, several states adopted an interim regulation allowing for a guaranteed minimum interest-crediting rate of 1.5% and/or a model regulation providing for a guaranteed indexed rate and have now adopted regulations that mirror the National Association of Insurance Commissioners (“NAIC”) model regulation for a guaranteed indexed rate. In response, we filed a number of contract changes in recent years to implement lower minimum guarantees. We will continue to implement contract changes as states adopt the new model regulation or as the interim regulation expires according to its terms.

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Liabilities and Reserves for Annuities We must maintain adequate financial reserves to cover the risks associated with guaranteed benefit provisions added to

variable annuity contracts in addition to liabilities arising from fixed and variable annuity base contracts. You can find a discussion of liabilities and reserves related to our annuity products in Note 2 to our consolidated financial statements included in our 2005 Annual Report to Shareholders.

Banking Products We provide consumer lending and Federal Deposit Insurance Corporation (“FDIC”) insured deposit products to our retail

clients through an arm’s length service arrangement with American Express Bank, Federal Savings Bank (“FSB”), a subsidiary of American Express Company, that will continue until we are able to establish our own banking subsidiary. For more information regarding this transition arrangement see “Our Relationship with American Express Company.” Our consumer lending products include first mortgages, home equity loans, home equity lines of credit, investment secured loans and lines of credit and unsecured loans and lines of credit. Our deposit products include the AmeripriseSM Insured Money Market Account and the ONE High-Yield Savings Account, both of which are offered in connection with the Ameriprise ONE Financial Account described below. We also offer stand-alone checking, savings and money market accounts and certificates of deposit.

Our mortgage and home equity installment loan products are originated through American Express Bank, FSB and sold to

third parties shortly after origination. All other lending products are originated and held on the balance sheet of American Express Bank, FSB. As of December 31, 2005, there were $501 million in home equity line of credit balances, $42 million in investment-secured loan and line of credit balances and $82 million in unsecured balances extended to our clients. The majority of our clients’ deposit balances are in the Ameriprise Insured Money Market Account and the ONE High-Yield Savings Account. These products held $4.0 billion and $0.9 billion in total deposits, respectively, as of December 31, 2005. We believe these products play a key role in our Asset Accumulation and Income business by offering our clients an FDIC-insured alternative to other cash products. They also provide pricing flexibility generally not available through money market funds.

We distribute our banking products through branded advisor referrals and direct mail to our retail clients and external

prospects. We believe that the availability of these products is a competitive advantage and supports our financial advisors in their ability to meet the financial needs of our clients.

We have received approval from the Office of Thrift Supervision (“OTS”) to obtain a new FSB charter for a wholly-owned

subsidiary named Ameriprise Bank, FSB. Issuance of the charter is subject to approval by the FDIC. We expect that our subsidiary will operate as an FSB and that it will replace American Express Bank, FSB, as the provider of the banking products described above once all necessary legal and regulatory approvals are obtained. We also expect that our banking subsidiary will eventually provide the personal trust services described above under “—Brokerage and Other Products and Services,” which are also currently provided by American Express Bank, FSB. We currently anticipate that we will be able to obtain required regulatory approvals and transfer client accounts to our new FSB in the first half of 2006. It is expected that these accounts will be transferred at fair value at the time the purchase is completed.

We continue to provide distribution services for Personal Trust Services, a division of American Express Bank, FSB.

Personal Trust Services provides personal trust, custodial, agency and investment management services to individual and corporate clients of our branded advisors. Personal Trust Services also uses some of our investment products in connection with its services. We expect to continue providing these distribution services until our new banking subsidiary is operating, at which point we intend to provide distribution services for the Personal Trust Services division of our new banking subsidiary.

Strategic Alliances and Other Marketing Channels We use strategic marketing alliances, local marketing programs for our branded advisors and on-site workshops through our

Financial Education and Planning Services group in order to generate new clients for our financial planning and other financial services. In addition, we use third party distribution channels for our own annuity products.

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Strategic Alliances and Other Marketing Arrangements An important aspect of our strategy is to leverage the client relationships of our other businesses by working with major

companies to create alliances that help generate new financial services clients for us. We currently have relationships with Costco, Delta, Ford, American Century Services Corporation (“American Century”), Marriott Ownership Resorts, Inc., and eWomenNetwork, Inc. In addition to these relationships, we also continue to market annuity products directly to consumers holding an American Express Card under our transition arrangement with American Express Company.

• Costco. Since 2002, we have had a relationship with Costco involving AMPF and our property casualty subsidiary.

AMPF signed a 1-year extension in January 2006, and our property casualty subsidiary recently signed a 5-year extension. The relationship with AMPF offers its financial advisors an opportunity to market our financial planning and advice services to Costco members through various marketing channels. We also market our property casualty products through our alliance with Costco. See “Protection—Distribution and Marketing Channels.”

• Delta. Our marketing alliance with Delta, which began in 2003, provides us with the opportunity to market financial

planning and advice services to consumers who have a relationship with Delta Air Lines through its Delta SkyMiles program.

• Ford. We recently entered into an alliance providing us the opportunity to offer personal auto, home and liability

insurance products to customers of Ford Motor Credit Company. • American Century. In April 2004, we began a cooperative marketing alliance with American Century. This alliance

provides us with the opportunity to market our financial planning and advice services to direct shareholders of American Century’s own mutual fund family.

• Marriott Vacation Club International (“MVCI”). Under our agreement with MVCI, which was entered into in

November 2004, our financial advisors conduct financial education sessions at vacation ownership properties marketed by Marriott Ownership Resorts, Inc., under its MVCI label.

• eWomenNetwork, Inc. In September 2005, we entered into a marketing agreement with eWomenNetwork, Inc., to offer

financial planning and advice services to their membership base. The agreement allows us to use multi-channel touch points, from online to seminars and events, to reach members for financial advisor client acquisition opportunities.

Our alliance arrangements are generally for a limited duration of one to five years with an option to renew. Additionally,

these types of marketing arrangements typically provide that either party may terminate the agreements on short notice, within 60 days. We compensate our alliance partners for providing opportunities to market to their clients.

In addition to our alliance arrangements, we have developed a number of local marketing programs for our branded advisors

to use in building a client base in their local communities. These include pre-approved seminars, seminar- and event-training and referral tools and training, which are designed to encourage both prospective and existing clients to refer or bring their friends to an event.

Third Party Distribution Channels We also offer our annuity products to retail clients through third party banks and broker-dealers, such as Wachovia

Securities, Inc., SunTrust Securities, Inc., Wells Fargo Securities, Inc., and Dreyfus Service Corporation. As of December 31, 2005 we had distribution agreements for our annuity products in place with approximately 40 banks and over 40 broker-dealers, with annual sales of approximately $1 billion in 2005.

Financial Education and Planning Services We provide workplace financial education and advisory services programs to major corporations and small businesses

through our Financial Education and Planning Services group, including some of our 401(k) plan sponsor clients. Our Financial Education and Planning Services group focuses on helping the individual employees of client companies plan for and achieve their long-term financial objectives. It makes available educational materials, tools and programs as well as trains and supports financial advisors working on-site at company locations to present educational seminars, conduct one-on-

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one meetings and participate in client educational events. In 2005, we increased sales of financial education relationships to companies and small businesses that do not have a 401(k) relationship with our retirement services business, and we also expanded our educational programs and on-site activities with 401(k) clients.

We also provide financial advice service offerings, such as Financial Planning and Executive Financial Services, tailored to

discrete employee segments. We believe that demand for employee financial education is expected to remain high, particularly given the continuing trend toward increased employee responsibility for selecting retirement investments, selecting benefit options, and for their overall personal retirement readiness.

Financial Services Center In 2004, we established the Financial Services Center, a special call center for remote-based sales and service. The Financial

Services Center provides support for those retail customers who do not have access to or do not desire a face-to-face relationship with a financial advisor. Financial consultants in the Financial Services Center provide personal service and guidance through phone-based interactions and may provide product choices in the context of the client’s needs and objectives.

Institutional Products and Services Through our asset management subsidiaries, we offer separately managed account services to a variety of institutional clients,

including pension plans, employee savings plans, foundations, endowments, corporations, banks, trusts, governmental entities, high-net-worth individuals and not-for-profit organizations. These asset management subsidiaries also provide investment management services for the general and separate accounts of insurance companies, including for our insurance subsidiaries, as well as hedge fund management and other alternative investment products. These alternative investment products include collateralized debt obligations (“CDOs”) available through our syndicated loan management group to our institutional clients. We also offer a variety of retirement services to clients. We are working to further develop our institutional capabilities, including through funding institutional product development by our investment management teams and through the recent expansion of our institutional and sub-advisory sales teams. At December 31, 2005, approximately $130.1 billion, or 30.4%, of our total owned, managed and administered assets (other than assets held in the general and separate accounts of our IDS Life companies described below) were managed for institutional clients, including assets managed by Threadneedle Investments.

Institutional Separately Managed Accounts We provide investment management services to pension, profit-sharing, employee savings and endowment funds, the

accounts of large- and medium-sized businesses and governmental clients, as well as the accounts of high-net-worth individuals and smaller institutional clients, including tax-exempt and not-for-profit organizations, through our asset management subsidiaries. The management services we offer include investment of funds on a discretionary or non-discretionary basis, and related services including trading, cash management and reporting.

We offer various fixed income and equity investment strategies for our institutional separately managed accounts clients.

Through an arrangement with Threadneedle Investments and our affiliate Kenwood, we also offer certain international and U.S. equity strategies to U.S. clients.

For our investment management services, we generally receive fees based on the market value of managed assets pursuant to

contracts that can typically be terminated by the client on short notice. Clients may also pay fees to our company based on the performance of their portfolio.

At December 31, 2005, we managed a total of $19.2 billion in assets under this range of services. Insurance Company General and Separate Accounts We provide investment management services for assets held in the general and separate accounts of our IDS Life companies.

Our fixed-income team manages the general account assets according to a strategy designed to provide for a consolidated and targeted rate of return on investments while controlling risk. Separate account assets are managed by both our fixed-income and equity teams. At December 31, 2005, on behalf of IDS Life and its subsidiaries, we managed general account assets of $31.2 billion and separate account assets of $18.6 billion, compared to $32.6 billion and $18.2 billion, respectively, at December 31, 2004.

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In accordance with regulatory investment guidelines, the IDS Life companies, through their respective boards of directors,

boards of directors’ investment committees or staff functions, review models projecting different interest rate scenarios, risk/return measures and their effect on profitability in order to guide us in our management of the general account assets. They also review the distribution of assets in the portfolio by type and credit risk sector. The objective is to structure the investment securities portfolio in the general accounts to meet contractual obligations under our insurance and annuity products and achieve targeted levels of profitability within defined risk parameters.

Threadneedle Investments provides investment management services for accounts of The Zurich Group totaling

approximately $84.1 billion in separately managed assets as of December 31, 2005, compared to $84.9 billion as of December 31, 2004. See “—International Products and Services—Threadneedle—Strategic Alliances” below.

Management of Collateralized Debt Obligations We provide collateral management services to special purpose vehicles that issue CDOs through a dedicated team of

investment professionals located in Los Angeles, California. CDOs are securities collateralized by a pool of assets, usually primarily syndicated bank loans and, to a lesser extent, high yield bonds. Multiple tranches of securities are issued by a CDO, offering investors various maturity and credit risk characteristics. Scheduled payments to investors are based on the performance of the CDO’s collateral pool. For collateral management of CDOs, we earn fees based on managed assets and, in certain instances, may also receive performance-based fees. At December 31, 2005, we managed approximately $6.0 billion of assets related to CDOs.

Sub-Advisory Services We serve as sub-advisors to certain offshore mutual funds sponsored by American Express Bank Ltd., a subsidiary of

American Express Company. These funds are organized under the laws of Luxembourg and are advised by American Express Asset Management Company (Luxembourg) Ltd., a subsidiary of American Express Company. We are pursuing opportunities to sub-advise additional investment company assets in the U.S. and overseas. As of December 31, 2005, we had over $1.2 billion in sub-advised assets. Our affiliates Kenwood and Threadneedle Investments also serve as sub-advisors to investment companies and other assets.

Hedge Funds We provide investment advice and related services through our asset management subsidiaries to private, pooled investment

vehicles organized as limited partnerships, limited liability corporations or foreign (non-U.S.) entities. These funds are currently exempt from registration under the Investment Company Act of 1940 and are organized as domestic and foreign funds.

For investment management services, we generally receive fees based on the market value of assets under management, as

well as performance-based fees. During the fourth quarter of 2005, we experienced outflow in institutional assets in connection with the transfer of our fund of hedge funds to American Express Company and the liquidation of certain hedge funds.

Retirement Services We provide a variety of services for our institutional clients who sponsor retirement plans. These services are provided

through our Ameriprise Retirement Services business unit which is a service group of our trust company subsidiary and one of our broker-dealer subsidiaries.

As of December 31, 2005, approximately $11.1 billion, or 2.6%, of our total owned, managed and administered assets as of

such date, were managed for retirement services clients, compared to $12.0 billion at December 31, 2004. This amount does not include the RiverSource family of mutual funds held in other retirement plans, because these assets are included under assets managed for institutional and retail clients and within the “Mutual Funds” section above. Also, this amount does not include other companies’ mutual funds because these assets are included in administered assets.

At December 31, 2005, our trust company acted as directed trustee or custodian for over 225 retirement plans, which

represented approximately $29.8 billion in assets managed or administered and approximately 820,000 participants. At December 31, 2004, our trust company acted as directed trustee or custodian for over 260 retirement plans, which represented approximately $31.4 billion in assets managed or administered, and approximately 900,000 participants.

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We provide investment management services through collective investment funds provided by our trust company subsidiary.

Collective funds are investment funds that are exempt from registration with the Securities and Exchange Commission (“SEC”) and offered primarily through banks and other financial institutions to institutional clients such as retirement, pension and profit-sharing plans. We currently serve as investment manager to 47 collective funds covering a broad spectrum of investment strategies. We receive fees for investment management services that are generally based upon a percentage of assets under management rather than performance-based fees. We generally consider the assets managed in connection with our retirement services as managed assets on behalf of individuals because the underlying assets are typically owned by individuals.

In addition to RiverSource Funds and RiverSource Trust Collective Funds, we offer separately managed accounts to our

retirement plan clients. Our retirement services investment platform offers a wide range of non-proprietary mutual fund offerings. We receive revenue from these mutual funds and their affiliates for services we provide to our retirement services clients.

The primary market for our retirement services is retirement plans with at least $10 million in assets, which are generally

sponsored by mid- and large-size private employers, governmental entities and labor unions. In addition to the investments described above, we offer additional services to employer-sponsored retirement plans, including participant record keeping and employee education offerings and both telephone and Internet-based plan servicing. Our trust company subsidiary also provides custodial and non-discretionary administrative services to qualified employer stock funds offered under plans sponsored by our retirement services clients.

In addition to the services described above, our trust company also acts as custodian, and one of our brokerage subsidiaries

acts as broker, for individual retirement accounts, tax-sheltered custodial accounts and other retirement plans for individuals and small- and mid-sized businesses. At December 31, 2005, these tax-qualified assets totaled $76.2 billion, approximately 17.8% of our total assets owned, managed and administered.

Our trust company subsidiary also provides institutional asset custodial services to our affiliates providing mutual funds,

face-amount certificates, asset management and life insurance. At December 31, 2005, our institutional assets under custody were approximately $106.4 billion. We receive fees for our custody services that are generally based upon assets under custody as well as transaction-related fees for our institutional custody services.

International Products and Services—Threadneedle Outside the United States, we offer investment management products and services through Threadneedle Investments.

Threadneedle Investments is headquartered in London, and had 749 employees as of January 1, 2006. The Threadneedle group of companies provides investment management products and services independently from our other affiliates. Threadneedle Investments offers a wide range of asset management products and services, including segregated asset management, mutual funds and hedge funds, to institutional clients as well as to retail clients through intermediaries, banks and fund platforms in Europe. These services comprise most asset classes, including equities, fixed income, cash and real estate.

Threadneedle Investments also offers investment management products and services to U.S. investment companies, other

U.S. institutional clients, including certain RiverSource Funds and VP Funds, as well as non-U.S. institutional clients. In addition, Threadneedle Investments provides sub-advisory services to the Luxembourg-based fund family of American Express Bank Ltd., a subsidiary of American Express Company.

Our September 2003 acquisition of Threadneedle Investments helped facilitate consolidation of our international asset

management activities in the United Kingdom. Threadneedle has benefited from growth in assets under management both through new client business and organic market growth of existing funds. At December 31, 2005, the Threadneedle group of companies managed over $113.6 billion, or approximately 27%, of our total owned, managed and administered assets for both retail and institutional clients compared to $112.8 billion at December 31, 2004.

Threadneedle’s distribution is organized along three lines: retail, institutional and strategic alliances. Retail. The retail business line includes Threadneedle’s U.K. mutual fund family, which ranked as the third largest retail

fund business in the United Kingdom in terms of assets under management at December 31, 2005 according to the Investment Management Association, a trade association for the U.K. investment management industry. Threadneedle sells mutual funds mostly in Europe (primarily the U.K. and Germany) through financial intermediaries and institutions. The

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retail business unit also includes Threadneedle’s hedge funds comprising four long/short equity funds, a fund of funds and one fixed income fund. The hedge funds are sold primarily to banks and other managers of funds of hedge funds.

Institutional. Threadneedle’s institutional business offers separately managed accounts to U.K. and international pension

funds and other institutions as well as offering insurance funds. Threadneedle Investments is expanding distribution of its institutional products in Scandinavia, Switzerland, the Middle East and Asia. At December 31, 2005, Threadneedle Investments had $102.9 billion in owned assets and managed assets in separately managed accounts (including “Strategic Alliance” assets, as described below) compared to $103.6 billion at December 31, 2004.

Strategic Alliances. Threadneedle’s strategic alliances business comprises the asset management activities undertaken by

Threadneedle Investments for The Zurich Group, its former parent, the American Express Bank Ltd. entities (which are subsidiaries of American Express Company) and affiliates of our company. The Zurich Group is Threadneedle’s single largest client and represented over 70% of Threadneedle’s assets under management at December 31, 2005. Threadneedle provides investment management products and services to Zurich for assets generated by The Zurich Group through the sale of its life insurance products, variable annuity, pension and general insurance products, as well as other assets on the balance sheet of The Zurich Group. Threadneedle entered into an agreement with The Zurich Group when we acquired Threadneedle Investments in 2003 for Threadneedle to continue to manage certain assets of Zurich Financial Services. For investment management of the assets underlying Zurich’s life insurance products (which represent a significant majority of the assets managed for Zurich), the initial term of the agreement is through October 2011. For investment management of Zurich’s other assets, the initial term is through October 2006. In both cases the term is subject to Threadneedle meeting performance criteria. The agreement also provides for a fee review in March 2007 for management of certain assets on the balance sheet of The Zurich Group. Threadneedle Investments also offers its funds directly or within a multi-manager wrap through an independent UK distribution platform operated by Openwork Limited. Threadneedle Investments provides sales and marketing support for these distribution channels.

Threadneedle Investments sold its controlling interest in an institutional multi-manager business, MM Asset Management

Ltd., to Investment Manager Selection (Holdings) Limited (“IMSHL”) in exchange for shares in IMSHL on October 31, 2005. Threadneedle Investments expects to develop additional hedge funds and other products for both the retail and institutional

markets as well as to continue its efforts to attract new retail and institutional clients.

Protection

We offer a variety of protection products, including life, disability income and other brokered life and health insurance products and personal auto and home insurance to address the identified protection and risk management needs of our retail clients. We offer these insurance protection products primarily to our clients with financial plans and, other than personal auto and home insurance, we offer these products exclusively through our financial advisor network. We offer our personal auto and home insurance protection products primarily on a direct basis through co-marketing alliances. We issue insurance policies through our insurance subsidiaries, the IDS Life companies and the Property Casualty companies (as defined below under “—IDS Property Casualty”). The IDS Life companies are also the issuers of the annuity products described above under “Asset Accumulation and Income—U.S. Retail Products and Solutions—Annuities.”

In 2005, approximately 26% of our revenues and 56% of our income before income tax provision, discontinued operations

and accounting change after separation costs (40% before separation costs) were attributable to our Protection business. Our Protection business generates income from premiums and cost of insurance charges, the spread between our earnings on the investment of general account assets of our IDS Life subsidiaries and the interest credited to contract owners’ fixed accounts, and mortality and expense risk fees as well as marketing, administrative, servicing and distribution support fees related to the funds underlying our variable life products.

IDS Life Companies The IDS Life companies are the issuers of both variable and fixed universal life insurance, traditional life insurance including

whole life and term life, and disability income insurance (IDS Life discontinued underwriting new long-term care policies as of December 31, 2002). Universal life insurance is a form of permanent life insurance characterized by its flexible premiums, its flexible death benefit amounts and its unbundling of the pricing factors (i.e., mortality, interest and expenses). Traditional life insurance refers to whole and term life insurance policies that pay a specified sum to a beneficiary upon death of the insured for a fixed premium. Variable universal life insurance combines the premium and death benefit flexibility of universal life with significant underlying fund investment flexibility and the risks associated therewith.

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IDS Life’s sales of individual life insurance in 2005, as measured by scheduled annual premiums, excluding lump sum and

excess premiums, consisted of 89% variable universal life, 2% fixed universal life and 9% traditional life. Our IDS Life companies issue only non-participating policies, which do not pay dividends to policyholders from the insurer’s earnings.

Assets supporting policy values associated with fixed account life insurance and annuity products, as well as those assets

associated with fixed account investment options under variable insurance and annuity products (collectively referred to as the “fixed accounts”), are part of the IDS Life companies’ general accounts. Under fixed accounts each IDS Life company bears the investment risk. More information on the IDS Life companies general accounts is found under “Asset Accumulation and Income—Institutional Products and Services—Insurance Company General and Separate Accounts” above.

Variable Universal Life Insurance Our best-selling life insurance products are variable universal life insurance policies. Variable universal life provides life

insurance coverage along with investment returns linked to underlying investment accounts of the policyholder’s choice, options that may include our VP Funds discussed above as well as funds of other companies. These products in-force offer a fixed account investment option with guaranteed minimum interest crediting rates ranging from 3.0% to 4.5% at December 31, 2005. For the year ended December 31, 2005, IDS Life ranked first in sales of variable universal life based on total premiums (according to Tillinghast-Towers Perrin Value survey).

Fixed Universal Life Insurance and Traditional Whole Life Insurance Fixed universal life and traditional whole life insurance policies do not subject the policyholder to the investment risks

associated with variable universal life insurance. Our fixed universal life insurance products provide life insurance coverage and cash value that increases by a fixed interest

rate. The rate is periodically reset at the discretion of the issuing company subject to certain policy terms relative to minimum interest crediting rates. Our fixed universal life insurance policies in-force provided guaranteed minimum interest crediting rates ranging from 4.0% to 5.0% at December 31, 2005. The IDS Life companies also offer traditional whole life insurance, which combines a death benefit with a cash value that generally increases gradually in amount over a period of years and does not pay a dividend (non-participating). The IDS Life Companies have sold very little traditional whole life insurance in recent years.

Term Life Insurance The IDS Life Companies also offer term life insurance. Term life insurance only provides a death benefit, does not build up

cash value and does not pay a dividend. The policyholder chooses the term of coverage with guaranteed premiums at the time of issue. During the chosen term, we could not raise premium rates even if claims experience were to deteriorate. At the end of the chosen term, coverage may continue with higher premiums until the maximum age is attained, at which point the policy expires with no value.

Disability Income Insurance The IDS Life Companies also issue disability income insurance. For the nine months ended September 30, 2005, we were

ranked as the eighth largest provider of individual disability income insurance based on premiums (according to LIMRA International). Disability income insurance provides monthly benefits to individuals who are unable to earn income at either their occupation at time of disability (“own occupation”) or at any suitable occupation (“any occupation”). Depending upon occupational and medical underwriting criteria, applicants for disability income insurance can choose “own occupation” and “any occupation” coverage for varying benefit periods up to age 65. In some states, applicants may also choose various benefit provisions to help them integrate individual disability income insurance benefits with social security or similar benefit plans and to help them protect their disability income insurance benefits from the risk of inflation.

Long-Term Care Insurance As of December 31, 2002, we discontinued underwriting long-term care insurance. Our financial advisors now sell only

long-term care insurance of other companies, primarily products offered by General Electric Capital Assurance

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Company (“GECA”), one of the Genworth Financial insurance companies. In addition, in May 2003, we began outsourcing claims administration on our existing block of long-term care policies to GECA.

Beginning in 2004, IDS Life filed for approval to implement rate increases on its existing block of nursing home-only

indemnity long-term care insurance policies. Implementation of these rate increases began in early 2005, and we have so far received approval in 45 states, covering over 83% of the eligible premiums, with an average approved rate increase of 32.1%. Implementation is expected to continue through 2006.

IDS Property Casualty We offer personal auto, homeowner, excess personal liability and American Express Card-related insurance products through

our wholly-owned subsidiary, IDS Property Casualty Insurance Company (“IDS Property Casualty”), and its wholly-owned subsidiary, AMEX Assurance Company. IDS Property Casualty is a stock insurance company organized under the laws of Wisconsin, and AMEX Assurance is a stock insurance company organized under the laws of Illinois. We refer to IDS Property Casualty and its subsidiaries as the Property Casualty companies.

Our Property Casualty companies provide personal auto, homeowner’s and liability coverage to clients in 37 states and the

District of Columbia. AMEX Assurance also provides certain American Express Card-related insurance products such as travel accident insurance, as well as currently providing errors and omissions insurance to our company and our financial advisors. AMEX Assurance, which currently issues most of the personal auto, homeowner’s, liability and errors and omissions coverage, cedes 100% of these risks to IDS Property Casualty pursuant to a reinsurance agreement. Effective July 1, 2005, AMEX Assurance ceded 100% of the travel insurance and card related business of American Express Travel Related Services Company, Inc., a subsidiary of American Express Company, to Amexco pursuant to a reinsurance agreement. In connection with the separation from American Express Company, we entered into an agreement to sell AMEX Assurance to American Express Travel Related Services Company, Inc., within two years after the Distribution. For additional information relating to this agreement and future sale, see “Our Relationship with American Express Company.”

Distribution and Marketing Channels We offer the insurance protection products of our IDS Life companies almost exclusively through our network of financial

advisors. Our branded advisors offer insurance protection products issued almost exclusively by the IDS Life companies. In limited circumstances in which we do not offer comparable products or based on risk rating or policy size, our branded advisors may offer insurance protection products of other unaffiliated carriers. We also sell IDS Life insurance protection products through our Financial Services Center.

Our Property Casualty companies do not have field agents; rather, we use co-branded direct marketing to sell our personal

auto and home insurance protection products through alliances with commercial institutions, through affinity groups and directly to our clients, American Express Cardmembers and the general public. We also receive referrals through our financial advisor network. Our Property Casualty companies have a major distribution agreement with Costco Insurance Agency, Inc., Costco’s affiliated insurance agency. Costco members represented approximately 70% of all new policy sales of our Property Casualty companies in 2005. Through another alliance, we market our property casualty products to certain consumers who have a relationship with Delta Air Lines. For more information regarding our alliances with Costco and Delta, see “Asset Accumulation and Income—Strategic Alliances and Other Marketing Channels—Strategic Alliances and Other Marketing Arrangements” above.

Liabilities and Reserves Our IDS Life and Property Casualty companies must maintain adequate financial reserves to cover the insurance risks

associated with the insurance products they issue. Generally, reserves represent estimates of the invested assets that our IDS Life and Property Casualty companies need to hold now to provide adequately for future benefits and expenses. You can find a discussion of liabilities and reserves related to our insurance products in Note 2 to our consolidated financial statements included in our 2005 Annual Report to Shareholders.

Reinsurance We reinsure a portion of the insurance risks associated with our life and long-term care insurance products through

reinsurance agreements with unaffiliated reinsurance companies. We use reinsurance in order to limit losses, reduce exposure to large risks, provide additional capacity for future growth and deploy capital efficiently. To manage exposure to losses from reinsurer insolvencies, we evaluate the financial condition of reinsurers prior to entering into new reinsurance treaties.

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Our insurance companies remain primarily liable as the direct insurers on all risks reinsured. They also retain all risk for

claims on disability income contracts. We currently manage risk by limiting the amount of disability income insurance written on any one individual. Our insurance companies also retain all risk on accidental death benefit claims and risk associated with waiver of premium provisions.

Generally, we reinsure 90% of the death benefit liability related to individual variable universal, fixed universal and

traditional life insurance products. As a result, the IDS Life Companies typically retain, and are at risk for, at most, 10% of each policy’s death benefit from the first dollar of coverage for new sales of these policies, subject to the reinsurer actually paying. IDS Life began reinsuring risks at this level during 2001 for term life insurance and 2002 for variable universal and fixed universal life insurance. Our IDS Life of New York subsidiary began reinsuring risks at this level during 2002 for term life insurance and 2003 for variable universal and fixed universal life insurance. Policies issued prior to these dates are not subject to these same reinsurance levels. Generally, the maximum amount of life insurance risk retained by IDS Life and IDS Life of New York is $750,000 on any policy insuring a single life and $1.5 million on any flexible premium survivorship variable life policy. For existing long-term care policies, IDS Life (and IDS Life of New York for 1996 and later issues) retained 50% of the risk and ceded the remaining 50% of the risk to GECA. Risk on variable universal life and fixed universal life policies is reinsured on a yearly renewable term basis. Risk on recent term life and long-term care policies is reinsured on a coinsurance basis, a type of reinsurance in which the reinsurer participates proportionately in all material risks and premiums associated with a policy.

We also reinsure a portion of the risks associated with our personal auto and home insurance products through two types of

reinsurance agreements with unaffiliated reinsurance companies. We purchase reinsurance with a limit of $3.15 million per loss and we retain $350,000 per loss. We purchase catastrophe reinsurance and retain $4 million of loss per event with loss recovery up to $55 million per event.

Financial Strength Ratings Our insurance subsidiaries receive ratings from independent rating agencies. Ratings are important to maintaining public

confidence in our insurance subsidiaries and our protection and annuity products. Lowering of our insurance subsidiaries’ ratings could have a material adverse effect on our ability to market our protection and annuity products and could lead to increased surrenders of these products. Rating agencies continually evaluate the financial soundness and claims-paying ability of insurance companies based on a number of different factors.

More specifically, the ratings assigned are developed from an evaluation of a company’s balance sheet strength, operating

performance and business profile. Balance sheet strength reflects a company’s ability to meet its current and ongoing obligations to its policyholders and includes analysis of a company’s capital adequacy. The evaluation of operating performance centers on the stability and sustainability of a company’s sources of earnings. The analysis of business profile reviews a company’s mix of business, market position and depth and experience of management.

Generally, IDS Life’s four insurance subsidiaries do not receive an individual rating, but receive the same rating as IDS Life.

IDS Life is currently rated as A+” (Superior) by A.M. Best Company, Inc. and its claims-paying ability/financial strength was rated “Aa3” (Excellent) by Moody’s Investors Service, Inc., “AA-” (Very Strong) by Fitch and “AA-” (Very Strong) by Standard & Poor’s.

Our Property Casualty companies receive two ratings from A.M. Best, one related to AMEX Assurance as a separate

company and one for the combined Property Casualty companies. Both AMEX Assurance and the combined Property Casualty companies recently received “A” ratings (Excellent) by A.M. Best with a negative outlook.

Risk-Based Capital The NAIC defines risk-based capital (“RBC”) requirements for insurance companies. The RBC requirements are used by the

NAIC and state insurance regulators to identify companies that merit regulatory actions designed to protect policyholders. The NAIC RBC report is completed as of December 31 and filed annually, along with the statutory financial statements.

Our IDS Life and Property Casualty companies would be subject to various levels of regulatory intervention should their total

adjusted statutory capital fall below the RBC requirement. At the “company action level,” defined as total adjusted capital level between 100% and 75% of the RBC requirement, an insurer must submit a plan for corrective action with its primary state regulator. The “regulatory action level,” which is between 75% and 50% of the RBC requirement, subjects an

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insurer to examination, analysis and specific corrective action prescribed by the primary state regulator. If a company’s total adjusted capital falls between 50% and 35% of its RBC requirement, referred to as “authorized control level,” the insurer’s primary state regulator may place the insurer under regulatory control. Insurers with total adjusted capital below 35% of the requirement will be placed under regulatory control.

For IDS Life, the company action level RBC was $751 million as of December 31, 2005, and the corresponding total adjusted capital was approximately $3.3 billion, which represents 435% of company action level RBC.

As of December 31, 2005, the company action level RBC was $72.6 million for IDS Property Casualty and $22.8 million for

AMEX Assurance. As of December 31, 2005, IDS Property Casualty had $464 million of total adjusted capital, or 639% of the company action level RBC, and AMEX Assurance had $115 million of total adjusted capital, or 505% of the company action level RBC.

As described above, the IDS Life, IDS Property Casualty, and AMEX Assurance companies maintain capital well in excess of the company action level required by their state insurance regulators. Competition

We operate in a highly competitive industry. Because of our integrated business model, we compete directly with a variety of financial institutions such as banks, securities brokers, asset managers and insurance companies depending on the type of product and service we are offering. We compete directly with these entities for the provision of products and services to clients, as well as for our financial advisors and investment management personnel. Our products and services also compete indirectly in the marketplace with the products and services of our competitors.

Our financial advisor force competes for clients with a range of other advisors, broker-dealers and direct channels, including wirehouses, regional broker-dealers, independent broker-dealers, insurers, banks, asset managers, registered investment advisers and direct distributors.

To acquire and maintain owned, managed and administered assets, we compete against a substantial number of firms, including those of the categories listed above. Our own RiverSource family of mutual funds, like other mutual funds, faces competition from other mutual fund families and alternative investment products, such as exchange traded funds. Additionally, for mutual funds, high ratings from rating services, such as Morningstar or Lipper, as well as favorable mention in financial publications, may influence sales and lead to increases in managed assets. As a mutual fund’s assets increase, management fee revenue increases and the fund may achieve economies of scale that make it more attractive to investors because of potential resulting reductions in the fund’s expense ratio. Conversely, low ratings and negative mention in financial publications can lead to outflows, which reduce management fee revenues and can impede achieving the benefits of economies of scale. Additionally, reputation and brand integrity are becoming increasingly more important as the mutual fund industry generally and certain firms in particular have come under regulatory and media scrutiny. Our mutual fund products compete against products of firms like Fidelity, American Funds and Oppenheimer. Our annuity products compete with products from numerous other companies, such as Hartford, MetLife, Lincoln National and Nationwide.

Our brokerage subsidiaries compete with securities broker-dealers, independent broker-dealers, financial planning firms, insurance companies and other financial institutions in attracting and retaining members of the field force. Competitive factors in the brokerage services business include price, service and execution. Our retirement services business competes with a substantial number of larger firms in seeking to acquire and maintain managed assets. Competitive factors in this business include scale, corporate relationships, fees, record keeping and technological capabilities, investment performance and client service.

Competitors of our IDS Life and Property Casualty companies consist of both stock and mutual insurance companies, as well as other financial intermediaries marketing insurance products such as Hartford, MetLife, Lincoln National and Nationwide. Competitive factors affecting the sale of life and disability income insurance products include the cost of insurance and other contract charges, the level of premium rates and financial strength ratings from rating agencies such as A.M. Best. Competitive factors affecting the sale of property casualty insurance products include brand recognition, distribution capabilities and product pricing. Technology

We have an integrated customer management system, built in the early 1980s, which serves as the hub of our technology platform. In addition, we have specialized record keeping engines that manage individual brokerage, mutual

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fund, insurance and banking client accounts. Over the years we have updated this basic platform to include new product lines such as brokerage, deposit, credit and products of other companies, wrap accounts and e-commerce capabilities for our financial advisors and clients. We also use a proprietary suite of tools for our financial planning services.

Most of our applications run on a technology infrastructure that we outsourced to IBM in 2002. Under this arrangement, IBM is responsible for all mainframe, midrange, Web hosting, end-user computing and help desk operations. Also, we outsource voice network operations to AT&T. In addition to these two arrangements, we have outsourced our production support and a portion of our development and maintenance of our computer applications to offshore firms.

We are updating our technological capabilities to create a more adaptive platform design that will allow a faster, lower cost response to emerging business opportunities, compliance requirements and marketplace trends. Since 2002, we have upgraded our investment accounting platform for our owned assets, completed the conversion of our 401(k) record keeping system and transitioned our wrap account system. We believe these upgrades have enhanced our flexibility by bringing our systems in line with industry standards. Additionally, in 2004, we transitioned our fixed income trading systems to BlackRock Solutions, a leading industry platform. This change has helped improve our risk management, as well as our ability to analyze the extent to which our fixed income performance can be attributed to various identified factors, such as interest rate movements. In 2004, in partnership with Acxiom, we also completed a customer analytics and business intelligence capability to enable targeted marketing and identify product sales opportunities. In 2005 we completed the upgrade of our mutual fund transfer agent platform, which will help improve compliance, enhance functionality and enable eventual third party distribution of our own mutual funds.

We are currently investing in our technology manufacturing processes with an objective of increasing our Capability Maturity Model for Integration (CMMI). The primary purposes of this investment are to improve the quality of our systems delivered, improve efficiency of our employee and outsource workforce, and enhance our ability to meet business service levels.

In the next phase of our technology upgrade, we intend to update our account opening, order management and servicing platforms for individual and corporate clients. We also plan to transition to a more modern equity trading platform, which should improve trading of our equity portfolios as well as compliance and may help us to reduce costs. In addition to general updating of our technological capabilities, as part of the separation from American Express Company, we are installing and implementing information technology infrastructure to support our enterprise business functions, including accounting and reporting, customer service and distribution. This separation from American Express Company’s technology infrastructure includes hardware, applications, network, telephony, databases, backup and recovery solutions.

We have developed a comprehensive business continuity plan that covers business disruptions of varying severity and scope and addresses the loss of a geographic area, building, staff, data, systems and/or our telecommunications. We subject our business continuity plan to review and testing on an ongoing basis and update it as necessary. Under our business continuity plan, we expect to continue to be able to do business and resume operations with minimal service impacts. However, under certain scenarios, the time that it would take for us to recover and to resume operations may significantly increase depending on the extent of the disruption and the number of personnel affected. Geographic Presence

For years ended December 31, 2005, 2004 and 2003, over 90% of our long-lived assets were located in the United States, and over 90% of our revenues were generated in the United States. Employees

At December 31, 2005, we had approximately 11,900 employees, including 3,225 employee financial advisors (which does not include our branded franchisee advisors/registered representatives nor those of SAI, neither of whom are employees of our company). None of our employees are subject to collective bargaining agreements governing their employment with our company. We believe that our employee relations are good. Regulation

Most aspects of our business are subject to extensive regulation by U.S. federal and state regulatory agencies and securities exchanges and by non-U.S. government agencies or regulatory bodies and securities exchanges. Our public disclosure, internal control environment and corporate governance principles are subject to the Sarbanes-Oxley Act of 2002, related regulations and rules of the SEC and the listing requirements of The New York Stock Exchange, Inc.

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We have implemented franchise and compliance standards, and strive for a consistently high level of client service. For

several years, we have used standards developed by the Certified Financial Planner Board of Standards, Inc., in our financial planning process. We also participated in developing the International Organization for Standardization (“ISO”) 22222 Personal Financial Planning Standard published in December 2005 by the ISO. We put in place franchise standards and requirements regardless of location. We have made significant investments in our compliance processes, enhancing policies and procedures to monitor our compliance with the numerous and varied legal and regulatory requirements applicable to our business. These requirements are discussed below. We expect to continue to make significant investments in our compliance efforts.

Asset Accumulation and Income

Our Asset Accumulation and Income business is regulated by the SEC, the National Association of Securities Dealers, commonly referred to as the NASD, the CFTC, the National Futures Association, state securities regulators and state insurance regulators and the U.K. Financial Services Authority (“FSA”). Our European fund distribution activities are also subject to local country regulations. Additionally, the U.S. Departments of Labor and Treasury regulate certain aspects of our retirement services business. As has the rest of the financial services industry, we have experienced, and believe we will continue to be subject to, increased regulatory oversight of the securities, insurance and commodities industries at all levels. As an example, under the European Union (“EU”) directive on the supplementary supervision of financial conglomerates (“EU Financial Conglomerates Directive”), we are required to have a “coordinating” or “consolidating” regulator to monitor the organization as a whole and coordinate information with other regulators (primarily the FSA, the supervisor of Threadneedle Investments) that have jurisdiction over discrete aspects of our operations. For more information on these requirements, see “General” below.

Beginning in October 2004, investment companies and investment advisers are required by the SEC to adopt and implement written policies and procedures designed to prevent violation of the federal securities laws and to designate a chief compliance officer responsible for administering these policies and procedures. The SEC and NASD have also heightened requirements for, and continued scrutiny of, the effectiveness of supervisory procedures and compliance programs of broker-dealers, including certification by senior officers regarding the effectiveness of these procedures and programs. Regulators have recently adopted or are considering regulatory requirements regarding directed brokerage, market timing, increased disclosures in mutual fund prospectuses and other applicable materials and an investment adviser code of ethics.

AMPF is registered as a broker-dealer and investment adviser with the SEC, is a member of the NASD and does business as a broker-dealer and investment adviser in all 50 states and the District of Columbia. The SEC and the NASD have stringent rules with respect to the net capital requirements and activities of broker-dealers. Our financial advisors and other personnel must obtain all required state and NASD licenses and registrations. SEC regulations also impose notice and capital limitations on the payment of dividends by a broker-dealer to a parent. Our subsidiary, American Enterprise Investment Services, Inc., is also registered as a broker-dealer with the SEC and appropriate states and is a member of the NASD and the Boston Stock Exchange and a stockholder in the Chicago Stock Exchange. A subsidiary of our independent financial advisor platform, Securities America, Inc., and our subsidiary IDS Life are also registered as broker-dealers and are members of the NASD. Certain of our subsidiaries also do business as registered investment advisers and are regulated by the SEC and state securities regulators where required. The IDS Life companies are subject to regulation by state insurance regulators as described under “—Protection” below.

Our trust company is primarily regulated by the Minnesota Department of Commerce (Banking Division) and is subject to capital adequacy requirements under Minnesota law. It may not accept deposits or make personal or commercial loans. As a provider of products and services to tax-qualified retirement plans and IRAs, certain aspects of our business, including the activities of our trust company, fall within the compliance oversight of the U.S. Departments of Labor and Treasury, particularly the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA, and the tax reporting requirements applicable to such accounts.

Our face-amount certificate company is regulated as an investment company. The payment of dividends to our company by our face-amount certificate company is subject to capital requirements under applicable law and understandings with the SEC and the Minnesota Department of Commerce.

As discussed above under “Asset Accumulation and Income—U.S. Retail Products and Solutions—Banking Products,” we have received approval from the OTS to obtain a new FSB charter. After we obtain the required regulatory approvals and our banking subsidiary is established, our FSB will be subject to regulation by the OTS, which is the primary regulator of federal savings banks, and by the FDIC in its role as insurer of our FSB’s deposits. As its controlling company,

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we will become a savings and loan holding company and also be subject to regulation by the OTS. Furthermore, our ownership of Threadneedle Investments subjects us to the EU Financial Conglomerates Directive to designate a global consolidated supervisory regulator, and we have designated the OTS for this purpose (subject to approval by the FSA). Because of our status as a savings and loan holding company, our activities will be limited to those that are financial in nature, and OTS will have authority to regulate our capital and debt, although there are not specific holding company capital requirements. Our FSB will be subject to specific capital rules and if its capital falls below certain levels, OTS will be required to take certain remedial actions and may take other actions, including the imposition of limits on dividends or activities, and OTS could direct us to divest the subsidiary. Our FSB also will be subject to limits on capital distributions, including payment of dividends to us and on transactions with affiliates. In addition, an array of community reinvestment, fair lending, and other consumer protection laws and regulations will apply to our FSB. Either of the OTS or the FDIC may bring administrative enforcement actions against the FSB or its officers, directors or employees if any of them violate a law or engage in an unsafe or unsound practice.

Compliance with these and other regulatory requirements adds to the cost and complexity of operating our business. In addition, the SEC, OTS, U.S. Departments of Labor and Treasury, NASD, other self-regulatory organizations and state securities, banking and insurance regulators may conduct periodic examinations. Periodic examinations may result in administrative proceedings, which, in turn, may result in, among other things, censure, fine, the issuance of cease-and-desist orders or suspension or expulsion of a broker-dealer or an investment adviser and its officers or employees. Individual investors also can bring complaints against our company. Because we are structured as a franchise system, we are also subject to Federal Trade Commission and state franchise requirements.

Protection

The Minnesota Department of Commerce (Insurance Division), the Indiana Department of Insurance, the Arizona Department of Insurance, the Wisconsin Office of the Commissioner of Insurance and the Illinois Insurance Department (collectively, and with the New York State Insurance Department, the “Domiciliary Regulators”) regulate certain of the IDS Life companies, IDS Property Casualty and AMEX Assurance, depending on the companies’ state of domicile. The New York State Insurance Department regulates our IDS Life of New York subsidiary and another IDS Life company that is domiciled in New York. In addition to being regulated by their Domiciliary Regulators, our IDS Life companies and Property Casualty companies are regulated by each of the insurance regulators in the states where each is authorized to transact the business of insurance. The other states also regulate such matters as the licensing of sales personnel and, in some cases the marketing and contents of insurance policies and annuity contracts. The primary purpose of such regulation and supervision is to protect the interests of contractholders and policyholders. Financial regulation of our IDS Life companies and Property Casualty companies is extensive, and their financial and intercompany transactions (such as intercompany dividends, capital contributions and investment activity) are often subject to pre-notification and continuing evaluation by the Domiciliary Regulators. Virtually all states require participation in insurance guaranty associations which assess fees to insurance companies in order to fund claims of policyholders and contractholders of insolvent insurance companies.

At the federal level, there is periodic interest in enacting new regulations relating to various aspects of the insurance industry, including taxation of annuities and life insurance policies, accounting procedures, and the treatment of persons differently because of gender, with respect to terms, conditions, rates or benefits of an insurance policy. Adoption of any new federal regulation in any of these areas could potentially have an adverse effect upon our IDS Life companies. Also, recent federal legislative proposals aimed at the promotion of tax-advantaged savings through Lifetime Savings Accounts and Retirement Savings Accounts may adversely impact our IDS Life companies’ sales of annuity and life insurance products if enacted.

Client Information

Many aspects of our business are subject to increasingly comprehensive legal requirements by a multitude of different functional regulators concerning the use and protection of personal information, particularly that of clients, including those adopted pursuant to the Gramm-Leach-Bliley Act , the Fair and Accurate Credit Transactions Act and an ever increasing number of state laws. Ameriprise has implemented policies and procedures in response to such requirements. We continue our efforts to safeguard the data entrusted to us in accordance with applicable law and our internal data protection policies, including taking steps to reduce the potential for identity theft or other improper use or disclosure of personal information, while seeking to collect and use data to properly achieve our business objectives and to best serve our clients.

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General The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act,

commonly referred to as the Patriot Act, was enacted in October 2001 in the wake of the September 11th terrorist attacks. The Patriot Act substantially broadened existing anti-money laundering legislation and the extraterritorial jurisdiction of the United States. In response, we have enhanced our existing anti-money laundering programs and developed new procedures and programs. For example, we have implemented a customer identification program applicable to many of our businesses, and have enhanced our “know your customer” and “enhanced due diligence” programs in others. We intend to take steps to comply with any additional regulations that are adopted. In addition, we will take steps to comply with anti-money laundering initiatives adopted in other jurisdictions in which we conduct business.

We have operations in the EU through Threadneedle Investments and certain of our other subsidiaries. We monitor

developments in EU legislation, as well as in the other markets in which we operate, to ensure that we comply with all applicable legal requirements, including EU directives applicable to financial institutions. Because of the mix of Asset Accumulation and Income and Protection activities we conduct, we will be addressing the EU Financial Conglomerates Directive, which contemplates that certain financial conglomerates involved in banking, insurance and investment activities will be subject to a system of supplementary supervision at the level of the holding company constituting the financial conglomerate. The directive requires financial conglomerates to, among other things, implement measures to prevent excessive leverage and multiple leveraging of capital, and to maintain internal control processes to address risk concentrations as well as risks arising from significant intragroup transactions. We have designated the OTS as our global consolidated supervisory regulator under the EU Financial Conglomerates Directive (subject to approval by the FSA).

SECURITIES EXCHANGE ACT REPORTS AND ADDITIONAL INFORMATION

We maintain an Investor Relations website on the Internet at http://ir.ameriprise.com. We make available free of charge, on

or through this website, our annual, quarterly and current reports and any amendments to those reports as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, just click on the “SEC Filings” link found on our Investor Relations homepage.

You can also access our Investor Relations website through our main website at www.ameriprise.com by clicking on the

“Investor Relations” link, which is located at the top of our homepage. Information contained on our website is not incorporated by reference into this report or any other report filed with the SEC.

SEGMENT INFORMATION AND CLASSES OF SIMILAR SERVICES

You can find information regarding our operating segments, geographic operations and classes of similar services in Note 20

to our consolidated financial statements included in our 2005 Annual Report to Shareholders and incorporated herein by reference.

EXECUTIVE OFFICERS OF OUR COMPANY

Set forth below is a list of all our executive officers and our principal accounting officer as of March 1, 2006. None of such officers has any family relationship with any other executive officer or our principal accounting officer, and none of such officers became an officer pursuant to any arrangement or understanding with any other person. Each such officer has been elected to serve until the next annual election of officers or until his or her successor is elected and qualified. Each officer’s age is indicated by the number in parentheses next to his or her name.

James M. Cracchiolo – Chairman and Chief Executive Officer

Mr. Cracchiolo (47) has been our Chairman and Chief Executive Officer since the Distribution in September 2005. Prior to the Distribution, Mr. Cracchiolo was Chairman and Chief Executive Officer of AEFC since March 2001; President and Chief Executive Officer of AEFC since November 2000; and Group President, Global Financial Services of American Express Company since June 2000. He served as Chairman of American Express Bank Ltd. from September 2000 until April 2005 and served as President and Chief Executive Officer of Travel Related Services International from May 1998 through July 2003. Mr. Cracchiolo joined American Express Company in 1982. Mr. Cracchiolo also currently serves on the board of directors of Tech Data Corporation. He is also currently on the board of advisors of the March of Dimes.

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Brian M. Heath – President—U.S. Advisor Group

Mr. Heath (45) has been our President—U.S. Advisor Group since September 2005. Prior to the Distribution, Mr. Heath served as Senior Vice President and General Sales Manager, U.S. Advisor Group of AEFC since June 1999. Mr. Heath joined American Express Company in 1984.

Mark Schwarzmann - President—Insurance, Annuities and Product Distribution

Mr. Schwarzmann (44) has been our President—Insurance, Annuities and Product Distribution since September 2005. Prior to the Distribution, Mr. Schwarzmann served as Senior Vice President, Insurance, Annuities and Product Distribution of AEFC since February 2005, and Chairman and Chief Executive Officer, IDS Life Insurance Company, and Chairman and Chief Executive Officer, American Enterprise Life Insurance Company since December 2003. Prior thereto, he served as Senior Vice President of Insurance and Annuities of AEFC from December 2003, when he joined American Express Company. Mr. Schwarzmann also currently serves on the American Council of Life Insurers’ Board of Directors, a position he has held since June 2004. Prior to joining American Express Company, he was Chief Executive Officer, Allfinanz, Inc., and had previously held a variety of senior leadership positions at GE, GE Capital, and GE Financial Assurance.

Joseph E. Sweeney - President—Financial Planning, Products and Services

Mr. Sweeney (44) has been our President—Financial Planning, Products and Services since September 2005. Prior to the Distribution, Mr. Sweeney served as Senior Vice President and General Manager of Banking, Brokerage and Managed Products of AEFC since April 2002. Prior thereto, he served as Senior Vice President and Head, Business Transformation, Global Financial Services of American Express Company from March 2001 until April 2002. Mr. Sweeney joined American Express Company in 1983. Mr. Sweeney also currently serves on the board of directors of the Securities Industry Association.

William F. Truscott - President—U.S. Asset Management and Chief Investment Officer

Mr. Truscott (45) has been our President—U.S. Asset Management and Chief Investment Officer since September 2005. Prior to the Distribution, Mr. Truscott served as Senior Vice President and Chief Investment Officer of AEFC, a position he held since he joined the company in September 2001. Prior thereto, Mr. Truscott had served as Chief Investment Officer with Zurich Scudder Investments, Americas, from October 2000 through August 2001 and Managing Director of Zurich Scudder Investments from January 1996 through October 2000.

Walter S. Berman - Executive Vice President and Chief Financial Officer

Mr. Berman (63) has been our Executive Vice President and Chief Financial Officer since September 2005. Prior to the Distribution, Mr. Berman served as Executive Vice President and Chief Financial Officer of AEFC, a position he held since January 2003. From April 2001 to January 2004, Mr. Berman served as Corporate Treasurer of American Express Company. Prior thereto, Mr. Berman served as Treasurer of International Business Machines Corporation from February 1999 through February 2000. Mr. Berman first joined American Express Company in 1965 and served until 1998 in various positions. Mr. Berman returned to American Express Company in April 2001.

Kelli A. Hunter - Executive Vice President of Human Resources

Ms. Hunter (44) has been our Executive Vice President of Human Resources since September 2005. Prior to the Distribution, Ms. Hunter served as Executive Vice President of Human Resources of AEFC since joining our company in June 2005. Prior to joining AEFC, Ms. Hunter was Senior Vice President—Global Human Capital for Crown Castle International Corporation in Houston, Texas. Prior to that, she held a variety of senior level positions in human resources for Software Spectrum, Inc., Mary Kay, Inc., as well as Morgan Stanley Inc. and Bankers Trust New York Corporation.

John C. Junek - Executive Vice President and General Counsel

Mr. Junek (56) has been our Executive Vice President and General Counsel since September 2005. Prior to the Distribution, Mr. Junek served as Senior Vice President and General Counsel of AEFC since June 2000. Prior thereto, he served as the Deputy General Counsel of American Express Travel Related Services Company, a position he held from 1990 until June 2000. Mr. Junek joined American Express Company in 1978.

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Glen Salow - Executive Vice President—Technology and Operations

Mr. Salow (49) has been our Executive Vice President—Technology and Operations since September 2005. Prior to the Distribution, Mr. Salow was Executive Vice President of Technologies and Operations of AEFC since May 2005 and was Executive Vice President and Chief Information Officer of American Express Company from March 2000 to May 2005. Mr. Salow joined American Express Company in 1997.

Kim M. Sharan - Executive Vice President and Chief Marketing Officer

Ms. Sharan (48) has been our Executive Vice President and Chief Marketing Officer since September 2005. Prior to the Distribution, Ms. Sharan served as Senior Vice President and Chief Marketing Officer of AEFC since July 2004. Prior thereto, she served as Senior Vice President and Head of Strategic Planning of the Global Financial Services Division of American Express Company from October 2002, when she joined American Express Company, until July 2004. Prior to joining American Express Company, Ms. Sharan was Managing Director at Merrill Lynch in Tokyo, Japan from February 2000 until September 2002.

Andrew J. MacMillan - Senior Vice President, Corporate Communications & Government Affairs

Mr. MacMillan (58) has been our Senior Vice President, Corporate Communications & Government Affairs since November 2005. Prior to joining our company, he was Head of Corporate Communications and Global Marketing at Americas for Barclays Capital from November 2002 to January 2005. Prior to that, he was Senior Vice President of Communications for Nasdaq, working for Nasdaq Chairman Frank Zarb, and he also spent more than 12 years at Credit Suisse First Boston in communications as well as public finance. Earlier in his career, Mr. MacMillan held roles in strategic planning, mergers and acquisitions and consulting.

John R. Woerner - Senior Vice President—Strategic Planning and Business Development

Mr. Woerner (37) has been our Senior Vice President—Strategic Planning and Business Development since September 2005. Prior to the Distribution, Mr. Woerner served as Senior Vice President—Strategic Planning and Business Development of AEFC since March 2005. Prior to joining our company Mr. Woerner was a Principal at McKinsey & Co., where he spent a decade serving leading U.S. and European financial services firms, and co-led their U.S. Asset Management Practice.

David K. Stewart - Senior Vice President and Controller (Principal Accounting Officer)

Mr. Stewart (52) has been our Senior Vice President and Controller since September 2005. Prior to the Distribution, Mr. Stewart had served as Vice President and Controller of AEFC and its subsidiaries since June 2002, when he joined American Express Company. Prior thereto, Mr. Stewart held various management positions in accounting, financial reporting and treasury operations at Lutheran Brotherhood, now part of Thrivent Financial for Lutherans, where he was Vice President—Treasurer from 1997 until 2001.

Item 1A. Risk Factors.

If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on our business, financial condition or results of operations. In such case, the trading price of our common stock could decline. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting our company in each of these categories of risk. However, the risks and uncertainties our company faces are not limited to those described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

Risks Relating to Our Business

Our financial condition and results of operations may be adversely affected by market fluctuations and by economic and other factors.

Our financial condition and results of operations may be materially affected by market fluctuations and by economic and other factors. Many such factors of a global or localized nature include: political, economic and market conditions; the

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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; investor sentiment and confidence in the financial markets; terrorism events and armed conflicts; and natural disasters such as weather catastrophes and widespread health emergencies. Furthermore, changes in consumer economic variables, such as the number and size of personal bankruptcy filings, the rate of unemployment, and the level of consumer confidence and consumer debt, may substantially affect consumer loan levels and credit quality, which, in turn, could impact the results of our banking business. These factors also may have an impact on our ability to achieve our strategic objectives.

Our insurance products and certain of our investment products are sensitive to interest rate fluctuations, and our future costs

associated with such variations may differ from our historical costs. In addition, interest rate fluctuations could result in fluctuations in the valuation of certain minimum guaranteed benefits contained in some of our variable annuity products.

During periods of increasing market interest rates, we must offer higher crediting rates on interest-sensitive products, such as

fixed universal life insurance, fixed annuities and face-amount certificates, and we must increase crediting rates on in-force products to keep these products competitive. Because returns on invested assets may not increase as quickly as current interest rates, we may have to accept a lower spread and thus lower profitability or face a decline in sales and greater loss of existing contracts and related assets. In addition, increases in market interest rates may cause increased policy surrenders, withdrawals from life insurance policies and annuity contracts and requests for policy loans, as policyholders and contractholders seek to shift assets to products with perceived higher returns. This process may lead to an earlier than expected flow of cash out of our business. Also, increases in market interest rates may result in extension of certain cash flows from structured mortgage assets. These policyholder withdrawals and surrenders 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 our financial condition and results of operations. An increase in policy surrenders and withdrawals also may require us to accelerate amortization of deferred acquisition costs or other intangibles or cause an impairment of goodwill, which would increase our expenses and reduce our net earnings.

During periods of falling interest rates, our “spread,” or the difference between the returns we earn on the investments that

support our obligations under these products and the amounts that we must pay policyholders and contractholders, may be reduced. Because we may adjust the interest rates we credit on most of these products downward only at limited, pre-established intervals, and because some of them have guaranteed minimum crediting rates, our spreads could decrease and potentially become negative.

Interest rate fluctuations also could have an adverse effect on the results of our investment portfolio. During periods of

declining market interest rates, the interest we receive on variable interest rate investments decreases. In addition, during those periods, we are forced to reinvest the cash we receive as interest or return of principal on our investments in lower-yielding high-grade instruments or in lower-credit instruments to maintain comparable returns. Issuers of certain callable fixed income securities also may decide to prepay their obligations in order to borrow at lower market rates, which exacerbates the risk that we may have to invest the cash proceeds of these securities in lower-yielding or lower-credit instruments.

Significant downturns and volatility in equity markets could have an adverse effect on our financial condition and results of

operations. Market downturns and volatility may cause potential new purchasers of our products to refrain from purchasing products, such as mutual funds, variable annuities and variable universal life insurance, that have returns linked to the performance of the equity markets. Downturns may also cause current shareholders in our mutual funds and contractholders in our annuity and protection products to withdraw cash values from those products.

Additionally, downturns and volatility in equity markets can have an adverse effect on the revenues and returns from our

asset management services, wrap accounts, and variable annuity contracts. Because the profitability of these products and services depends on fees related primarily to the value of assets under management, declines in the equity markets will reduce our revenues because the value of the investment assets we manage will be reduced. In addition, some of our variable annuity products contain guaranteed minimum death benefits and guaranteed minimum income, withdrawal and accumulation benefits. A significant equity market decline could result in guaranteed minimum benefits being higher than what current account values would support, thus producing a loss as we pay the benefits, having an adverse effect on our financial condition and results of operations. We have hedged a portion of the guarantees for the variable annuity contracts in order to somewhat mitigate the financial loss of an equity markets decline.

We believe that investment performance is an important factor in the growth of our Asset Accumulation and Income

business. Poor investment performance could impair our revenues and earnings, as well as our prospects for growth. A significant portion of our revenue is derived from investment management agreements with our own RiverSource family of

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mutual funds that are terminable on 60 days’ notice. In addition, although some contracts governing investment management services are subject to termination for failure to meet performance benchmarks, institutional and individual clients can generally terminate their relationships with us or our financial advisors at will or on relatively short notice. Our clients can also reduce the aggregate amount of managed assets or shift their funds to other types of accounts with different rate structures, for any number of reasons, including investment performance, changes in prevailing interest rates, changes in investment preferences, changes in our (or our financial advisors’) reputation in the marketplace, changes in client management or ownership, loss of key investment management personnel and financial market performance. A reduction in managed assets, and the associated decrease in revenues and earnings, could have a material adverse effect on our business.

In addition, during periods of unfavorable market or economic conditions, the level of individual investor participation in the

global markets may also decrease, which would negatively impact the results of our retail businesses. Moreover, fluctuations in global market activity could impact the flow of investment capital into or from assets under management and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Asset Accumulation and Income business.

Defaults in our fixed income securities portfolio or consumer credit products would adversely affect our earnings.

Issuers of the fixed income securities that we own may default on principal and interest payments. As of December 31, 2005, approximately 7% of our investment portfolio 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, as occurred in 2001 and 2002. As of December 31, 2005, we had fixed income securities in or near default (where the issuer had missed payment of principal or interest or entered bankruptcy) with a fair value of $58.1 million. Default-related declines in the value of our fixed income securities portfolio or consumer credit products could cause our net earnings to decline and could also cause us to contribute capital to some of our regulated subsidiaries, which may require us to obtain funding during periods of unfavorable market conditions.

If the counterparties to our reinsurance arrangements or to the derivative instruments we use to hedge our business risks default, we may be exposed to risks we had sought to mitigate, which could adversely affect our financial condition and results of operations.

We use reinsurance to mitigate our risks in various circumstances. See Item 1 of this Annual Report on Form 10-K—”Protection—Reinsurance.” Reinsurance does not relieve us of our direct liability to our policyholders, even when the reinsurer is liable to us. Accordingly, we bear credit and performance risk with respect to our reinsurers. A reinsurer’s insolvency or its inability or unwillingness to make payments under the terms of our reinsurance agreement could have an adverse effect on our financial condition and results of operations that could be material.

In addition, we use a variety of derivative instruments to hedge several business risks. If our counterparties fail to honor their

obligations under the derivative instruments, our hedges of the related risk will be ineffective. That failure could have an adverse effect on our financial condition and results of operations that could be material.

Some of our investments are relatively illiquid.

We invest a portion of our owned assets in privately placed fixed income securities, mortgage loans, policy loans, limited partnership interests, real estate and restricted investments held by securitization trusts, among others, all of which are relatively illiquid. These asset classes represented approximately 12.4% of the carrying value of our investment portfolio as of December 31, 2005. If we require significant amounts of cash on short notice in excess of our normal cash requirements, we may have difficulty selling these investments in a timely manner, or be forced to sell them for an amount less than we would otherwise have been able to realize, or both, which could have an adverse effect on our financial condition and results of operations.

Intense competition and the economics of changes in our product revenue mix and distribution channels could negatively affect our ability to maintain or increase our market share and profitability.

Our businesses operate in intensely competitive industry segments. We compete based on a number of factors including name recognition, service, the quality of investment advice, investment performance, product features, price, perceived financial strength, and claims-paying and credit ratings. Our competitors include broker-dealers, banks, asset managers, insurers and other financial institutions. Many of our businesses face competitors that have greater market share, offer a broader range of products, have greater financial resources, or have higher claims-paying or credit ratings than we do. In addition, over time certain sectors of the financial services industry have become considerably more concentrated, as financial institutions

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involved in a broad range of financial services have been acquired by or merged into other firms. This convergence could result in our competitors gaining greater resources and we may experience pressures on our pricing and market share as a result of these factors and as some of our competitors seek to increase market share by reducing prices.

Over recent years, sales of our own mutual funds by our financial advisor network, including sales within our wrap account

products (for which we receive a fee based on assets in the account), have declined as a percentage of our total mutual funds sales. We expect this trend to continue for the near-term. This is principally a result of the addition of mutual funds of other companies to our product offerings in response to competition and clients’ desire for expanded product choice. In addition, other critical factors such as shareholder demographics and increasing sales of alternative investment products have caused our RiverSource Funds to experience significant net outflows overall since 2000.

In recent years, a substantial portion of the mutual funds sold by our financial advisors was comprised of the products of

other companies. Generally, our profits from sales of other companies’ mutual funds are lower than those from our own mutual funds. Part of our growth strategy is to expand alternative distribution channels for our own products. If we are unable to efficiently manage the economics of selling a growing proportion of mutual funds of other companies, to maintain an acceptable level of sales of our own products through our financial advisor network, to effectively develop third party distribution channels for our own mutual funds, or to expand the third party distribution channels for our annuity products, our results of operations could be adversely affected.

Currently, our branded advisor network distributes annuity and protection products issued almost exclusively by our IDS Life

companies. If our branded advisor distribution network is opened to annuity and protection products of other companies, there can be no assurance that there would not be a material adverse effect on our financial condition and results of operations.

We face intense competition in attracting and retaining key talent.

We are dependent on our network of branded advisors for a significant portion of the sales of our mutual funds, annuities, face-amount certificates and insurance protection products. In addition, our continued success depends to a substantial degree on our ability to attract and retain qualified personnel to conduct our fund management and investment advisory businesses, as well as senior management. The market for financial advisors, registered representatives, management talent, qualified fund managers, and investment analysts is extremely competitive and has grown more so in recent periods due to industry growth. If we are unable to attract and retain qualified individuals or our recruiting and retention costs increase significantly, our financial condition and results of operations could be materially adversely affected.

Our businesses are heavily regulated, and changes in regulation may reduce our profitability, limit our growth, or impact our ability to pay dividends or achieve targeted return-on-equity levels.

We operate in highly regulated industries, and are required to obtain and maintain licenses for many of the businesses we operate in addition to being subject to regulatory oversight. Securities regulators have significantly increased the level of regulation in recent years and have several outstanding proposals for additional regulation. In addition, we are subject to heightened regulatory requirements relating to privacy and the protection of customer data. These regulations, as well as possible legislative or regulatory changes, may constrain our ability to market our products and services to our potential customers and could negatively affect our profitability and make it more difficult for us to pursue our growth strategy.

Our insurance companies are subject to state regulation, so must comply with statutory reserve and capital requirements.

State regulators are continually reviewing and updating these requirements. As of December 31, 2005, our life insurance companies were subject to new capital requirements for variable annuity contracts with guaranteed death or living benefits. These new requirements had minimal impact on our balance sheet in 2005, but that may not continue to be true in the event equity market values fall in the future. Moreover, there is active discussion at the NAIC of moving to a principles-based reserving system. This could change statutory reserve requirements significantly, and it is not possible to estimate the impact at this time.

Compliance with applicable laws and regulations is time consuming and personnel-intensive. Changes in these laws and

regulations may increase materially our direct and indirect compliance and other expenses of doing business. Our financial advisors may decide that the direct cost of compliance and the indirect cost of time spent on compliance matters outweigh the benefits of a career as a financial advisor, which could lead to financial advisor attrition. The costs of the compliance requirements we face, and the constraints they impose on our operations, could have a material adverse effect on our financial condition and results of operations.

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In addition, we may be required to reduce our fee levels, or restructure the fees we charge, as a result of regulatory initiatives

or proceedings that are either industry-wide or specifically targeted at our company. Reductions or other changes in the fees that we charge for our products and services could reduce our revenues and earnings. Moreover, in the years ended December 31, 2005 and 2004, we received approximately $1.2 billion and $1.1 billion, respectively, in distribution fees. A significant portion of these revenues was paid to us by our own RiverSource family of mutual funds in accordance with plans and agreements of distribution adopted under Rule 12b-1 promulgated under the Investment Company Act of 1940, as amended, or Rule 12b-1. We believe that these fees are a critical element in the distribution of our own mutual funds. There have recently been suggestions from regulatory agencies and other industry participants that Rule 12b-1 fees in the mutual fund industry should be reconsidered and potentially reduced or eliminated. We believe that distribution and servicing-related fees paid to financial advisors will remain a key element in the mutual fund industry. However, an industry-wide reduction or restructuring of Rule 12b-1 fees could have a material adverse effect on our ability to distribute our own mutual funds and the fees we receive for distributing other companies’ mutual funds, which could, in turn, have an adverse effect on our revenues and earnings.

For a further discussion of the regulatory framework in which we operate, see Item 1 of this Annual Report on Form 10-K—

“Regulation.”

Conflicts of interest are increasing and a failure to appropriately deal with conflicts of interest could adversely affect our businesses.

Our reputation is one of our most important assets. As we have expanded the scope of our businesses and our client base, we increasingly have to address potential conflicts of interest, including those relating to our proprietary activities. For example, conflicts may arise between our position as a provider of financial planning products and a manufacturer and/or distributor or broker of asset accumulation, income or insurance protection products that one of our financial advisors may recommend to a financial planning client. We have procedures and controls that are designed to address conflicts of interest. However, appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear 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 will make our clients less willing to enter into transactions in which such a conflict may occur, and will adversely affect our businesses.

Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm our businesses.

We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our operations, both domestically and internationally. Various regulatory and governmental bodies have the authority to review our products and business practices and those of our employees and independent financial advisors and to bring regulatory or other legal actions against us if, in their view, our practices, or those of our employees or independent financial advisors, are improper. Pending legal and regulatory actions include proceedings relating to aspects of our businesses and operations that are specific to us and proceedings that are typical of the industries and businesses in which we operate. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. See Item 3 of this Annual Report on Form 10-K— “Legal Proceedings.” Substantial legal liability in these or future legal or regulatory actions could have a material adverse financial effect or cause significant reputational harm, which in turn could seriously harm our business prospects.

A downgrade or a potential downgrade in our financial strength or credit ratings could adversely affect our financial condition and results of operations.

Financial strength ratings, which various ratings organizations publish as a measure of an insurance company’s ability to meet contractholder and policyholder obligations, are important to maintaining public confidence in our products, the ability to market our products and our competitive position. Any downgrade in our financial strength ratings, or the announced potential for a downgrade, could have a significant adverse effect on our financial condition and results of operations in many ways, including:

• reducing new sales of insurance products, annuities and investment products; • adversely affecting our relationships with our financial advisors and third party distributors of our products; • materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders;

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• requiring us to reduce prices for many of our products and services to remain competitive; and • adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance. A downgrade in our credit ratings could also adversely impact our future cost and speed of borrowing and have an adverse

effect on our financial condition, results of operations and liquidity.

If our reserves for future policy benefits and claims are inadequate, we may be required to increase our reserve liabilities, which could adversely affect our results of operations and financial condition.

We establish reserves as estimates of our liabilities to provide for future obligations under our insurance policies, annuities and investment certificate contracts. Reserves do not represent an exact calculation of liability, but rather are estimates of contract benefits and related expenses we expect to incur over time. The assumptions and estimates we make in establishing reserves require certain judgments about future experience and, therefore, are inherently uncertain. We monitor our reserve levels continually. If we were to conclude that our reserves are insufficient to cover actual or expected contract benefits, we would be required to increase our reserves and potentially incur income statement charges for the period in which we make the determination, which could adversely affect our results of operations and financial condition. For more information on how we set our reserves, see Note 2 to our consolidated financial statements included in our 2005 Annual Report to Shareholders.

Morbidity rates or mortality rates that differ significantly from our pricing expectations could negatively affect profitability.

We set prices for our life insurance, disability income insurance and some annuity products based upon expected claim payment patterns, derived from assumptions we make about the morbidity rates, or likelihood of sickness, and mortality rates, or likelihood of death, of our policyholders and contractholders. The long-term profitability of these products depends upon how our actual experience compares with our pricing assumptions. For example, if morbidity rates are higher, or mortality rates are lower, than our pricing assumptions, we could be required to make greater payments under disability income insurance policies and immediate annuity contracts than we had projected. The same holds true for long-term care policies we previously underwrote to the extent they are not fully reinsured. If mortality rates are higher than our pricing assumptions, we could be required to make greater payments under our life insurance policies and annuity contracts with guaranteed minimum death benefits than we had projected.

The risk that our claims experience may differ significantly from our pricing assumptions is particularly significant for our

long-term care insurance products notwithstanding our ability to implement future price increases. As with life insurance, long-term care insurance policies provide for long-duration coverage and, therefore, our actual claims experience will emerge over many years. However, as a relatively new product in the market, long-term care insurance does not have the extensive claims experience history of life insurance, and, as a result, our ability to forecast future claim rates for long-term care insurance is more limited than for life insurance. We have sought to moderate these uncertainties to some extent by partially reinsuring long-term policies we previously underwrote and by limiting our present long-term care insurance offerings to policies underwritten fully by an unaffiliated third party.

We may face losses if there are significant deviations from our assumptions regarding the future persistency of our insurance policies and annuity contracts.

The prices and expected future profitability of our life insurance and deferred annuity products are based in part upon assumptions related to persistency, which is the probability that a policy or contract will remain in force from one period to the next. The effect of persistency on profitability varies for different products. For most of our life insurance and deferred annuity products, actual persistency that is lower than our persistency assumptions could have an adverse impact on profitability, especially in the early years of a policy or contract, primarily because we would be required to accelerate the amortization of expenses we deferred in connection with the acquisition of the policy or contract.

For our long-term care insurance, actual persistency that is higher than our persistency assumptions could have a negative

impact on profitability. If these policies remain in force longer than we assumed, then we could be required to make greater benefit payments than we had anticipated when we priced or partially reinsured these products. Some of our long-term care insurance policies have experienced higher persistency than we had assumed, which led us to increase premium rates on certain of these policies.

Because our assumptions regarding persistency experience are inherently uncertain, reserves for future policy benefits and

claims may prove to be inadequate if actual persistency experience is different from those assumptions. Although some of

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our products permit us to increase premiums during the life of the policy or contract, we cannot guarantee that these increases would be sufficient to maintain profitability. Additionally, some of these pricing changes require regulatory approval, which may not be forthcoming. Moreover, many of our products do not permit us to increase premiums or limit those increases during the life of the policy or contract. Significant deviations in experience from pricing expectations regarding persistency could have an adverse effect on the profitability of our products.

We may be required to accelerate the amortization of deferred acquisition costs, which would increase our expenses and reduce profitability.

Deferred acquisition costs (“DAC”) represent the costs of acquiring new business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity, life and disability income insurance and, to a lesser extent, marketing and promotional expenses for personal auto and home insurance, and distribution expense for certain mutual fund products. For annuity and insurance products, we amortize DAC over periods approximating the lives of the related policy or contract, generally as a percentage of premiums or estimated gross profits associated with that policy or contract. For certain mutual fund products, we generally amortize DAC over fixed periods on a straight-line basis.

Our projections underlying the amortization of DAC require the use of certain assumptions, including interest margins,

mortality rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. We periodically review and, where appropriate, adjust our assumptions. When we change our assumptions, we may be required to accelerate the amortization of DAC or to record a charge to increase benefit reserves.

As of December 31, 2005 and December 31, 2004, we had $4.2 billion and $4.0 billion of DAC, respectively, and we

amortized $431 million and $437 million, respectively, of DAC as a current-period expense for the years ended December 31, 2005 and 2004, respectively. For more information regarding DAC, see the information contained in our 2005 Annual Report to Shareholders under the captions “Management’s Discussion and Analysis—Critical Accounting Policies—Deferred Acquisition Costs” and “—Recent Accounting Pronouncements.”

Risk management policies and procedures may not be fully effective in mitigating risk exposure in all market environments or against all types of risk, including employee and financial advisor misconduct.

We have devoted significant resources toward developing our risk management policies and procedures and will continue to do so in the future. Nonetheless, our policies and procedures to identify, monitor and manage risks may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Many of our methods of managing risk and exposures are based upon our use of observed historical market behavior or statistics based on historical models. As a result, these methods may not accurately predict future exposures, which could be significantly greater than what our models indicate. Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that is publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. Moreover, we are subject to the risks of misconduct by our employees and 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 our business, results of operations or financial condition. 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 our risk exposure in all market environments or against all types of risk.

As a holding company, we depend on the ability of our subsidiaries to transfer funds to us to pay dividends and to meet our obligations.

We act as a holding company for our insurance and other subsidiaries. Dividends from our subsidiaries and permitted payments to us under our intercompany arrangements with our subsidiaries are our principal sources of cash to pay shareholder dividends and to meet our other financial obligations. These obligations include our operating expenses and interest and principal on our borrowings and also include amounts we must pay under the tax allocation agreement and transition services agreement we entered into with American Express Company. If the cash we receive from our subsidiaries pursuant to dividend payment and intercompany arrangements is insufficient for us to fund any of these obligations, we may be required to raise cash through the incurrence of additional debt, the issuance of additional equity or the sale of assets. If any of this happens, it could adversely affect our financial condition and results of operations.

Insurance and securities laws and regulations regulate the ability of many of our subsidiaries (such as our insurance and

brokerage subsidiaries and our face-amount certificate company) to pay dividends or make other distributions. See Item 1 of this Annual Report on Form 10-K—”Protection – Risk-Based Capital” and “Regulation” as well as the information contained in our

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2005 Annual Report to Shareholders under the heading “Management’s Discussion and Analysis – Liquidity and Capital Resources.” When we form our new banking subsidiary, its ability to pay dividends will also be regulated. In addition to the various regulatory restrictions that constrain our subsidiaries’ ability to pay dividends to our company, the rating agencies impose various capital requirements on our company and our insurance company subsidiaries in order for us to maintain our ratings and the ratings of our insurance subsidiaries, which also constrains our and their ability to pay dividends.

Changes in U.S. federal income tax law could make some of our products less attractive to clients.

Many of the products we issue or on which our businesses are based (including both insurance products and non-insurance products) enjoy favorable treatment under current U.S. federal income tax law. Changes in U.S. federal income tax law could thus make some of our products less attractive to clients.

We are subject to tax contingencies that could adversely affect reserves.

We are subject to the income tax laws of the U.S., its states and municipalities and those of the foreign jurisdictions in which we have significant business operations. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. We 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.

Risks Relating to Our Common Stock

The market price of our shares may fluctuate.

The market price of our common stock may fluctuate widely, depending upon many factors, some of which may be beyond our control, including:

• changes in expectations concerning our future financial performance and the future performance of the financial services

industry in general, including financial estimates and recommendations by securities analysts; • differences between our actual financial and operating results and those expected by investors and analysts; • strategic moves by us or our competitors, such as acquisitions or restructurings; • changes in the regulatory framework of the financial services industry and regulatory action; and • changes in general economic or market conditions. Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a

particular company. These broad market fluctuations may adversely affect the trading price of our common stock.

Provisions in our certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the market value of our common stock.

Our certificate of incorporation and bylaws and Delaware law contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making them unacceptably expensive to the raider and to encourage prospective acquirors to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include, among others:

• a board of directors that is divided into three classes with staggered terms; • elimination of the right of our shareholders to act by written consent; • rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings; • the right of our board of directors to issue preferred stock without shareholder approval; and • limitations on the right of shareholders to remove directors.

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Delaware law also imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock.

We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal, and are not intended to make our company immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our company and our shareholders.

Risks Relating to Our Separation from American Express Company

We will only have the right to use the “American Express” brand name and logo in a limited capacity for up to two years. If our new brand names “Ameriprise” and “RiverSource” do not develop a strong reputation, our revenue and profitability could decline.

In connection with the separation from American Express Company, we changed our corporate name to “Ameriprise Financial, Inc.” and are operating under two new brand names, although we and our subsidiaries may use the “American Express” brand name and logo in a limited capacity in conjunction with our brand names and logos until September 30, 2007 pursuant to our marketing and branding agreement with American Express Company. For more information regarding these arrangements, see Item 1 of this Annual Report on Form 10-K— “Our Relationship with American Express Company.” When our right to use the “American Express” brand name and logo expires, we may not be able to maintain or enjoy comparable name recognition or status under our new brands. If we are unable to successfully manage the transition of our business to our new brands, the benefit we previously offered our branded advisors, customers and employees of having a recognized brand will be reduced, which could have an adverse effect on our revenue and profitability.

Client acquisition may be adversely affected by our separation from American Express Company.

Although we generally operated independently of American Express Company’s other operations with respect to client services, we did rely on the “American Express” brand and cardmember relationships in acquiring clients as part of our retail growth strategy. As part of the marketing and branding arrangement with American Express Company, we will continue to market our products in a manner similar to the methods we used prior to the separation from American Express Company. However, overall response rates, marginal costs and profitability from these efforts may be negatively affected as a result of the change in our brand name. For additional information regarding this arrangement, see Item 1 of this Annual Report on Form 10-K— “Our Relationship with American Express Company.” We cannot assure you that the clients we gained as a result of being affiliated with American Express Company will not move some or all of their existing business from us to another company or that we will be able to implement our mass affluent client acquisition strategy as cost-effectively as when our cross-selling relationship with American Express Company was operated on an affiliated basis. Loss of a significant portion of these clients could negatively impact our results of operations and failure to acquire these clients could also have a negative impact on our business.

Our historical consolidated financial information is not necessarily representative of the results we would have achieved as a stand-alone company and may not be a reliable indicator of our future results.

Our historical consolidated financial information does not reflect the financial condition, results of operations or cash flows we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future. This is primarily a result of the following factors:

• Our historical consolidated financial information reflects certain businesses that are not included in our company

following the separation from American Express Company; • Our historical consolidated financial results reflect allocations of corporate expenses from American Express Company.

Those allocations may be lower than the comparable expenses we would have actually incurred as a stand-alone company;

• Our working capital requirements historically have been satisfied as part of American Express Company’s corporate-

wide cash management policies. Our cost of debt and our capitalization is different from that reflected in our historical consolidated financial statements;

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• Significant changes have occurred and may continue to occur in our cost structure, management, financing and business

operations as a result of our separation from American Express Company, including the costs for us to establish our new brands and operating infrastructure; and

• Our separation from American Express Company and the creation of our new brands may have an adverse effect on our

customer and other business relationships. We have made adjustments based upon available information and assumptions that we believe are reasonable to reflect these

factors. However, our assumptions may prove not to be accurate, and accordingly, our financial information should not be assumed to be indicative of what our financial condition or results of operations actually would have been as a stand-alone company nor to be a reliable indicator of what our financial condition or results of operations actually may be in the future.

For a description of the components of our historical consolidated financial information and adjustments, see “Management’s

Discussion and Analysis – Significant Factors Affecting our Results of Operations and Financial Condition —Separation from American Express” and our historical consolidated financial statements contained in our 2005 Annual Report to Shareholders.

We have experienced increased costs in connection with the separation from American Express Company and as an independent company.

We are in the process of developing certain independent facilities, systems, infrastructure and personnel to replace services we had access to from American Express Company. We have also made significant investments to develop our new brand and establish our ability to operate without access to American Express Company’s operational and administrative infrastructure. These initiatives have been costly to implement. We have incurred approximately $293 million in total pretax non-recurring separation costs through December 31, 2005 and we expect to incur an additional $582 million in separation costs. Due to the scope and complexity of the underlying projects, the amount of total costs could be materially higher and the timing of incurrence of these costs is subject to change.

We pay American Express Company to continue performing many important corporate functions for our operations,

including information technology support, treasury, accounting, financial reporting, tax administration, human resource administration, marketing, procurement and other services. The amounts we pay for this transitional support are arm’s length rates generally based on American Express Company’s direct and indirect costs. For more information regarding the transition arrangements, see Item 1 of this Annual Report on Form 10-K —”Our Relationship with American Express Company.” Although we implemented many independent functions, if we are not able to complete the establishment of these functions, or obtain them from third parties, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline.

As a stand-alone company, we do not have the same purchasing power we had through American Express Company and, in

some cases, we may not have as favorable terms or prices as those obtained prior to the separation from American Express Company, which could decrease our overall profitability.

We may not have sufficient capital generation ability to meet our operating and regulatory capital requirements, and current and future funding may adversely affect holders of our common stock through the issuance of more senior securities or through dilution.

As a stand-alone company we are required to maintain higher capital ratios to retain our credit ratings. In addition, we need to cover volatility associated with variations in our operating, risk-based and regulatory capital requirements, including separation costs and contingent exposures, for example, in connection with our ongoing legal and regulatory matters. See Item 1 of this Annual Report on Form 10-K— “Regulation” for more information regarding capital requirements and see Item 3 of this Annual Report on Form 10-K— “Legal Proceedings” for more information regarding pending regulatory and legal proceedings. Although American Express Company made a substantial capital contribution to our company to cover, among other things, certain separation costs and the costs to establish our new brands, we cannot be certain that this capital contribution will be sufficient to cover all of our additional costs. If it is not sufficient, our financial condition could be adversely affected and our company credit ratings and/or the financial strength ratings of our insurance subsidiaries may be downgraded.

In connection with the separation from American Express Company we incurred external debt, and we may from time to time

need to incur additional debt or issue equity, in order to fund working capital, capital expenditures and product development requirements or to make acquisitions and other investments. Any debt incurred or preferred stock issued has or will have liquidation rights, preferences and privileges senior to those of holders of our common stock. If we raise funds through

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the issuance of equity, the issuance will dilute the ownership interest of common shareholders. We cannot assure you that debt or equity financing will be available to us on acceptable terms, if at all. If we are not able to obtain sufficient financing, we may be unable to maintain or grow our business. It may also be more expensive for us to raise funds through the issuance of additional debt than the cost of raising funds or issuing debt for our business while we were part of American Express Company.

As we build our information technology infrastructure and transition our data to our own systems, we could experience temporary business interruptions and incur substantial additional costs.

We are in the process of installing and implementing information technology infrastructure to support our business functions, including accounting and reporting, customer service and distribution. We anticipate this will involve significant costs. We may incur temporary interruptions in business operations if we cannot transition effectively from American Express Company’s existing technology infrastructure (which covers hardware, applications, network, telephony, databases, backup and recovery solutions), as well as the people and processes that support them. We may not be successful in implementing our new technology infrastructure and transitioning our data, and we may incur substantially higher costs for implementation than currently anticipated. Our failure to avoid operational interruptions as we implement the new infrastructure and transition our data, or our failure to implement the new infrastructure and transition our data successfully, could disrupt our business and have a material adverse effect on our profitability. In addition, technology service failures could have adverse regulatory consequences for our business and make us vulnerable to our competitors.

We continue to rely on American Express Company’s disaster recovery capabilities as part of our business continuity

processes. We will only have the right to use American Express Company’s disaster recovery resources for up to two years after the Distribution. We are developing and implementing our own disaster recovery infrastructure and developing business continuity for our operations, which we anticipate will involve significant costs. We may not be successful in developing stand-alone disaster recovery capabilities and business continuity processes, and may incur substantially higher costs for implementation than currently anticipated. Our failure to avoid operational interruptions as we implement new business continuity processes, or our failure to implement the new processes successfully, could disrupt our business and have a material adverse effect on our profitability in the event of a significant business disruption.

We agreed to certain restrictions to preserve the treatment of the Distribution as tax free to American Express Company and its shareholders, which reduces our strategic and operating flexibility.

In connection with the Internal Revenue Service ruling and opinion confirming the tax free status of the Distribution, we made certain representations and undertakings. In addition, current tax law generally creates a presumption that the Distribution would be taxable to American Express Company, but not to its shareholders, if we or our shareholders were to engage in a transaction that would result in a 50% or greater change by vote or by value in our stock ownership during the four-year period beginning on the date that begins two years before the Distribution date, unless it is established that the Distribution and the transaction are not part of a plan or series of related transactions to effect such a change in ownership. In the case of such a 50% or greater change in our stock ownership, tax imposed on American Express Company in respect of the Distribution would be based on the fair market value of our stock on the Distribution date over American Express Company’s tax basis in our stock.

Under our tax allocation agreement with American Express Company, we are generally prohibited, for a period of two years

following the Distribution, except in certain circumstances, from (i) consenting to certain acquisitions of significant amounts of our stock; (ii) transferring significant amounts of our assets; (iii) failing to maintain certain components of our business as an active business; or (iv) engaging in certain other actions or transactions that could jeopardize the tax free status of the Distribution. In addition, we are generally prohibited from consenting to certain acquisitions of significant amounts of our stock or assets, or from participating in certain other corporate transactions, unless the other parties to the transaction agree to be jointly and severally liable with us in respect of our indemnification obligation to American Express Company under the tax allocation agreement (described below).

We agreed to indemnify American Express Company and its shareholders for taxes and related losses resulting from certain actions that cause the Distribution to fail to qualify as a tax free transaction.

Under the tax allocation agreement, we agreed to indemnify American Express Company and its shareholders for taxes and related losses they suffer as a result of the Distribution failing to qualify as a tax free transaction, if the taxes and related losses are attributable to (i) direct or indirect acquisitions of our stock or assets (regardless of whether we consent to such acquisitions); (ii) negotiations, understandings, agreements, or arrangements in respect of such acquisitions; or (iii) our failure to comply with certain representations and undertakings from us, including the restrictions described in the preceding risk factor. See Item 1 of this Annual Report on Form 10-K— “Our Relationship with American Express Company.” Our indemnity will

41

cover both corporate level taxes and related losses imposed on American Express Company in the event of a 50% or greater change in our stock ownership described in the preceding risk factor, as well taxes and related losses imposed on both American Express Company and its shareholders if, due to our representations or undertakings being incorrect or violated, the Distribution is determined to be taxable for other reasons.

We currently estimate that the indemnification obligation to American Express Company for taxes due in the event of a 50%

or greater change in our stock ownership could exceed $1.5 billion. This estimate, which does not take into account related losses such as interest, penalties, and other additions to tax, depends upon several factors that are beyond our control. As a consequence, the indemnity to American Express Company could vary substantially from the estimate. Furthermore, the estimate does not address the potential indemnification obligation to both American Express Company and its shareholders in the event that, due to our representations or undertakings being incorrect or violated, the Distribution is determined to be taxable for other reasons. In that event, the total indemnification obligation would likely be much greater.

Our separation from American Express Company could increase our U.S. federal income tax costs.

Due to the separation from American Express Company, our life insurance subsidiaries will not be able to file a consolidated U.S. federal income tax return with the other members of our affiliated group for five tax years following the Distribution. As a consequence, during this period, net operating and capital losses, credits, and other tax attributes generated by one group will not be available to offset income earned or taxes owed by the other group for U.S. federal income tax purposes. Any benefits relating to taxes arising from being part of the larger American Express group may also not be available. As a result of these and other inefficiencies, the aggregate amount of U.S. federal income tax that we pay may increase and we may in addition not be able to fully realize certain of our deferred tax assets.

The continued ownership of American Express Company common stock and options by our executive officers may create, or may create the appearance of, conflicts of interest.

Because of their former positions with American Express Company, substantially all of our executive officers, including our Chairman and Chief Executive Officer and our Chief Financial Officer, own American Express Company common stock and options to purchase American Express Company common stock. Although these holdings in the aggregate are insubstantial in relation to American Express Company, the individual holdings of American Express Company stock and options to purchase that stock that remain after the Distribution may be significant for some of these persons compared to that person’s total assets. Even though our board of directors consists of a majority of directors who are independent from both American Express Company and our company and our executive officers who were formally employees of American Express Company have ceased to be employees of American Express Company following the Distribution, ownership of American Express Company common stock and options to purchase American Express Company stock by our officers after the Distribution may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for American Express Company than they do for us.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We operate our business from two principal locations, both of which are located in Minneapolis, Minnesota: the Ameriprise Financial Center, a 897,280 square foot building that we lease, and our 903,722 square foot Client Service Center, which we own. Our lease term for the Ameriprise Financial Center began in November 2000 and is for 20 years, with several options to extend the term. Our aggregate annual rent for the Ameriprise Financial Center is approximately $15 million. We also own the 170,815 square foot Oak Ridge Conference Center, a training facility and conference center in Chaska, Minnesota, which can also serve as a disaster recovery site if necessary. We also lease space in an operations center located in Minneapolis. American Express Travel Related Services Company, an American Express Company subsidiary, also leases space in the center from the same landlord and we share common space in the building with them. We transferred title to the Minneapolis operations center to American Express Travel Related Services Company in the first quarter of 2004, and it sold the property to the current landlord as part of a December 2004 sale-leaseback transaction. Additionally, we occupy space in a second operations center located in Phoenix, Arizona, which is owned by American Express Travel Related Services Company.

Our property and casualty subsidiary, IDS Property Casualty, leases its corporate headquarters in Ashwaubenon, Wisconsin,

a suburb of Green Bay. In December 2004, it entered into a sale-and-leaseback agreement with Inland Real

42

Estate Acquisitions, Inc., and sold that property for $18 million. Under the terms of the agreement, Inland leased the property back to IDS Property Casualty for a ten-year term with an option to renew the lease for up to six renewal terms of five years each. The lease is a net lease, which means our subsidiary is responsible for all costs and expenses relating to the property in addition to annual rent.

Generally, we lease the premises we occupy in other locations, including the executive offices that we maintain in New York,

New York. We believe that the facilities owned or occupied by our company suit our needs and are well maintained.

Item 3. Legal Proceedings.

We and our subsidiaries are involved in the normal course of business in legal, regulatory and arbitration proceedings, including class actions, concerning matters arising in connection with the conduct of our activities as a diversified financial services firm. These include proceedings specific to us as well as proceedings generally applicable to business practices in the industries in which we operate. We can also be subject to litigation arising out of our general business activities, such as our investments, contracts, leases and employment relationships.

In addition, from time to time we receive requests for information from, and have been subject to examination or

investigation by, the SEC, NASD, OTS and various state regulatory authorities concerning our business activities and practices, including: sales and product or service features of, or disclosures pertaining to, financial plans, our mutual funds, annuities, insurance products and brokerage services; non–cash compensation paid to our financial advisors; supervision of our financial advisors; operational and data privacy issues; and sales of, or brokerage or revenue sharing practices relating to, other companies’ REIT shares, mutual fund shares or other investment products. The number of reviews and investigations has increased in recent years with regard to many firms in the financial services industry, including our company. We have cooperated and will continue to cooperate with the applicable regulators regarding their inquiries.

These proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that

may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on our consolidated financial condition, results of operations or credit ratings.

Certain legal and regulatory proceedings involving our company are described below. Legal In November 2002, a suit, now captioned Haritos et al. v. American Express Financial Advisors Inc., was filed in the United

States District Court for the District of Arizona. The suit was filed by plaintiffs who purport to represent a class of all persons that have purchased financial plans from our financial advisors from November 1997 through July 2004. Plaintiffs allege that the sale of the plans violates the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission of the investment advisor plans and restitution of monies paid for such plans. On January 3, 2006, the Court granted the parties joint stipulation to stay the action pending the approval of the proposed settlement in the putative class action, “In re American Express Financial Advisors Securities Litigation,” which is described below.

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express

Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota. In response to our motion to dismiss the complaint, the Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery.

In October 2005, we reached a comprehensive settlement regarding the consolidated securities class action lawsuit filed

against us, our former parent and affiliates in October 2004 called “In re American Express Financial Advisors Securities Litigation.” The settlement, under which we deny any liability, includes a one-time payment of $100 million to the class members. The class members include individuals who purchased mutual funds in our Preferred Provider Program, Select Group Program, or any similar revenue sharing program, purchased mutual funds sold under the American Express® or AXP® brand; or purchased for a fee financial plans or advice from our company between March 10, 1999 and through the date on which a formal stipulation of settlement is signed. The settlement will be submitted to the Court for approval. Two

43

lawsuits making similar allegations (based solely on state causes of actions) are pending in the United States District Court for the Southern District of New York: “Beer v. American Express Company and American Express Financial Advisors” and “You v. American Express Company and American Express Financial Advisors.” Plaintiffs have moved to remand the cases to state court. The Court’s decision on the remand motion is pending.

Regulatory As with other financial services firms, the level of regulatory activity and inquiry concerning our businesses remains

elevated. We have continued to receive requests for information from, and have been subject to examination by, the SEC, NASD, OTS and various state regulatory agencies concerning our business activities and practices, including: sales and product or service features of, or disclosures pertaining to, financial plans, our mutual funds, annuities, insurance products and brokerage services; non–cash compensation paid to our financial advisors; supervision of our financial advisors; operational issues relating to the RiverSource mutual funds; and sales of, or brokerage or revenue sharing practices relating to, other companies’ REIT shares, mutual fund shares or other investment products. Other open matters relate, among other things, to the portability (or network transferability) of our RiverSource mutual funds, the suitability of product recommendations made to retail financial planning clients, licensing matters related to sales by our financial advisors to out-of-state clients and net capital and reserve calculations. We have also received a number of regulatory inquiries in connection with our notification of the theft of a laptop computer containing certain client and financial advisor information. These open matters relate to the activities of various of our legal entities, including AMPF (formerly known as “American Express Financial Advisors Inc.” or “AEFA”), Ameriprise Enterprise Investment Services, Inc. (our clearing-broker subsidiary) and SAI. We have cooperated and will continue to cooperate with the regulators regarding their inquiries.

In 2005 we resolved by settlement a number of pending matters that pre-dated the Distribution. The majority of these

settlements involved AEFA. On December 1, 2005, we announced settlement of two additional SEC enforcement matters relating to periods before the

Distribution. The first matter involved allegations that AEFA failed to adequately disclose the details of various revenue sharing programs we maintained in connection with sales of certain non-proprietary mutual funds and 529 college savings plans. The SEC announcement also covers a second enforcement action alleging that AEFC permitted improper market timing in our own mutual funds (including market timing by a limited number of our employees through their own personal 401(k) retirement accounts) as well as in certain of our annuity products, notwithstanding prohibitions against this practice in the product disclosures. Under the terms of the settlements we agreed to a censure and to pay an aggregate of $45 million ($30 million allocated to revenue sharing and $15 million to market timing) in the form of civil penalties and disgorgement. We are required to develop plans of distribution with the assistance of an independent distribution consultant. Regarding revenue sharing, the plan will address how such funds will be distributed to benefit customers that purchased the particular mutual funds between January 1, 2001 through August 31, 2004. A second plan will address how funds will be distributed to benefit investors in our mutual funds for market-timing activity that took place between January 1, 2002 and September 30, 2003. The distribution plans will be subject to final approval by the SEC. As part of the settlements, we also agreed to certain undertakings regarding disclosure, compliance and training.

Additionally on December 1, 2005, we announced that we had reached agreement with the NASD to settle alleged violations

of NASD conduct rules prohibiting directed brokerage in connection with our revenue sharing programs with certain preferred non-proprietary mutual funds. Under the settlement we received a censure and paid a fine of $12.3 million.

During the course of 2005 we reached settlements with four states in regulatory matters regarding supervisory practices,

financial advisor misappropriations of customer funds, 529 plan and Class B mutual fund sales practices, incentives for AEFA’s branded advisors to sell both its proprietary mutual funds and other companies’ mutual funds, the sale of proprietary mutual fund products to financial planning clients, and the matters raised in the SEC and NASD enforcement actions described above. As part of these state settlements we paid approximately $13.4 million total in fines and penalties and also agreed, in certain instances, to provide restitution and to independent consultant review of certain of our practices and policies, including certain of our sales and advice supervisory practices. One such review was delivered in January 2006, and we have commenced implementation of the recommended enhancements. We will continue to meet our obligations under these settlements throughout 2006. There are pending investigations and demands made by regulators of other states regarding matters substantially similar to those which have settled, as well as the open matters described in the first paragraph under the heading “Regulatory”, and there can be no assurance that any one or more of these investigations, demands and matters will settle or otherwise conclude without a material adverse effect on our consolidated financial condition, results of operations or credit ratings.

44

Item 4. Submissions of Matters to a Vote of Security Holders.

None.

PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock trades principally on The New York Stock Exchange under the trading symbol AMP. As of February 28, 2006, we had approximately 38,350 common shareholders of record. Price and dividend information concerning our common shares may be found in Note 21 to our consolidated financial statements included in our 2005 Annual Report to Shareholders and incorporated herein by reference. We are primarily a holding company and as a result, our ability to pay dividends in the future will depend on receiving dividends from our subsidiaries. For information regarding our ability to pay dividends, see the information set forth under the heading “Management’s Discussion and Analysis—Liquidity and Capital Resources” contained in our 2005 Annual Report to Shareholders and incorporated herein by reference.

Item 6. Selected Financial Data.

The “Consolidated Five-Year Summary of Selected Financial Data” appearing on pages 99 and 100 of our 2005 Annual Report to Shareholders is incorporated herein by reference. The “Schedule I - Condensed Financial Information of Registrant (Parent Company Only)” appearing on pages F-1 through F-7 of this report is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information set forth under the heading “Management’s Discussion and Analysis” appearing on pages 22 through 52 of our 2005 Annual Report to Shareholders is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information set forth under the heading “Management’s Discussion and Analysis — Quantitative and Qualitative Disclosures About Market Risk” appearing on pages 51 and 52 of our 2005 Annual Report to Shareholders is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

The “Report of Independent Registered Public Accounting Firm,” the “Consolidated Financial Statements” and the “Notes to Consolidated Financial Statements” appearing on pages 55 through 98 of our 2005 Annual Report to Shareholders are incorporated herein by reference.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

The information set forth under the heading “Changes in and Disagreements With Accountants on Accounting and Financial Disclosure” appearing on page 54 of our 2005 Annual Report to Shareholders is incorporated herein by reference.

Item 9A. Controls and Procedures. Disclosure Controls and Procedures.

Our company 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 and pursuant to SEC regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to our 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, our company’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.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the

45

effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of December 31, 2005.

Changes in Internal Control over Financial Reporting

American Express Company has historically provided a variety of corporate and other support services for our company, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal, procurement and other services. American Express Company will continue to provide us with many of these services pursuant to a transition services agreement for transition period of up to two years following the Distribution. We are now relying upon American Express Company as a third party to perform these services, many of which may impact our financial reporting processes. During this transition there have been some changes in personnel and in relative responsibility for oversight of the processes. We consider this a material change in our internal control over financial reporting.

Other than the changes mentioned above, no other changes in our 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 have materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

Item 9B. Other Information.

None.

PART III. Item 10. Directors and Executive Officers of the Registrant.

In addition, the information regarding executive officers called for by Items 401(b), (e) and (f) of Regulation S-K may be found under the caption “Executive Officers of the Company” in this Annual Report on Form 10-K.

We have adopted a set of Corporate Governance Principles and Categorical Standards of Director Independence, which together with the charters of the three standing committees of the Board of Directors (Audit; Compensation and Benefits; and Nominating and Governance) and our Code of Conduct (which constitutes the Company’s code of ethics), provide the framework for the governance of our company. A complete copy of our Corporate Governance Principles and Categorical Standards of Director Independence, the charters of each of the Board committees, the Code of Conduct (which applies not only to our Chief Executive Officer, Chief Financial Officer and Controller, but also to all other employees of our company) and the Code of Business Conduct for the Members of the Board of Directors may be found by clicking on the “Corporate Governance” link found on our Investor Relations website at http://ir.ameriprise.com. You may also access our Investor Relations website through our main website at www.ameriprise.com by clicking on the “Investor Relations” link, which is located at the top of our homepage. (Information from such sites is not incorporated by reference into this report.) You may obtain free copies of these materials by also writing to our Corporate Secretary at our principal executive offices.

46

The following portions of the Proxy Statement are incorporated herein by reference:

•

information included under the caption “Items to be Voted on by Shareholders—Item 1 - Election of Directors”;•

information included under the caption “Corporate Governance—Director Independence”;•

information under the caption “Corporate Governance—Board Meetings”;•

information included in the table under the caption “Corporate Governance—Membership on Board Committees”;•

information under the caption “Corporate Governance—Compensation and Benefits Committee”; •

information under the caption “Corporate Governance—Nominating and Governance Committee”; •

information included under the caption “Corporate Governance—Audit Committee”; and•

information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance.”

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information included under the caption “Ownership of Our Common Shares” in the Proxy Statement is incorporated herein by reference.

Equity Compensation Plan Information The following table provides information about our company’s equity compensation plans as of December 31, 2005.

(1) In connection with the separation from American Express Company, our former sole stockholder approved the Ameriprise Financial 2005 Incentive Compensation Plan (“2005 ICP”). Under the 2005 ICP, stock and cash incentive awards may be granted to employees, directors and independent contractors including stock options, restricted stock awards, restricted stock units, performance shares and similar awards (“Incentive Awards”) designed to comply with the applicable federal regulations and laws of jurisdiction. Subject to the limit of the plan’s total authorization as reflected in the table above, the 2005 ICP does not limit the number of shares of company common stock that may be issued other than upon the exercise of an option, warrant or other right. The plan’s total authorization is automatically increased to the extent that participants tender common shares in payment of any obligation in connection with any Incentive Awards and to the extent the company uses cash received from participants as exercise or purchase price in connection with Incentive Awards to repurchase common shares. See Note 10 to the consolidated financial statements contained in our 2005 Annual Report to Shareholders for further descriptive information regarding the 2005 ICP.

(2) The only equity compensation plan not approved by shareholders pursuant to which equity securities are outstanding or

remaining available for grant as reflected in the table above is our Deferred Equity Program for Independent Financial Advisors (“P2 Deferral Plan”). The P2 Deferral Plan provides for the issuance of common shares only to our independent branded advisors (“P2 Advisors”). Issuances may be made (i) to an eligible P2 Advisor in respect of deferrals of compensation elected by the P2 Advisor, which elections are subject to qualification based on certain financial planning revenues earned by the P2 Advisor and are also subject to certain minimum and maximum limits, and (ii) to certain P2 Advisors who were affiliated with our company on December 31, 2005 as a retention incentive in connection with the Distribution and separation from American Express Company. The P2 Deferral Plan and the issuance of common shares under the P2 Deferral Plan is determined and administered by the Compensation and Benefits Committee of our Board of Directors (“CBC”) or such other committee as the Board or the CBC may designate (“Committee”). The Committee determines all terms by which deferrals may be made or shares of common stock may be issued under the P2 Deferral Plan,

47

The following portions of the Proxy Statement are incorporated herein by reference:

•

information included under the caption “Compensation of Executive Officers” (excluding the Compensation and Benefits Committee Report, which precedes the Summary Compensation Table, and excluding the information under the caption “- Performance Graph”); and

• information included under the caption “Compensation of Directors.”

Plan category

Number of securities to beissued upon exercise of

outstanding options, warrants and rights

(a)

Weighted-average exercise price of

outstanding options, warrants and rights

(b)

Number of securitiesremaining available for future issuance

under equity compensation plans (excluding securities

reflected in column (a))(c)

Equity compensation plans approved by security holders (1)

11,396,709

$ 31.569 22,772,793

Equity compensation plans not approved by security holders (2)

0

Not Applicable 2,500,000

Total

11,396,709

$ 31.569 25,272,793

including such terms as the threshold performance levels that a P2 Advisor must meet in order to make deferrals under the P2 Deferral Plan and the vesting in account balances. Vesting of P2 Deferral Plan interests accelerate immediately upon a “Change in Control,” as defined in the P2 Deferral Plan. The P2 Deferral Plan is not anticipated to terminate at any specific future date, although the Board may terminate or amend the P2 Deferral Plan at any time so long as no such amendment or termination adversely affects any P2 Deferral Plan interests then outstanding. This summary of the P2 Deferral Plan does not purport to be complete and is qualified in its entirety by the terms of the P2 Deferral Plan, the entire text of which is filed as Exhibit 10.27 to this Annual Report on Form 10-K.

Item 13. Certain Relationships and Related Transactions.

The information under the caption “Certain Transactions” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information set forth under the heading “Items to be Voted on by Shareholders — Item 2 – Ratification of Audit Committee’s Selection of Independent Registered Public Accountants—Audit Fees”; “—Audit-Related Fees”; “—Tax Fees”; “—All Other Fees”; “—Services to Associated Organizations”; and “—Policy on Pre-Approval of Services Provided by Independent Registered Public Accountants,” in the Proxy Statement is incorporated herein by reference.

PART IV. Item 15. Exhibits and Financial Statement Schedules. (a) 1. Financial Statements:

The financial statements filed as a part of this report are listed on page F-1 hereof under “Schedule I - Condensed Financial Information of the Registrant (Parent Company Only),” which is incorporated herein by reference.

2. Financial Statement Schedules: The financial statement schedules required to be filed in this report are listed on page F-1 hereof under “Schedule I -

Condensed Financial Information of the Registrant (Parent Company Only),” which is incorporated herein by reference. 3. Exhibits: The list of exhibits required to be filed as exhibits to this report are listed on pages E-1 through E-3 hereof under

“Exhibit Index,” which is incorporated herein by reference.

48

SIGNATURES

Pursuant to the requirements 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.

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned directors and officers of Ameriprise Financial, Inc., a Delaware corporation, does hereby make, constitute and appoint James M. Cracchiolo, Walter S. Berman and John C. Junek, and each of them, the undersigned’s true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned’s name, place and stead, to sign and affix the undersigned’s name as such director and/or officer of said corporation to an Annual Report on Form 10-K or other applicable form, and all amendments thereto, to be filed by such corporation with the Securities and Exchange Commission, Washington, D.C., under the Securities Exchange Act of 1934, as amended, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in-fact, and any of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers herein expressly granted. 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.

49

AMERIPRISE FINANCIAL, INC.

(Registrant)

Date: March 8, 2006 By /s/ Walter S. Berman

Walter S. Berman

Executive Vice President and Chief Financial Officer

Date: March 8, 2006

/s/ James M. Cracchiolo

James M. Cracchiolo

Chairman and Chief Executive Officer

(Principal Executive Officer and Director) Date: March 8, 2006

/s/ Walter S. Berman

Walter S. Berman

Executive Vice President and Chief Financial Officer

(Principal Financial Officer) Date: March 8, 2006

/s/ David K. Stewart

David K. Stewart

Senior Vice President and Controller

(Principal Accounting Officer) Date: March 8, 2006

/s/ Ira D. Hall

Ira D. Hall

Director Date: March 8, 2006

/s/ W. Walker Lewis

W. Walker Lewis

Director Date: March 8, 2006

/s/ Siri S. Marshall

Siri S. Marshall

Director Date: March 8, 2006

/s/ Jeffrey Noddle

Jeffrey Noddle

Director

50

Date: March 8, 2006

/s/ Richard F. Powers III

Richard F. Powers III

Director Date: March 8, 2006

/s/ H. Jay Sarles

H. Jay Sarles

Director Date: March 8, 2006

/s/ Robert F. Sharpe, Jr.

Robert F. Sharpe, Jr.

Director Date: March 8, 2006

/s/ William H. Turner

William H. Turner

Director

AMERIPRISE FINANCIAL, INC.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Parent Company Only)

Table of Contents

F-1

Condensed Statements of Income F-2Condensed Balance Sheets F-3Condensed Statements of Cash Flows F-4Notes to Condensed Financial Information of Registrant F-5

AMERIPRISE FINANCIAL, INC.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (Parent Company Only)

(a) 2004 includes a $71 million non-cash after tax charge ($109 million pretax) relating to the January 1, 2004 adoption of

American Institute of Certified Public Accountants Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts.” 2003 includes a $13 million non-cash after-tax charge ($20 million pretax) relating to the December 31, 2003 adoption of Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised December 2003.

See Notes to Condensed Financial Information of Registrant.

F-2

2005 2004

2003

(in millions)

REVENUES

Management and service fees

$ 339 $ 413

$ 420

Distribution fees

54 19

11

Net investment income

20 19

4

Other revenues

6 10

6

Total revenues

419 461

441

EXPENSES

Compensation and benefits

418 356

357

Interest and debt expense 70 51 45

Separation costs

76 —

—

Other expenses

30 182

61

Total expenses

594 589

463

Loss before income tax (benefit) provision, equity in earnings of subsidiaries and discontinued operations of subsidiary

(175) (128) (22)Income tax (benefit) provision

(27) (15) 5

Loss before equity in earnings of subsidiaries and discontinued operations of subsidiary

(148) (113) (27)Equity in earnings of subsidiaries before discontinued operations of subsidiary(a)

706 867

708

Income before discontinued operations of subsidary

558 754

681

Discontinued operations of subsidiary, net of tax 16 40 44

Net income $ 574 $ 794 $ 725

AMERIPRISE FINANCIAL, INC.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS

DECEMBER 31, 2005 AND 2004 (Parent Company Only)

See Notes to Condensed Financial Information of Registrant.

F-3

2005

2004

(in millions)

ASSETS

Cash and cash equivalents $ 1,192

$ 17

Investments 303

380

Receivables 29

30

Due from subsidiaries 148 149

Land, buildings, equipment, and software, net of accumulated depreciation of $336 and $274 566

550

Investment in subsidiaries 7,777

7,504

Other assets 214

258

Parent Company assets applicable to and investment in discontinued operations of subsidiary —

242

Total assets $ 10,229

$ 9,130

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:

Accounts payable and accrued expenses $ 599

$ 396

Due to subsidiaries 245 135

Payable to American Express 16

1,686

Debt 1,550

50

Other liabilities 132 161

Total liabilities 2,542

2,428

Shareholders’ Equity:

Common shares ($.01 par value, 1,250 million shares authorized; 249.9 million issued and outstanding as of December 31, 2005; $.01 par value, 100 shares authorized, issued and outstanding (prior to adjusting for September 2005 stock split) as of December 31, 2004)

2

—

Additional paid-in capital 4,091 2,907

Retained earnings 3,745

3,415

Accumulated other comprehensive (loss) income, net of tax, including amounts applicable to equity investments in subsidiaries:

Net unrealized securities (losses) gains (129) 425

Net unrealized derivative gains (losses) 6 (28)

Foreign currency translation adjustment (25) (16)

Minimum pension liability (3) (1)

Total accumulated other comprehensive (loss) income (151) 380

Total shareholders’ equity 7,687 6,702

Total liabilities and shareholders’ equity $ 10,229

$ 9,130

AMERIPRISE FINANCIAL, INC.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (Parent Company Only)

See Notes to Condensed Financial Information of Registrant.

F-4

2005 2004

2003

(in millions)

Cash Flows from Operating Activities

Net income

$ 574 $ 794

$ 725

Less: Discontinued operations of subsidiary, net of tax

(16) (40) (44)Income before discontinued operations of subsidiary

558 754

681

Adjustments to reconcile income before discontinued operations of subsidiary to net cash provided by (used in) operating activities:

Equity in earnings of subsidiaries before discontinued operations of subsidiary

(706) (867) (708)Dividends received from subsidiaries and affiliates 486

1,147 124Other operating activities, primarily with subsidiaries

615 124

591

Net cash provided by operating activities 953 1,158 688

Cash Flows from Investing Activities

Available-for-Sale securities:

Proceeds from sales

243 156

261

Maturities

179 21

14

Purchases

(278) (162) (265)Purchase of land, buildings, equipment, and software

(113) (100) (108)Investment in subsidiaries

(924) (29) (1,140)Net cash used in investing activities

(893) (114) (1,238)Cash Flows from Financing Activities

Debt issuance costs

(7) —

—

Proceeds from issuance of debt

2,850 —

—

Principal repayments of debt (1,350) (78) —Payable to American Express, net (1,578) 263 269Dividends paid to American Express

(53) (1,325) (334)Dividends paid to shareholders

(27) —

—

Capital transactions with American Express, net 1,256 40 566

Net cash provided by (used in) financing activities 1,091 (1,100) 501

Parent Company Operations Applicable to Discontinued Operations of Subsidiary

Net cash provided by operating activities

48 95

130

Net cash used in financing activities (24) (40) (65)Cash provided by Parent Company operations applicable to discontinued operations of

subsidiary

24 55

65

Net increase (decrease) in cash and cash equivalents

1,175 (1) 16

Cash and cash equivalents at beginning of year 17 18 2

Cash and cash equivalents at end of year

$ 1,192 $ 17

$ 18

Supplemental Disclosures:

Interest paid

$ 80 $ 52

$ 44

Income taxes received, net $ 169 $ 21 $ 15

Supplemental schedule of non-cash transactions in connection with separation:

Non-cash dividend of AEIDC to American Express

$ 164 $ —

$ —

AMERIPRISE FINANCIAL, INC.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(Parent Company Only)

Note 1 Basis of Presentation

Ameriprise Financial, Inc. (the Company or Ameriprise Financial) was formerly a wholly-owned subsidiary of American Express Company (American Express). On February 1, 2005, the American Express Board of Directors announced its intention to pursue the disposition of 100% of its shareholdings in the Company (the Separation) through a tax-free distribution to American Express shareholders. In preparation for the disposition, the Company approved a stock split of its 100 common shares entirely held by American Express into 246 million common shares. Effective as of the close of business on September 30, 2005, American Express completed the separation of Ameriprise Financial and the distribution of the Ameriprise Financial common shares to American Express shareholders (the Distribution). The Distribution was effectuated through a pro-rata dividend to American Express shareholders consisting of one share of Ameriprise Financial common stock for every 5 shares of American Express common stock owned by its shareholders on September 19, 2005, the record date. Prior to August 1, 2005, Ameriprise Financial was named American Express Financial Corporation.

The accompanying condensed financial statements include the accounts of Ameriprise Financial, Inc. (the Registrant or

Parent Company) and, on an equity basis, its subsidiaries and affiliates. The financial information of the Parent Company should be read in conjunction with the consolidated financial statements of Ameriprise Financial and the notes thereto. Parent Company revenues and expenses, other than compensation and benefits and debt and interest expense, are primarily related to intercompany transactions with subsidiaries and affiliates.

Until the fourth quarter of 2005, the Parent Company was a Registered Investment Advisor. During the fourth quarter of

2005, the Parent Company ceased being a Registered Investment Advisor and in turn, an Ameriprise Financial subsidiary became a Registered Investment Advisor.

Note 2 Discontinued Operations

Effective August 1, 2005, the Company transferred its 50% ownership interest and the related assets and liabilities of its subsidiary, American Express International Deposit Company (AEIDC), to American Express for $164 million through a non-cash dividend equal to the net book value excluding net unrealized investment losses of $26 million and accordingly, no gain or loss was recorded. In connection with the AEIDC transfer, American Express made a cash capital contribution of $164 million to the Company. The investment in and equity in the operations of AEIDC are shown as Parent Company assets applicable to and investments in discontinued operations of subsidiary and discontinued operations of subsidiary, net of tax in the accompanying Condensed Financial Statements.

F-5

The components of earnings associated with discontinued operations of subsidiary for the years ended December 31 are as

follows:

The Parent Company assets applicable to and investment in discontinued operations of subsidiary included in the Parent

Company’s Condensed Balance Sheet as of December 31, 2004 consisted of the following:

Note 3 Investments

The following is a summary of investments at December 31, 2005 and 2004:

Note 4 Goodwill

Goodwill was $185 million at both December 31, 2005 and 2004. Goodwill reflected in the Parent Company Condensed Financial Statements relates to Ameriprise Financial’s predecessor, Investors Diversified Services Inc., which was founded in 1894 and acquired by American Express in 1984.

Note 5 Debt

All of the borrowings of Ameriprise Financial are borrowings of the Parent Company, except as indicated below. At December 31, 2005 and 2004, Ameriprise Financial had a combined $283 million and $317 million, respectively, of debt

relating to a collateralized debt obligation (CDO), which was consolidated beginning December 31, 2003 upon the adoption of Financial Accounting Standards Boards Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised (FIN 46). This debt is non-recourse to Ameriprise Financial and will be extinguished from the cash flows of the investments held within the portfolio of the CDO.

F-6

2005 2004

2003

(in millions)

Parent Company income tax provision applicable to discontinued operations of subsidiary

$ 9 $ 21

$ 24

Loss before equity in earnings of subsidiaries and discontinued operations of subsidiary

(9) (21) (24)Equity in earnings of subsidiaries before discontinued operations of subsidiary

25 61

68

Discontinued operations of subsidiary, net of tax

$ 16 $ 40

$ 44

December 31,

2004

(in millions)

Investment in subsidiaries

$ 178

Receivable from American Express

64

Total assets

$ 242

2005 2004

(in millions)

Available-for-Sale securities, at fair value

$ 129

$ 254

Trading securities, at fair value 174 126Total $ 303 $ 380

Note 6 Payable to American Express

Payable to American Express at December 31 consisted of:

Note 7 Commitments and Contingencies

The Parent Company is the guarantor for an operating lease of IDS Property Casualty Insurance Company. The Parent Company is involved in the normal course of business in legal, regulatory and arbitration proceedings, including

class actions and investigations, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Parent Company as well as proceedings generally applicable to business practices in the industries in which the Parent Company operates. The Parent Company can also be subject to litigation arising out of its general business activities, such as its investments, contracts, leases and employment relationships.

These proceedings are subject to uncertainties and, as such, the Parent Company is unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the Parent Company’s results of operations, financial condition or credit ratings.

In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota. In response to a motion to dismiss the complaint, the Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery.

In October 2005, the Parent Company reached a comprehensive settlement regarding the consolidated securities class action lawsuit filed against the Parent Company, its former parent and affiliates in October 2004 called “In re American Express Financial Advisors Securities Litigation.” The settlement, under which the Parent Company denies any liability, includes a one-time payment of $100 million to the class members. The class members include individuals who purchased mutual funds in certain revenue sharing programs; purchased mutual funds sold under the American Express® or AXP® brand; or purchased for a fee financial plans or advice between March 10, 1999 and through the date on which a formal stipulation of settlement is signed. The settlement will be submitted to the Court for approval. Two lawsuits making similar allegations (based solely on state causes of actions) are pending in the United States District Court for the Southern District of New York: “Beer v. American Express Company and American Express Financial Advisors” and “You v. American Express Company and American Express Financial Advisors.” Plaintiffs have moved to remand the cases to state court. The Court’s decision on the remand motion is pending.

On December 1, 2005, the Parent Company announced settlement of an SEC enforcement matter relating to periods before the Distribution. The matter involved allegations that the Parent Company permitted improper market timing in the Parent Company’s own mutual funds (including market timing by a limited number of the Parent Company’s employees through their own personal 401(k) retirement accounts) as well as in certain annuity products, notwithstanding prohibitions against this practice in the product disclosures. Under the terms of the settlement the Parent Company agreed to a censure and to pay $15 million in the form of civil penalties and disgorgement. The Parent Company is required to develop a plan of distribution with the assistance of an independent distribution consultant. The plan will address how funds will be distributed to benefit investors in the Company’s mutual funds for market-timing activity that took place between January 1, 2002 and September 30, 2003. The distribution plan will be subject to final approval by the SEC. As part of the settlement, the Parent Company also agreed to certain undertakings regarding disclosure, compliance and training.

F-7

2005

2004

(in millions)Debt

$ —

$ 1,578

Interest payable —

11

Taxes payable 10

35

Accounts payable 6

62

Total payable to American Express $ 16

$ 1,686

EXHIBIT INDEX

Pursuant to the rules and regulations of the Securities and Exchange Commission, Ameriprise Financial, Inc. has filed certain

agreements as exhibits to this Annual Report on Form 10-K. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in Ameriprise Financial, Inc.’s public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe Ameriprise Financial, Inc.’s actual state of affairs at the date hereof and should not be relied upon.

The following exhibits are filed as part of this Annual Report on Form 10-K. The exhibit numbers followed by an asterisk (*)

indicate exhibits electronically filed herewith. All other exhibit numbers indicate exhibits previously filed and are hereby incorporated herein by reference. Exhibits numbered 10.5 through 10.26 and Exhibit 10.28 are management contracts or compensatory plans or arrangements.

E-1

Exhibit Description

3.1

Amended and Restated Certificate of Incorporation of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

3.2

Amended and Restated Bylaws of Ameriprise Financial, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

4.1

Form of Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Form 10 Registration Statement, File No. 1-32525, filed on August 19, 2005).

Other instruments defining the rights of holders of long-term debt securities of the registrant are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The registrant agrees to furnish copies of these instruments to the SEC upon request.

10.1

Separation and Distribution Agreement between American Express Company and Ameriprise Financial, Inc., dated August 24, 2005 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on August 30, 2005).

10.2

Transition Services Agreement by and between American Express Company and Ameriprise Financial, Inc., dated as of September 30, 2005 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.3

Tax Allocation Agreement by and between American Express Company and Ameriprise Financial, Inc., dated as of September 30, 2005 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.4

Employee Benefits Agreement by and between American Express Company and Ameriprise Financial, Inc., dated as of September 30, 2005 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.5

Ameriprise Financial 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8, File No. 333-128789, filed on October 5, 2005).

10.6

Ameriprise Financial Deferred Compensation Plan (incorporated by reference to Exhibit 10.5 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.7

Ameriprise Financial Supplemental Retirement Plan (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

E-2

10.8

Form of Ameriprise Financial 2005 Incentive Compensation Plan Master Agreement for Substitution Awards (incorporated by reference to Exhibit 10.8 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.9

Form of Ameriprise Financial 2005 Incentive Compensation Plan Agreement for Assumed Portfolio Grant Awards (incorporated by reference to Exhibit 10.9 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.10

Form of Ameriprise Financial 2005 Incentive Compensation Plan Agreement for Assumed Performance Grants (incorporated by reference to Exhibit 10.10 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.11

Key Employee Retention Award for Mr. Berman (incorporated by reference to Exhibit 10.11 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.12

Key Employee Retention Award for Mr. Heath (incorporated by reference to Exhibit 10.12 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.13

Key Employee Retention Award for Mr. Truscott (incorporated by reference to Exhibit 10.13 to Amendment No. 2 to Form 10 Registration Statement, File No. 1-32525, filed on August 15, 2005).

10.14

Letter sent by American Express Company to Mr. Cracchiolo (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, File No. 1-32525, filed on August 30, 2005).

10.15

Ameriprise Financial Form of Award Certificate — Non-Qualified Stock Option Award (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.16

Ameriprise Financial Form of Award Certificate — Restricted Stock Award (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.17

Ameriprise Financial Form of Award Certificate — Restricted Stock Unit Award (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.18

Ameriprise Financial Form of Agreement — Cash Incentive Award (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.19

Ameriprise Financial Long-Term Incentive Award Program Guide (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.20

Ameriprise Financial Deferred Share Plan for Outside Directors (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K, File No. 1-32525, filed on October 4, 2005).

10.21

Compensatory Arrangements for CEO (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on August 30, 2005).

10.22

CEO Security and Compensation Arrangements (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on October 31, 2005).

10.23

Completion/Retention Awards (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on October 31, 2005).

10.24*

Ameriprise Financial, Inc. Senior Executive Severance Plan, as amended November 14, 2005. 10.25

Restricted Stock Awards in lieu of Key Executive Life Insurance Program (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on November 18, 2005).

10.26

Treatment of Portfolio Grants and Portfolio Grant for CEO (incorporated by reference to Item 1.01 of the Current Report on Form 8-K, File No. 1-32525, filed on December 21, 2005).

10.27*

Ameriprise Financial, Inc. Deferred Equity Program for Independent Financial Advisors.

E-3

10.28* Ameriprise Financial Annual Incentive Award Plan, adopted effective as of September 30, 2005.

10.29*

Form of Indemnification Agreement for directors, Chief Executive Officer, Chief Financial Officer, General Counsel and Principal Accounting Officer and any other officers designated by the Chief Executive Officer.

10.30

Indenture dated as of October 5, 2005, between the Registrant and U.S. Bank National Association, trustee (incorporated by reference to Exhibit 4(a) to the Registration Statement on Form S-3, File No. 333-128834, filed on October 5, 2005).

10.31*

Credit Agreement, dated as of September 30, 2005, among Ameriprise Financial, Inc., the lenders listed therein, Wells Fargo Bank, National Association, Citibank, N.A., Bank of America, N.A., HSBC Bank USA, National Association, Wachovia Bank, National Association and Citigroup Global Markets, Inc.

12*

Ratio of Earnings to Fixed Charges. 13*

Portions of the Ameriprise Financial, Inc. 2005 Annual Report to Shareholders, which, except for those sections incorporated herein by reference, are furnished solely for the information of the SEC and are not to be deemed “filed”.

16.1

Letter from Ernst & Young LLP addressed to the Securities and Exchange Commission, dated June 6, 2005, regarding change in certifying accountant (incorporated by reference to Exhibit 16.1 to Form 10 Registration Statement, File No. 1-32525, filed on June 7, 2005).

16.2

Letter from PricewaterhouseCoopers LLP addressed to the Securities and Exchange Commission, dated June 3, 2005, regarding change in certifying accountant (incorporated by reference to Exhibit 16.2 to Form 10 Registration Statement, File No. 1-32525, filed on June 7, 2005).

21*

Subsidiaries of Ameriprise Financial, Inc. 23*

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. 24

Powers of attorney (included on Signature Page). 31.1*

Certification of James M. Cracchiolo pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2*

Certification of Walter S. Berman pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32*

Certification of James M. Cracchiolo and Walter S. Berman pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 10.24

AMERIPRISE FINANCIAL SENIOR EXECUTIVE SEVERANCE PLAN

Amended and Restated as of November 14, 2005

AMERIPRISE FINANCIAL SENIOR EXECUTIVE SEVERANCE PLAN

INTRODUCTION

The Board of Directors of Ameriprise Financial, Inc. established the Ameriprise Financial Senior Executive Severance Plan (hereinafter referred to as the “Plan”), effective as of September 30, 2005 and restated as of November 14, 2005, to provide for severance benefits for certain eligible senior executives of Ameriprise Financial, Inc. and its participating subsidiaries whose employment is terminated under certain conditions. Severance benefits under the Plan are to be provided to such eligible executives in exchange for a signed agreement that includes a release of all claims.

1

ARTICLE ONE

DEFINITIONS

1.1. “Affiliated Company” means any corporation which is a member of a controlled group of corporations (determined in

accordance with Section 4l4(b) of the Code) of which the Company is a member and any other trade or business (whether or not incorporated) which is controlled by, or under common control (determined in accordance with Section 4l4(c) of the Code) with the Company, but which is not an Employing Company.

1.2. “Base Salary” means the regular basic cash remuneration before deductions for taxes and other items withheld,

payable to an Employee for services rendered to an Employing Company, but not including pay for bonuses, incentive compensation, special pay, awards or commissions.

1.3. “Board of Directors” means the board of directors of the Company. 1.4. “Bonus” means the greater of: (1) the largest of any one of the last three annual incentive compensation amounts paid

to an Employee over and above Base Salary earned and paid in cash or otherwise under any executive bonus or sales incentive plan or program of an Employing Company or (2) the Employee’s designated target bonus.

1.5. “Change in Control” has the meaning set forth in the Ameriprise Financial 2005 Incentive Compensation Plan;

provided that, notwithstanding anything to the contrary therein, a Change in Control shall not be deemed to occur under this Plan as a result of any event or transaction to the extent that treating such event or transaction as a Change in Control would cause any tax to become due under Section 409A of the Code.

1.6. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations

and administrative guidance issued thereunder. 1.7. “Committee” means the Compensation and Benefits Committee of the Board of Directors or any committee

established and appointed by the Board of Directors or by a committee of the Board of Directors, or any successor committee appointed by the Board of Directors to administer the Plan.

1.8. “Company” means Ameriprise Financial, Inc., a Delaware corporation, its successors and assigns. 1.9. “Comparable Position” means a job with the Company, an Employing Company, an Affiliated Company or successor

company at the same or higher Total Cash Compensation as an Employee’s current job and at a work location within reasonable commuting distance from an Employee’s home, as determined by such Employee’s Employing Company. For Employees in a qualifying international

2

expatriate program adopted by an Employee’s Employing Company, “Comparable Position” means a job with an Employing Company, an Affiliated Company or successor company at the same or higher Total Cash Compensation as an Employee’s current job and at a work location in the Employee’s country of assignment, home country or career base country.

1.10. “Completed Years of Service” means the number of full one-year periods that have transpired since the Employee’s

original date of hire or, in the case of someone who has incurred a break in service as defined in the Ameriprise Financial Retirement Plan, the adjusted date of hire, through the Employee’s last day of active employment with the Company. The determination of Completed Years of Service will take into account years of service with American Express Company if and to the extent, and in accordance with, the provisions of the Employee Benefits Agreement by and between American Express Company and Ameriprise Financial, Inc., dated as of September 30, 2005 (the “Employee Benefits Agreement”).

1.11. “Constructive Termination” means resignation or other employment termination by an Employee from an Employing

Company as a result of one or more of the following without the Employee’s written consent within two (2) years after a Change in Control:

(a) a reduction in Base Salary, except for across-the-board changes similarly affecting all Employees of the Employing Company and all Employees of any Person in control of the Employing Company, or any material reduction in the aggregate of the Employee’s annual target bonus and long term incentive opportunity, in each case from that in effect immediately prior to the Change in Control, (b) the Employing Company’s requirement that the Employee be based more than fifty (50) miles from the location at which the Employee was based immediately prior to the Change in Control and which location is more than thirty-five (35) miles from the Employee’s residence, (c) the assignment to the Employee of any duties that are materially inconsistent with the Employee’s duties prior to the Change in Control, or (d) a significant reduction in the Employee’s position, duties, or responsibilities from those in effect prior to the Change in Control.

1.12. “Defined Termination” means a termination of employment of an Employee within two (2) years after a Change in Control that occurs as a result of either:

(a) an Involuntary Termination, or (b) a Constructive Termination.

1.13. “Disability” shall have the meaning set forth in Section 409A of the Code. 3

1.14. “Employee” means any person, at the senior executive level as defined by the Committee, paid through the payroll

function of the Employing Company (as opposed to the accounts payable function of the Employing Company) and employed on a regular full-time basis (i.e., an employee whose scheduled workweek is consistent with the standard workweek schedule of a business unit or department) or regular part time basis (i.e., an employee who is scheduled to work at least twenty (20) hours per week, but fewer than the hours of a regular full-time employee) by an Employing Company, who receives from an Employing Company a regular stated compensation and an annual IRS Form W-2; provided, however, that an Employing Company or operating business unit thereof, due to business, marketplace or employee relations reasons, may, in its sole discretion, by policy exclude from the definition of Employee under the Plan any category or level of Employee employed in a non-exempt, exempt or executive level position or in an initial probationary or trial period of employment. The term “Employee” shall not include any person who has entered into an independent contractor agreement, consulting agreement, franchise agreement or any similar agreement with an Employing Company, nor the employees of any such person, regardless of whether that person (including his or her employees) is later found to be an employee by any court of law or regulatory authority.

1.15. “Employing Company” means each of the Company and the subsidiary and affiliated companies of the Company

listed on Schedule A attached hereto, as such Schedule A may be amended by the Committee, in its sole discretion, from time to time.

1.16. “ERISA” means the Employee Retirement Income Security Act of l974, as amended from time to time, and all

regulations, interpretations and administrative guidance issued thereunder. 1.17. “Good Cause” means a discontinuance of an Employee’s employment by an Employing Company upon one of the

following:

(a) an Employee’s Willful and continued failure to adequately perform substantially all of the Employee’s duties with an Employing Company, (b) an Employee’s Willful engagement in conduct which is demonstrably and materially injurious to an Employing Company or an affiliate thereof, monetarily or otherwise, or (c) an Employee’s conviction of, or entering a plea of guilty or nolo contendere to (i) a felony or (ii) any misdemeanor that disqualifies an Employee from employment with an Employing Company.

1.18. “Involuntary Termination” means any involuntary discontinuance of an Employee’s employment by an Employing Company for reasons other than Good Cause within two (2) years after a Change in Control.

4

1.19. “Leave of Absence” means the period during which an Employee is absent from work pursuant to a leave of absence

granted by an Employing Company. 1.20. “Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Securities and Exchange Act of

1934 (the “Exchange Act”), including any “group” within the meaning of Section 13(d)(3) under the Exchange Act. 1.21. “Plan” means the Ameriprise Financial Senior Executive Severance Plan, as set forth herein and as hereafter amended

from time to time. 1.22. “Retirement” means early, normal or deferred retirement as defined in and meeting the terms and conditions of the

Ameriprise Financial Retirement Plan, as amended, or any successor plan thereto. 1.23. “Separation Period” means the period of time over which an Employee receives severance benefits under the Plan in

biweekly or other installment payments. 1.24. “Specified Employee” means a key employee (as defined for purposes of Section 409A of the Code) of an Employing

Company, as determined by the Committee in its sole discretion. 1.25. “Termination of Active Employment” means the date on which an Employee ceases performing services for an

Employing Company. 1.26. “Total Cash Compensation” means an Employee’s Base Salary and any Bonus. 1.27. “Willful” means that an act or failure to act on an Employee’s part is done, or omitted to be done, by the Employee in

a manner that is not in good faith, and that is without reasonable belief that such action or omission was in the best interests of an Employing Company.

1.28. The masculine pronoun shall be construed to mean the feminine and the singular shall be construed to mean the plural,

wherever appropriate herein. 1.29. Headings in this document are for identification purposes only and do not constitute a part of the Plan.

5

ARTICLE TWO

ELIGIBILITY TO RECEIVE BENEFITS

2.1. Eligibility to Receive Benefits. Each Employee shall be eligible to receive benefits under the Plan in the event his

employment is terminated by an Employing Company for one of the following reasons: 2.1.1. Reduction in force; 2.1.2. Position elimination; 2.1.3. Office closing; 2.1.4. Poor performance; 2.1.5. Mutually satisfactory resignation; 2.1.6. Relocation of an Employee’s current position that does not meet the definition of Comparable Position; 2.1.7. Defined Termination, as defined in Section 1.12, (applicable only within two (2) years after a Change in Control),

and notwithstanding any provision of Section 2.3. The Committee may, in its sole discretion, grant eligibility to receive benefits under the Plan to any Employee or group of Employees employed in a business unit of the Company or an Employing Company who terminate employment due to a sale of such business unit not later than six (6) months following such sale.

2.2. Limitations on Eligibility. In the event an Employee who is otherwise eligible to receive benefits under the Plan is offered a Comparable Position (whether the position is accepted or rejected by the Employee), he will not be eligible to receive benefits under the Plan. In addition, an Employee is not eligible to receive benefits under the Plan if the Employee accepts any position in the Employing Company, an Affiliated Company or successor company (regardless of whether it is a Comparable Position). An Employee who is offered or placed on a temporary layoff status (often referred to as a furlough) with reduced or no pay for a period of less than six (6) months during which time the Employee continues to participate in certain benefit plans as determined by the Company is not eligible to receive benefits under the Plan.

2.3. Ineligibility to Receive Benefits. An Employee is ineligible to receive benefits under the Plan in the event his

employment by an Employing Company terminates for a reason other than those enumerated in Section 2.1 above, including, but not limited to, the following:

2.3.1. Voluntary resignation; 2.3.2. Failure to report for work; 2.3.3. Failure to return from leave; 2.3.4. Return from a Leave of Absence which extends beyond the policy reinstatement period, if applicable, and no

position is available; 2.3.5. Excessive absenteeism or lateness;

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2.3.6. Merger, acquisition, sale, transfer, outsourcing or reorganization of all or part of the Employing Company that does

not constitute a Change in Control where either (i) a Comparable Position is offered with, or (ii) the Employee accepts any position (regardless of whether it is a Comparable Position) with, a successor company, whether affiliated or unaffiliated with the Employing Company, including an outside contractor, and whether or not the successor company participates the Plan.

2.3.7. Violation of a policy or procedure of the Employing Company, insubordination, unwillingness to perform the duties of a position, or other misconduct;

2.3.8. Retirement, including the acceptance of any Employing Company sponsored retirement incentive; provided, however, that in the event an Employee is otherwise eligible for a severance pay benefit in accordance with Section 2.1 above and also eligible for Retirement, the Employee shall be eligible to receive benefits under the Plan in accordance with Article 3 below;

2.3.9. Death; or 2.3.10. Disability.

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ARTICLE THREE

AMOUNT OF BENEFITS

3.1 Amount of Benefits. The severance benefit payable to an eligible Employee under the Plan shall be based on his Completed Years of Service and position with the Company, Employing Company or an Affiliated Company. The formula for determining an Employee’s severance benefit payment shall be calculated by first adding together (i) the Employee’s annual Base Salary in effect immediately prior to the date of Termination of Active Employment; provided that, in the case of an Employee whose employment is terminated pursuant to 1.11(a), then the Base Salary that was in effect immediately before such reduction in Base Salary, and (ii) the Employee’s Bonus. The sum of subsections (i) and (ii) above shall then be divided by fifty-two (52) to calculate the weekly severance benefit. The amount of the total severance benefit to which an Employee may be entitled is set out in Schedule B.

Notwithstanding the foregoing and in accordance with the terms of the Employee Benefits Agreement, any Employee who was eligible to receive severance benefits under the American Express Company Senior Executive Severance Plan immediately prior to the Distribution Date (as defined in the Employee Benefits Agreement) and becomes eligible to receive severance benefits pursuant to the Plan during the period commencing on the Distribution Date (as defined in the Employee Benefits Agreement) and ending on the first anniversary of the Distribution Date, shall receive an amount of severance benefit that is not less than the number of weeks of pay that such Employee would have received under the American Express Company Senior Executive Severance Plan as in effect immediately prior to the Distribution Date.

3.2 Special Retirement Program Contributions. An Employee eligible for benefits under the Plan due to a Defined Termination resulting from a Change in Control shall, in addition to the benefits provided above in Article 3.1, receive the value of Company contributions that would have been made to the Ameriprise Financial Retirement Plan, Ameriprise Financial 401(k) Plan, Ameriprise Financial Supplemental Retirement Plan or other similar plans adopted by the Company, for the period during which the Employee is receiving weekly severance payments under this Plan. Effective on the date of the Defined Termination, this amount will be credited to the Employee’s book reserve account in the Ameriprise Financial Supplemental Retirement Plan, consistent with the terms of such plan.

3.3 Limitations on Amount of Severance Benefits. Severance benefits payable under the Plan shall be inclusive of and offset by

any other severance, redundancy or termination payment made by an Employing Company to an Employee, including, but not limited to, any amounts paid pursuant to federal, state, local or foreign government worker notification (e.g., Worker Adjustment and Retraining Notification Act) or office closing requirements, any amounts owed the Employee pursuant to a contract with the Employing Company (unless the contract specifically provides otherwise) and amounts paid to an Employee placed in a temporary layoff status (often referred to as a furlough) which immediately precedes the commencement of the severance payments.

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3.4 Reemployment. In the event an Employee is reemployed by the Employing Company or an Affiliated Company within the

period covered by the schedule of severance benefits in Section 3.1 above, the severance benefits, if any, that are in excess of the number of weeks between the Termination of Active Employment and the rehire date shall be repaid by the Employee or withheld by the Employing Company, as the case may be. In the further event an eligible Employee who is receiving severance benefits under the Plan is later rehired by an Employing Company or an Affiliated Company, and employment later terminates under conditions making such Employee eligible for severance benefits under the Plan, the amount of the second severance benefit will be based on such Employee’s actual date of reemployment and not the original date of employment; provided, however, that any benefits withheld or repaid in accordance with the preceding sentence that are in excess of one (1) year shall be additionally paid to the terminating Employee.

3.5 Withholding Tax. The Employing Company shall deduct from the amount of any severance benefits payable under the Plan,

any amount required to be withheld by the Employing Company by reason of any law or regulation, for the payment of taxes or otherwise to any federal, state, local or foreign government. In determining the amount of any applicable tax, the Employing Company shall be entitled to rely on the number of personal exemptions on the official form(s) filed by the Employee with the Employing Company for purposes of income tax withholding on regular wages.

3.6 Requirement of Signed Agreement. Receipt of severance benefits under the Plan is conditioned upon the Employee signing

an agreement with the Employee’s Employing Company in a form satisfactory to the Company and in accordance with the requirements of applicable law (the “Agreement”). The Agreement must include a release of claims and may include whatever other terms the Employing Company deems appropriate, including restrictive covenants. If the terms of the Agreement are found to be legally unenforceable, the Employee must return any severance benefits paid pursuant to Section 3.1 of the Plan plus the value of any long term incentive awards which vested during the Separation Period; provided, however, that in the event the Employee has a Defined Termination, such restrictive covenants shall: (a) be reasonable under the applicable facts and circumstances; (b) include the following (i) non-solicitation of customers and employees; (ii) confidentiality of business data; (iii) full release of claims; and (iv) non-denigration of the Company and its affiliates, and their officers, directors and agents and (c) not include any non-competition limitations. Notwithstanding anything herein to the contrary, the Company shall, for a period of two (2) years and one (1) day following a Change in Control, be prohibited from entering into any agreement with an Employee, which contains a more expansive Competitor List (as provided in Paragraph 2 of the Consent to the Application of Forfeiture and Detrimental Conduct Provisions to Long-Term Incentive Awards relating to awards issued under the Ameriprise Financial 2005 Incentive Compensation Plan) than that which was in effect for such Employee immediately prior to the date of such Change in Control. If an Employee has already signed an Agreement as required by Section 3.6 prior to the date of a Change in Control, the Employee is not eligible to receive any benefits that would otherwise be triggered by a Change in Control, except as provided by Section 4.2.

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3.7 Excise Tax.

(a) Section 3.7 shall apply in the event of a Change in Control, as defined in Section 1.5 hereof. (b) In the event that any payment or benefit received or to be received by an Employee from the Company, an Employing Company or any Affiliated Company in connection with a Change in Control or termination of such Employee’s employment (such payments and benefits, excluding any Gross-Up Payment (as hereinafter defined), being hereinafter referred to collectively as the “Payments”), will be subject to the excise tax (the “Excise Tax”) referred to in Section 4999 of the Code, then the Company shall pay to such Employee, within five (5) days after receipt by such Employee of the written statement referred to in subsection (d) below, an additional amount (the “Gross-Up Payment”) such that the net amount retained by such Employee, after deduction of any Excise Tax on the Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Payments. (c) For purposes of determining whether the Payments will be subject to the Excise Tax and the amount of such Excise Tax: (i) all payments and benefits received or to be received by an Employee in connection with such Change in Control or the termination of such Employee’s employment, whether pursuant to the terms of the Plan or any other plan, arrangement or agreement with the Company, any Employing Company, any Person (as such term is defined in Section 1.20) whose actions result in such Change in Control or any Person affiliated with the Company, such Employing Company or such Person (all such payments and benefits, excluding the Gross-Up Payment and any similar gross-up payment to which an Employee may be entitled under any such other plan, arrangement or agreement, being hereinafter referred to as the “Total Payments”), shall be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor, or if that firm refuses to serve, by another qualified firm, whether or not serving as independent auditors, designated by the Committee (the “Auditor”), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(2)(A) or section 280G(b)(4)(A) of the Code; (ii) no portion of the Total Payments the receipt or enjoyment of which the Employee shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code shall be taken into account; (iii) all “excess parachute payments” within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount (within the meaning of section 280G(b)(3) of the Code) allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax; and (iv) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code and regulations or other guidance there under. For purposes of determining the amount of the Gross-Up Payment in respect of an

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Employee, the Employee shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation (and state and local income taxes at the highest marginal rate of taxation in the state and locality of such Employee’s residence, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes) in the calendar year in which the Gross-Up Payment is to be made. The Auditor will be paid reasonable compensation by the Company for its services. (d) In the event that the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, then an amount equal to the amount of the excess of the earlier payment over the redetermined amount (the “Excess Amount”) will be treated as if it were a loan to the Employee made on the date of the Employee’s receipt of such Excess Amount, which the Employee will have an obligation to repay to the Company on the fifth business day after demand, together with interest on such amount at the lowest applicable federal rate (as defined in Section 1274(d) of the Code or any successor provision thereto), compounded semi-annually (the “Section 1274 Rate”) from the date of the Employee’s receipt of such Excess Amount until the date of such repayment (or such lesser rate (including zero) as may be designated by the Auditor such that the Excess Amount and such interest will not be treated as a parachute payment as previously defined). In the event that the Excise Tax is finally determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), within five (5) business days of such determination, the Company will pay to the Employee an additional amount, together with interest thereon from the date such additional amount should have been paid to the date of such payment, at the Section 1274 Rate (or such lesser rate (including zero) as may be designated by the Auditor such that the amount of such deficiency and such interest will not be treated as a parachute payment as previously defined). The Employee and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the amount of any Gross-Up Payment. (e) As soon as practicable following a Change in Control, the Company shall provide to each Employee, a written statement setting forth the manner in which the Total Payments in respect of such Employee were calculated and the basis for such calculations, including, without limitation, any opinions or other advice the Company has received from the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). (f) Notwithstanding anything herein to the contrary, the Committee may designate by resolution any group of Employees or individual Employee that would not be eligible to receive a Gross-Up Payment or any other benefit provided for under this Section 3.6. With regard to any such Employee or group of Employees, the Committee may provide for a reduction in Payments for the purpose of avoiding the imposition of the Excise Tax, in all or certain specified circumstances, such reduction to be implemented pursuant to such rules as the Committee shall adopt from time to time.

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3.8. Payment for Cancelled Stock Options. An Employee eligible for benefits under the Plan due to a Change in Control may

receive the value of American Express Company vested stock options that are cancelled, on or before December 31, 2009, due to a (a) Change in Control or (b) Defined Termination. The value, if any, will be determined by the Company, in its sole discretion and be equal to the Black Scholes value (for the remaining term) less the intrinsic value of the option (all measured at the options’ cancellation date). Subject to Article 4.1, this benefit will be payable in a one-time lump sum payment made as soon as reasonably practicable following the cancellation of the option due to (a) or (b) above.

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ARTICLE FOUR

METHOD OF PAYMENT

4.1. Payment. A severance benefit under the Plan may be payable in biweekly or other installments (if permitted under

Section 409A of the Code) over a number of weeks not exceeding the number of weekly severance benefit payments determined pursuant to Section 3.1 above (including any resolution referred to therein) at the sole discretion of the Employing Company; provided, however, that in the event the Employee has a Defined Termination or the payment of severance in installments would result in the imposition of a tax under Section 409A of the Code, the severance benefit under the Plan will be paid as soon as practicable after the date of such Employee’s last day of active employment (but no earlier than six (6) months following the date of such termination of employment in the case of a Specified Employee). If installment payments are made under the Plan to a Specified Employee, the first installment payment shall be made on or as soon as administratively practical after the six-month anniversary of the date such Specified Employee’s employment terminates and (i) the amount of the first payment will equal the sum of the installment payments that would have been paid to the Specified Employee during the six-month period immediately following the Specified Employee’s termination of employment had the payment commenced as of such date and (ii) the remainder of the severance benefit shall be paid in substantially equivalent installments. Notwithstanding anything in this Plan to the contrary, if the Employee’s employment terminates within two (2) years following a Change in Control and if the Employee receives lump-sum severance, to the extent permitted under Section 409A, the Employee shall continue to be eligible to receive benefits under the Company’s medical and dental plans for a number of weeks equal to the number of weekly severance benefit payments determined pursuant to Section 3.1 above (including any resolution referred to therein), such benefits to be substantially identical to the benefits provided to other employees who remain in active employment status on substantially the same terms and conditions as apply to such active employees (including without limitation, any requirement that the Employee pay premiums or other similar costs). In the event that continuing to provide any such benefits would result in the imposition of a tax under Section 409A of the Code, instead of continuing to provide such benefits, the Company will make a lump-sum payment to the Employee as soon as practicable after the date of the Employee’s last day of active employment (but no earlier than six (6) months following the date of such termination of employment in the case of a Specified Employee) in an amount equal to the present value of such benefits as determined by the Committee in its sole discretion.

4.2. Inactive Employment Status. During the Separation Period (where severance benefits are paid in biweekly or other

installments) the Employee receiving such payments will remain in an inactive employment status until receipt of such payments is completed, at which time such inactive status will be terminated. During the Separation Period, certain other employee benefits may be continued to

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the extent permitted under Section 409A of the Code, payment for which shall be deducted from such severance payments in accordance with the Employee’s previously elected benefit coverage. If an Employee has already signed an Agreement as required by Section 3.5 and is receiving severance payments under the Plan on the date of Change in Control, the following would apply (subject to applicable governing documents):

a) immediate vesting of outstanding unvested stock option shares and restricted stock awards under the Company’s incentive compensation plans; and b) cash payment equivalent to the amount of excise tax paid as a result of the Employee being deemed a “disqualified”individual under current U.S. tax laws.

During the Separation Period, the Company reserves the right to continue other programs such as the Ameriprise Financial 2005 Incentive Compensation Plan and the Perquisite Program in accordance with its policies, which may be changed or terminated from time to time. Nothing in this section shall create a contract to provide such benefits.

4.3. Death. In the event an Employee dies before full receipt of severance benefits payable under the Plan, the remaining

severance benefits will be paid to the legal representative of such Employee’s estate in a lump sum as soon as practicable after receipt of notice of such death and evidence satisfactory to the Company of the payment or provision for the payment of any estate, transfer, inheritance or death taxes which may be payable with respect thereto.

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ARTICLE FIVE

ADMINISTRATION OF THE PLAN

5.1. Powers of the Employing Company. The Employing Company shall have such powers, authorities and discretion as

are necessary or appropriate in order to carry out its duties under the Plan, including, but not limited to, the power:

5.1.1. To obtain such information as it shall deem necessary or appropriate in order to carry out its duties under the Plan; 5.1.2. To make determinations with respect to the grounds for termination of employment of any Employee; and

5.1.3. To establish and maintain necessary records.

5.2. Employing Company Authority. Nothing contained in the Plan shall be deemed to qualify, limit or alter in any manner the Employing Company’s sole and complete authority and discretion to establish, regulate, determine or modify at any time, the terms and conditions of employment, including, but not limited to, levels of employment, hours of work, the extent of hiring and employment termination, when and where work shall be done, marketing of its products, or any other matter related to the conduct of its business or the manner in which its business is to be maintained or carried on, in the same manner and to the same extent as if the Plan were not in existence.

5.3. Committee Duties and Powers. The Committee shall be responsible for the general administration and interpretation

of the Plan and the proper execution of its provisions and shall have full discretion to carry out its duties. The Committee shall be the “Administrator” of the Plan and shall be, in its capacity as Administrator, a “Named Fiduciary,” as such terms are defined or used in ERISA. For the purposes of carrying out its duties as Administrator, the Committee may, in its sole discretion, allocate its responsibilities under the Plan among its members, and may, in its sole discretion, designate persons other than members of the Committee to carry out such of its responsibilities under the Plan as it may deem fit. In addition to the powers of the Committee specified elsewhere in the Plan, the Committee shall have all discretionary powers necessary to discharge its duties under the Plan, including, but not limited to, the following discretionary powers and duties:

5.3.1. To interpret or construe the Plan, and resolve ambiguities, inconsistencies and omissions; 5.3.2. To make and enforce such rules and regulations and prescribe the use of such forms as it deems necessary or

appropriate for the efficient administration of the Plan; and

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5.3.3. To decide all questions on appeal concerning the Plan and the eligibility of any person to receive benefits under the

Plan.

5.4. Determinations. The determination of the Committee as to any question involving the general administration and interpretation or construction of the Plan shall be within its sole discretion and shall be final, conclusive and binding on all persons, except as otherwise provided herein or by law.

5.5. Claims Review Procedure. Consistent with the requirements of ERISA and the regulations thereunder as promulgated

by the Secretary of Labor from time to time, the following claims review procedure shall be followed with respect to the denial of severance benefits to any Employee:

5.5.1. Within thirty (30) days from the date of an Employee’s Termination of Active Employment, the Employing

Company shall furnish such Employee either an agreement offering severance benefits under the Plan or notice of such Employee’s ineligibility for or denial of severance benefits, either in whole or in part. Such notice from the Employing Company will be in writing and sent to the Employee or the legal representatives of his estate stating the reasons for such ineligibility or denial and, if applicable, a description of additional information that might cause a reconsideration by the Committee or its delegate of the decision and an explanation of the Plan’s claims review procedure. In the event such notice is not furnished within thirty (30) days, any claim for severance benefits shall be deemed denied and the Employee shall be permitted to proceed to Section 5.5.2 below.

5.5.2. Within sixty (60) days after receiving notice of such denial or ineligibility or within ninety (90) days after the date

of an Employee’s Termination of Active Employment if no notice is received, the Employee, the legal representatives of his estate or a duly authorized representative may then submit to the Committee a written request for a review of such decision of denial.

5.5.3. The Committee will review the claim and within sixty (60) days (or one hundred twenty (120) days in special

circumstances) provide a written response to the appeal setting forth specific reasons for such decision. In the event the decision on review is not furnished within such time period, the claim shall be deemed denied.

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ARTICLE SIX

ADOPTING COMPANIES AND PLAN MERGERS

6.1. Adopting Companies. Any corporation which succeeds to the business and assets of the Company or any part of its

operations, may by appropriate resolution adopt the Plan and shall thereupon succeed to such rights and assume such obligations hereunder as the Company and said corporation shall have agreed upon in writing. Any corporation which succeeds to the business of any Employing Company other than the Company, or any part of the operations of such Employing Company, may by appropriate resolution adopt the Plan and shall thereupon succeed to such rights and assume such obligations hereunder as such Employing Company and said corporation shall have agreed upon in writing; provided, however, that such adoption and the terms thereof agreed upon in such writing have been approved by the Company.

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ARTICLE SEVEN

AMENDMENT AND TERMINATION

7.1. Right to Amend or Terminate. The Company reserves the right, by action of the Board of Directors or the Committee,

to amend or terminate this Plan in whole or in part at any time and from time to time, and any amendment or effective date of termination may be given retroactive effect. The foregoing sentence to the contrary notwithstanding, for a period of two (2) years and one (1) day after the date of an occurrence of a Change in Control, neither the Board of Directors nor the Committee may terminate this Plan or amend this Plan in a manner that is detrimental to the rights of any Employee receiving severance benefits under the Plan without his or her written consent.

7.2. Termination by an Employing Company. Any Employing Company other than the Company may withdraw from

participation in the Plan at any time by delivering to the Committee written notification to that effect signed by such Employing Company’s chief executive officer or his delegate. Withdrawal by any Employing Company pursuant to this section or complete discontinuance of severance benefits under the Plan by any Employing Company other than the Company, shall constitute termination of the Plan with respect to such Employing Company. The foregoing sentence to the contrary notwithstanding, neither the Board of Directors nor the Committee may terminate this Plan or amend this Plan in a manner that is detrimental to the rights of any Employee receiving severance benefits under the Plan without his written consent (i) with respect to the provisions of the Plan which become applicable upon a Change in Control, and (ii) with respect to all provisions of the Plan for a period of two (2) years and one (1) day after the date of a Change in Control.

7.3. Limitation on Benefits. In the event any Employing Company withdraws from participation or the Company

terminates the Plan as provided in this Article Seven, no Employee shall be entitled to receive benefits hereunder for Employment either before or after such action.

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ARTICLE EIGHT

FINANCIAL PROVISIONS

8.1. Funding. All severance benefits payable under the Plan shall be payable and provided for solely from the general

assets of the Employing Company in accordance with the Plan, at the time such severance benefits are payable, unless otherwise determined by the Employing Company. The Employing Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any severance benefits under the Plan.

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ARTICLE NINE

LIABILITY AND INDEMNIFICATION

9.1. Standard of Conduct. To the extent permitted by ERISA and other applicable law, no member (which term, as used in

this Article Nine, shall include any employee of any Employing Company designated to carry out any responsibility of the Committee pursuant to Section 5.3 above) of the Committee shall be liable for anything done or omitted to be done by him in connection with the Plan, unless the member failed to act (i) in good faith and (ii) for a purpose which such member reasonably believed to be in accordance with the intent of the Plan. The Company or Employing Company as applicable hereby indemnifies each person made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, or against whom any claim or demand is made, by reason of the fact that he, his testator or intestate, was or is a member of the Committee, against judgments, fines, amounts paid in settlement and reasonable expenses (including attorney’s fees) actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, or as a result of such claim or demand, if such member of the Committee acted in good faith for a purpose which he reasonably believed to be in accordance with the intent of the Plan and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful.

9.2. Presumption of Good Faith. The termination of any such civil or criminal action or proceeding or the disposition of

any such claim or demand, by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such member of the Committee did not act (i) in good faith and (ii) for a purpose which he reasonably believed to be in accordance with the intent of the Plan.

9.3. Successful Defense. A person who has been wholly successful, on the merits or otherwise, in the defense of a civil or

criminal action or proceeding or claim or demand of the character described in Section 9.1 above shall be entitled to indemnification as authorized in such Section 9.1.

9.4. Unsuccessful Defense. Except as provided in Section 9.3 above, any indemnification under Sections 9.1 and 9.2

above, unless ordered by a court of competent jurisdiction, shall be made by the Company or Employing Company as applicable only if authorized in the specific case:

9.4.1. By the Board of Directors acting by a quorum consisting of directors who are not parties to such action, proceeding,

claim or demand, upon a finding that the member of the Committee has met the standard of conduct set forth in Section 9.1 above; or

9.4.2. If a quorum under Section 9.4.1 above is not obtainable with due diligence:

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9.4.2.1 By the Board of Directors upon the opinion in writing of independent legal counsel (who may be

counsel to any Employing Company) that indemnification is proper in the circumstances because the standard of conduct set forth in Section 9.1 above has been met by such member of the Committee; or

9.4.2.2 By the shareholders of the Company upon a finding that the member of the Committee has met

the standard of conduct set forth in such Section 9.1 above.

9.5. Advance Payments. Expenses incurred in defending a civil or criminal action or proceeding or claim or demand may be paid by the Company or Employing Company as applicable in advance of the final disposition of such action or proceeding, claim or demand, if authorized in the manner specified in Section 9.4 above, except that, in view of the obligation of repayment set forth in Section 9.6 below, there need be no finding or opinion that the required standard of conduct has been met.

9.6. Repayment of Advance Payments. All expenses incurred in defending a civil or criminal action or proceeding, claim

or demand, which are advanced by the Company or Employing Company as applicable under Section 9.5 above shall be repaid in case the person receiving such advance is ultimately found, under the procedures set forth in this Article Nine, not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the Company or Employing Company as applicable exceed the indemnification to which he is entitled.

9.7. Right to Indemnification. Notwithstanding the failure of the Company or Employing Company as applicable to

provide indemnification in the manner set forth in Section 9.4 or 9.5 above, and despite any contrary resolution of the Board of Directors or of the shareholders in the specific case, if the member of the Committee has met the standard of conduct set forth in Section 9.1 above, the person made or threatened to be made a party to the action or proceeding or against whom the claim or demand has been made, shall have the legal right to indemnification from the Company or Employing Company as applicable as a matter of contract by virtue of this Plan, it being the intention that each such person shall have the right to enforce such right of indemnification against the Company or Employing Company as applicable in any court of competent jurisdiction.

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ARTICLE TEN

MISCELLANEOUS

10.1. No Right to Continued Employment. Nothing in the Plan shall be construed as giving any Employee the right to be

retained in the employ of any Employing Company or any right to any payment whatsoever, except to the extent of the severance benefits provided for by the Plan. Each Employing Company expressly reserves the right to dismiss any Employee at any time and for any reason without liability for the effect which such dismissal might have upon him as a Employee receiving severance benefits under of the Plan.

10.2. Construction. This Plan shall be governed by and construed in accordance with the substantive laws but not the choice

of law rules of the state of New York, except to the extent that such laws have been superseded by federal law. 10.3. Expenses of the Plan. The expenses of establishment and administration of the Plan shall be paid by the Employing

Companies. Any expenses paid by the Company pursuant to this Section 10.3 and indemnification under Article Nine shall be subject to reimbursement by the other Employing Companies of their proportionate shares of such expenses and indemnification, as determined by the Committee in its sole discretion.

10.4. ERISA Rights.

Plan Sponsor. Ameriprise Financial, Inc. is the Plan Sponsor. The address is:

Ameriprise Financial, Inc. 200 Ameriprise Financial Center Minneapolis, MN 55474

Employer Identification Number. The employer identification number assigned to Ameriprise Financial, Inc. by the IRS is: 13-3180631.

Plan Administrator. The Compensation and Benefits Committee of the Board of Directors, or its delegate, is the Plan Administrator. The address is:

Ameriprise Financial, Inc. 360 Ameriprise Financial Center Minneapolis, MN 55474

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Agent for Service of Legal Process. Process can be served on the Company or the Plan Administrator by directing service to:

Plan Administrator c/o General Counsel Amerprise Financial, Inc. 52 Ameriprise Financial Center Minneapolis, MN 55474

ERISA Rights. Employees in the Ameriprise Financial Senior Executive Severance Pay Plan (the “Plan”), are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that participants are entitled to: Receive Information About the Plan and Benefits Examine, without charge, at the Plan Administrator’s office and at other specified locations, all documents governing the Plan, including a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor, and available at the Public Disclosure Room of the Employee Benefits Security Administration. Obtain, upon written request to the Plan Administrator, copies of documents governing the administration of the Plan, including copies of the latest annual report (Form 5500 Series) and updated summary plan descriptions. The Plan Administrator may make a reasonable charge for the copies. Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. Prudent Actions by Plan Fiduciaries In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Plan participants and beneficiaries. No one, including Ameriprise Financial, Inc. or any other person, may terminate a participant’s employment or otherwise discriminate against a participant in any way in order to prevent a participant from obtaining a benefit to which a participant is entitled or from exercising their rights under ERISA. Enforce Participant’s Rights If a participant’s claim for a benefit is denied or ignored, in whole or in part, a participant has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps a participant can take to enforce the above rights. For instance, if a participant requests a copy of a Plan document from the Plan Administrator

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or the latest annual report from the Plan and does not receive them within 30 days, the participant may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until the participant receives them, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If a participant has a claim for benefits that is denied or ignored, in whole or in part, the participant may file suit in a state or federal court provided that the participant has exhausted their administrative rights under the Plan. If it should happen that Plan fiduciaries misuse the Plans’ money, or if a participant is discriminated against for asserting their rights, the participant may seek assistance from the U.S. Department of Labor, or may file suit in a federal court. The court will decide who should pay court costs and legal fees. If the participant is successful, the court may order the person being sued to pay the court costs and legal fees. If the participant loses, the court may order the participant to pay these costs and fees, for example, if it finds the participant’s claim is frivolous. Assistance with Questions If a participant has any questions about the Plan, they should contact the Plan Administrator. If a participant has any questions about their rights under ERISA, or needs assistance in obtaining documents from the Plan Administrator, they should contact the nearest office of the Employee Benefits Security Administration of the U.S. Department of Labor, listed in the telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, D.C. 20210. A participant may also obtain publications about their rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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Ameriprise Financial

Senior Executive Severance Plan

Schedule A

November 14, 2005 Employing Companies

• American Centurion Life Assurance Company • Ameriprise Enterprise Investment Services, Inc. • Ameriprise Financial Services Inc. • RiverSource Investments, LLC • RiverSource Client Service Corporation • IDS Life Insurance Company • IDS Life Insurance Company of New York • IDS Property Casualty Insurance Company • Ameriprise Trust Company

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Exhibit 10.27

AMERIPRISE FINANCIAL

DEFERRED EQUITY PROGRAM

FOR INDEPENDENT FINANCIAL ADVISORS

Adopted effective as of September 30, 2005

AMERIPRISE FINANCIAL

DEFERRED EQUITY PROGRAM FOR INDEPENDENT FINANCIAL ADVISORS

Adopted effective as of September 30, 2005

Purpose

The purpose of the Plan is to provide a means for the deferral by Eligible Financial Advisors of GDC. This Plan

shall be unfunded for tax purposes and for purposes of Title I of ERISA.

Article 1

Definitions

For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the meanings indicated in this Article 1:

1.01 “Account Adjustment” shall mean an adjustment made to the balance of any Plan Account in accordance with Section 3.05

hereof. 1.02 “Advisor” shall mean an independent contractor who is a party to an effective Franchise Agreement. 1.03 “Aggregate Vested Balance” shall mean, with respect to the Plan Accounts of any Participant as of a given date, the sum of

the amounts that have become vested under all of the Participant’s Plan Accounts, as adjusted to reflect all applicable Account Adjustments and all prior withdrawals and distributions, in accordance with Article 4 of the Plan and the provisions of the applicable Enrollment Forms.

1.04 “Amended Beneficiary Designation Form” shall mean the Amended Beneficiary Designation Form required by the

Committee to be signed and submitted by a Participant to effect a permitted change in the designation of a Participant’s Beneficiary or Beneficiaries previously made by the Participant under any Beneficiary Designation Form.

1.05 “Annual Deferral Account” shall mean a notional, bookkeeping account established under the Plan to reflect the amount

credited in a Plan Year with respect to a Participant’s elective deferral for such Plan Year in accordance with Sections 3.01 and 3.02 of the Plan, as adjusted to reflect all applicable dividend crediting pursuant to Section 3.04 and Account Adjustments pursuant to Section 3.05 hereof.

1.06 “Annual Election Form” shall mean the Annual Election Form required by the Committee to be signed and submitted by a

Participant by the December 31

immediately preceding the start of each Plan Year in connection with the Participant’s Annual Participant Deferral Percentage election with respect to a given Plan Year.

1.07 “Annual Participant Deferral Percentage” shall mean the percentage of GDC a Participant elects to defer in respect of a

particular Plan Year pursuant to Section 3.01(a). 1.08 “Annual Stock Match” shall mean the aggregate amount credited to a Participant in respect of a particular Plan Year

pursuant to Section 3.03 hereof. 1.09 “Annual Stock Match Account” shall mean a notional, bookkeeping account established under the Plan to reflect the

amount credited in a Plan Year with respect to a Participant’s Annual Stock Match for a such Plan Year in accordance with Section 3.03 of the Plan, as adjusted to reflect all applicable dividend crediting pursuant to Section 3.04 and Account Adjustments pursuant to Section 3.05 hereof.

1.10 “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 6

hereof, that are entitled to receive a Participant’s Aggregate Vested Balance under the Plan in the event of the Participant’s death.

1.11 “Beneficiary Designation Form” shall mean the Beneficiary Designation Form or Amended Beneficiary Designation Form

last signed and submitted by a Participant and accepted by the Committee. 1.12 “Board” shall mean the board of directors of the Company. 1.13 “Change in Control” has the meaning set forth in Section 4.03(a) herein. 1.14 “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and all regulations,

interpretations and administrative guidance issued thereunder. 1.15 “Committee” shall mean the Compensation and Benefits Committee of the Company or such other committee designated

by the Board to administer the Plan. 1.16 “Company” shall mean Ameriprise Financial, Inc., a Delaware corporation, and any successor to all or substantially all of

its assets or business. 1.17 “Company Stock” shall mean the common stock, par value $0.01 per share, of the Company. 1.18 “Disability” shall have the meaning set forth in Section 409A of the Code. 1.19 “Distribution Election” shall mean an irrevocable election made in accordance with Section 4.01 hereof.

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1.20 “Distribution Election Form” shall mean the Distribution Election Form required by the Committee to be signed and

submitted by a Participant with respect to a Distribution Election for a given Plan Year. 1.21 “Elected Amount” shall mean the aggregate amount a Participant elects to defer in respect of a particular Plan year

pursuant to Section 3.01(a). 1.22 “Eligible Financial Advisor” shall mean an Advisor who meets eligibility criteria established by the Committee to

participate in the Plan for a given Plan Year. 1.23 “Enrollment Forms” shall mean, for any Plan Year, the Annual Election Form, the Distribution Election Form, the

Beneficiary Designation Form and any other forms or documents which may be required of a Participant by the Committee, in its sole discretion.

1.24 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. 1.25 “Financial Planning GDC” shall mean GDC from any financial plan account governed by an ADV that requires an annual

written deliverable. 1.26 “Franchise Agreement” shall mean an Independent Advisor Business Franchise Agreement, including all addenda and

amendments thereto, entered into between a Participating Company and an Advisor. 1.27 “GDC” shall mean a Participant’s gross dealer concessions which shall be expressed in U.S. dollars. 1.28 “Investment Benchmark” shall mean a benchmark made available under the Plan from time to time by the Committee for

purposes of valuing Plan Accounts. 1.29 “Mandatory Early Distribution” shall mean the portion of a Participant’s Elected Amount paid to the Participant by a

Participating Company in accordance with Section 3.05(b) hereof. 1.30 “Market Value” of a share of Company Stock shall mean the fair market value thereof, with respect to dividends paid on

Company Stock, Elected Amounts and payments made pursuant to Section 3.05(b) hereof, as the case may be, which shall be the price per common share which is equal to the closing price per common share of Company Stock on the NYSE as of the date of determination. If at any time the Company Stock is no longer listed or traded on the NYSE, the Market Value shall be calculated in such manner as may be determined by the Committee from time to time.

1.31 “NASD” shall mean the National Association of Securities Dealers, Inc. 1.32 “NYSE” shall mean the New York Stock Exchange, Inc.

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1.33 “Participant” shall mean any Eligible Financial Advisor (i) who elects to participate in the Plan, (ii) who signs the

applicable Enrollment Forms, (iii) whose signed Enrollment Forms are accepted by the Committee, (iv) who commences participation in the Plan, and (v) whose participation in the Plan has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

1.34 “Participating Company” shall mean the Company and each of its subsidiaries listed on Schedule A attached hereto, as

such Schedule A may be amended by the Committee, in its sole discretion, from time to time. 1.35 “Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act, including any “group”

within the meaning of Section 13(d)(3) under the Exchange Act. 1.36 “Plan” shall mean the Ameriprise Financial Deferred Equity Program for Independent Financial Advisors, which shall be

evidenced by this instrument and by each Enrollment Form, as they may be amended from time to time. 1.37 “Plan Accounts” shall mean the Annual Deferral Accounts and Annual Stock Match Accounts, established under the Plan

for a Participant. 1.38 “Plan Year” shall mean a period with a duration defined by the Committee from time to time under the Plan. 1.39 “Qualified Transition” shall mean with respect to a Participant, at any time after January 20, 2009: (i) a transfer of 100%

of such Participant’s interest in his or her Individual Financial Advisor Business (as such term is defined in the Franchise Agreement) and in all client accounts and (ii) Termination of Franchise Agreement; provided that such Participant meets the Rule of 60 and remits to the Company a signed non-competition and non-solicitation and general release provided by the Company.

1.40 “Reference Date” shall mean the date used to determine the Market Value of a share of Company Stock for purposes of

determining the number of Share Units to be credited to a Participant’s Plan Accounts, which date shall be, unless otherwise determined by the Committee and approved by the Board: (a) with respect to dividend payments, the date dividends are paid on Company Stock, (b) with respect to the Elected Amounts, the last trading day prior to and including the last day of a given Service Period, and (c) with respect to any payments pursuant to Section 3.05 (b), the last trading day of the January that includes the last day of the Plan Year to which the relevant deferrals relate.

1.41 “Rule of 60” shall mean that the sum of a Participant’s Years of Association and age must be at least 60. 1.42 “Securities Act” means the Securities Act of 1933, as amended.

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1.43 “Service Period” shall mean any of the biweekly periods of a Plan Year, the first of which begins on the first day of such

Plan Year. 1.44 “Settlement Date” shall mean, unless otherwise determined by the Committee, the date on which shares of Company Stock

shall be delivered in settlement of Share Units in accordance with Article 4 hereof. 1.45 “Share Unit” shall mean a unit credited to a Participant’s Plan Accounts in accordance with the terms and conditions of the

Plan. Each Share Unit shall represent the right to receive a share of Company Stock at the time or times designated in the Plan.

1.46 “Stock Match Crediting Date” shall mean with respect to any Plan Year, the date used to determine the Stock Match

Market Value of a share of Company Stock for purposes of determining the number of Share Units to be credited in respect of such Plan Year to a Participant’s Annual Stock Match Account, which date shall be, unless otherwise determined by the Committee and approved by the Board, the last trading day of February following the end of the applicable Plan Year.

1.47 “Stock Match Market Value” of a share of Company Stock with respect to Annual Stock Matches shall mean the fair

market value thereof, which shall be the price per common share which is equal to the average closing price per common share of Company Stock on the NYSE during the five trading days immediately preceding the date of determination. If at any time the Company Stock is no longer listed or traded on the NYSE, the Stock Match Market Value shall be calculated in such manner as may be determined by the Committee from time to time.

1.48 “Termination of Franchise Agreement” shall mean, with respect to a Participant, the termination of such Participant’s

Franchise Agreement and the subsequent provision of all services to a Participating Company or any of their affiliates, if applicable, voluntarily or involuntarily, under circumstances that would constitute a “separation from service” for purposes of Section 409A of the Code.

1.49 “T & O Plan Account” shall mean the account to which amounts received and adjusted pursuant to the terms of the

Transition and Opportunity Stock Program. 1.50 “Transition and Opportunity Stock Program” shall mean the one-time stock bonus program offered by the Company in

2005 to eligible Advisors. 1.51 “Trust” shall mean the trust established in accordance with Article 11 of the Plan. 1.52 “Vesting Date” with respect to the deferred amounts in a Participant’s Plan Accounts for a given Plan Year, the first

January 1st following the last day of the Plan Year to which any such Plan Account relates. 1.53 “Voting Securities” means, at any time, the Company’s then outstanding voting securities.

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1.54 “Years of Association” shall mean the years that a Participant has been affiliated with as an independent advisor, or

employed by, the Company, the Company’s predecessors, any Participating Company and, solely with respect to affiliation or employment prior to September 30, 2005, American Express Company and its affiliates.

Article 2

Eligibility, Selection, Enrollment

2.01 Eligibility. Participation in the Plan shall be limited to Eligible Financial Advisors. If an Eligible Financial

Advisor is permitted to defer Elected Amounts and/or receive an Annual Stock Match in respect of a particular Plan Year, he or she will not automatically be entitled to defer an Elected Amount or receive an Annual Stock Match for any subsequent Plan Year, unless such Eligible Financial Advisor again meets eligibility criteria as established by the Committee for such subsequent Plan Year.

2.02 Enrollment Requirements. As a condition to being eligible to defer an Elected Amount for any Plan Year,

each Eligible Financial Advisor shall complete, execute and return to the Committee each of the required Enrollment Forms no later than the December 31 immediately preceding any such Plan Year (or such earlier date as the Committee may establish from time to time).

2.03 Commencement of Participation. Provided an Eligible Financial Advisor in respect of a particular Plan

Year has met all enrollment requirements set forth in the Plan and any other requirements imposed by the Committee, including signing and submitting all Enrollment Forms to the Committee within the specified time period, the Eligible Financial Advisor’s designated deferrals with respect to such Plan Year shall commence as of the date established by the Committee in its sole discretion. If an Eligible Financial Advisor fails to meet all such requirements within the specified time period with respect to a Plan Year, such Eligible Financial Advisor shall not be eligible to defer an Elected Amount or receive an Annual Stock Match under the Plan with respect to such Plan Year.

2.04 Subsequent Elections. The Enrollment Forms submitted by a Participant in respect of a particular Plan Year

will not be effective with respect to any subsequent Plan Year, except that the Beneficiary Designation Form on file with the Committee will remain effective for all subsequent Plan Years unless and until an Amended Beneficiary Designation Form is submitted to the Committee. If an Eligible Financial Advisor is eligible to participate in the Plan for a subsequent Plan Year and the required Enrollment Forms are not timely delivered for the subsequent Plan Year, the Participant shall not be eligible to defer an Elected Amount or receive an Annual Stock Match under the Plan with respect to such subsequent Plan Year.

Article 3

Participant Deferrals, Commitments, Account Adjustments,

and Vesting

3.01 Participant Deferrals. 6

(a) Deferral Election. The Committee shall have sole discretion to determine in respect of each Plan Year:

(i) the Eligible Financial Advisors; (ii) the form(s) of compensation which may be the subject of any Elected Amount; and (iii) any other terms and conditions applicable to the Elected Amount. To the extent permitted by the Committee and subject to the terms and conditions provided by the Committee, a Participant for a given Plan Year may make an election to defer a percentage of his or her GDC for such Plan Year (the “Annual Participant Deferral Percentage”). Such election shall be evidenced by an Annual Election Form completed by a Participant and submitted to the Committee in accordance with the procedures and time frames as may be established by the Committee in its sole discretion. The aggregate amount that the Participant elected to defer prior to the commencement of a given Plan Year based on the Participant’s Annual Participant Deferral Percentage multiplied by the Participant’s aggregated earned GDC for such Plan Year (the “Elected Amount”) will be credited to the Participant’s Annual Deferral Account in accordance with Section 3.02 below. A separate Annual Deferral Account shall be established and maintained for each Participant’s deferrals with respect to a given Plan Year.

(b) Deferral Limitations.

(i) Maximum and Minimum Deferrals. The Committee may from time to time designate a minimum and maximum deferral amount applicable to Participants with respect to a given Plan Year. If an election is made for less than the minimum amount, or if no election is made, the amount deferred shall be zero. If an election is made for more than the maximum amount, the amount deferred shall be equal to the maximum amount deferrable as determined by the Committee.

(ii) Other Deferral Limitations. In all cases, a Participant’s deferral elections as set forth in Section 3.01(a) shall be made pursuant to the limitations established by the Committee from time to time under the Plan.

3.02 Annual Deferral Account. A Participant’s Elected Amount will be credited to his or her Annual Deferral

Account during the Plan Year on the Reference Date for each Service Period in the form of Share Units. Commencing in the Plan Year that begins in calendar year 2006 and subject to adjustment pursuant to the provisions of Sections 3.04 and 3.05 below, the number of Share Units to be credited with respect to a Service Period shall be determined in accordance with the following formula: the quotient of (A) the product of (i) the Participant’s Annual Participant Deferral Percentage multiplied by (ii) the Participant’s GDC for such Service Period, divided by (B) the Market Value of a share of Company Stock on the Reference Date for such Service Period. Fractional Share Units, if any, will be credited to the Participant’s Annual Deferral Account and rounded to three decimal places.

The Committee may, but is not required to, make available other Investment Benchmarks from time to time to measure the

value of a Participant’s Plan Accounts. 3.03 Annual Stock Match. If a Participant meets the Minimum Financial Planning GDC Requirement (as

described in Section 3.05(a)) for a Plan Year, the Committee may credit a Participant’s Annual Stock Match Account with an Annual Stock Match in respect

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of such Plan Year on the Stock Match Crediting Date. The amount of the Annual Stock Match shall be determined pursuant to the criteria established by the Committee in its sole discretion and shall be expressed as a percentage of the difference between the Participant’s Elected Amount and the Mandatory Early Distribution, if any (the “Match Amount”). If the Committee determines to credit a Participant with an Annual Stock Match in a Plan Year, the number of Share Units to be credited for such Plan Year with effect on the Stock Match Crediting Date shall be equal to the quotient of: (A) the Match Amount, divided by (B) the Stock Match Market Value of a share of Company Stock on the Stock Match Crediting Date for such Plan Year. Fractional Share Units, if any, will be credited to the Participant’s Annual Stock Match Account and rounded to three decimal places. A separate Annual Stock Match Account shall be established and maintained for each Participant and each Annual Stock Match.

3.04 Dividends. A Participant shall, from time to time during such Participant’s period of participation under the

Plan, including during the period following the Participant’s Termination of Franchise Agreement and until the Settlement Date, have credited to each of his or her Plan Accounts on the applicable Reference Date with respect to dividend payments with additional Share Units, the number of which shall be equal to the quotient determined by dividing: (A) the product of (i) one hundred percent (100%) of each dividend declared and paid by the Company on the Company Stock on a per share basis and (ii) the number of Share Units recorded in the Participant’s Plan Accounts on the record date for the payment of any such dividend, by (B) the Market Value of a share of Company Stock on the Reference Date for such dividend, in each case, with fractions computed to three decimal places.

In the event of any change in the capitalization of the Company, the Committee may make such adjustments in the Shares

Units credited to Participants’ Plan Accounts on the date on which such change occurs and in such other terms of such Share Units as the Committee may consider appropriate.

3.05 Account Adjustments.

(a) Minimum Financial Planning GDC Requirement. The Committee may determine that a Participant must earn a minimum amount of Financial Planning GDC in order to effectuate the deferrals requested by such Participant for a Plan Year (the “Minimum Deferral Threshold”). Whether a Participant has met the Minimum Deferral Threshold will be determined by the Committee on the last day of the applicable Plan Year and will be based on an objective standard. If a Participant does not meet the Minimum Deferral Threshold for a given Plan Year, the value of the Share Units credited during such Plan Year pursuant to a Participant’s Elected Amount (including any dividends credited on the Participant’s Elected Amount during such Plan Year) will be distributed to the Participant in cash based on the Market Value of Company Stock at the time the distribution is processed, but in any case no later than March 15 immediately following the Plan Year to which such deferrals relate.

(b) Mandatory Early Distribution. On the last day of each Plan Year, the Committee shall determine the amount

of Financial Planning GDC earned by each Participant in respect of such Plan Year. If such amount is greater than the Minimum Deferral Threshold but less than the Elected Amount, the Company will, or will cause a Participating Company to: (i) distribute to the Participant a lump sum cash payment equal to the lesser of (A) the difference

8

between the Participant’s earned Financial Planning GDC and the Elected Amount and (B) the amount in such Participant’s Annual Deferral Account on the applicable Reference Date (either such amount, the “Mandatory Early Distribution”), (ii) debit the Participant’s Annual Deferral Account by a number of Share Units determined by dividing (A) the Mandatory Early Distribution by (B) the Market Value on the applicable Reference Date. Any such distribution will be made no later than March 15 immediately following the end of the Plan Year to which such deferrals relate.

3.06 Vesting. (a) Forfeiture of Unvested Amounts. Except as expressly set forth in Sections 3.06(c) and 3.06(d) below, as of

the date of a Participant’s Termination of Franchise Agreement (including a termination for Cause as defined in Section 17 of the Franchise Agreement), the amounts credited to the Participant’s Plan Accounts shall be reduced by the amount which has not become vested in accordance with the vesting provisions set forth below, and such unvested amounts shall be forfeited by the Participant.

(b) Vesting of Amounts. The Participant shall be vested in all amounts credited to his or her Plan Accounts with

respect to amounts deferred for a given Plan Year and proportionate earnings on such amounts based on the following schedule:

Notwithstanding anything to the contrary, the Committee has the discretion to change the vesting schedule

for any subsequent Plan Year at any time before Eligible Financial Advisors are required to submit their Annual Election Forms for such Plan Year.

(c) Vesting upon Plan Termination. In the event of a termination of the Plan as it relates to any Participant, all amounts credited to any and all Plan Accounts of such Participant as of the effective date of such termination shall be 100% vested and paid to the Participant, to the extent not yet paid, in a lump sum as soon as reasonably practical after termination of the Plan.

(d) Vesting upon Certain Events. Notwithstanding anything to the contrary contained in the Plan or any Annual

Election Form, the Committee shall have the authority, exercisable in its sole discretion, to accelerate the vesting of any amounts credited to any Plan Account of any Participant and any such acceleration shall be evidenced by a written notice to the Participant setting forth in detail the Plan Account(s) and the amounts affected by the Committee’s decision to accelerate vesting and the terms of the new vesting schedule applicable

9

Amount vested Date of vesting

25% The Vesting Date

25% One Year following the Vesting Date

25% Two Years following the Vesting Date

25% Three Years following the Vesting Date

to such amounts. Unless otherwise determined by the Committee, the following sets forth the guidelines the Committee shall follow with respect to accelerated vesting of Plan Accounts:

(i) Death. In the case of a Participant’s death, all amounts credited to the Plan Accounts of the affected Participant shall be 100% vested and shall be paid to the Participant or the Participant’s Beneficiary, to the extent not yet paid, in a lump sum notwithstanding any elections made by the Participant on his or her Distribution Election Forms, and the Annual Election Forms relating to each the Participant’s Plan Accounts shall terminate upon full payment of such Plan Accounts. Such lump sum payment will be made as soon as administratively practical after the date on which the Committee is notified in writing of the Participant’s death.

(ii) Disability. In the case of the Participant’s Disability, all amounts credited to the Plan Accounts of the affected Participant shall be 100% vested and shall be paid to the Participant, to the extent not yet paid, in accordance with any such Participant’s Distribution Election Forms. From and after the date that a Participant is deemed to have suffered a Disability, any standing deferral election of the Participant shall automatically be terminated and no further deferrals shall be made with respect to the Participant under the Plan.

(iii) Qualified Transition. In the case of a Qualified Transition, a Participant’s Plan Accounts shall be immediately 100% vested and paid to the Participant, to the extent not yet paid, in accordance with such Participant’s Distribution Election Forms. For purposes of clarification, if the Participant who has a Qualified Transition elected to receive a distribution of his or her Plan Accounts in annual installment payments commencing following Termination of Franchise Agreement, the effective date of the Termination of Franchise Agreement for purposes of the distribution provisions of the Plan will be deemed to be the effective date of the Qualified Transition. No transition that occurs prior to January 20, 2009 will be considered a Qualified Transition under the Plan. (iv) Transfer to Employee Status. In the event a Participant transfers to employee status by becoming an employee of the Company or any Participating Company, the Participant’s Plan Accounts will continue to vest in accordance with Section 3.06(b) above and shall be paid to the Participant, to the extent not yet paid, in accordance with the Participant’s Distribution Election Forms. For purposes of the payment provisions of Section 4 of the Plan, a Participant who transfers to employment status will not be deemed to have a “Termination of Franchise Agreement” until the Participant’s employment with the Company and any Participating Company terminates. If employee status is terminated prior to the date on which the Participant’s Plan Accounts have fully vested, all unvested portions of the Plan Accounts will be forfeited, unless otherwise determined by the Committee.

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3.07 Savings Clause. No provision of this Article 3 shall be given effect to the extent that such provision would

cause any tax to become due under Section 409A of the Code.

Article 4

Distribution of Plan Accounts

4.01 Distribution Elections. The Participant shall make a Distribution Election at the time he or she completes his or her Annual Election Form with respect to a given Plan Year to have the Aggregate Vested Balance of the Participant’s respective Plan Accounts for that Plan Year distributed as follows:

(i) Lump sum payments of Aggregate Vested Balance on the first March 31 following each annual vesting date; (ii) Lump sum payment on March 31 of a specified year that is at least four years from the last day of the Plan Year in which a given Annual Participant Deferral Percentage was elected; or (iii) Annual installment payments following Termination of Franchise Agreement. If this option is elected, the first installment will be paid at the end of the calendar quarter that follows the Participant’s Termination of Agreement and all future installments will be paid on March 31 of a given year, commencing on the March 31 of the year following the year in which the initial installment distribution is made.

4.02 Valuation of Plan Accounts Pending Distribution. To the extent that the distribution of any portion of any Plan Account is deferred, whether pursuant to the limitations imposed under this Article 4 or for any other reason, any amounts remaining to the credit of the Plan Accounts shall continue to be adjusted by the applicable Account Adjustments in accordance with Article 3.

4.03 Change in Control.

(a) Definition of Change in Control. As used in this Plan, the term “Change in Control” means the occurrence of any of the following:

(i) Any Person becoming the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act, a “Beneficial Owner”) of twenty-five percent or more of the combined voting power of Voting Securities; provided, however that a Change in Control shall not be deemed to occur by reason of an acquisition of Voting Securities by the Company or by an employee benefit plan (or a trust forming a part thereof) maintained by the Company; and provided, further that a Change in Control shall not be deemed to occur solely because any Person

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becomes the Beneficial Owner of twenty-five percent or more of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities deemed to be outstanding, increases the proportional number of shares Beneficially Owned by such Person, except that a Change in Control shall occur if a Change in Control would have occurred (but for the operation of this proviso) as a result of the acquisition of Voting Securities by the Company, and after such acquisition such Person becomes the Beneficial Owner of any additional Voting Securities following which such Person is the Beneficial Owner of twenty-five percent or more of the outstanding Voting Securities; (ii) The individuals who, as of September 30, 2005, are members of the Board of Directors (the “Incumbent Board”), cease for any reason to constitute at least a majority of the members of the Board; provided, however that if the election or appointment, or nomination for election by the Company’s common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of the Plan, thereafter be considered as a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Proxy Contest; or (iii) The consummation of: (A) A merger, consolidation, reorganization or similar transaction (any of the foregoing, a “Business Combination”) with or into the Company or in which securities of the Company are issued, unless such Business Combination is a Non-Control Transaction; (B) A complete liquidation or dissolution of the Company; or (C) The sale or other disposition of all or substantially all of the assets of the Company (on a consolidated basis) to any Person other than the Company or an employee benefit plan (or a trust forming a part thereof) maintained by the Company or by a Person which, immediately thereafter, will have all its voting securities owned by the holders of the Voting Securities immediately prior thereto, in substantially the same proportions. For purposes of the Plan, a “Non-Control Transaction” is a Business Combination involving the Company

where: (A) the holders of Voting Securities immediately before such Business Combination own, directly or indirectly immediately following such

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Business Combination more than fifty percent of the combined voting power of the outstanding voting securities of the parent corporation resulting from, or issuing its voting securities as part of, such Business Combination (the “Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities immediately before such Business Combination by reason of their prior ownership of Voting Securities; (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such Business Combination constitute a majority of the members of the board of directors of the Surviving Corporation, or a corporation beneficially owning a majority of the voting securities of the Surviving Corporation; and (C) no Person other than the Company or any employee benefit plan (or any trust forming a part thereof) maintained immediately prior to such Business Combination by the Company, is a Beneficial Owner of twenty-five percent or more of the combined voting power of the Surviving Corporation’s voting securities outstanding immediately following such Business Combination. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur as a result of any event or

transaction to the extent that treating such event or transaction as a Change in Control would cause any tax to become due under Section 409A of the Code.

(b) Payment on Change in Control. Notwithstanding anything to the contrary set forth in a Participant’s Annual

Election Form or the Plan, upon the occurrence of a Change in Control, and in the event that the resulting company does not continue the Plan or maintain a comparable plan, each Participant will vest in all amounts attributable to his or her unvested Plan Accounts and the Company will, or will cause a Participating Company to, distribute all previously undistributed Plan Accounts to Participants (or their Beneficiaries, as the case may be).

4.04 Form of Payment. All distributions under the Plan will be paid in Company Stock. Such Company Stock

may be newly issued shares, currently traded shares that have been repurchased by the Company or treasury shares. Notwithstanding the foregoing, Mandatory Early Distributions shall be paid in cash.

4.05 Savings Clause. No provision of this Article 4 shall be given effect to the extent that such provision would

cause any tax to become due under Section 409A of the Code.

Article 5

Transition and Opportunity Stock Program

5.01 Notwithstanding anything to the contrary set forth herein, effective as of

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January 1, 2006, the Company will, or will cause a Participating Company to, establish a T & O Plan Account under the Plan for each Advisor who is eligible to receive a transition and opportunity stock bonus pursuant to the terms of the Transition and Opportunity Stock Program, whether or not such Advisor is otherwise a Participant under the Plan. All transition and opportunity bonus amounts will be credited to the respective T & O Plan Accounts and distributed to participating Advisors pursuant to the terms of the Transition and Opportunity Stock Program. The T & O Plan Accounts are not eligible to receive dividends.

Article 6

Beneficiary Designation

6.01 Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both

primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under the Plan may be the same as or different from the beneficiary designation under any other plan or arrangement in which the Participant participates.

6.02 Beneficiary Designation; Change. A Participant shall designate his or her Beneficiary by completing and

signing a Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and submitting to the Committee an Amended Beneficiary Designation Form in accordance with the Committee’s rules and procedures, as in effect from time to time. Upon the acceptance by the Committee of an Amended Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

6.03 Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until

received, accepted and acknowledged in writing by the Committee or its designated agent. 6.04 No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided above or, if all

designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s Plan Accounts, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate.

6.05 Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments

pursuant to the Plan, the Committee shall have the right, exercisable in its discretion, to cause the Company to withhold such payments until this matter is resolved to the Committee’s satisfaction.

6.06 Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and

completely discharge the Company, a Participating Company and the Committee from all further obligations under the Plan with respect to the Participant, and each of

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the Participant’s Annual Election Forms shall terminate upon such full payment of benefits.

6.07 Disclaimer of Interest. Subject to certain requirements as determined by the Committee, any Beneficiary

shall have the right to disclaim his or her interest under the Plan.

Article 7

Termination, Amendment or Modification

7.01 Termination. Although the Company may anticipate that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to terminate the Plan, at any time, with respect to its participating Eligible Financial Advisors by action of the Board. Upon the termination of the Plan by the Company, subject to Section 4.02, all amounts credited to each of the Plan Accounts of each affected Participant shall be 100% vested and shall be paid to the Participant.

7.02 Amendment. The Company may, at any time, amend or modify the Plan in whole or in part by the actions

of the Committee; provided, however, that (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Aggregate Vested Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Franchise Agreement as of the effective date of the amendment or modification and (ii) except as specifically provided in Section 7.01 above, no amendment or modification shall be made after a Change in Control which adversely affects the calculation or payment of benefits hereunder or diminishes any other rights or protections any Participant or Beneficiary would have had but for such amendment or modification, unless each affected Participant or Beneficiary consents in writing to such amendment.

7.03 Effect of Payment. The full payment of the applicable benefit under the provisions of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under the Plan and each of the Participant’s Annual Election Forms shall terminate.

7.04 Savings Clause. Neither the Company nor any Participating Company shall have any right to so accelerate

the payment of any amount in this Article 7 to the extent such right would cause the Plan to fail to comply with, or cause a Participant or such Participant’s Beneficiary to be subject to a tax under, the provisions of Section 409A of the Code.

Article 8

Administration

8.01 Committee Duties. This Plan shall be administered by the Committee. The Committee shall also have the

discretion and authority to (i) make, amend, interpret, and

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enforce all appropriate rules and regulations for the administration of the Plan and (ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in connection with the Plan. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or a Participating Company.

8.02 Agents. In the administration of the Plan, the Committee may, from time to time, employ agents and

delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company. Any reference herein to the Committee shall be deemed to include any person to whom any such duty of the Committee has been delegated.

8.03 Binding Effect of Decisions. The decision or action of the Committee with respect to any question arising

out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

8.04 Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee

and any of its designees to whom duties of the Committee may be delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Plan, except in the case of willful misconduct by the Committee or any of its members or any such designee.

Article 9

Other Benefits and Agreements

The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other

benefits available to such Participant under any other plan or program made available to Participants. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

Article 10

Claims Procedures

10.01 Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary

being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. The claim must state with particularity the determination desired by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

10.02 Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, and shall

notify the Claimant in writing:

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(a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or (b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested

determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

(i) the specific reason(s) for the denial of the claim, or any part of it;

(ii) specific reference(s) to pertinent provisions of the Plan upon which such denial was based; (iii) a description of any additional material or information necessary for the Claimant to perfect the

claim, and an explanation of why such material or information is necessary; and (iv) an explanation of the claim review procedure set forth in Section 10.03 below.

10.03 Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(i) may review pertinent documents; (ii) may submit written comments or other documents; and/or

(iii) may request a hearing, which the Committee, in its sole discretion, may grant.

10.04 Decision on Review. The Committee shall render its decision on review promptly, and not later than sixty (60) days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(i) specific reasons for the decision; (ii) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(iii) such other matters as the Committee deems relevant.

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10.05 Arbitration. Any dispute, claim or controversy that may arise between a Participant and the Company or any other

person (“Claims”) under the Plan is subject to arbitration, unless otherwise agreed to in writing by the Participant and the Company. To the extent that such Claims are required to be arbitrated under the rules, constitutions, or by-laws of the NASD, as amended form time to time, they will be arbitrated in accordance with the policies and procedures established by the NASD. If either the NASD declines to administer an arbitration of any Claims or the NASD rules do not allow for arbitration of any Claims, the Claims shall be finally decided by arbitration conducted pursuant to the Commercial Dispute Resolution Procedures of the American Arbitration Association (“AAA”), and its Supplementary Rules for Securities Arbitration, or other applicable rules promulgated by the AAA. In addition, all claims, statutory or otherwise, which allege discrimination or other violation of employment laws, including but not limited to claims of sexual harassment, shall be finally decided by arbitration pursuant to the AAA unless otherwise agreed to in writing by a Participant and the Company. By agreement of a Participant and the Company in writing, disputes may be resolved in arbitration by a mutually agreed-upon organization other than the NASD or the AAA. In consideration of the promises and the compensation provided in this Plan, neither a Participant nor the Company shall have a right (a) to arbitrate a Claim on a class action basis or in a purported representative capacity on behalf of any Participants, employees, applicants or other persons similarly situated; (b) to join or to consolidate in an arbitration Claims brought by or against another Participant, employee, applicant or the Participant, unless otherwise agreed to in writing by the Participant and the Company; (c) to litigate any Claims in court or to have a jury trial on any Claims; and (d) to participate in a representative capacity or as a member of any class of claimants in an action in a court of law pertaining to any Claims. Nothing in this Plan relieves a Participant or the Company from any obligation the Participant or the Company may have to exhaust certain administrative remedies before arbitrating any claims or disputes under this Section 10.05. Either a Participant or the Company may compel arbitration of any Claims filed in a court of law. In addition, either a Participant or the Company may apply to a court of law for an injunction to enforce the terms of the Plan pending a final decision on the merits by an arbitration panel pursuant to this provision. The Company shall pay all fees, costs or other charges charged by the AAA or any other organization administering arbitration proceeding agreed upon pursuant to this Section 10 that are above and beyond the filing fees of the federal or state court in the jurisdiction in which the dispute arises, whichever is less. A Participant or the Company shall each be responsible for their own costs of legal representation, if any, except where such costs of legal representation may be awarded as a statutory remedy by the arbitrator. Any award by an arbitration panel shall be final and binding upon a Participant or the Company. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets. This provision is covered and enforceable under the terms of the Federal Arbitration Act.

Article 11

Trust

11.01 Establishment of the Trust. The Company may establish one or more Trusts to which Participating Companies may

transfer such assets as the Participating Companies determine in their sole discretion to assist in meeting their obligations under the Plan.

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11.02 Interrelationship of the Plan and the Trust. The provisions of the Plan and the relevant Annual Election Forms shall

govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Participating Companies, Participants and the creditors of the Participating Companies to the assets transferred to the Trust.

11.03 Distributions from the Trust. Each Participating Company’s obligations under the Plan may be satisfied with Trust

assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Participating Company’s obligations under this Agreement.

Article 12

Miscellaneous

12.01 Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a).

The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent. All Plan Accounts and all credits and other adjustments to such Plan Accounts shall be bookkeeping entries only and shall be utilized solely as a device for the measurement and determination of amounts to be paid under the Plan. No Plan Accounts, credits or other adjustments under the Plan shall be interpreted as an indication that any benefits under the Plan are in any way funded. In addition, the Committee shall use its reasonable best efforts to interpret and administer the Plan in a manner that satisfies the requirements of Section 409A of the Code.

12.02 Securities Matters. The Company shall be under no obligation to effect the registration pursuant to the Securities

Act of any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Company Stock are traded. The Committee may require, as a condition to the issuance and delivery of certificates evidencing shares of Company Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Committee deems necessary or desirable.

12.03 Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or

equitable rights, interests or claims in any property or assets of the Company or any Participating Company. For purposes of the payment of benefits under the Plan, any and all of the Company’s and Participating Companies’ assets, shall be, and remain, the general, unpledged unrestricted assets of the Company or the Participating Companies, as applicable. A Participating Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

12.04 Nonassignability. Neither a Participant nor any other person shall have

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any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

12.05 No Right to Service. Nothing in the Plan or any Annual Election Form shall be deemed to give a Participant the

right to continue to be retained in the service of the Company or any Participating Company. 12.06 Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any

and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

12.07 Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the

feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

12.08 Captions. The captions of the articles, sections and paragraphs of the Plan are for convenience only and shall not

control or affect the meaning or construction of any of its provisions. 12.09 Governing Law. The provisions of the Plan shall be construed and interpreted according to the internal laws of the

State of New York without regard to its conflicts of laws principles. 12.10 Notice. Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if

in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Ameriprise Financial, Inc. 361 Ameriprise Financial Center Minneapolis, Minnesota 55474 Attn: VP, Compensation and Benefits with a copy to: General Counsel’s Office

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Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. Any notice or filing required or permitted to be given to a Participant under the Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

12.11 Successors. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

12.12 Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the

Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

12.13 Validity. In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall

not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

12.14 Incompetent. If the Committee determines in its discretion that a benefit under the Plan is to be paid to a minor, a

person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

12.15 Taxation.

(a) Distribution in the Event of Taxation. If, for any reason, all or any portion of a Participant’s benefit under the Plan

becomes taxable to the Participant prior to receipt, a Participant may petition the Committee before a Change in Control, or the trustee of the Trust after a Change in Control, for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Company shall, or shall cause a Participating Company to, distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed a Participant’s unpaid Account Balances under the Plan). If the petition is granted, the tax liability distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under the Plan.

(b) Tax Withholding. No withholding is required on distributions of Plan Accounts, unless at the time of any such distribution, a Participant is an employee of the

21

Company or a Participating Company (or is terminated as an employee of the Company or a Participating Company).

12.16 Insurance. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may,

or may cause a Participating Company to, apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Company, the Participating Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company or a Participating Company, as the case may be, shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company or such Participating Company has applied for insurance.

12.17 Legal Fees To Enforce Rights After Change in Control. The Company is aware that upon the occurrence of a

Change in Control, the Board (which might then be composed of new members) or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, arbitration or litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor corporation or any Participating Company or successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company, a Participating Company or any other person takes any action to declare the Plan void or unenforceable or institutes any arbitration, litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company and the applicable Participating Company irrevocably authorize such Participant to retain counsel of his or her choice at the expense of the Company and the Participating Company to represent such Participant in connection with the initiation or defense of any arbitration, litigation or other legal action, whether by or against the Company, the Participating Company or any director, officer, shareholder or other person affiliated with the Company, the Participating Company or any successor thereto in any jurisdiction; provided, however, that in the event that the trier in any such legal action determines that the Participant’s claim was not made in good faith or was wholly without merit, the Participant shall return to the Company any amount received pursuant to this Section 12.17.

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Ameriprise Financial

Deferred Equity Progam For Independent Financial Advisors

Schedule A

September 30, 2005

Participating Employers

• Ameriprise Financial Services Inc. • IDS Life Insurance Company • IDS Life Insurance Company of New York

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Exhibit 10.28

AMERIPRISE FINANCIAL ANNUAL INCENTIVE AWARD PLAN

(Adopted effective as of September 30, 2005)

ARTICLE I

PURPOSE

The purpose of this Ameriprise Financial Annual Incentive Award Plan (the “Plan”) is to provide added incentive for those officers and key executives of Ameriprise Financial, Inc. (the “Company”) and its subsidiaries and affiliated companies who are in a position to make substantial contributions to the earnings and growth of these companies and to reward them collectively and individually for performance which contributes significantly toward such earnings and growth. The companies participating in this Plan include the Company and such subsidiaries and affiliated companies of the Company listed on Schedule A attached hereto, as such Schedule A may be amended by the Committee, in its sole discretion, from time to time (the “Participating Companies”).

ARTICLE II

ADMINISTRATION OF THE PLAN

This plan shall be administered by the Compensation and Benefits Committee of the Board of Directors of the Company (the

“Committee”) as constituted from time to time, unless and until the Board of Directors of the Company provides otherwise. The Committee shall be responsible for the general administration of the Plan. It shall also be responsible for the

interpretation of the Plan and the determination of all questions arising hereunder. It shall have power to establish, interpret, enforce, amend and revoke from time to time such rules and regulations for the administration of the Plan and the conduct of its business as it deems appropriate. The Committee shall also have the power to delegate any of its authority under the Plan as allowed by law. Any action taken by the Committee within the scope of its authority shall be final and binding upon the Participating Companies, upon each and every person who participates in the Plan and any successors in interest of such persons, and any and all other persons claiming under or through any such person.

ARTICLE III

ANNUAL PERFORMANCE GOALS AND AWARD GUIDELINES

(a) As soon as practicable at the beginning of each calendar year, the Committee shall determine the individual,

division/group, Company, other Participating Company and/or other appropriate performance goals, and award guidelines for such year. In fixing such goals and guidelines, the Committee shall receive and consider the

recommendations of the chief executive officer of the Company who, in turn, shall have received and considered the respective recommendations of other appropriate officers and executives of the Company and any of the other Participating Companies.

(b) If the Committee finds, during the course of and with respect to any year, that any of the performance goals and/or

award guidelines determined as herein above provided would not be justified for such year in the circumstances, it may in its sole discretion fix such performance goals and/or award guidelines for such year at such different levels as it deems appropriate.

ARTICLE IV

PARTICIPATION IN THE PLAN

(a) Those eligible to participate for any calendar year shall include such key executives of the Participating Companies

as shall be designated by the Committee. In designating such persons the Committee shall receive and consider the recommendations of the chief executive officer of the Company who, in turn, shall have received and considered the respective recommendations of other appropriate officers and executives of the Company and any of the other Participating Companies. However, the Committee shall have full authority to act in the matter and its determination shall be in all respects final and conclusive. Further, the Committee shall have full authority to delegate eligibility determination. Participants shall be designated prior to the beginning of the year or as soon as practicable thereafter, but new executives or executives whose duties and responsibilities have been materially increased during the year may be designated participants for such year at any time during the year. Designation as a participant shall not of itself entitle a person to an award under the Plan. The Committee has the sole discretion to consider an award (if any) for a participant in the event of termination, retirement, disability, death, or other individual circumstances. Participants must generally remain in continuous active employment with the Company or any other Participating Company (or any affiliate of the Company or such other Participating Company), through the end of the performance period (year end) and up until the payment date, and shall also make progress towards goals and fulfill Article VII. The Committee, upon recommendations provided by management, will approve to what extent, if any, payment of an award should be made if termination occurs after December 31, but before an actual payment date. No member of the Committee shall be eligible to participate in or receive awards or deferred payments of awards under the Plan.

(b) The Committee may, by rules and regulations of general or specific application, establish one or more classes of

awards, the payment of which shall, in whole or in part, be deferred and made at such later time or times, in a lump sum or in such installments, as the Committee shall prescribe, provided that the participant shall have fulfilled the conditions specified in Article VII hereof. At the time each year that an employee shall be designated as a participant in the Plan, or as soon as practicable thereafter, the Committee, in or without consultation with such employee, shall determine what proportion, if any, of any award that may be made to him for such year shall be paid to him immediately and what proportion shall consist of a class or classes

2

of awards so established by the Committee. If the Committee shall have failed to make such a determination in the case of any participant for any year, the award to such participant shall be paid in cash as soon as practicable after the award shall be made.

ARTICLE V

DETERMINATION OF INCENTIVE AWARDS

(a) As soon as practicable after the end of each calendar year, the Committee shall fix the amount of each award. The

Committee shall also have the power to delegate to the chief executive officer of the Company the authority to approve individual awards and award changes for employees below the executive officer level. Notwithstanding the previous sentence, the Committee shall continue to approve annual awards for executive officers, and to approve the aggregate annual incentive awards for all plan participants below the executive officer level, subject to adjustment for delegated award changes after each February. In determining the aggregate annual incentive awards, the Committee, may approve the establishment of maximum award guidelines for employees of a Participating Company, division, business unit or other designated group, based upon specified Company and other applicable organizational performance goals subject to applicable past limitations. The Committee shall also have the authority to approve payments upon retirement and disability termination executive officers. In fixing such awards the Committee shall receive and consider the recommendations of the chief executive officer of the Company who, in turn, shall have received and considered the respective recommendations of other appropriate officers and executives of the Company and any of the other Participating Companies, as to whether and to what extent the individual, Participating Company, division/group, and/or Company performance goals have been met for such year, and as to where in the range of award guidelines each participant’s performance falls. Individual awards shall then be calculated based on the AIA award grid subject to available pool monies. If the employment of a participant shall have terminated during a calendar year for any reason, including, but without limitation, as the result of termination by a Participating Company without cause, he, or, in the event of his death, his widow, legal representatives, or such other person or persons, as the Committee may in its discretion select, may (but need not) be granted such award, if any, on such basis, as the Committee may in its discretion determine; provided, however, that if within two years following the occurrence of a Change in Control (as defined in the Ameriprise Financial 2005 Incentive Compensation Plan), a participant under the Plan experiences a termination of employment that would otherwise entitle him to receive the payment of severance benefits under the provisions of the severance plan that are in effect and that he participates in as of the date of such Change in Control, and is at Job Band 50 or higher on the date of such termination of employment, then such participant in the Plan shall, notwithstanding the provisions of Article III, be paid, within five days after the date of such termination of employment, a prorata award under the Plan equal to (i) (A) the average award paid or payable to such participant under the Plan (or any other annual incentive award program of the Company, any other Participating Company, or any of their respective subsidiaries at the time of such prior payment) for the two years prior to the Change in Control, or (B) if such participant has not received two such awards, the most recent award paid or payable (or target amount so payable if such

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participant has not previously received any such award) to such participant under the Plan (or any other annual incentive award program of the Company, any other Participating Company, or any of their respective subsidiaries at the time of such prior payment), multiplied by (ii) the number of full or partial months that have elapsed during the performance year under the Plan at the time of such termination of employment divided by 12, provided, further, that in the event such termination of employment occurs after the end of the performance year under the Plan but before the payment date under the Plan, then such participant shall also be paid, within five days after such termination of employment, an award under the Plan equal to (X) the average award paid or payable to such participant under the Plan (or any other annual incentive award program of the Company, any other Participating Company, or any of their respective subsidiaries at the time of such prior payment) for the two years prior to the Change in Control, or (Y) if such participant has not received two such awards, the most recent award paid or payable (or target amount so payable, if such participant has not previously received any such award) to such participant under the Plan (or any other annual incentive award program of the Company, any other Participating Company or any of their respective subsidiaries at the time of such prior payment).

(b) The Committee, upon recommendations as provided by paragraph (a) of this Article, may also make special awards

to a limited number of participants under the Plan. The chief executive officer of the Company may also authorize special awards under the Plan, at any time or times during the year, provided that any special awards authorized by the chief executive officer of the Company shall be reported to the Committee at its next regular meeting. These special awards shall be made in recognition of outstanding individual achievement.

(c) Except for awards payable as a result of a Change in Control pursuant to section (a) above and except as otherwise

determined by the Committee, no award to a single participant or employee for any year shall exceed (i) 200% of his total award guideline for such year, or (ii) 200% of his base salary for such year.

ARTICLE VI

PAYMENT OF INCENTIVE AWARDS

(a) Each incentive award shall be paid as soon as practicable after the amount of the award shall have been determined,

or at such subsequent time or times as the Committee shall determine. Such payment shall be made in cash unless the Committee shall, at any time or from time to time, according to rules and regulations of general application, provide for a different method of payment, in whole or in part, of incentive awards. Such payment may be made (i) by the issuance or transfer of securities or other property, including common shares or other securities of Ameriprise Financial, Inc., another corporation or of a regulated investment company or companies, subject to restrictions and requirements to assure compliance with the conditions set forth in Article VII hereof and elsewhere in the Plan and such other restrictions and requirements as the Committee shall prescribe, (ii) by undertaking to issue or transfer such securities or other property in the future, together with a sum or sums equal to dividend equivalents and other income equivalents earned thereon from

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the date of such undertaking until the date or dates of payment, (iii) in cash measured by the value of such securities or other property, or of a portfolio comprised of either securities or other property or both, together with dividend equivalents and other income equivalents earned thereon from the date that such measure has been established until the date or dates of payment, or (iv) by undertaking to pay cash in the future together with such additional amounts of income equivalents earned thereon until the date or dates of payment, such additional amounts to be determined by a measure established by the Committee in its discretion.

(b) If any incentive award or installment thereof shall become payable by reason of or following the death of a

participant or former participant, such award or installment shall be payable, at the same time or times and in the same manner as if such participant or former participant were alive, to such beneficiaries of the participant or former participant as he shall have designated in the manner described herein. If such participant or former participant shall have failed to designate any beneficiary, or if no such beneficiary shall survive him, then such payments shall be made to his legal representatives. With the approval of the Committee, a participant or former participant may designate one or more beneficiaries by executing and delivering to the Committee or its delegate written notice thereof at any time prior to his death, and may revoke or change the beneficiaries designated therein without their consent by written notices similarly executed and delivered to the Committee at any time and from time to time prior to his death.

(c) Any Participating Company required to make payments under this Plan shall deduct and withhold from any such

payment all amounts which its officers believe in good faith it is required to deduct or withhold pursuant to the laws of any jurisdiction whatsoever or, in the event that any such payment shall be made in securities, shall require that arrangements satisfactory to such Participating Company shall be made for the payment of all such amounts before such securities are delivered. No such Participating Company is required to pay any amount to the beneficiary or legal representatives of any former participant until such beneficiary or legal representatives shall have furnished evidence satisfactory to it of the payment or provision for the payment of all estate, transfer, inheritance and death taxes, if any, which may be payable with respect thereto.

(d) The obligation of any Participating Company under the Plan to make deferred payments or awards when due is

merely contractual and no amount credited to an account of a participant or former participant on the books of any Participating Company shall be deemed to be held in trust for such participant or former participant or for his beneficiary or legal representatives. Nothing contained in the Plan shall require any Participating Company under the Plan to segregate or earmark any cash or other property. Any securities or other property held or acquired by any such Participating Company specifically for use under the Plan or otherwise shall, unless and until transferred in accordance with the terms and conditions of the Plan, be and at all times remain the property of such Participating Company, irrespective of whether such securities or other property are entered in a special account for the purpose of the Plan, and such securities or other property shall at all times be and remain available for any corporate purpose.

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(e) Upon a deferral of the payment of an incentive award, the terms of such deferral and the payments thereunder shall

be governed by the provision of the deferral plan where such deferral has been made.

ARTICLE VII

CONDITIONS AND FORFEITURES

(a) In addition to any other condition that may be imposed by the Committee, the payment of all awards (or any part thereof) deferred under the Plan shall be contingent on the following:

(1) The participant or former participant entitled thereto shall refrain from engaging (A) in any business or other

activity which, in the judgment of the Committee, is competitive with any activity of any Participating Company or any affiliate thereof, in which he was engaged at any time during the last five years of his employment by a Participating Company or any affiliate thereof, or (B) in any business or other activity which is so competitive and of which he shall have special knowledge as the result of having been employed by the Participating Company or any affiliate thereof; and from counseling or otherwise assisting any person, firm or organization that is so engaged;

(2) He shall not furnish, divulge or disclose to any unauthorized person, firm or other organization any trade secrets,

information or data with respect to any Participating Company or any affiliate thereof, or any of their employees, that he shall have reason to believe is confidential;

(3) He will make himself available for such consultation and advice concerning matters with respect to which he was

familiar while employed by any Participating Company or affiliate as may reasonably be requested, taking fairly into consideration his age, health, residence and individual circumstances and the total amount of the payments that he is receiving, and shall render such assistance and cooperation (including testimony and depositions) in respect of matters of which he shall have knowledge, as may reasonably be requested in any action, proceeding or other dispute, pending or prospective, to which any Participating Company or affiliate may be a party or in which it may have an interest. The participant or former participant shall have no obligation to render any services after he shall have ceased to be an employee of the Participating Companies and affiliates thereof, except as may be required under this subparagraph, and the death of the participant or former participant, or the failure to call upon him for the rendition of services called for under this subparagraph, shall not in any way affect the right of the participant or former participant or his beneficiary or legal representatives, as the case may be, to receive any unpaid portion of any amounts payable to him;

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(4) His employment by any Participating Company, subsidiary or any affiliate thereof, shall not have terminated as a

result of his gross negligence, willful misconduct or poor performance and he shall not, while employed by a Participating Company, subsidiary or affiliate, have engaged in conduct which, had it been known at the time, would have resulted, on grounds of gross negligence or willful misconduct, in the termination of his employment by the Participating Company, subsidiary or affiliate by which he had been employed.

(5) If, in the judgment of the Committee, reasonably exercised, a participant or former participant shall have failed at

any time to comply with any of the conditions set forth in paragraph (a) of this Article VII, the obligation of the Participating Company to make further payments to such participant or former participant or his beneficiary or legal representatives shall forthwith terminate, provided that no installment or amount delivered or paid prior to the date of any such determination by the Committee shall be required to be repaid.

(6) No payment of any award under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer,

assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void. No payment of any award shall be subject to any jurisdictional payment requirement upon death or termination. No such payments shall be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled thereto, except as specifically provided in rules or regulations established by the Committee under the Plan; and in the event that any participant, former participant or beneficiary under the Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any such payment or a part thereof, then all such payments due him shall cease and in that event, the Participating Company shall hold and apply the same to or for his benefit or that of his spouse, children, or other dependents, or any of them, in such manner and in such proportions as the Committee, with the approval of the chief executive officer of such Participating Company, may deem proper.

ARTICLE VIII

PARTICIPATING COMPANIES

(a) Any Participating Company may cease to be a Participating Company at any time and shall cease to be one upon

delivering to the Committee certified copies of an appropriate resolution duly adopted by its Board of Directors terminating its participation in the Plan. If any Participating Company hereunder ceases to be a subsidiary, such corporation may continue to be a Participating Company hereunder only upon such terms and conditions as the Company and such corporation shall agree upon in writing. In no event shall the termination of a corporation’s participation in this Plan relieve it of obligations theretofore incurred by it under the Plan, except to the extent that the same have been assumed by another corporation pursuant to paragraph (b) of this Article VIII.

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(b) Any corporation which succeeds to all or any part of the business or assets of a Participating Company may, by

appropriate resolution of its board of directors, adopt the Plan and shall thereupon succeed to such rights and assume such obligations under the Plan as such corporation, such Participating Company and the Company shall have agreed upon in writing.

(c) For the purposes of this Article VIII the term “subsidiary” shall mean any corporation (other than the Company and

any non-Participating Company specifically designated by the Committee) in one or more unbroken chains of corporations connected through stock ownership with the Company, if the Company directly or indirectly through one or more such chains owns stock possessing more than 50% of the total combined voting power of all classes of stock and more than 50% of each class of non-voting stock of such corporation.

ARTICLE IX

GENERAL PROVISIONS

(a) No member of the Committee shall be liable for anything done or omitted to be done by him or by any other

member of the Committee in connection with the Plan, unless such act or omission constitutes willful misconduct on his part. (b) The Board of Directors of the Company may amend this Plan in whole or in part from time to time, and

may terminate it at any time, without prior notice to any interested party. The Board of Directors may delegate its amendment power to such individual or individuals as it deems appropriate in its sole discretion. The foregoing sentence to the contrary notwithstanding, for a period of two years and one day following a Change in Control, neither the Board of Directors nor the Committee may amend this Plan in a manner that is detrimental to the rights of any participant of the Plan without his or her written consent. No amendment or termination shall deprive any participant, former participant, beneficiary or legal representatives of a former participant of any right under this Plan as such right exists at the time of such amendment or termination, nor increase the obligations of any company that is or has been a Participating Company without its consent.

(c) Nothing in this Plan shall be construed as giving any person employed by a company which is or has been a

Participating Company the right to be retained in the employ of such company or any right to any payment whatsoever, except to the extent provided by the Plan. Each such company shall have the right to dismiss any employee at any time with or without cause and without liability for the effect which such dismissal might have upon him as a participant under the Plan.

(d) The Plan shall not be deemed a substitute for any other employee benefit or compensation plans or arrangements

that may now or hereafter be provided for employees. The Plan shall not preclude any group, division, subsidiary or affiliate of the Company, whether or not a Participating Company, from continuing or adopting one or more separate or additional such plans or arrangements for all or a defined class of

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the employees of such group, division, subsidiary or affiliate. Any payment under any such plan or arrangement may be made independently of the Plan.

(e) By accepting any benefits under the Plan, each participant, each beneficiary and each person claiming under or

through him shall be conclusively bound by any action or decision taken or made, or to be taken or to be made under the Plan, by the Company, the Board of Directors of the Company, or the Committee.

(f) No provision of the Plan shall be given effect to the extent that such provision would cause any tax to become due

under Section 409A of the Code. (g) The masculine pronoun means the feminine, the singular the plural, and vice versa wherever appropriate. (h) This Plan shall be governed by and construed in accordance with the laws of the State of New York.

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Ameriprise Financial

Annual Incentive Award Plan

Schedule A September 30, 2005

Participating Companies

• American Centurion Life Assurance Company • Ameriprise Enterprise Investment Services, Inc. • Ameriprise Financial Services Inc. • RiverSource Investments, LLC • RiverSource Client Service Corporation • IDS Life Insurance Company • IDS Life Insurance Company of New York • IDS Property Casualty Insurance Company • Ameriprise Trust Company

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Exhibit 10.29

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of ___________, 2006 between Ameriprise Financial, Inc. a Delaware corporation (the “Company”), and _________________ (“Indemnitee”).

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is essential to the Company to

retain and attract the most capable persons available; and A. WHEREAS, the substantial increase in corporate litigation subjects directors and officers to expensive litigation

risks at the same time that the availability of and coverage provided by directors’ and officers’ liability insurance has become uncertain; and

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is

detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons of increased certainty of indemnification protections; and

B. WHEREAS, it is now and has been the express policy of the Company to indemnify its directors and officers so as

to provide them with the maximum possible protection permitted by law; and

WHEREAS, the Company does not regard the protection available to Indemnitee as adequate in the present circumstances, and realizes that Indemnitee may not be willing to serve as a director or officer without adequate protection, and the Company desires Indemnitee to serve in such a capacity; and

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors, officers, or in

other capacities unless they are provided with adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation; and

WHEREAS, the General Corporation Law of the State of Delaware (“DGCL”) and the By-laws expressly provide

that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and its directors and officers with respect to indemnification; and

WHEREAS, this Agreement is a supplement to and in furtherance of the By-laws of the Company and any

resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

WHEREAS, the uncertainties relating to directors’ and officers’ liability insurance and to indemnification have

increased the difficulty of attracting and retaining such qualified persons to serve as directors and officers of the Company;

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or officer after the date hereof, the

parties hereto agree as follows:

1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be

entitled to the rights of indemnification provided in this Section l(a) if, by reason of his or her Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), including judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her, or on his or her behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of

indemnification provided in this Section 1(b) if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware or the court in which such Proceeding was brought shall determine that such indemnification may be made; provided further, further, that in no event shall Indemnitee be indemnified against Expenses not allowable under applicable law.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any

other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he or she shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue or matter.

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2. Contribution.

(a) If Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute the amount of Expenses actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all its officers, directors or employees, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all its officers, directors or employees, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) in connection with the events that resulted in such Expenses, as well as any other equitable considerations which the Law may require. The relative fault of the Company and all its officers, directors or employees, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive.

(b) To the fullest extent permissible under applicable law, if the indemnification provided for in this

Agreement is unavailable to Indemnitee, the Company, in lieu of indemnifying Indemnitee, may contribute to the amount of Expenses incurred by Indemnitee in connection with a claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

3. Indemnification for Expenses as a Witness. Notwithstanding any other provision of this Agreement, to the

extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

4. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall

advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf

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of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.

5. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this

Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the Delaware General Corporation Law and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

(a) Written Request. To obtain indemnification under this Agreement, Indemnitee shall submit to the

Company a written request, including therein or therewith such documentation and information as is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing of the request.

(b) Method of Determination. Upon such written request by Indemnitee for indemnification pursuant

to Section 5(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors, as defined herein, even though less than a quorum, or by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (2) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel, as defined herein, in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (3) if so directed by the Board, by the stockholders of the Company; provided, however, in the event of a Potential Change of Control, as defined herein, or a Change of Control, as defined below, or within two (2) months after a Change of Control, Independent Counsel shall make such determination rather than the Board.

(c) Change in Control. A “Change in Control” shall be deemed to occur, after the date of this

Agreement, upon the earliest of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities;

(ii) Change in Board. During any period of two (2) consecutive years (not including any period prior to the

execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in this Section 5(c)), whose election by the Board or nomination for election by

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the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a least a majority of the members of the Board;

(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any

other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the governing board of such surviving entity;

(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the

Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

(v) Other Events. Regardless whether the Company is then subject to such a reporting requirement, there

occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

For purposes of this Section 5(c), the following terms shall have the following meanings:

(A) “Person” shall mean any natural person, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental authority or other entity; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(B) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange

Act. (d) Selection of Independent Counsel. If the determination of entitlement to indemnification is to be

made by Independent Counsel pursuant to Section 5(b) 5

hereof, the Independent Counsel shall be selected by the Disinterested Directors (or a committee thereof) as provided in Section 5(b) or if there are no Disinterested Directors, by the Board. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Section 13(e) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 5(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 5(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 5(b) hereof.

(e) Presumptions in Favor of Indemnitee. In making a determination with respect to entitlement to

indemnification hereunder, the persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement and that Indemnitee has at all times acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. Anyone, including the Company, seeking to overcome this presumption shall have the burden of proof. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination of entitlement to indemnification pursuant to this Agreement prior to the commencement of any action, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(f) Prompt Determination of Entitlement. If the persons or entity empowered or selected to determine

whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent: (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time if the persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto;

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(g) Cooperation. Indemnitee shall cooperate with the persons or entity making such determination

with respect to Indemnitee’s entitlement to indemnification, including providing to such persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.

(h) Termination of Proceeding. The termination of any Proceeding or of any claim, issue or matter

therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

6. Remedies of Indemnitee.

(a) In the event that: (i) a determination is made pursuant to this Agreement that Indemnitee is not entitled to indemnification under this Agreement; (ii) advancement of Expenses is not timely made pursuant to this Agreement; (iii) no determination of entitlement to indemnification is made pursuant to this Agreement within thirty (30) days after receipt by the Company of the request for indemnification (as such period may be extended pursuant to Section 5(f)) ; (iv) payment of indemnification is not made pursuant to this Agreement within thirty (30) days after receipt by the Company of a written request; or (v) payment of indemnification is not made within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification.

(b) In the event that a determination has been made pursuant to this Agreement that Indemnitee is not

entitled to indemnification, any judicial proceeding regarding an Indemnitee’s entitlement shall be conducted as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the prior adverse determination.

7

7. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company, the By-laws, any agreement, a vote of stockholders, a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the Delaware General Corporation Law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent the Company maintains an insurance policy or policies providing liability insurance

for directors, officers, employees, or agents or fiduciaries of the Company or of an Enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies with no less coverage than any other individual receives under the Company’s policy or policies. The Company shall maintain such insurance for Indemnitee for two years post-termination at the same level as it then maintains for its then current directors and officers. The Company shall give prompt notice of the commencement of a Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take reasonable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent

of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts

otherwise indemnifiable hereunder to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of an Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such Enterprise.

8. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company

shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee: 8

(a) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee

of securities of the Company or any Enterprise within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;

(b) where it is determined by final adjudication that the liability imposed upon Indemnitee was the

result of Indemnitee’s actual improper receipt of a personal benefit or profit or of Indemnitee’s deliberate dishonesty to the Company; or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,

including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless: (i) the Board of Directors of the Company authorized the Proceeding, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iii) as provided in the By-Laws.

9. Joint Representation and Selection of Counsel. In the event the Company shall be obligated hereunder to

pay an Indemnitee’s Expenses, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld). The Company and Indemnitee shall be jointly represented until such time as Indemnitee reasonably concludes that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense. Notwithstanding this provision, Indemnitee retains the right to employ separate counsel, wholly at Indemnitee’s own expense, in any such proceeding in addition to or in place of any counsel retained by the Company on behalf of Indemnitee.

10. Duration of Agreement. All agreements and obligations of the Company contained herein, including

advancement of expenses, shall continue past Indemnitee’s time of service to the Company or an Enterprise, and shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

11. Security. To the extent requested by Indemnitee and approved by the Board of Directors of the Company,

the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee. In the event of a Potential Change in Control, as defined herein, or a Change in Control, the Company shall, promptly upon written request by Indemnitee, create a Trust for the benefit of Indemnitee and from time to time, upon written request by or on behalf of Indemnitee to the Company, shall fund such Trust in an amount, as set forth in such request, sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with an indemnifiable event. The terms of the Trust shall provide that upon a Change in Control: (i) the Trust shall not be revoked or the principal thereof invaded, without the written consent of Indemnitee; (ii) the Trustee shall advance, within ten (10) business days of a request by

9

Indemnitee, any and all Expenses to Indemnitee, not advanced directly by the Company to Indemnitee (and Indemnitee hereby agrees to reimburse the Trust under the circumstances under which Indemnitee would be required to reimburse the Company under this Agreement); (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above; (iv) the Trustee shall promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise; and (v) all unexpended funds in such Trust shall revert to the Company upon a final determination that Indemnitee has been fully indemnified under the terms of this Agreement. Nothing in this Section 11 shall relieve the Company of any of its obligations under this Agreement. A Potential Change in Control shall be deemed to have occurred if: (i) the Company enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any person publicly announces an intention to take or to begin taking actions which if completed would constitute a Change in Control; or (iii) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

12. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the

subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

13. Definitions. For purposes of this Agreement:

(a) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other Enterprise that such person is or was serving at the request of the Company. Indemnitee’s service to an Enterprise at the request of the Company is expressly deemed to be included within an Indemnitee’s Corporate Status. Indemnitee’s service as a director, officer, employee, agent or fiduciary to any of the following Enterprises shall be deemed to be at the express written request of the Company: any direct or indirect subsidiary of the Company, any entity for which the Company accounts on the equity method, any special purpose entity or variable interest entity of the Company, and any investment company as to which an affiliate of the Company serves as investment advisor.

(b) “Disinterested Director” means a director of the Company who is not and was not a party to the

Proceeding in respect of which indemnification is sought by Indemnitee.

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(c) “Enterprise” shall mean the Company and any other corporation, partnership, direct or indirect

subsidiary, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary. Enterprise shall also include, but is not limited to, entities for which the Company accounts on the equity method, special purpose entities, variable interest entities, and investment companies as to which an affiliate of the Company serves as investment advisor.

(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees

of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, appeal costs and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. Expenses shall also include judgments, penalties or fines against Indemnitee and amounts paid in settlement by Indemnitee (only if such settlement is approved by the Company, which approval shall not be unreasonably withheld) of any claim relating to a Proceeding. In addition, Expenses shall include the incremental personal income taxes (whether federal, state, local or foreign) actually paid or payable by Indemnitee, together with any interest or penalties thereon, by virtue of the receipt of indemnification payments under this Agreement.

(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in

matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person (i) who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement or (ii) who, or whose firm, represented a third party that was adverse to the Company, or any affiliate of the Company, or Indemnitee within the preceding twelve months. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel.

(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate

dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact of Indemnitee’s past or present Corporate Status, by reason of any action taken by him or her or of any inaction on his or her part while acting as an officer or director of the Company or any Enterprise, or by reason of the fact that he or she is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another Enterprise, in each case whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement, including one pending on or before the date of this Agreement, but excluding one initiated by an

11

Indemnitee pursuant to Section 6 of this Agreement to enforce his or her rights under this Agreement.

14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity

or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall

be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

16. Notice. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise

receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise, unless and only to the extent that such failure or delay materially prejudices the Company. All communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to Indemnitee at the address set forth below Indemnitee’s signature hereto, and to the Company at:

Ameriprise Financial, Inc. 55 Ameriprise Financial Center Minneapolis, MN 55474 Attention: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

17. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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18. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall

not be deemed to constitute part of this Agreement or to affect the construction thereof. 19. No Construction as Employment Agreement. Nothing contained herein shall be construed as giving

Indemnitee, if an employee of the Company or any Enterprise, any right to be retained in the employ of the Company or any Enterprise.

20. Governing Law. This Agreement and the legal relations among the parties shall be governed by, and

construed and enforced in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

SIGNATURE PAGE TO FOLLOW

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the day and year first

above written.

Signature Page to Indemnification Agreement with Ameriprise Financial, Inc.

AMERIPRISE FINANCIAL, INC.

By

Its

INDEMNITEE

Address of Indemnitee:

Exhibit 10.31

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 30, 2005

AMONG

AMERIPRISE FINANCIAL, INC., as Borrower,

THE LENDERS LISTED HEREIN, as Lenders,

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent,

CITIBANK, N.A., as Syndication Agent

and

BANK OF AMERICA, N.A., HSBC BANK USA, NATIONAL ASSOCIATION

and WACHOVIA BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

______________________________

WELLS FARGO BANK, NATIONAL ASSOCIATION

and CITIGROUP GLOBAL MARKETS INC.,

as Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

i

SECTION 1.

DEFINITIONS 1

1.1

Certain Defined Terms. 1

1.2

Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. 211.3

Other Definitional Provisions and Rules of Construction. 22

SECTION 2.

AMOUNTS AND TERMS OF LOANS 22

2.1

Loans; Making of Loans; the Register; Optional Notes; Bid Loans. 22

2.2

Interest on the Loans. 312.3

Fees. 34

2.4

Repayments, Prepayments and Reductions of Revolving Loan Commitment Amount; General Provisions Regarding Payments.

35

2.5

Use of Proceeds. 382.6

Special Provisions Governing Eurodollar Rate Loans. 38

2.7

Increased Costs; Taxes; Capital Adequacy. 402.8

Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate. 44

2.9

Replacement of a Lender. 452.10

Increase in Commitments. 46

2.11

Extension of Revolving Loan Commitment Termination Date. 47

SECTION 3.

LETTERS OF CREDIT 47 3.1

Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein. 47

3.2

Letter of Credit Fees. 503.3

Drawings and Reimbursement of Amounts Paid Under Letters of Credit. 50

3.4

Obligations Absolute. 533.5

Nature of Issuing Lenders’ Duties. 54

3.6

Applicability of UCP. 54

SECTION 4.

CONDITIONS TO LOANS AND LETTERS OF CREDIT 55 4.1

Conditions to Closing. 55

4.2

Conditions to Effective Date; All Loans. 574.3

Conditions to Letters of Credit. 58

SECTION 5.

COMPANY’S REPRESENTATIONS AND WARRANTIES 59

5.1

Organization, Powers, Qualification, Good Standing, Business and Subsidiaries. 59

5.2

Authorization of Borrowing, etc. 59

ii

5.3

Financial Condition. 605.4

No Material Adverse Change. 60

5.5

Title to Properties; Liens. 605.6

Litigation; Adverse Facts. 61

5.7

Payment of Taxes. 615.8

Governmental Regulation. 61

5.9

Securities Activities. 615.10

Employee Benefit Plans. 61

5.11

Environmental Protection. 625.12

Solvency. 62

5.13

Disclosure. 625.14

Foreign Assets Control Regulations, etc. 62

SECTION 6.

AFFIRMATIVE COVENANTS 63

6.1

Financial Statements and Other Reports. 63

6.2

Existence, etc. 666.3

Payment of Taxes and Claims. 66

6.4

Maintenance of Properties; Insurance. 666.5

Inspection Rights. 66

6.6

Compliance with Laws, etc. 67

SECTION 7.

NEGATIVE COVENANTS 67 7.1

Liens and Related Matters. 67

7.2

Acquisitions. 697.3

Restricted Junior Payments. 69

7.4

Financial Covenants. 697.5

Restriction on Fundamental Changes; Asset Sales. 70

7.6

Transactions with Affiliates. 707.7

Conduct of Business. 70

SECTION 8.

EVENTS OF DEFAULT 71

8.1

Failure to Make Payments When Due. 71

8.2

Default in Other Agreements. 718.3

Breach of Certain Covenants. 71

8.4

Breach of Warranty. 718.5

Other Defaults Under Loan Documents. 72

8.6

Involuntary Bankruptcy; Appointment of Receiver, etc. 728.7

Voluntary Bankruptcy; Appointment of Receiver, etc. 72

8.8

Judgments and Attachments. 738.9

Dissolution. 73

8.10

Employee Benefit Plans. 738.11

Change in Control. 73

8.12

Licensing. 738.13

Certain Proceedings. 73

iii

8.14

Invalidity of Loan Documents; Repudiation of Obligations. 74

SECTION 9.

ADMINISTRATIVE AGENT 75 9.1

Appointment. 75

9.2

Powers and Duties; General Immunity. 759.3

Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness. 77

9.4

Right to Indemnity. 779.5

Resignation of Agents; Successor Administrative Agent and Swing Line Lender. 77

9.6

Duties of Other Agents. 789.7

Administrative Agent May File Proofs of Claim. 78

SECTION 10.

MISCELLANEOUS 79

10.1

Successors and Assigns; Assignments and Participations in Loans and Letters of Credit. 79

10.2

Expenses. 8210.3

Indemnity. 83

10.4

Set-Off. 8310.5

Ratable Sharing. 84

10.6

Amendments and Waivers. 8510.7

Independence of Covenants. 86

10.8

Notices; Effectiveness of Signatures; Posting on Electronic Delivery Systems. 8610.9

Survival of Representations, Warranties and Agreements. 88

10.10

Failure or Indulgence Not Waiver; Remedies Cumulative. 8810.11

Marshalling; Payments Set Aside. 88

10.12

Severability. 8910.13

Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver. 89

10.14

Applicable Law. 8910.15

Construction of Agreement; Nature of Relationship. 90

10.16

Consent to Jurisdiction and Service of Process. 9010.17

Waiver of Jury Trial. 90

10.18

Confidentiality. 9110.19

Counterparts; Effectiveness. 92

10.20

USA Patriot Act. 92

EXHIBITS

iv

I FORM OF NOTICE OF REVOLVING BORROWING

IA FORM OF BID REQUEST

IB FORM OF COMPETITIVE BID

II FORM OF NOTICE OF CONVERSION/CONTINUATION

III FORM OF REQUEST FOR ISSUANCE

IV FORM OF REVOLVING NOTE

V FORM OF SWING LINE NOTE

VI FORM OF COMPLIANCE CERTIFICATE

VII FORM OF ASSIGNMENT AGREEMENT

SCHEDULES

1.1 SIGNIFICANT SUBSIDIARIES

2.1 LENDERS’ COMMITMENTS AND PRO RATA SHARES

5.6 LITIGATION

7.1 CERTAIN EXISTING LIENS

10.8 NOTICE ADDRESSES

v

AMERIPRISE FINANCIAL, INC.

CREDIT AGREEMENT

This CREDIT AGREEMENT is dated as of September 30, 2005 and entered into by and among AMERIPRISE FINANCIAL, INC., a Delaware corporation (“Company”), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a “Lender” and collectively as “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as administrative agent for Lenders (in such capacity, “Administrative Agent”), and CITIBANK, N.A., as syndication agent for Lenders (in such capacity, “Syndication Agent”), and BANK OF AMERICA, N.A., HSBC BANK USA, NATIONAL ASSOCIATION and WACHOVIA BANK, NATIONAL ASSOCIATION, as co-documentation agents for Lenders (in such capacity, “Co-Documentation Agents”).

R E C I T A L S

WHEREAS, Lenders, at the request of Company, have agreed to extend certain credit facilities to Company, the proceeds of which will be used to provide financing for working capital and other general corporate purposes of Company and its Subsidiaries:

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Company, Lenders and Administrative Agent agree as follows:

Section 1. DEFINITIONS 1.1 Certain Defined Terms.

The following terms used in this Agreement shall have the following meanings:

“Absolute Rate” means a fixed rate of interest expressed in multiples of 1/100th of one percent.

“Absolute Rate Loan” means a Bid Loan that bears interest at a rate determined by reference to an Absolute Rate.

“Administrative Agent” has the meaning assigned to that term in the introduction to this Agreement and also means and includes any successor Administrative Agent appointed pursuant to subsection 9.5A.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Lender” has the meaning assigned to that term in subsection 2.6C.

“Affected Loans” has the meaning assigned to that term in subsection 2.6C.

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise; provided, however, that the term “Affiliate” shall specifically exclude the Agents and each Lender.

“Agents” means Administrative Agent, the Syndication Agent and the Co-Documentation Agents named in the introduction to this Agreement.

“Agreement” means this Credit Agreement.

“Annual Statement” means the annual statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation, which statement shall be in the form required by such Insurance Subsidiary’s jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing annual statutory financial statements and shall contain the type of information permitted by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith.

“Applicable Margin” means, from time to time, the following rate per annum based upon the Debt Rating as set forth below:

Initially, the Applicable Margin shall be Pricing Level II. Thereafter, each change in the Applicable Margin

resulting from a publicly announced change in the Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change. If, at any time, Company has no Debt Rating from S&P or

2

Pricing Level

Debt Rating

S&P/Moody’s

Eurodollar Margin

Facility Fee

Utilization

Fee

Pricing Level I

> A / A2 0.24%

0.06% 0.05%

Pricing Level II

A- / A3 0.28%

0.07% 0.05%

Pricing Level III

BBB+ / Baa1 0.31%

0.09% 0.10%

Pricing Level IV

BBB / Baa2 0.375% 0.125%

0.125%

Pricing Level V < BBB / Baa2

0.45% 0.175% 0.125%

Moody’s, the Applicable Margin shall be Pricing Level V; provided that until S&P issues a Debt Rating, only the Debt Rating issued by Moody’s shall be taken into account.

“Approved Fund” means a Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

“Asset Sale” means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its wholly-owned Subsidiaries of (i) any of the stock of any of Company’s Subsidiaries, (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or (iii) any other assets (whether tangible or intangible) of Company or any of its Subsidiaries (other than (a) sales, assignments, transfers or dispositions of accounts in the ordinary course of business for purposes of collection and (b) sales, assignments, transfers or dispositions of investment assets by Insurance Subsidiaries in the ordinary course of business).

“Assignment Agreement” means an Assignment and Assumption in substantially the form of Exhibit VII annexed hereto.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Base Rate” means, at any time, the higher of (i) the Prime Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change.

“Base Rate Loans” means Loans bearing interest at rates determined by reference to the Base Rate as provided in subsection 2.2A.

“Bid Borrowing” means a borrowing consisting of simultaneous Bid Loans of the same Type from each of the Lenders whose offer to make one or more Bid Loans as part of such borrowing has been accepted under the auction bidding procedures described in Section 2.03.

“Bid Loan” has the meaning specified in subsection 2.1A(iii).

“Bid Loan Lender” means, in respect of any Bid Loan, the Lender making such Bid Loan to Company.

“Bid Request” means a written request for one or more Bid Loans substantially in the form of Exhibit IA.

“Bridge Loan Agreement” means that certain Credit Agreement, dated as of September , 2005, among Company, Citibank, N.A., as agent, and the financial institutions party thereto.

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“Business Day” means (i) except as set forth in clause (ii) below, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or the State of Minnesota or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close, and (ii) with respect to all notices, determinations, fundings and payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day described in clause (i) above and that is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Capital Lease”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

“Capital Stock” means the capital stock of or other equity interests in a Person.

“Cash” means money, currency or a credit balance in a Deposit Account.

“Change in Control” means any of the following:

(a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), but excluding any employee benefit plan of such Person or its Subsidiaries, of 20% or more of the outstanding shares of voting stock of Company;

(b) during any period of 12 consecutive months, a majority of the members of the board of directors of Company cease to be composed of individuals (i) who were members of the board of directors on the first day of such period, (ii) whose election or nomination to the board of directors was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of the board of directors or (iii) whose election or nomination to the board of directors was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of the board of directors; or

(c) any Person or two or more Persons acting in concert will have acquired by contract or otherwise, or will have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of Company, or control over the equity securities of Company entitled to vote for members of the board of directors or equivalent governing body of Company on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right) representing 20% or more of the combined voting power of such securities.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation, treaty or order, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Government Authority, (iii) any determination of a court or other

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Government Authority or (iv) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Government Authority.

“Closing Date” means the date on which the conditions precedent set forth in subsection 4.1 have been satisfied.

“Commitments” means the commitments of Lenders to make Loans as set forth in subsections 2.1A and 3.3.

“Competitive Bid” means a written offer by a Lender to make one or more Bid Loans, substantially in the form of Exhibit IB, duly completed and signed by a Lender.

“Company” has the meaning assigned to that term in the introduction to this Agreement.

“Compliance Certificate” means a certificate substantially in the form of Exhibit VI annexed hereto.

“Confidential Information Memorandum” means the Confidential Information Memorandum dated August 2005 relating to the credit facilities evidenced by this Agreement, which Confidential Information Memorandum incorporates by reference the Form 10.

“Consolidated Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (i) Consolidated Total Debt as of such day to (ii) Consolidated Total Capitalization as of such day.

“Consolidated Net Worth” means, as of any date of determination, the consolidated shareholders’ equity of Company and its Subsidiaries determined on a consolidated basis as of such date in accordance with GAAP (excluding the effect of Statement of Financial Accounting Standards No. 115).

“Consolidated Total Capitalization” means, as of any date of determination, the sum of (a) Consolidated Net Worth and (b) Consolidated Total Debt.

“Consolidated Total Debt” means, as of any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Contingent Obligation”, as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof or (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings. Contingent Obligations shall include (a) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making,

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discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.

“Contractual Obligation”, as applied to any Person, means any provision of any Security issued by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Debt Rating” means, as of any date of determination, the rating as determined by S&P and Moody’s (collectively, the “Debt Ratings”) of Company’s non-credit-enhanced, senior unsecured long-term debt; provided that if a Debt Rating is issued by each of the foregoing rating agencies, then the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing Level I being the highest and the Debt Rating for Pricing Level V being the lowest), unless there is a split in Debt Ratings of more than one level, in which case the Pricing Level that is one Pricing Level higher than the lower Debt Rating shall apply.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Revolving Loans, participations in Letters of Credit or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

“Deposit Account” means a demand, time, savings, passbook or similar account maintained with a Person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.

“Dollars” and the sign “$” mean the lawful money of the United States of America.

“Effective Date” means the date on which the conditions precedent set forth in subsections 4.1 and 4.2A have been satisfied.

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“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender or any Approved Fund of any Lender; and (ii) (a) a commercial bank organized under the laws of the United States or any state thereof; (b) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (c) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided that (1) such bank is acting through a branch or agency located in the United States or (2) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (d) any other entity that is an institutional “accredited investor” (as defined in Regulation D under the Securities Act) that extends credit or buys loans as one of its businesses, including insurance companies and mutual funds; provided that neither Company nor any Affiliate of Company shall be an Eligible Assignee.

“Employee Benefit Plan” means any “employee benefit plan”, as defined in Section 3(3) of ERISA, which is or was maintained or contributed to by Company, any of its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Government Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (ii) in connection with any Hazardous Materials or any actual or alleged Hazardous Materials Activity, or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

“Environmental Laws” means any and all current or future statutes, ordinances, orders, rules, regulations, guidance documents, judgments, Governmental Authorizations, or any other requirements of any Government Authority relating to (i) environmental matters, including those relating to any Hazardous Materials Activity, (ii) the generation, use, storage, transportation or disposal of Hazardous Materials, or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any of its properties.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“ERISA Affiliate”, as applied to any Person, means (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) that is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of a Person or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of such Person or such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of such Person or such Subsidiary and with

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respect to liabilities arising after such period for which such Person or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in material liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which would reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there would be any liability therefor, or the receipt by Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the assertion of a claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Company, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan that would reasonably be expected to result in a material liability to Company or any of its Subsidiaries; (ix) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code where such failure would reasonably be expected to result in a Material Adverse Effect; or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan. With respect to a Multiemployer Plan or a Pension Plan not maintained or contributed to by Company or its Subsidiaries, an event described above shall not be an ERISA Event unless it is reasonably likely to result in material liability to Company or any of its Subsidiaries.

“Eurodollar Bid Margin” means the margin above or below the Eurodollar Base Rate to be added to or subtracted from the Eurodollar Base Rate, which margin shall be expressed in multiples of 1/100th of one percent.

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“Eurodollar Margin Bid Loan” means a Bid Loan that bears interest at a rate based upon the Eurodollar Base Rate.

“Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (i) (A) the rate per annum (rounded upward to the nearest 1/16 of one percent) that appears on the Moneyline Telerate page 3750 (or such other comparable page as may, in the opinion of Administrative Agent, replace such page for the purpose of displaying such rate) as the interbank offered rate for Dollar deposits with maturities comparable to such Interest Period as of approximately 11:00 A.M. (London time) on such Interest Rate Determination Date or (B) if such rate is not available at such time for any reason, the rate per annum obtained by dividing (i) the arithmetic average (rounded upward to the nearest 1/16 of one percent) of the offered quotations, if any, to first class banks in the interbank Eurodollar market by Wells Fargo (or, in the case of a Bid Loan, the applicable Bid Loan Lender) for Dollar deposits of amounts in same day funds comparable to the principal amount of the Eurodollar Rate Loan of Wells Fargo (or, in the case of a Bid Loan, the applicable Bid Loan Lender) for which the Eurodollar Rate is then being determined with maturities comparable to such Interest Period as of approximately 12:00 Noon (New York time) on such Interest Rate Determination Date by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve requirements (including any marginal, emergency, supplemental, special or other reserves) applicable on such Interest Rate Determination Date to any member bank of the Federal Reserve System in respect of “Eurocurrency liabilities” as defined in Regulation D (or any successor category of liabilities under Regulation D).

“Eurodollar Rate Loan” means a Eurodollar Rate Revolving Loan or a Eurodollar Margin Bid Loan.

“Eurodollar Rate Margin” means the margin over the Eurodollar Rate used in determining the rate of interest of Eurodollar Rate Revolving Loans in accordance with the definition of Applicable Margin.

“Eurodollar Rate Revolving Loans” means Revolving Loans bearing interest at rates determined by reference to the Eurodollar Rate as provided in subsection 2.2A.

“Event of Default” means each of the events set forth in Section 8.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of Company hereunder (i) taxes that are imposed on the overall net income (however denominated) and franchise taxes imposed in lieu thereof (a) by the United States, (b) by any other Government Authority under the laws of which such Lender is organized or has its principal office or maintains its applicable lending office or (c) by any Government Authority solely by reason of any connection between the Administrative Agent or any Lender (as the case may be) and the taxing jurisdiction (other than such connection arising solely from the execution or delivery of,

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the receipt of payments pursuant to, or the enforcement of, this Agreement or any other Loan Document), (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which Company is located, (iii) any gross income taxes (other than gross income taxes imposed in the form of withholding taxes) imposed by the United States on any Lender (x) at the time such Lender became a party hereto (or designated a new lending office), except in the case of an assignee pursuant to subsection 2.9, or (y) as a result of such Lender ceasing to be eligible for a complete exemption from such taxes after the date such Lender becomes a party hereto (except to the extent that such Lender’s failure to be so eligible is as a result of a Change in Law, any action that Company or any of its Affiliates takes, or as a result of an assignment pursuant to Company’s request under subsection 2.9); and (iv) any withholding tax that (x) would have been imposed on amounts payable to such Lender at the time it became a party hereto (or designated a new lending office), except in the case of an assignee pursuant to a request of Company under subsection 2.9, (y) is attributable to such Lender’s failure or inability (including by reason of not being legally entitled to do so, other than as a result of a Change in Law) to comply with its obligations under subsection 2.7B(iv), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from Company with respect to such withholding tax pursuant to subsection 2.7B or (z) as a result of a Lender or Administrative Agent ceasing to be eligible for a complete exemption from such taxes after the date the Lender becomes a party hereto (except to the extent that such Lender’s Agent failure to be so eligible is as a result of a Change in Law, any action that Company or any of its Affiliates takes, or as a result of an assignment pursuant to Company’s request under subsection 2.9).

“Extension Request” is defined in subsection 2.11.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by Administrative Agent.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on December 31 of each calendar year. For purposes of this Agreement, any particular Fiscal Year shall be designated by reference to the calendar year in which such Fiscal Year ends.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Company is resident for tax purposes. For purposes of this definition, the United States, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Form 10” means that certain filing on Securities and Exchange Commission Form 10-12B of Company filed with the Securities and Exchange Commission on June 7, 2005,

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as amended by those certain filings on Securities and Exchange Commission Form 10-12B/A filed on July 25, 2005, August 15, 2005 and August 19, 2005.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

“Funding and Payment Office” means (i) the office of Administrative Agent and Swing Line Lender located at 201 Third Street, 8th Floor, San Francisco, California 94103 or (ii) such other office of Administrative Agent and Swing Line Lender as may from time to time hereafter be designated as such in a written notice delivered by Administrative Agent and Swing Line Lender to Company and each Lender.

“Funding Date” means the date of funding of a Loan.

“GAAP” means, subject to the limitations on the application thereof set forth in subsection 1.2, generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are applicable to the circumstances as of the date of determination.

“Governing Body” means the board of directors or other body having the power to direct or cause the direction of the management and policies of a Person that is a corporation, partnership, trust or limited liability company.

“Government Authority” means the government of the United States or any other nation, or any state, regional or local political subdivision or department thereof, and any other governmental or regulatory agency, authority, body, commission, central bank, board, bureau, organ, court, instrumentality or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, in each case whether federal, state, local or foreign (including supra-national bodies such as the European Union or the European Central Bank).

“Governmental Authorization” means any permit, license, registration, authorization, plan, directive, accreditation, consent, order or consent decree of or from, or notice to, any Government Authority.

“Hazardous Materials” means (i) any chemical, material or substance at any time defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”, “toxic substances”, or any other term or expression intended to define, list or classify substances by reason of properties harmful to health, safety or the indoor or outdoor environment (including harmful properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any applicable Environmental Laws); (ii) any oil, petroleum,

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petroleum fraction or petroleum derived substance; (iii) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (iv) any flammable substances or explosives; (v) any radioactive materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Government Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any facility of Company or any of its Subsidiaries or to the indoor or outdoor environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement designed to hedge against fluctuations in interest rates or currency values, respectively.

“Indebtedness”, as applied to any Person, means (i) indebtedness created, issued or incurred for borrowed money (whether by loan or the issuance and sale of debt securities), but excluding customer deposits, investment accounts and certificates, and insurance reserves, (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) obligations to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business (excluding any such obligations incurred under ERISA), (iv) obligations in respect of letters of credit or similar instruments; and (v) Contingent Obligations of such Person in respect of Indebtedness of the types described in clauses (i), (ii), (iii) and (iv) of this definition.

“Indemnified Liabilities” has the meaning assigned to that term in subsection 10.3.

“Indemnified Taxes” means any Taxes imposed on, asserted with respect to or attributable to (i) any payment made or received under any Loan Document or (ii) the execution, entering into, delivery, performance or enforcement of any Loan Document, including all Other Taxes, but in each case excluding Excluded Taxes.

“Indemnitee” has the meaning assigned to that term in subsection 10.3.

“Insurance Subsidiary” means any Subsidiary which is engaged in the insurance business.

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the last Business Day of each March, June, September and December of each year, commencing on the first such date to occur after the Closing Date, and (ii) with respect to any Eurodollar Rate Loan,

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the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or a multiple thereof, after the commencement of such Interest Period.

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Interest Rate Determination Date”, with respect to any Interest Period, means the second Business Day prior to the first day of such Interest Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

“Issuing Lender”, with respect to any Letter of Credit, means Wells Fargo or another Lender requested by Company and approved by Administrative Agent that agrees or is otherwise obligated to issue such Letter of Credit, determined as provided in subsection 3.1B(ii).

“Lender” and “Lenders” means the Persons identified as “Lenders” and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 10.1, and the term “Lenders” shall include Swing Line Lender unless the context otherwise requires.

“Letter of Credit” or “Letters of Credit” means standby letters of credit issued or to be issued by Issuing Lenders for the account of Company pursuant to subsection 3.1.

“Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum aggregate amount which is or at any time thereafter may become available for drawing under all Letters of Credit then outstanding plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed by Company. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of the UCP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“License” means any license, certificate of authority, permit or other authorization which is required to be obtained from any Government Authority in connection with the operation, ownership or transaction of insurance, broker-dealer or investment advisory businesses or other regulated businesses.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

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“Loan” or “Loans” means one or more of the Loans made by Lenders to Company pursuant to subsection 2.1A and shall include one or more Revolving Loans, Bid Loans and Swing Line Loans.

“Loan Documents” means this Agreement, the Notes and the Letters of Credit (and any applications for, or reimbursement agreements or other documents or certificates executed by Company in favor of an Issuing Lender relating to, the Letters of Credit).

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means a material adverse effect upon (i) the business, financial condition, prospects or operations of Company and its Subsidiaries taken as a whole or (ii) Company’s ability to perform its obligations under the Loan Documents, or (iii) the enforceability of the Obligations.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means any Employee Benefit Plan that is a “multiemployer plan” as defined in Section 3(37) of ERISA.

“Notes” means one or more of the Revolving Notes or Swing Line Note or any combination thereof.

“Notice of Conversion/Continuation” means a notice substantially in the form of Exhibit II annexed hereto.

“Notice of Revolving Borrowing” means a notice substantially in the form of Exhibit I annexed hereto.

“Obligations” means all obligations of every nature of Company from time to time owed to Administrative Agent, Lenders or any of them under the Loan Documents, whether for principal, interest, reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification or otherwise.

“Officer” means the president, chief executive officer, a vice president, chief financial officer, treasurer, general partner (if an individual), managing member (if an individual) or other individual appointed by the Governing Body or the Organizational Documents of a corporation, partnership, trust or limited liability company to serve in a similar capacity as the foregoing.

“Officer’s Certificate”, as applied to any Person that is a corporation, partnership, trust or limited liability company, means a certificate executed on behalf of such Person by one or more Officers of such Person or one or more Officers of a general partner or a managing member if such general partner or managing member is a corporation, partnership, trust or limited liability company.

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“Organizational Documents” means the documents (including bylaws, if applicable) pursuant to which a Person that is a corporation, partnership, trust or limited liability company is organized.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes (other than property taxes generally imposed), charges, fees, expenses or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Participant” means a purchaser of a participation in the rights and obligations under this Agreement pursuant to subsection 10.1C.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.

“Permitted Encumbrances” means the following types of Liens (excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA, and any such Lien relating to or imposed in connection with any Environmental Claim):

(i) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by subsection 6.3;

(ii) statutory Liens of landlords, Liens of collecting banks under the UCC on items in the course of collection, statutory Liens and rights of set-off of banks, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 5 days) are being contested in good faith by appropriate proceedings, so long as (1) such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, and (2) no foreclosure, sale or similar proceedings have been commenced;

(iii) deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, old age pensions and other types of social security, for the maintenance of self-insurance or to secure the performance of statutory obligations, bids, leases, government contracts, trade contracts, and other similar obligations (exclusive of obligations for the payment of borrowed money), so long as no foreclosure, sale or similar proceedings have been commenced with respect thereto;

(iv) any attachment or judgment Lien not constituting an Event of Default under subsection 8.8;

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(v) licenses (with respect to intellectual property and other property), leases or subleases granted to third parties not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries;

(vi) easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries;

(vii) any (a) interest or title of a lessor or sublessor under any lease not prohibited by this Agreement, (b) Lien or restriction that the interest or title of such lessor or sublessor may be subject to, or (c) subordination of the interest of the lessee or sublessee under such lease to any Lien or restriction referred to in the preceding clause (b), so long as the holder of such Lien or restriction agrees to recognize the rights of such lessee or sublessee under such lease;

(viii) Liens arising from filing UCC financing statements relating solely to leases not prohibited by this Agreement;

(ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(x) any zoning or similar law or right reserved to or vested in any Government Authority to control or regulate the use of any real property; and

(xi) Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of Company and its Subsidiaries.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Government Authorities.

“Potential Event of Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Prime Rate” means the rate that Wells Fargo announces from time to time as its prime lending rate, as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Wells Fargo or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Proceedings” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration.

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“Pro Rata Share” means (i) with respect to all payments, computations and other matters relating to the Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit issued or participations therein deemed purchased by any Lender or any assignments of any Swing Line Loans deemed purchased by any Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, and (ii) for all other purposes with respect to each Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each of clauses (i), (ii), and (iii) of the preceding sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed hereto.

“Quarterly Statement” means the quarterly statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing quarterly statutory financial statements and shall contain the type of financial information permitted by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith.

“Refunded Swing Line Loans” has the meaning assigned to that term in subsection 2.1A(ii).

“Register” has the meaning assigned to that term in subsection 2.1D.

“Regulated Subsidiary” means any Insurance Subsidiary or any other Subsidiary of Company engaged in the broker-dealer or investment advisory businesses or otherwise subject to specific licensing or regulatory schemes by a Government Authority.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), including the movement of any Hazardous Materials through the air, soil, surface water or groundwater.

“Request for Issuance” means a request substantially in the form of Exhibit III annexed hereto.

“Requisite Lenders” means Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders; provided that the Commitment of, and the portion of the Total Utilization of Revolving Credit Commitments held or deemed held by, any

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Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

“Response Date” is defined in subsection 2.11.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Company now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class or an increase in the liquidation value of shares of that class of stock, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company now or hereafter outstanding, and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Company now or hereafter outstanding.

“Revolving Loan Commitment” means the commitment of a Lender to make Revolving Loans to Company pursuant to subsection 2.1A(i), and “Revolving Loan Commitments” means such commitments of all Lenders in the aggregate.

“Revolving Loan Commitment Amount” means, at any date, the aggregate amount of the Revolving Loan Commitments of all Lenders.

“Revolving Loan Commitment Termination Date” means September 30, 2010, as such date may be extended in accordance with subsection 2.11; provided that if the Spin-Off Transaction has not been consummated on or before October 31, 2005, the Revolving Loan Commitment Termination Date shall be October 31, 2005.

“Revolving Loan Exposure”, with respect to any Lender, means, as of any date of determination (i) prior to the termination of the Revolving Loan Commitments, the amount of that Lender’s Revolving Loan Commitment, and (ii) after the termination of the Revolving Loan Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of that Lender plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (in each case net of any participations purchased by other Lenders in such Letters of Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount of all participations purchased by that Lender in any outstanding Letters of Credit or any unreimbursed drawings under any Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any assignments thereof deemed purchased by other Lenders) plus (e) the aggregate amount of all assignments deemed purchased by that Lender in any outstanding Swing Line Loans.

“Revolving Loans” means the Loans made by Lenders to Company pursuant to subsection 2.1A(i).

“Revolving Notes” means any promissory notes of Company issued pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders, substantially in the form of Exhibit IV annexed hereto.

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“S&P” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc.

“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting practices prescribed or permitted by the insurance commissioner (or other similar authority) in the jurisdiction of such Person for the preparation of annual statements and other financial reports by insurance companies of the same type as such Person in effect from time to time, applied in a manner consistent with those used in preparing the financial statements referred to in Section 6.1.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated, certificated or uncertificated, or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Securities Laws” means the Securities Act, the Exchange Act, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the Securities and Exchange Commission or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

“Separation and Distribution Agreement” means the Separation and Distribution Agreement dated as of August 24, 2005 by and between Company and American Express Company.

“Significant Subsidiary” means, at any date of determination, any Subsidiary of Company which either (i) has assets at such time in excess of $1,000,000,000 or (ii) has net income in an amount in excess of 10% of the consolidated net income of Company and its Subsidiaries on a consolidated basis as reflected in the then most recent consolidated financial statements of Company and its Subsidiaries delivered pursuant to Section 6.1. The Significant Subsidiaries of Company as of June 30, 2005 are listed on Schedule 1.1 annexed hereto.

“Solvent”, with respect to any Person, means that as of the date of determination both (i)(a) the then fair saleable value of the property of such Person is (1) greater than the total amount of liabilities (including contingent liabilities) of such Person and (2) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and due considering all financing alternatives, ordinary operating income and potential asset sales reasonably available to such Person; (b) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it

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will incur, debts beyond its ability to pay such debts as they become due; and (ii) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Spin-Off Transaction” means the distribution by American Express Company to its stockholders by means of a share dividend of 100% of the outstanding common stock of Company owned by American Express Company and all transactions related thereto, all substantially as described in the Form 10.

“Spin-Off Transaction Documents” means, collectively, the Separation and Distribution Agreement, the Tax Allocation Agreement, the Transition Services Agreement and all other material definitive documents pertaining to the Spin-Off Transaction.

“Subsidiary”, with respect to any Person, means any corporation, partnership, trust, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the members of the Governing Body is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

“Swap Counterparty” means a Lender or an Affiliate of a Lender that has entered into a Hedge Agreement with Company or one of its Subsidiaries.

“Swing Line Lender” means Wells Fargo, or any Person serving as a successor Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

“Swing Line Loan Commitment” means the commitment of Swing Line Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(ii).

“Swing Line Loans” means the Loans made by Swing Line Lender to Company pursuant to subsection 2.1A(ii).

“Swing Line Note” means any promissory note of Company issued pursuant to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender, substantially in the form of Exhibit V annexed hereto.

“Tax” or “Taxes” means any present or future tax, levy, impost, duty, fee, assessment, deduction, withholding or other charge of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed, including interest, penalties, additions to tax and any similar liabilities with respect thereto.

“Tax Allocation Agreement” means the Tax Allocation Agreement dated as of September 30, 2005 by and between Company and American Express Company.

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“Total Utilization of Revolving Loan Commitments” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans plus (ii) the aggregate principal amount of all outstanding Bid Loans plus (iii) the aggregate principal amount of all outstanding Swing Line Loans plus (iv) the Letter of Credit Usage.

“Transition Services Agreement” means the Transition Services Agreement dated as of September 30, 2005 by and between Company and American Express Company.

“Type” means (a) with respect to a Revolving Loan, its character as a Base Rate Loan or a Eurodollar Rate Revolving Loan, and (b) with respect to a Bid Loan, its character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.

“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.

“UCP” is defined in subsection 3.6.

“Unasserted Obligations” means, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, any Indebtedness and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for payment has been made (or, in the case of Obligations for indemnification, no notice for indemnification has been issued by the Indemnitee) at such time.

“Wells Fargo” has the meaning assigned to that term in the introduction to this Agreement.

1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall

have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Lenders pursuant to subsection 6.1 shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in subsection 6.1(v)). Calculations in connection with the definitions, covenants and other provisions of this Agreement shall utilize GAAP as in effect on the date of determination, applied in a manner consistent with that used in preparing the financial statements referred to in subsection 5.3. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and Company, Administrative Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and Company shall provide to Administrative Agent and Lenders reconciliation statements provided for in subsection 6.1(v). For purposes of determining compliance with the financial covenants in Section 7.4 of this Agreement, the application of Financial Accounting Standards Board Interpretation No. 46 shall be disregarded with respect to

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financial consolidation of any entity that is required to be included in the consolidated financial statements of Company solely as a result of such application.

1.3 Other Definitional Provisions and Rules of Construction. A. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the

plural, depending on the reference.

B. References to “Sections” and “subsections” shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

C. The use in any of the Loan Documents of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

D. Unless otherwise expressly provided herein, references to Organizational Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document.

Section 2. AMOUNTS AND TERMS OF LOANS 2.1 Loans; Making of Loans; the Register; Optional Notes; Bid Loans.

A. Loans. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, each Lender hereby severally agrees to make Revolving Loans as described in subsection 2.1A(i) and Swing Line Lender hereby agrees to make the Swing Line Loans as described in subsection 2.1A(ii). In addition, Company may request Bid Loans as described in subsection 2.1A(iii).

(i) Revolving Loans. Each Lender severally agrees, subject to the limitations set forth below with respect to the maximum amount of Revolving Loans permitted to be outstanding from time to time, to make revolving loans (each such loan a “Revolving Loan”) to Company from time to time during the period from the Effective Date to but excluding the Revolving Loan Commitment Termination Date in an aggregate amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan Commitments to be used in accordance with the terms of this Agreement. The original amount of each Lender’s Revolving Loan Commitment is set forth opposite its name on Schedule 2.1 annexed hereto and the original Revolving Loan Commitment Amount is $750,000,000; provided that the amount of the Revolving Loan Commitment of each

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Lender shall be adjusted to give effect to any assignment of such Revolving Loan Commitment pursuant to subsection 10.1B and shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4. Each Lender’s Revolving Loan Commitment shall expire on the Revolving Loan Commitment Termination Date and Company hereby agrees that all Revolving Loans and all other Obligations shall be paid in full no later than that date. Amounts borrowed under this subsection 2.1A(i) may be repaid and reborrowed to but excluding the Revolving Loan Commitment Termination Date.

Anything contained in this Agreement to the contrary notwithstanding, the Revolving Loans and the Revolving Loan Commitments shall be subject to the limitation that in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan Commitment Amount then in effect.

(ii) Swing Line Loans.

(a) General Provisions. Swing Line Lender hereby agrees, subject to the limitations set forth in the last paragraph of subsection 2.1A(ii) and set forth below with respect to the maximum amount of Swing Line Loans permitted to be outstanding from time to time, to make a portion of the Revolving Loan Commitments available to Company from time to time during the period from the Effective Date to but excluding the Revolving Loan Commitment Termination Date by making Swing Line Loans to Company in an aggregate amount not exceeding the amount of the Swing Line Loan Commitment to be used for the purposes identified in subsection 2.5A, notwithstanding the fact that such Swing Line Loans, when aggregated with Swing Line Lender’s outstanding Revolving Loans and Swing Line Lender’s Pro Rata Share of the Letter of Credit Usage then in effect, may exceed Swing Line Lender’s Revolving Loan Commitment. The original amount of the Swing Line Loan Commitment is $25,000,000; provided that any reduction of the Revolving Loan Commitment Amount made pursuant to subsection 2.4 that reduces the Revolving Loan Commitment Amount to an amount less than the then current amount of the Swing Line Loan Commitment shall result in an automatic corresponding reduction of the amount of the Swing Line Loan Commitment to the amount of the Revolving Loan Commitment Amount, as so reduced, without any further action on the part of Company, Administrative Agent or Swing Line Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan Commitment Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans shall be paid in full no later than that date.

(b) Swing Line Loan Prepayment with Proceeds of Revolving Loans. With respect to any Swing Line Loans that have not been voluntarily prepaid by Company pursuant to subsection 2.4A(i), Swing Line Lender may, at any time in its sole and absolute discretion but not less frequently than once weekly, deliver to Administrative Agent (with a copy to Company), no later than 12:00 noon (Minneapolis time) on the first Business Day in advance of the proposed Funding Date, a notice requesting Lenders to make Revolving Loans that are Base Rate

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Loans on such Funding Date in an amount equal to the amount of such Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is given. Company hereby authorizes the giving of any such notice and the making of any such Revolving Loans. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to Company) and applied to repay a corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and shall no longer be due under the Swing Line Note, if any, of Swing Line Lender but shall instead constitute part of Swing Line Lender’s outstanding Revolving Loans and shall be due under the Revolving Note, if any, of Swing Line Lender. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of Company from Swing Line Lender in any bankruptcy proceeding, in any assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by subsection 10.5.

(c) Swing Line Loan Assignments. On the Funding Date of each Swing Line Loan, each Lender shall be deemed to, and hereby agrees to, purchase an assignment of such Swing Line Loan in an amount equal to its Pro Rata Share. If for any reason (1) Revolving Loans are not made upon the request of Swing Line Lender as provided in the immediately preceding paragraph in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of such Swing Line Loan or (2) the Revolving Loan Commitments are terminated at a time when such Swing Line Loan is outstanding, upon notice from Swing Line Lender as provided below, each Lender shall fund the purchase of such assignment in an amount equal to its Pro Rata Share (calculated, in the case of the foregoing clause (2), immediately prior to such termination of the Revolving Loan Commitments) of the unpaid amount of such Swing Line Loan together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Lender shall deliver to Swing Line Lender such amount in same day funds at the Funding and Payment Office. In order to further evidence such assignment (and without prejudice to the effectiveness of the assignment provisions set forth above), each Lender agrees to enter into an Assignment Agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any Lender fails to make available to Swing Line Lender any amount as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon at the rate customarily used by Swing Line Lender for the correction of errors among banks for three Business Days and thereafter at the Base Rate. In the event Swing Line Lender receives a payment of any amount with respect to which other Lenders have funded the purchase of

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assignments as provided in this paragraph, Swing Line Lender shall promptly distribute to each such other Lender its Pro Rata Share of such payment.

(d) Lenders’ Obligations. Anything contained herein to the contrary notwithstanding, each Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to subsection 2.1A(ii)(b) and each Lender’s obligation to purchase an assignment of any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including (1) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, Company or any other Person for any reason whatsoever; (2) the occurrence or continuation of an Event of Default or a Potential Event of Default; (3) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries; (4) any breach of this Agreement or any other Loan Document by any party thereto; or (5) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that such obligations of each Lender are subject to the condition that (x) Swing Line Lender believed in good faith that all conditions under Section 4 to the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as the case may be, were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made or (y) the satisfaction of any such condition not satisfied had been waived in accordance with subsection 10.6 prior to or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made.

(iii) Bid Loans.

(a) General. Subject to the terms and conditions set forth herein, each Lender agrees that Company may from time to time request the Lenders to submit offers to make loans in Dollars (each such loan, a “Bid Loan”) to Company prior to the Revolving Loan Commitment Termination Date pursuant to this subsection 2.1A(iii); provided, however, that after giving effect to any Bid Borrowing, the Total Utilization of Revolving Loan Commitments shall not exceed the Revolving Loan Commitment Amount. There shall not be more than seven different Interest Periods in effect with respect to Bid Loans at any time. Company shall repay each Bid Loan on the last day of the Interest Period in respect thereof.

(b) Requesting Competitive Bids. Company may request the submission of Competitive Bids by delivering a Bid Request to the Administrative Agent not later than 1:00 P.M. (Minneapolis time) (i) one Business Day prior to the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans. Each Bid Request shall specify (i) the requested date of the Bid Borrowing (which shall be a Business Day), (ii) the aggregate principal amount of Bid Loans requested (which must be in a minimum amount of $5,000,000 and a multiple of $1,000,000

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in excess thereof), (iii) the Type of Bid Loans requested, (iv) the duration of the Interest Period with respect thereto (which shall be for maturities of 7 to 360 days) and (v) the day-count convention, if other than actual/360, and shall be signed by an authorized Officer of Company. No Bid Request shall contain a request for (i) more than one Type of Bid Loan or (ii) Bid Loans having more than three different Interest Periods. Unless the Administrative Agent otherwise agrees in its sole and absolute discretion, Company may not submit a Bid Request if it has submitted another Bid Request within the prior five Business Days.

(c) Submitting Competitive Bids.

(i) The Administrative Agent shall promptly notify each Lender of each Bid Request received by it from Company and the contents of such Bid Request.

(ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid containing an offer to make one or more Bid Loans in response to such Bid Request. Such Competitive Bid must be delivered to the Administrative Agent not later than 11:30 A.M. (Minneapolis time) (A) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and (B) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans; provided, however, that any Competitive Bid submitted by Wells Fargo in its capacity as a Lender in response to any Bid Request must be submitted to the Administrative Agent not later than 11:15 A.M. (Minneapolis time) on the date on which Competitive Bids are required to be delivered by the other Lenders in response to such Bid Request. Each Competitive Bid shall specify (A) the proposed date of the Bid Borrowing; (B) the principal amount of each Bid Loan for which such Competitive Bid is being made, which principal amount (x) may be equal to, greater than or less than the Commitment of the bidding Lender, (y) must be in a minimum amount of $5,000,000 and a multiple of $1,000,000 in excess thereof, and (z) may not exceed the principal amount of Bid Loans for which Competitive Bids were requested; (C) if the proposed Bid Borrowing is to consist of Absolute Rate Loans, the Absolute Rate offered for each such Bid Loan and the Interest Period applicable thereto; (D) if the proposed Bid Borrowing is to consist of Eurodollar Margin Bid Loans, the Eurodollar Bid Margin with respect to each such Eurodollar Margin Bid Loan and the Interest Period applicable thereto; and (E) the identity of the bidding Lender.

(iii) Any Competitive Bid shall be disregarded if it (A) is received after the applicable time specified in subsection (ii) above, (B) is not substantially in the form of a Competitive Bid as specified herein, (C) contains qualifying, conditional or similar language, (D) proposes terms other than or in addition to those set forth in the applicable Bid Request, or (E) is otherwise not responsive to such Bid Request. Any Lender may

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correct a Competitive Bid containing a manifest error by submitting a corrected Competitive Bid (identified as such) not later than the applicable time required for submission of Competitive Bids. Any such submission of a corrected Competitive Bid shall constitute a revocation of the Competitive Bid that contained the manifest error. The Administrative Agent may, but shall not be required to, notify any Lender of any manifest error it detects in such Lender’s Competitive Bid.

(iv) Subject only to the provisions of subsections 2.6B, 2.6C and 4.2 and subsection (iii) above, each Competitive Bid shall be irrevocable.

(d) Notice to Borrower of Competitive Bids. Not later than 12:00 noon (Minneapolis time) (i) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans, the Administrative Agent shall notify Company of the identity of each Lender that has submitted a Competitive Bid that complies with subsection 2.1A(iii)(c) and of the terms of the offers contained in each such Competitive Bid.

(e) Acceptance of Competitive Bids. Not later than 12:30 P.M. (Minneapolis time) (i) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans, Company shall notify the Administrative Agent of its acceptance or rejection of the offers notified to it pursuant to subsection 2.1A(iii)(d). Company shall be under no obligation to accept any Competitive Bid and may choose to reject all Competitive Bids. In the case of acceptance, such notice shall specify the aggregate principal amount of Competitive Bids for each Interest Period that is accepted. Company may accept any Competitive Bid in whole or in part; provided that:

(i) the aggregate principal amount of each Bid Borrowing may not exceed the applicable amount set forth in the related Bid Request;

(ii) the principal amount of each Bid Loan must be $5,000,000 and a multiple of $1,000,000 in excess thereof;

(iii) the acceptance of offers may be made only on the basis of ascending Absolute Rates or Eurodollar Bid Margins within each Interest Period; and

(iv) Company may not accept any offer that is described in subsection 2.1A(iii)(c)(iii) or that otherwise fails to comply with the requirements hereof.

(f) Procedure for Identical Bids. If two or more Lenders have submitted Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin,

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as the case may be, for the same Interest Period, and the result of accepting all of such Competitive Bids in whole (together with any other Competitive Bids at lower Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted for such Interest Period in conformity with the requirements of subsection 2.1A(iii)(e)(iii)) would be to cause the aggregate outstanding principal amount of the applicable Bid Borrowing to exceed the amount specified therefor in the related Bid Request, then, unless otherwise agreed by Company, the Administrative Agent and such Lenders, such Competitive Bids shall be accepted as nearly as possible in proportion to the amount offered by each such Lender in respect of such Interest Period, with such accepted amounts being rounded to the nearest whole multiple of $1,000,000.

(g) Notice to Lenders of Acceptance or Rejection of Bids. The Administrative Agent shall promptly notify each Lender having submitted a Competitive Bid whether or not its offer has been accepted and, if its offer has been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof that is not accepted by Company by the applicable time specified in subsection 2.1A(iii)(e) shall be deemed rejected.

(h) Notice of Eurodollar Base Rate. If any Bid Borrowing is to consist of Eurodollar Margin Loans, the Administrative Agent shall determine the Eurodollar Base Rate for the relevant Interest Period, and promptly after making such determination, shall notify Company and the Lenders that will be participating in such Bid Borrowing of such Eurodollar Base Rate.

(i) Funding of Bid Loans. Each Lender that has received notice pursuant to subsection 2.1A(iii)(g) that all or a portion of its Competitive Bid has been accepted by Company shall make the amount of its Bid Loan(s) available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 2:00 P.M. (Minneapolis time) on the date of the requested Bid Borrowing. Upon satisfaction of the applicable conditions set forth in subsection 4.2, the Administrative Agent shall make all funds so received available to Company in like funds as received by the Administrative Agent.

(j) Notice of Range of Bids. After each Competitive Bid auction pursuant to this subsection 2.1A(iii), the Administrative Agent shall notify each Lender that submitted a Competitive Bid in such auction of the ranges of bids submitted (without the bidder’s name) and accepted for each Bid Loan and the aggregate amount of each Bid Borrowing.

B. Borrowing Mechanics. Revolving Loans made on any Funding Date (other than Swing Line Loans, Revolving Loans made pursuant to a request by Swing Line Lender pursuant to subsection 2.1A(ii) or Revolving Loans made pursuant to subsection 3.3B) shall be in an aggregate minimum amount of $5,000,000 and multiples of $1,000,000 in excess of that amount. Swing Line Loans made on any Funding Date shall be in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess of that amount. Whenever Company

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desires that Lenders make Revolving Loans it shall deliver to Administrative Agent a duly executed Notice of Revolving Borrowing no later than 1:00 P.M. (Minneapolis time) at least three Business Days in advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business Day in advance of the proposed Funding Date (in the case of a Base Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line Loan, it shall deliver to Administrative Agent a duly executed Notice of Revolving Borrowing no later than 1:00 P.M. (Minneapolis time) on the proposed Funding Date. Revolving Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In lieu of delivering a Notice of Revolving Borrowing, Company may give Administrative Agent telephonic notice by the required time of any proposed borrowing under this subsection 2.1B; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Revolving Borrowing to Administrative Agent on or before the applicable Funding Date.

Neither Administrative Agent nor any Lender shall incur any liability to Company in acting upon any telephonic notice referred to above that Administrative Agent believes in good faith to have been given by an Officer or other person authorized to borrow on behalf of Company or for otherwise acting in good faith under this subsection 2.1B or under subsection 2.2D, and upon funding of Loans by Lenders, and upon conversion or continuation of the applicable basis for determining the interest rate with respect to any Loans pursuant to subsection 2.2D, in each case in accordance with this Agreement, pursuant to any such telephonic notice Company shall have effected Loans or a conversion or continuation, as the case may be, hereunder.

Company shall notify Administrative Agent prior to the funding of any Revolving Loans in the event that any of the matters to which Company is required to certify in the applicable Notice of Revolving Borrowing is no longer true and correct as of the applicable Funding Date, and the acceptance by Company of the proceeds of any Revolving Loans shall constitute a re-certification by Company, as of the applicable Funding Date, as to the matters to which Company is required to certify in the applicable Notice of Revolving Borrowing.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Revolving Borrowing for, or a Notice of Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to make a borrowing or to effect a conversion or continuation in accordance therewith.

C. Disbursement of Funds. All Revolving Loans shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that neither Administrative Agent nor any Lender shall be responsible for any default by any other Lender in that other Lender’s obligation to make a Revolving Loan requested hereunder nor shall the amount of the Commitment of any Lender to make the particular Type of Loan requested be increased or decreased as a result of a default by any other Lender in that other Lender’s obligation to make a Revolving Loan requested hereunder. Promptly after receipt by Administrative Agent of a Notice of Revolving Borrowing pursuant to subsection 2.1A (or telephonic notice in lieu thereof), Administrative Agent shall notify each Lender for that Type of Loan or Swing Line Lender, as the case may be, of the proposed borrowing. Each such Lender

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(other than Swing Line Lender) shall make the amount of its Revolving Loan available to Administrative Agent not later than 1:00 P.M. (Minneapolis time) on the applicable Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan available to Administrative Agent not later than 3:00 P.M. (Minneapolis time) on the applicable Funding Date, in each case in same day funds in Dollars, at the Funding and Payment Office. Except as provided in subsection 2.1A(ii) and subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any Issuing Lender for the amount of a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of the conditions precedent specified in subsections 4.1 and 4.2, Administrative Agent shall make the proceeds of such Revolving Loans available to Company on the applicable Funding Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Revolving Loans received by Administrative Agent from Lenders to be credited to the account of Company at the Funding and Payment Office.

Unless Administrative Agent shall have been notified by any Lender prior to a Funding Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Revolving Loan requested on such Funding Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Funding Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Funding Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the rate payable under this Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.

D. The Register. Administrative Agent, acting for these purposes solely as an agent of Company (it being acknowledged that Administrative Agent, in such capacity, and its officers, directors, employees, agent and affiliates shall constitute Indemnitees under subsection 10.3), shall maintain (and make available for inspection by Company and by each Lender, but only as to information regarding the Loans made by such Lender, upon reasonable prior notice at reasonable times) at its address referred to in subsection 10.8 a register for the recordation of, and shall record, the names and addresses of Lenders and the respective amounts of the Revolving Loan Commitment, Swing Line Loan Commitment, Revolving Loans and Swing Line Loans of each Lender from time to time (the “Register”). Company, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof; all amounts owed with respect to any Commitment or Loan shall be owed to the Lender listed in the Register as the owner thereof; and any request, authority or consent of any Person who, at the

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time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans. Each Lender shall record on its internal records the amount of its Loans and Commitments and each payment in respect hereof, and any such recordation shall be conclusive and binding on Company, absent manifest error, subject to the entries in the Register, which shall, absent manifest error, govern in the event of any inconsistency with any Lender’s records. Failure to make any recordation in the Register or in any Lender’s records, or any error in such recordation, shall not affect any Loans or Commitments or any Obligations in respect of any Loans.

E. Optional Notes. If so requested by any Lender by written notice to Company (with a copy to Administrative Agent) at least two Business Days prior to the Closing Date or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to subsection 10.1) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after Company’s receipt of such notice) a promissory note or promissory notes to evidence such Lender’s Revolving Loans or Swing Line Loans, substantially in the form of Exhibit IV or Exhibit V annexed hereto, respectively, with appropriate insertions.

2.2 Interest on the Loans. A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7, each Revolving Loan shall bear

interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate or the Eurodollar Rate. Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate. The applicable basis for determining the rate of interest with respect to any Revolving Loan shall be selected by Company initially at the time a Notice of Revolving Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and the basis for determining the interest rate with respect to any Revolving Loan may be changed from time to time pursuant to subsection 2.2D. If on any day a Revolving Loan is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day that Loan shall bear interest determined by reference to the Base Rate.

(i) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Revolving Loans shall bear interest through maturity as follows:

(a) if a Base Rate Loan, then at the Base Rate; or

(b) if a Eurodollar Rate Loan, then at the sum of the Eurodollar Rate plus the Eurodollar Rate Margin.

(ii) Each Bid Loan shall bear interest on the outstanding principal amount thereof for the Interest Period therefor at a rate per annum equal to the Eurodollar Rate

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for such Interest Period plus (or minus) the Eurodollar Bid Margin, or at the Absolute Rate for such Interest Period, as the case may be.

(iii) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Swing Line Loans shall bear interest through maturity at the Base Rate.

B. Interest Periods. In connection with each Eurodollar Rate Loan or Bid Request, Company may, pursuant to the applicable Notice of Revolving Borrowing, Notice of Conversion/Continuation or Bid Request, as the case may be, select an interest period (each an “Interest Period”) to be applicable to such Loan, which Interest Period shall be, at Company’s option, (a) as to each Eurodollar Rate Revolving Loan, the period commencing on the date such Eurodollar Rate Revolving Loan is disbursed or converted to or continued as a Eurodollar Rate Revolving Loan and ending on the date one, two, three or six months thereafter, as selected by Company in its Notice of Revolving Borrowing or nine or twelve months if requested by Company and available to all the Lenders; and (b) as to each Bid Loan, a period of not less than 7 days and not more than 360 days as selected by Company in its Bid Request; provided that:

(i) the initial Interest Period for any Eurodollar Rate Loan shall commence on the Funding Date in respect of such Loan, in the case of a Loan initially made as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate Revolving Loan;

(ii) in the case of immediately successive Interest Periods applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice of Conversion/Continuation, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;

(iii) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

(iv) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.2B, end on the last Business Day of a calendar month;

(v) no Interest Period with respect to any portion of the Revolving Loans or any Bid Loans shall extend beyond the Revolving Loan Commitment Termination Date;

(vi) there shall be no more than seven Interest Periods with respect to Revolving Loans outstanding at any time; and

(vii) in the event Company fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Notice of Revolving Borrowing or Notice of

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Conversion/Continuation, Company shall be deemed to have selected an Interest Period of one month.

C. Interest Payments. Subject to the provisions of subsection 2.2E, interest on each Loan shall be payable in arrears on and to each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity (including final maturity); provided that, in the event any Swing Line Loans or any Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on such Loans through the date of such prepayment shall be payable on the next succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier, at final maturity).

D. Conversion or Continuation. Subject to the provisions of subsection 2.6, Company shall have the option (i) to convert at any time all or any part of its outstanding Revolving Loans equal to $1,000,000 and multiples of $100,000 in excess of that amount from Loans bearing interest at a rate determined by reference to one basis to Loans bearing interest at a rate determined by reference to an alternative basis or (ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate Revolving Loan, to continue all or any portion of such Loan equal to $1,000,000 and multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Revolving Loan; provided, however, that a Eurodollar Rate Revolving Loan may only be converted into a Base Rate Loan on the expiration date of an Interest Period applicable thereto.

Company shall deliver a duly executed Notice of Conversion/Continuation to Administrative Agent no later than 1:00 P.M. (Minneapolis time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Revolving Loan). In lieu of delivering a Notice of Conversion/Continuation, Company may give Administrative Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Conversion/Continuation to Administrative Agent on or before the proposed conversion/continuation date. Administrative Agent shall notify each Lender of any Loan subject to a Notice of Conversion/Continuation.

E. Default Rate. Upon the occurrence and during the continuation of any Event of Default, the outstanding principal amount of all Loans and, to the extent permitted by applicable law, any interest payments thereon not paid when due and any fees and other amounts then due and payable hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable upon demand by Administrative Agent at a rate that is 2% per annum in excess of the interest rate otherwise payable under this Agreement with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this subsection

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2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

F. Computation of Interest. Except as may be provided with respect to a Bid Loan, interest on the Loans shall be computed on the basis of a 365-day year (or a 366-day year in case of a leap year) with respect to Base Rate Loans bearing interest based on the Prime Rate and otherwise a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Revolving Loan, the date of conversion of such Eurodollar Rate Revolving Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Revolving Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

G. Maximum Rate. Notwithstanding the foregoing provisions of this subsection 2.2, in no event shall the rate of interest payable by Company with respect to any Loan exceed the maximum rate of interest permitted to be charged under applicable law.

2.3 Fees. A. Facility Fee. Company shall pay to the Administrative Agent for the account of each Lender in

accordance with its Pro Rata Share, a facility fee equal to the Applicable Margin times the actual daily amount of the Revolving Loan Commitment Amount (or, if the Revolving Loan Commitment Amount has terminated, on the Total Utilization of Revolving Loan Commitments), regardless of usage. The facility fee shall accrue at all times from the Closing Date to the Revolving Loan Commitment Termination Date (and thereafter so long as any Loans or Letter of Credit Usage remain outstanding), including at any time during which one or more of the conditions in subsection 4.2 is not met, and shall be due and payable in arrears on and to (but excluding) the last Business Day of each March, June, September and December of each year and on the Revolving Loan Commitment Termination Date (and, if applicable, thereafter on demand). The facility fee and utilization fee referred to in subsection 2.3B shall be calculated quarterly in arrears, and if there is any change in the Applicable Margin during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect.

B. Utilization Fee. Company agrees to pay to the Administrative Agent for the pro rata account of each Lender, in accordance with such Lender’s Loans, a utilization fee for each quarter during which the average daily Total Utilization of Revolving Loan Commitments for such quarter is greater than 50% of the Revolving Loan Commitment Amount. The utilization fee shall accrue at all such times, including at any time during which one or more of the conditions in subsection 4.2 is not met. If applicable, such utilization fee shall be equal to the Applicable Margin times the average daily Total Utilization of Revolving Loan Commitments during such quarter, due and payable in arrears on the last Business Day of each March, June,

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September and December of each year and on the Revolving Loan Commitment Termination Date (and, if applicable, thereafter on demand).

C. Other Fees. Company agrees to pay to the Agents such fees in the amounts and at the times separately agreed upon between Company and the Agents.

2.4 Repayments, Prepayments and Reductions of Revolving Loan Commitment Amount; General Provisions Regarding Payments. A. Prepayments and Reductions in Revolving Loan Commitment Amount.

(i) Voluntary Prepayments. Company may, upon written or telephonic notice to Administrative Agent on or prior to 12:00 noon (Minneapolis time) on the date of prepayment, which notice, if telephonic, shall be promptly confirmed in writing, at any time and from time to time prepay, without premium or penalty, any Swing Line Loan on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess of that amount. Company may, upon not less than one Business Day’s prior written or telephonic notice, in the case of Base Rate Loans, and three Business Days’ prior written or telephonic notice, in the case of Eurodollar Rate Loans, in each case given to Administrative Agent by 12:00 noon (Minneapolis time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent, who will promptly notify each Lender whose Loans are to be prepaid of such prepayment, at any time and from time to time prepay, without premium or penalty, any Revolving Loans on any Business Day in whole or in part in an aggregate minimum amount of $5,000,000 and multiples of $1,000,000 in excess of that amount. Notice of prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in subsection 2.4A(iv) and, in the case of Eurodollar Rate Loans, shall be subject to subsection 2.6D.

(ii) Voluntary Reductions of Revolving Loan Commitments. Company may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent, or upon such lesser number of days’ prior written or telephonic notice, as determined by Administrative Agent in its sole discretion, at any time and from time to time, terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitment Amount in an amount up to the amount by which the Revolving Loan Commitment Amount exceeds the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or reduction; provided that any such partial reduction of the Revolving Loan Commitment Amount shall be in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount. Company’s notice to Administrative Agent (who will promptly notify each Lender of such notice) shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction shall be effective on the date specified in Company’s notice and shall reduce the amount of the Revolving Loan Commitment of each Lender

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proportionately to its Pro Rata Share. Any such voluntary reduction of the Revolving Loan Commitment Amount shall be applied as specified in subsection 2.4A(iv).

(iii) Mandatory Prepayments Due to Reductions of Revolving Loan Commitment Amount. Company shall from time to time prepay first the Swing Line Loans, second the Revolving Loans and third the Bid Loans (and, after prepaying all Loans, Cash collateralize any outstanding Letters of Credit by depositing the requisite amount with the Issuing Lender) to the extent necessary so that the Total Utilization of Revolving Loan Commitments shall not at any time exceed the Revolving Loan Commitment Amount then in effect. At such time as the Total Utilization of Revolving Loan Commitments shall be equal to or less than the Revolving Loan Commitment Amount if no Event of Default has occurred and is continuing, to the extent any Cash collateral was provided by Company and has not been applied to any Obligations, such amount shall be released to Company.

(iv) Application of Prepayments.

(a) Application of Voluntary Prepayments by Type of Loans and Order of Maturity. Any voluntary prepayments pursuant to subsection 2.4A(i) shall be applied as specified by Company in the applicable notice of prepayment; provided that in the event Company fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied first to repay outstanding Swing Line Loans to the full extent thereof, and second to repay outstanding Revolving Loans to the full extent thereof.

(b) Application of Mandatory Prepayments by Type of Loans. Any mandatory reduction of the Revolving Loan Commitment Amount pursuant to this subsection 2.4A shall be in proportion to each Lender’s Pro Rata Share.

(c) Application of Prepayments to Base Rate Loans and Eurodollar Rate Loans. Considering Revolving Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by Company pursuant to subsection 2.6D.

(v) No Bid Loan may be prepaid without the prior consent of the applicable Bid Loan Lender.

B. General Provisions Regarding Payments.

(i) Manner and Time of Payment. All payments by Company of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 2:00 P.M. (Minneapolis time) on the date due at the Funding and Payment Office for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day.

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(ii) Application of Payments to Principal and Interest. Except as provided in subsection 2.2C, all payments in respect of the principal amount of any Loan shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments shall be applied to the payment of interest before application to principal.

(iii) Apportionment of Payments. Aggregate payments of principal and interest shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to Lenders’ respective Pro Rata Shares or, in the case of Bid Loans, for the account of the respective Lenders entitled to such payments. Administrative Agent shall promptly distribute to each Lender, at the account specified in the payment instructions delivered to Administrative Agent by such Lender, its Pro Rata Share of all such payments received by Administrative Agent and fees of such Lender, if any, when received by Administrative Agent pursuant to subsections 2.3 and 3.2. Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if, pursuant to the provisions of subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Revolving Loans, Administrative Agent shall give effect thereto in apportioning interest payments received thereafter.

(iv) Payments on Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the commitment fees hereunder, as the case may be.

C. Payments after Event of Default. Upon the occurrence and during the continuation of an Event of Default, if requested by Requisite Lenders, or upon acceleration of the Obligations pursuant to Section 8, all payments received by Administrative Agent, whether from Company or otherwise may, in the discretion of Administrative Agent, be held by Administrative Agent, and/or (then or at any time thereafter) shall be applied in full or in part by Administrative Agent, in each case in the following order of priority:

(i) to the payment of all costs and expenses of such sale, collection or other realization, all other expenses, liabilities and advances made or incurred by Administrative Agent in connection therewith, and all amounts for which Administrative Agent is entitled to compensation (including the fees described in subsection 2.3C), reimbursement and indemnification under any Loan Document and all advances made by Administrative Agent thereunder for the account of Company, and to the payment of all costs and expenses paid or incurred by Administrative Agent in connection with the Loan Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this Agreement and the Loan Documents;

(ii) thereafter, to the payment of all other Obligations for the ratable benefit of the holders thereof (subject to the provisions of subsection 2.4B(ii) hereof); and

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(iii) thereafter, to the payment to or upon the order of Company or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

2.5 Use of Proceeds. A. Loans. The proceeds of any Loans may be applied by Company for working capital or any other general

corporate purposes.

B. Margin Regulations. No portion of the proceeds of any borrowing under this Agreement shall be used by Company or any of its Subsidiaries in any manner that might cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of such Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds.

2.6 Special Provisions Governing Eurodollar Rate Loans. Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with

respect to Eurodollar Rate Loans as to the matters covered:

A. Determination of Applicable Interest Rate. On each Interest Rate Determination Date, Administrative Agent shall determine in accordance with the terms of this Agreement (which determination shall, absent manifest error, be conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Revolving Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each applicable Lender.

B. Inability to Determine Applicable Interest Rate. In the event that Administrative Agent shall have determined (which determination shall be conclusive and binding upon all parties hereto), on any Interest Rate Determination Date that by reason of circumstances affecting the interbank Eurodollar market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Eurodollar Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to Company and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Revolving Loans until such time as Administrative Agent notifies Company and Lenders that the circumstances giving rise to such notice no longer exist and (ii) any Notice of Revolving Borrowing or Notice of Conversion/Continuation given by Company with respect to the Loans in respect of which such determination was made shall be deemed to be for a Base Rate Loan.

C. Illegality or Impracticability of Eurodollar Rate Loans. In the event that on any date any Lender shall have determined (which determination shall be conclusive and binding upon all parties hereto but shall be made only after consultation with Company and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law,

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treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause such Lender material hardship, as a result of contingencies occurring after the date of this Agreement which materially and adversely affect the interbank Eurodollar market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Company and Administrative Agent of such determination. Administrative Agent shall promptly notify each other Lender of the receipt of such notice. Thereafter (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Revolving Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (b) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Revolving Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (d) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Revolving Borrowing, Bid Request or a Notice of Conversion/Continuation, Company shall have the option, subject to the provisions of subsection 2.6D, to rescind such Notice of Revolving Borrowing, Bid Request or Notice of Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above. Administrative Agent shall promptly notify each other Lender of the receipt of such notice. Except as provided in the immediately preceding sentence, nothing in this subsection 2.6C shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or Non-Commencement of Interest Periods. Company shall compensate each Lender, upon written request by that Lender pursuant to subsection 2.8A, for all reasonable losses, expenses and liabilities (including any interest paid by that Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by that Lender in connection with the liquidation or re-employment of such funds) which that Lender may sustain: (i) if for any reason (other than a default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Revolving Borrowing or a telephonic request therefor, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment or other principal payment or any conversion of any of its Eurodollar Rate Loans (including any prepayment or conversion occasioned by the circumstances described in subsection 2.6C) occurs on a date prior to the last day of an Interest Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by Company, or (iv) as a consequence of any other default by Company in the repayment of its Eurodollar Rate Loans on a date prior to the last day

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of the Interest Period therefor. Breakage cost loss shall consist of an amount equal to the excess, if a positive number, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Rate Loans provided for herein (excluding, however, the Eurodollar Rate Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market.

E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of that Lender.

F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A shall be made as though that Lender had funded each of its Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition of Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period, whether or not its Eurodollar Rate Loans had been funded in such manner.

G. Eurodollar Rate Loans After Default. After the occurrence of and during the continuation of an Event of Default, (i) Company may not elect to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan after the expiration of any Interest Period then in effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of Revolving Borrowing or Notice of Conversion/Continuation given by Company with respect to a requested borrowing or conversion/continuation that has not yet occurred shall be deemed to be for a Base Rate Loan or, if the conditions to making a Loan set forth in subsection 4.2 cannot then be satisfied, to be rescinded by Company.

2.7 Increased Costs; Taxes; Capital Adequacy. A. Compensation for Increased Costs. Subject to the provisions of subsection 2.7B (which shall be

controlling with respect to the matters covered thereby including, for the avoidance of doubt, Excluded Taxes), in the event that any Lender (including any Issuing Lender) shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any Change in Law:

(i) subjects such Lender to any additional tax of any kind whatsoever with respect to this Agreement or any of its obligations hereunder (including with respect to issuing or maintaining any Letters of Credit or purchasing or maintaining any participations therein or maintaining any Commitment hereunder) or any payments to such Lender of principal, interest, fees or any other amount payable hereunder (except for the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender);

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(ii) imposes, modifies or holds applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Eurodollar Rate); or

(iii) imposes any other condition (other than with respect to Taxes) on or affecting such Lender or its obligations hereunder or the interbank Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining its Loans or Commitments or agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to purchase, purchasing or maintaining any participation therein or to reduce any amount received or receivable by such Lender with respect thereto; then, in any such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in subsection 2.8A, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion may reasonably determine) as may be necessary to compensate such Lender on an after-tax basis for any such increased cost or reduction in amounts received or receivable hereunder. Company shall not be required to compensate a Lender pursuant to this subsection 2.7A for any increased cost or reduction in respect of a period occurring more than 90 days prior to the date on which such Lender notifies Company of such Change in Law and such Lender’s intention to claim compensation therefor, except, if the Change in Law giving rise to such increased cost or reduction is retroactive, no such 90 day time limitation shall apply to such period of retroactivity, so long as such Lender requests compensation within 90 days from the date on which such Lender obtained actual knowledge of such Change in Law.

B. Taxes.

(i) Payments to Be Free and Clear. Any and all payments by or on account of any obligation of Company under this Agreement and the other Loan Documents (except as required by law) shall be made free and clear of, and without any deduction or withholding on account of, any Indemnified Taxes.

(ii) Grossing-up of Payments. If Company or any other Person is required by law to make any deduction or withholding on account of any Tax from any sum paid or payable by Company to Administrative Agent or any Lender under any of the Loan Documents:

(a) Company shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Company becomes aware of it;

(b) Company shall timely pay any such Tax to the relevant Government Authority when such Tax is due, in accordance with applicable law;

(c) unless such Tax is an Excluded Tax, the sum payable by Company shall be increased to the extentnecessary to ensure that, after making the required

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deductions (including deductions applicable to additional sums payable under this subsection 2.7B(ii)), Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to the sum it would have received had no such deduction been required or made; and

(d) within 30 days after the due date of payment of any Tax which it is required by clause (b) above to pay, Company shall deliver to Administrative Agent the original or a certified copy of an official receipt or other document that provides reasonable evidence the payment and its remittance to the relevant Government Authority.

(iii) Indemnification by Company. Company shall indemnify Administrative Agent and each Lender, within 30 days after the date Administrative Agent or such Lender (as the case may be) makes written demand therefor, for the full amount of any Indemnified Taxes (including for the full amount of any Indemnified Taxes imposed or asserted on or attributable to amounts payable under this subsection 2.7B(iii)) paid by Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Government Authority. A certificate as to the amount of such payment or liability delivered to Company by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(iv) Tax Status of Lenders. Unless not legally entitled to do so:

(a) any Foreign Lender shall deliver two (2) copies to Company and Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter, as may be necessary in the determination of Company or Administrative Agent, each in the reasonable exercise of its discretion), of either:

(1) properly completed and duly executed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party, or

(2) properly completed and duly executed copies of Internal Revenue Service Form W-8ECI, or

(3) in the case of a Foreign Lender claiming the benefits of the exemption for “portfolio interest” under Section 881(c) of the Internal Revenue Code, (A) a duly executed certificate to the effect that such Foreign Lender is not (i) a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code) of Company or (iii) a controlled foreign corporation described in Section 881(c)(3)(C) of the Internal Revenue Code and (B) properly

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completed and duly executed copies of Internal Revenue Service Form W-8BEN,

in each case together with properly completed and duly executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in any Tax and such supplementary documentation as may be prescribed by applicable law to permit Company and Administrative Agent to determine the withholding or deduction required to be made, if any;

(b) any Lender that is not a Foreign Lender and has not otherwise established to the reasonable satisfaction of Company and Administrative Agent that it is an exempt recipient (as defined in section 6049(b)(4) of the Internal Revenue Code and the United States Treasury Regulations thereunder) shall deliver to Company and Administrative Agent two (2) copies on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter as prescribed by applicable law or upon the request of Company or Administrative Agent), duly executed and properly completed copies of Internal Revenue Service Form W-9; and

(c) each Lender hereby agrees, from time to time after the initial delivery by such Lender of such forms, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered obsolete or inaccurate in any material respect, that such Lender shall promptly (1) deliver to Administrative Agent and Company two original copies of renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required in order to confirm or establish that such Lender is entitled to an exemption from or reduction of any Tax with respect to payments to such Lender under the Loan Documents and, if applicable, that such Lender does not act for its own account with respect to any portion of such payment, or (2) notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence.

(v) Refunds. If Company believes that a Lender or Administrative Agent shall be entitled to a refund for any Indemnified Tax that Company has paid hereunder, it shall notify such Lender or Administrative Agent, as applicable, in writing of the availability of such refund and such Lender or Administrative Agent shall, within 30 days after the receipt of a request from Company, apply for such refund at Company’s sole expense. If Company has paid any Indemnified Taxes pursuant to this subsection 2.7B and any Lender or Administrative Agent at any time thereafter receives, in its sole judgment, a refund of such Indemnified Taxes (whether by receipt of a payment or direct offset for other such Taxes due), then such Lender or Administrative Agent shall promptly pay to Company the amount of such refund or credit (net of all expenses incurred by such Lender or Administrative Agent to obtain such refund and without interest, except for the after-Tax amount of any interest paid by the relevant Government Authority with respect to the refund); provided, however, that under no circumstances shall any Lender or Administrative Agent be required to make a payment under this

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subsection 2.7B(v) to the extent the after-Tax proceeds that such Lender or Administrative Agent receives under this Agreement or any other Loan Document (determined after any payment required under this subsection 2.7B(v)) is less than the after-Tax proceeds that such Lender or Administrative Agent would have received (as determined by such Lender or Administrative Agent in its sole judgment) had no Indemnified Taxes been imposed on the relevant payment hereunder. If a Lender or Administrative Agent makes a payment to Company under this subsection 2.7B(v) and such Lender or Administrative Agent is required to repay such refund to any Government Authority, Company agrees to repay the amount paid over to Company under this subsection 2.7B(v) (plus any penalties, interest, and other related charges imposed on such Lender or Administrative Agent by the applicable Government Authority with respect to the repayment of such refund).

C. Capital Adequacy Adjustment. If any Lender shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Commitments or Letters of Credit or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such Change in Law (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within ten Business Days after receipt by Company from such Lender of the statement referred to in subsection 2.8A, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Company shall not be required to compensate a Lender pursuant to this subsection 2.7C for any reduction in respect of a period occurring more than 90 days prior to the date on which such Lender notifies Company of such Change in Law and such Lender’s intention to claim compensation therefor, except, if the Change in Law giving rise to such reduction is retroactive, no such 90 day time limitation shall apply to such period of retroactivity, so long as such Lender requests compensation within 90 days from the date on which such Lender obtained actual knowledge of such Change in Law.

2.8 Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate.

A. Statements. Each Lender claiming compensation or reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis of the calculation of such compensation or reimbursement, which statement shall be conclusive and binding upon all parties hereto absent manifest error.

B. Mitigation. Each Lender and Issuing Lender agrees that, as promptly as practicable after the officer of such Lender or Issuing Lender responsible for administering the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender or Issuing Lender to receive payments under subsection 2.7, it will use reasonable efforts to make, issue, fund or maintain the

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Commitments of such Lender or the Loans or Letters of Credit of such Lender or Issuing Lender through another lending or letter of credit office of such Lender or Issuing Lender, if (i) as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7 would be materially reduced and (ii) as determined by such Lender or Issuing Lender in its good faith, reasonable judgment, such action would not otherwise be disadvantageous to such Lender or Issuing Lender; provided that such Lender or Issuing Lender will not be obligated to utilize such other lending or letter of credit office pursuant to this subsection 2.8B unless Company agrees to pay all incremental expenses incurred by such Lender or Issuing Lender as a result of utilizing such other lending or letter of credit office as described above.

2.9 Replacement of a Lender.

If (i) Company receives a statement of amounts due pursuant to subsection 2.8A from a Lender (other than for breakage costs under subsection 2.6D), (ii) a Lender is a Defaulting Lender, (iii) a Lender (a “Non-Consenting Lender”) refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to subsection 10.6, requires consent of 100% of the Lenders or 100% of the Lenders with Obligations directly affected or (iv) a Lender becomes an Affected Lender (any such Lender, a “Subject Lender”), so long as (i) no Event of Default shall have occurred and be continuing and Company has obtained a commitment from another Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the Subject Lender’s Commitments and all other obligations of the Subject Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any Letters of Credit outstanding (unless all such Letters of Credit are terminated or arrangements reasonably acceptable to such Issuing Lender (such as a “back-to-back” letter of credit) are made) and (iii), if applicable, the Subject Lender is unwilling to withdraw the notice delivered to Company pursuant to subsection 2.8 upon 10 days prior written notice to the Subject Lender and Administrative Agent and/or is unwilling to remedy its default upon three days prior written notice to the Subject Lender and Administrative Agent, Company may require the Subject Lender to assign all of its Loans and Commitments to such other Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection 10.1B; provided that, prior to or concurrently with such replacement, (1) the Subject Lender shall have received payment in full of all principal, interest, fees and other amounts (including all amounts under subsections 2.6D, 2.7 and/or 2.8B (if applicable)) through such date of replacement and a release from its obligations under the Loan Documents, (2) the processing fee required to be paid by subsection 10.1B(i) shall have been paid to Administrative Agent by Company or the assignee, (3) all of the requirements for such assignment contained in subsection 10.1B, including, without limitation, the consent of Administrative Agent (if required) and the receipt by Administrative Agent of an executed Assignment Agreement and other supporting documents, have been fulfilled, and (4) in the event such Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the time of such assignment, to each matter in respect of which such Subject Lender was a Non-Consenting Lender.

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2.10 Increase in Commitments.

A. Request for Increase. Provided there exists no Potential Event of Default or Event of Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), Company may from time to time request an increase in the Revolving Loan Commitment Amount by an amount (for all such requests) not exceeding $250,000,000; provided that (i) the Revolving Loan Commitment Amount may not exceed $1,000,000,000; and provided further that any such request for an increase shall be in a minimum amount of $25,000,000 and in multiples of $5,000,000 in excess thereof and (ii) Company may not request more than two increases during any twelve month period. At the time of sending such notice, Company (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

B. Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Loan Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Revolving Loan Commitment.

C. Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify Company and each Lender of the Lenders’ responses to each request made hereunder. If the Lenders do not agree to the full amount of a requested increase, subject to the approval of the Administrative Agent and the Issuing Lender (which approvals shall not be unreasonably withheld or delayed), Company may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

D. Effective Date and Allocations. If the Revolving Loan Commitment Amount is increased in accordance with this Section, the Administrative Agent and Company shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify Company and the Lenders of the final allocation of such increase, the Increase Effective Date and revised Pro Rata Shares.

E. Conditions to Effectiveness of Increase. As a condition precedent to such increase, Company shall deliver to the Administrative Agent an Officer’s Certificate dated as of the Increase Effective Date (i) certifying and attaching the resolutions adopted by Company approving or consenting to such increase, and (ii) certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Section 5 and the other Loan Documents are true and correct on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (B) no Potential Event of Default or Event of Default exists. Company shall prepay any Revolving Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to subsection 2.6D) to the extent necessary to keep the outstanding Revolving Loans ratable with any revised Pro Rata Shares arising from any nonratable increase in the Revolving Loan Commitments under this subsection.

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F. Conflicting Provisions. This Section shall supersede any provisions in subsection 10.5 or 10.6 to the contrary.

2.11 Extension of Revolving Loan Commitment Termination Date.

Prior to the Revolving Loan Commitment Termination Date, Company may request an extension of the Revolving Loan Commitment Termination Date by submitting a request for an extension to the Administrative Agent (an “Extension Request”) no earlier than 90 days, but no later than 60 days prior to either or both of the first and second anniversaries of the Closing Date. The Extension Request must specify the new Revolving Loan Commitment Termination Date requested by Company and the date (which must be at least 30 days after the Extension Request is delivered to the Administrative Agent) as of which the Lenders must respond to the Extension Request, which date shall not be less than 20 days prior to the applicable anniversary date (the “Response Date”). Promptly upon receipt of an Extension Request, the Agent shall notify each Lender of the contents thereof and shall request each Lender to approve the Extension Request. Each Lender may, in its sole and absolute discretion, approve or deny any Extension Request. Each Lender approving the Extension Request (an “Extending Lender”) shall deliver its written consent no later than the Response Date. The Administrative Agent shall provide written notice to Company of the Lenders’ response no later than 15 days prior to the applicable anniversary date. The Extending Lenders’ Revolving Loan Commitments (and the Revolving Loan Commitment Termination Date) shall be extended for one additional year after the Revolving Loan Commitment Termination Date in effect at the time the Extension Request is received, including the Revolving Loan Commitment Termination Date as one of the days in the calculation of the days elapsed; provided that at least 50% of the Revolving Loan Commitment Amount is extended or otherwise committed to by Extending Lenders and any new lenders. Otherwise, the Revolving Loan Commitment Termination Date shall not be extended.

The Commitment of any Lender that declines an Extension Request or fails to approve an Extension Request on or prior to the Response Date (a “Declining Lender”) shall be terminated on the Revolving Loan Commitment Termination Date in effect at the time the Extension Request is received (without regard to any extension by other Lenders) and Company shall pay to such Declining Lender all principal, interest, fees and other amounts owing to such Declining Lender on the Revolving Loan Commitment Termination Date in effect at the time the Extension Request is received (without regard to any extension by other Lenders). Company shall have the right, on or prior to the applicable anniversary date, to replace any Declining Lender with a third party financial institution reasonably acceptable to the Administrative Agent and Company in the manner set forth in subsection 2.9.

Section 3. LETTERS OF CREDIT 3.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.

A. Letters of Credit. Company may request, in accordance with the provisions of this subsection 3.1, from time to time during the period from the Effective Date to but excluding the Revolving Loan Commitment Termination Date, that one or more Lenders issue Letters of Credit for the account of Company for the general corporate purposes of

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Company or a Subsidiary of Company. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, any one or more Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in accordance with the provisions of this subsection 3.1; provided that Company shall not request that any Lender issue (and no Lender shall issue):

(i) any Letter of Credit if, after giving effect to such issuance, the Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitment Amount then in effect;

(ii) any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed $50,000,000;

(iii) any Letter of Credit having an expiration date later than the earlier of (a) five days prior to the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such Letter of Credit; provided that the immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless such Issuing Lender elects not to extend for any such additional period; and provided, further that such Issuing Lender shall elect not to extend such Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 10.6) at the time such Issuing Lender must elect whether or not to allow such extension; or

(iv) any Letter of Credit denominated in a currency other than Dollars.

Notwithstanding anything contained in this Agreement, no Issuing Lender shall be under any obligation to issue any Letter of Credit if (i) the Issuing Lender has received written notice that the conditions precedent set forth in subsection 4.3 have not been satisfied or (ii) a default of any Lender’s obligations to fund under subsection 3.3C exists or any Lender is at such time a Defaulting Lender hereunder, unless the Issuing Lender has entered into satisfactory arrangements with Company or such Lender to eliminate the Issuing Lender’s risk with respect to such Lender.

B. Mechanics of Issuance.

(i) Request for Issuance. Whenever Company desires the issuance of a Letter of Credit, it shall deliver to the proposed Issuing Lender (with a copy to Administrative Agent if Administrative Agent is not the proposed Issuing Lender) a Request for Issuance no later than 1:00 P.M. (Minneapolis time) at least five Business Days or such shorter period as may be agreed to by the Issuing Lender in any particular instance, in advance of the proposed date of issuance. The Issuing Lender, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any documents described in or attached to the Request for Issuance. In furtherance of the provisions of subsection 10.8, and not in limitation thereof, Company may submit Requests for Issuance by telefacsimile and Administrative Agent and Issuing Lenders may rely and act upon any such Request for Issuance without receiving an original signed copy thereof.

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Company shall notify the applicable Issuing Lender (and Administrative Agent, if Administrative Agent is not such Issuing Lender) prior to the issuance of any Letter of Credit in the event that any of the matters to which Company is required to certify in the applicable Request for Issuance is no longer true and correct as of the proposed date of issuance of such Letter of Credit, and upon the issuance of any Letter of Credit Company shall be deemed to have re-certified, as of the date of such issuance, as to the matters to which Company is required to certify in the applicable Request for Issuance.

(ii) Determination of Issuing Lender. Upon receipt by a proposed Issuing Lender of a Request for Issuance pursuant to subsection 3.1B(i) requesting the issuance of a Letter of Credit, (a) in the event Administrative Agent is the proposed Issuing Lender, Administrative Agent shall be the Issuing Lender with respect to such Letter of Credit and shall issue such Letter of Credit, notwithstanding the fact that the Letter of Credit Usage with respect to such Letter of Credit and with respect to all other Letters of Credit issued by Administrative Agent, when aggregated with Administrative Agent’s outstanding Revolving Loans and Swing Line Loans, may exceed the amount of Administrative Agent’s Revolving Loan Commitment then in effect; and (b) in the event any other Lender is the proposed Issuing Lender, such Lender shall promptly notify Company and Administrative Agent whether or not, in its sole discretion, it has elected to issue such Letter of Credit, and (1) if such Lender so elects to issue such Letter of Credit it shall be the Issuing Lender with respect thereto and (2) if such Lender fails to so promptly notify Company and Administrative Agent or declines to issue such Letter of Credit, Company may request Administrative Agent or another Lender to be the Issuing Lender with respect to such Letter of Credit in accordance with the provisions of this subsection 3.1B.

(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance with subsection 10.6) of the conditions set forth in subsection 4.3, the Issuing Lender shall issue the requested Letter of Credit in accordance with the Issuing Lender’s standard operating procedures.

(iv) Notification to Lenders. Upon the issuance of or amendment to any Letter of Credit the applicable Issuing Lender shall promptly notify Administrative Agent and Company of such issuance or amendment in writing and such notice shall be accompanied by a copy of such Letter of Credit or amendment. Upon receipt of such notice (or, if Administrative Agent is the Issuing Lender, together with such notice), Administrative Agent shall notify each Lender in writing of such issuance or amendment and the amount of such Lender’s respective participation in such Letter of Credit or amendment, and, if so requested by a Lender, Administrative Agent shall provide such Lender with a copy of such Letter of Credit or amendment. In the event that Issuing Lender is other than Administrative Agent, such Issuing Lender will send by facsimile transmission to Administrative Agent, promptly upon the first Business Day of each week, a report of its daily aggregate maximum amount available for drawing under commercial Letters of Credit for the previous week. Upon receipt of such report, Administrative Agent shall notify each Lender in writing of the contents thereof.

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C. Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Lender a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share of the maximum amount that is or at any time may become available to be drawn thereunder.

3.2 Letter of Credit Fees.

Company agrees to pay the following amounts with respect to Letters of Credit issued hereunder:

(i) with respect to each Letter of Credit, (a) a fronting fee, payable directly to the applicable Issuing Lender for its own account, in an amount agreed to between Company and the applicable Issuing Lender and (b) a letter of credit fee, payable to Administrative Agent for the account of Lenders, equal to the applicable Eurodollar Rate Margin plus, for as long as any increased rates of interest apply pursuant to subsection 2.2E, 2% per annum, multiplied by the daily amount available to be drawn under such Letter of Credit, each such fronting fee or letter of credit fee to be payable in arrears on and to (but excluding) the last Business Day of each March, June, September and December of each year and computed on the basis of a 360-day year for the actual number of days elapsed; and

(ii) with respect to the issuance, amendment or transfer of each Letter of Credit and each payment of a drawing made thereunder (without duplication of the fees payable under clause (i) above), documentary and processing charges payable directly to the applicable Issuing Lender for its own account in accordance with such Issuing Lender’s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or payment, as the case may be.

For purposes of calculating any fees payable under clause (i) of this subsection 3.2, the daily amount available to be drawn under any Letter of Credit shall be determined as of the close of business on any date of determination.

3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.

A. Responsibility of Issuing Lender With Respect to Drawings. In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit.

B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the event an Issuing Lender has determined to honor a drawing under a Letter of Credit issued by it, such Issuing Lender shall immediately notify Company and Administrative Agent, and Company shall reimburse such Issuing Lender on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds equal to the amount of such payment; provided that, anything contained in this Agreement to the contrary notwithstanding, (i) unless Company

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shall have notified Administrative Agent and such Issuing Lender prior to 12:00 noon (Minneapolis time) on the date such drawing is honored that Company intends to reimburse such Issuing Lender for the amount of such payment with funds other than the proceeds of Revolving Loans, Company shall be deemed to have given a timely Notice of Revolving Borrowing to Administrative Agent requesting Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such payment and (ii) subject to satisfaction or waiver of the conditions specified in subsection 4.2, Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such payment, the proceeds of which shall be applied directly by Administrative Agent to reimburse such Issuing Lender for the amount of such payment; and provided, further that if for any reason proceeds of Revolving Loans are not received by such Issuing Lender on the Reimbursement Date in an amount equal to the amount of such payment, Company shall reimburse such Issuing Lender, on demand, in an amount in same day funds equal to the excess of the amount of such payment over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its obligation to make Revolving Loans on the terms and conditions set forth in this Agreement, and Company shall retain any and all rights it may have against any Lender resulting from the failure of such Lender to make such Revolving Loans under this subsection 3.3B. During the continuance of an Event of Default, if Administrative Agent receives any Cash collateral in respect of any outstanding Letter of Credit, such Cash collateral shall be held by Administrative Agent for the ratable benefit of the Lenders.

C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

(i) Payment by Lenders. In the event that Company shall fail for any reason to reimburse any Issuing Lender as provided in subsection 3.3B in an amount equal to the amount of any payment by such Issuing Lender under a Letter of Credit issued by it, such Issuing Lender shall promptly notify Administrative Agent, who shall promptly notify each Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata Share (after giving effect to any Revolving Loans made by such Lender under subsection 3.3B in respect of such drawing). Each Lender (other than such Issuing Lender) shall make available to Administrative Agent an amount equal to its respective participation, in Dollars, in same day funds, at the Funding and Payment Office, not later than 1:00 P.M. (Minneapolis time) on the first Business Day after the date notified by Administrative Agent, and Administrative Agent shall make available to such Issuing Lender in Dollars, in same day funds, at the office of such Issuing Lender on such Business Day the aggregate amount of the payments so received by Administrative Agent. In the event that any Lender fails to make available to Administrative Agent on such Business Day the amount of such Lender’s participation in such Letter of Credit as provided in this subsection 3.3C, such Issuing Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon at the rate customarily used by such Issuing Lender for the correction of errors among banks for three Business Days and thereafter at the Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the right of Administrative Agent to recover, for the benefit of Lenders, from any Issuing Lender any amounts made available to such Issuing Lender pursuant to this subsection

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3.3C in the event that it is determined by the final judgment of a court of competent jurisdiction that the payment with respect to a Letter of Credit by such Issuing Lender in respect of which payments were made by Lenders constituted gross negligence or willful misconduct on the part of such Issuing Lender.

(ii) Distribution to Lenders of Reimbursements Received From Company. In the event any Issuing Lender shall have been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any portion of any payment by such Issuing Lender under a Letter of Credit issued by it, and Administrative Agent or such Issuing Lender thereafter receives any payments from Company in reimbursement of such payment under the Letter of Credit, to the extent any such payment is received by such Issuing Lender, it shall distribute such payment to Administrative Agent, and Administrative Agent shall distribute to each other Lender that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such Lender’s Pro Rata Share of all payments subsequently received by Administrative Agent or by such Issuing Lender from Company. Any such distribution shall be made to a Lender at the account specified in subsection 2.4B(iii).

D. Interest on Amounts Paid Under Letters of Credit.

(i) Payment of Interest by Company. Company agrees to pay to Administrative Agent, with respect to payments under any Letters of Credit issued by any Issuing Lender, interest on the amount paid by such Issuing Lender in respect of each such payment from the date a drawing is honored to but excluding the date such amount is reimbursed by Company (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for the period from the date such drawing is honored to but excluding the Reimbursement Date, the rate then in effect under this Agreement with respect to Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable under this Agreement with respect to Base Rate Loans. Interest payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a 365-day year (or 366-day year in case of a leap year) for the actual number of days elapsed in the period during which it accrues and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full.

(ii) Distribution of Interest Payments by Administrative Agent. Promptly upon receipt by Administrative Agent of any payment of interest pursuant to subsection 3.3D(i) with respect to a payment under a Letter of Credit, (a) Administrative Agent shall distribute to (x) each Lender (including the Issuing Lender) out of the interest received by Administrative Agent in respect of the period from the date such drawing is honored to but excluding the date on which the applicable Issuing Lender is reimbursed for the amount of such payment (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that such Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period pursuant to subsection 3.2 if no drawing had been honored under such Letter of Credit, and (y) such Issuing Lender the amount, if any, remaining after payment of the amounts applied pursuant to clause (x),

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and (b) in the event such Issuing Lender shall have been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any portion of such payment, Administrative Agent shall distribute to each Lender (including such Issuing Lender) that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such Lender’s Pro Rata Share of any interest received by Administrative Agent in respect of that portion of such payment so made by Lenders for the period from the date on which such Issuing Lender was so reimbursed to but excluding the date on which such portion of such payment is reimbursed by Company. Any such distribution shall be made to a Lender at the account specified in subsection 2.4B(iii).

3.4 Obligations Absolute.

The obligation of Company to reimburse each Issuing Lender for payments under the Letters of Credit issued by it and to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances including any of the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit;

(ii) the existence of any claim, set-off, defense or other right which Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), any Issuing Lender or other Lender or any other Person or, in the case of a Lender, against Company, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured);

(iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(iv) payment by the applicable Issuing Lender under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit;

(v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries;

(vi) any breach of this Agreement or any other Loan Document by any party thereto;

(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or

(viii) the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing;

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provided, in each case, that payment by the applicable Issuing Lender under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of such Issuing Lender under the circumstances in question (as determined by a final judgment of a court of competent jurisdiction).

3.5 Nature of Issuing Lenders’ Duties.

As between Company and any Issuing Lender, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by such Issuing Lender by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, such Issuing Lender shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of such Issuing Lender, including any act or omission by a Government Authority, and none of the above shall affect or impair, or prevent the vesting of, any of such Issuing Lender’s rights or powers hereunder.

In furtherance and extension and not in limitation of the specific provisions set forth in the first paragraph of this subsection 3.5, any action taken or omitted by any Issuing Lender under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to Company.

Notwithstanding anything to the contrary contained in this subsection 3.5, Company shall retain any and all rights it may have against any Issuing Lender for any liability arising solely out of the gross negligence or willful misconduct of such Issuing Lender, as determined by a final judgment of a court of competent jurisdiction.

3.6 Applicability of UCP.

Unless otherwise expressly agreed by the Issuing Lender and Company when a Letter of Credit is issued, the rules of the Uniform Customs and Practice for Documentary Credits (UCP 500) (the “UCP”), as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each Letter of Credit.

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Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT The obligations of Lenders to make Loans and the issuance of Letters of Credit hereunder are subject to the

satisfaction of the following conditions.

4.1 Conditions to Closing.

This Agreement shall become effective subject to prior or concurrent satisfaction of the following conditions, upon which the Closing Date shall occur:

A. Loan Documents. Company shall deliver to Lenders (or to Administrative Agent with sufficient originally executed copies, where appropriate, for each Lender) the following with respect to Company, each, unless otherwise noted, dated the date hereof:

(i) Copies of the Organizational Documents of Company, certified by the Secretary of State of its jurisdiction of organization or, if such document is of a type that may not be so certified, certified by the secretary or similar officer of Company, together with a good standing certificate from the Secretary of State of its jurisdiction of organization dated a recent date prior to the date hereof;

(ii) Resolutions of the Governing Body of Company approving and authorizing the execution, delivery and performance of the Loan Documents, certified as of the date hereof by the secretary or similar officer of Company as being in full force and effect without modification or amendment;

(iii) Signature and incumbency certificates of the officers of Company executing the Loan Documents;

(iv) Executed originals of the Loan Documents; and

(v) Such other opinions, documents or materials as Administrative Agent or any Lender may reasonably request.

B. Fees. Company shall have paid to Administrative Agent, for distribution (as appropriate) to Administrative Agent, the Syndication Agent and Lenders, the fees payable on the date hereof referred to in subsection 2.3.

C. Representations and Warranties. Company shall have delivered to Administrative Agent an Officer’s Certificate, in form and substance satisfactory to Administrative Agent, to the effect that the representations and warranties in Section 5 are true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of that date (or, to the extent such representations and warranties specifically relate to an earlier date, that such representations and warranties were true and correct in all material respects on and as of such earlier date); provided that, if a representation and warranty is qualified as to materiality, the applicable materiality qualifier set forth above shall be disregarded with respect to such representation and warranty for purposes of this condition.

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D. Financial Statements. Lenders shall have received from Company audited financial statements for the year ended December 31, 2004 and unaudited financial statements for the fiscal quarter ended June 30, 2005 of Company and its Subsidiaries in form and substance reasonably satisfactory to Administrative Agent.

E. Opinions of Counsel. Lenders shall have received executed copies of the opinion of Cleary Gottlieb Steen & Hamilton LLP, counsel for Company, and John Junek, Esq., Executive Vice President and General Counsel of Company, each dated as of the date hereof and in form and substance reasonably satisfactory to Administrative Agent.

F. Solvency Assurances. Administrative Agent and Lenders shall have received an Officer’s Certificate of Company dated as of the date hereof as to solvency matters in form and substance reasonably satisfactory to Administrative Agent.

G. Debt Ratings. Company shall have furnished to Administrative Agent a letter or a public statement from either S&P or Moody’s stating that after the Spin-Off Transaction and subject to the conditions in such letter(s) (which conditions shall be satisfactory to Administrative Agent), Company shall have a Debt Rating of not less than A- or A3, respectively, and neither S&P’s nor Moody’s Debt Rating shall be less than BBB+ or Baa1, respectively.

H. Necessary Governmental Authorizations and Consents; Expiration of Waiting Periods, Etc. Company shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or advisable in connection with the transactions contemplated by the Loan Documents and all Governmental Authorizations and consents necessary for the continued operation of the business conducted by Company and its Subsidiaries in substantially the same manner as conducted prior to the date hereof. Each such Governmental Authorization and consent shall be in full force and effect, except in a case where the failure to obtain or maintain a Governmental Authorization or consent, either individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the Loan Documents or the financing thereof. No action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending.

I. Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

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4.2 Conditions to Effective Date; All Loans.

The obligations of Lenders to make any Revolving Loans and Swing Line Loans on any Funding Date are, in addition to the conditions precedent specified in subsection 4.1, subject to prior or concurrent satisfaction of the following conditions:

A. Spin-Off Transaction.

(i) In the good faith judgment of Administrative Agent, there shall not exist (A) any order, decree, judgment, ruling or injunction which would materially and adversely affect any aspect of the Spin-Off Transaction, or any portion thereof, or the transactions hereunder in the manner contemplated hereunder, and (b) any pending or, to the knowledge of Company or to Administrative Agent, threatened action, suit, investigation or other arbitral, administrative or judicial proceeding, which, if adversely determined, would reasonably be expected to result in a Material Adverse Effect or materially and adversely affect any aspect of the Spin-Off Transaction.

(ii) American Express Company and Company shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the Spin-Off Transaction, and each portion thereof, and the other transactions contemplated hereby without the occurrence of any material default under, material conflict with or material violation of (A) any applicable laws or approvals, consents and waivers from any Government Authority, or (B) any agreement, document or instrument to which Company or any of its Subsidiaries is a party or by which any of them or their properties or their businesses are bound, and all applicable waiting periods shall have expired without any action being taken by any Government Authority that could restrain, prevent or impose any material adverse conditions on Company and its Subsidiaries or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent would have such effect.

(iii) The Spin-Off Transaction shall have been consummated substantially consistent with the description set forth in the Form 10 and in accordance with the terms of the Spin-Off Transaction Documents and the Form 10, which Spin-Off Transaction Documents shall not have been materially altered, amended or otherwise changed or supplemented or any condition therein waived in any manner which would materially adversely affect the Lenders without the prior written consent of the Lenders, and in compliance with all applicable laws and regulations or approvals, consents and waivers from any Government Authority.

(iv) Company shall have delivered to Administrative Agent an Officer’s Certificate in form and substance reasonably satisfactory to Administrative Agent, (i) certifying as to and attaching true and correct copies of the Spin-Off Transaction Documents and (ii) certifying as to compliance, on a pro forma basis, with the Consolidated Leverage Ratio and Consolidated Net Worth for Company and its Subsidiaries as of the date of consummation of the Spin-Off Transaction.

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B. Notice of Revolving Borrowing. Administrative Agent shall have received before that Funding Date, in accordance with the provisions of subsection 2.1B, a duly executed Notice of Revolving Borrowing, in each case signed by a duly authorized Officer of Company.

C. Representations and Warranties True; No Default; Etc. As of that Funding Date:

(i) the representations and warranties contained herein (other than subsection 5.4) and in the other Loan Documents shall be true and correct in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; provided, that, if a representation and warranty is qualified as to materiality, the materiality qualifier set forth above shall be disregarded with respect to such representation and warranty for purposes of this condition;

(ii) no event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated by such Notice of Revolving Borrowing that would constitute an Event of Default or a Potential Event of Default; and

(iii) no order, judgment or decree of any arbitrator or Government Authority shall purport to enjoin or restrain such Lender from making the Loans to be made by it on that Funding Date.

4.3 Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder (whether or not the applicable Issuing Lender is obligated to issue such Letter of Credit) is subject to the following conditions precedent:

A. On or before the date of issuance of such Letter of Credit, Administrative Agent shall have received, in accordance with the provisions of subsection 3.1B(i), an originally executed Request for Issuance (or a facsimile copy thereof) in each case signed by a duly authorized Officer of Company, together with all other information specified in subsection 3.1B(i) and such other documents or information as the applicable Issuing Lender may reasonably require in connection with the issuance of such Letter of Credit.

B. On the date of issuance of such Letter of Credit, all conditions precedent described in subsection 4.2C shall be satisfied to the same extent as if the issuance of such Letter of Credit were the making of a Loan and the date of issuance of such Letter of Credit were a Funding Date.

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Section 5. COMPANY’S REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Agreement and to make the Loans, to induce Issuing Lenders to issue

Letters of Credit and to induce Lenders to purchase participations therein, Company represents and warrants to each Lender:

5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.

A. Organization and Powers. Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Company has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

B. Qualification and Good Standing. Company is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect.

C. Conduct of Business. Company and its Subsidiaries are engaged only in the businesses permitted to be engaged in pursuant to subsection 7.7.

D. Subsidiaries. The Capital Stock of each of the Significant Subsidiaries of Company is duly authorized, validly issued, fully paid and nonassessable and none of such Capital Stock constitutes Margin Stock. Each of the Subsidiaries of Company is a corporation, partnership, trust or limited liability company duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization set forth therein, has all requisite organizational power and authority to own and operate its properties and to carry on its business as now conducted, and is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, in each case except where failure to be so qualified or in good standing or a lack of such power and authority would not reasonably be expected to result in a Material Adverse Effect.

5.2 Authorization of Borrowing, etc.

A. Authorization of Borrowing. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary organizational action on the part of Company.

B. No Conflict. The execution, delivery and performance by Company of the Loan Documents and the consummation of the transactions contemplated by the Loan Documents do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Company or any of its Subsidiaries, the Organizational Documents of Company or any of its Subsidiaries or any order, judgment or decree of any court or other Government Authority binding on Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any

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Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of Company or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the date hereof and disclosed in writing to Lenders and except, in each case, to the extent such violation, conflict, Lien or failure to obtain such approval or consent would not reasonably be expected to result in a Material Adverse Effect.

C. Governmental Consents. The execution, delivery and performance by Company of the Loan Documents and the consummation of the transactions contemplated by the Loan Documents do not and will not require any Governmental Authorization except to the extent failure to obtain any such Governmental Authorization would not reasonably be expected to have a Material Adverse Effect.

D. Binding Obligation. Each of the Loan Documents has been duly executed and delivered by Company and is the legally valid and binding obligation of Company, enforceable against Company in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

5.3 Financial Condition.

Company has heretofore delivered to Lenders, at Lenders’ request, the audited consolidated balance sheets, statements of income and cash flows of Company and its Subsidiaries as at and for the year ended December 31, 2004, and the unaudited consolidated balance sheets, statements of income and cash flows of Company and its Subsidiaries as at and for the fiscal quarter ended June 30, 2005. All such statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position (on a consolidated basis) of the entities described in such financial statements as at the respective dates thereof and the results of operations and cash flows (on a consolidated basis) of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments and the absence of footnote disclosure.

5.4 No Material Adverse Change.

Since December 31, 2004, no event or change has occurred that has resulted in or evidences, either in any case or in the aggregate, a Material Adverse Effect, except for the occurrence of the Spin-Off Transaction, including the incurrence of expenses related thereto.

5.5 Title to Properties; Liens.

Company and its Significant Subsidiaries have good and marketable title to all of their respective properties and assets reflected in the financial statements referred to in subsection 5.3 or in the most recent financial statements delivered pursuant to subsection 6.1, in

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each case except for assets disposed of since the date of such financial statements in the ordinary course of business or as otherwise permitted under subsection 7.5 and except for defects and irregularities that would not reasonably be expected to result in a Material Adverse Effect. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.

5.6 Litigation; Adverse Facts.

Except as set forth in Schedule 5.6 annexed hereto, there are no Proceedings (whether or not purportedly on behalf of Company or any of its Subsidiaries) at law or in equity, or before or by any court or other Government Authority (including any Environmental Claims) that are pending or, to the knowledge of Company, threatened against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, or (ii) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Government Authority that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

5.7 Payment of Taxes.

Except to the extent permitted by subsection 6.3, all federal and all other material tax returns and reports of Company and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all material assessments, fees and other governmental charges upon Company and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable, unless such taxes, assessments, fees or charges are being actively contested by Company or such Subsidiary in good faith and by appropriate proceedings and reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

5.8 Governmental Regulation.

Company is not subject to regulation under the Public Utility Holding Company Act of 1935 or the Investment Company Act of 1940.

5.9 Securities Activities.

No part of the proceeds of the Loans will be used for the purpose, directly or indirectly, of buying or carrying any Margin Stock.

5.10 Employee Benefit Plans.

A. Company, each of its Subsidiaries and each of their respective ERISA Affiliates are in material compliance with all applicable provisions and requirements of ERISA and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan. To the

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knowledge of Company and each of its Subsidiaries, each Employee Benefit Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code is so qualified.

B. No ERISA Event has occurred or is reasonably expected to occur.

5.11 Environmental Protection.

In the ordinary course of its business, the officers of Company and its Subsidiaries consider the effect of Environmental Laws on the business of Company and its Subsidiaries, in the course of which they identify and evaluate potential risks and liabilities accruing to Company due to Environmental Laws. On the basis of this consideration, Company has concluded that Environmental Laws would not reasonably be expected to have a Material Adverse Effect. Neither Company nor any Subsidiary has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any Hazardous Materials into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

5.12 Solvency.

Company is and, after the consummation of the Spin-Off Transaction and upon the incurrence of any Obligations by Company on any date on which this representation is made, will be, Solvent.

5.13 Disclosure.

No representation or warranty of Company contained in the Confidential Information Memorandum or in any Loan Document or in any other document, certificate or written statement furnished to Lenders by or on behalf of Company for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact (known to Company, in the case of any information not furnished by it) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Company to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.

5.14 Foreign Assets Control Regulations, etc..

Neither the making of the Loans to, or issuance of Letters of Credit on behalf of, Company nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. Without limiting the foregoing, neither Company nor any of its Subsidiaries or Affiliates (a) is or will become a Person whose property or interests in property

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are blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any such Person. Company and its Subsidiaries and Affiliates are in compliance, in all material respects, with the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).

Section 6. AFFIRMATIVE COVENANTS Company covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until

payment in full of all of the Loans and other Obligations (other than Unasserted Obligations) and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 6.

6.1 Financial Statements and Other Reports.

Company will maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP. Company will deliver, or cause to be delivered, to Administrative Agent and Lenders:

(i) Events of Default, etc.: reasonably promptly upon any officer of Company obtaining knowledge of any condition or event that constitutes an Event of Default or Potential Event of Default, or becoming aware that any Lender has given any notice (other than to Administrative Agent) or taken any other action with respect to a claimed Event of Default or Potential Event of Default, an Officer’s Certificate specifying the nature and period of existence of such condition, event or change, or specifying the notice given or action taken by any such Person and the nature of such claimed Event of Default or Potential Event of Default, and what action Company has taken, is taking and proposes to take with respect thereto;

(ii) Quarterly Financials: (a) as soon as available and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and the absence of footnote disclosure, and (b) within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a narrative report describing the operations of Company and its Subsidiaries in the

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form prepared for presentation to senior management for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter; it being understood and agreed that the delivery of Company’s Form 10-Q promptly following the filing thereof with the Securities and Exchange Commission shall satisfy the delivery requirements set forth in this clause (subject to the time periods set forth in this clause (ii));

(iii) Year-End Financials: as soon as available and in any event within 90 days after the end of each Fiscal Year, (a) the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the consolidated financial condition of Company and its Subsidiaries as at the dates indicated and the consolidated results of their operations and their cash flows for the periods indicated, (b) a report for Company and its Subsidiaries setting forth in comparative form the corresponding figures for the previous Fiscal Year, (c) a narrative report describing the operations of Company and its Subsidiaries in the form prepared for presentation to senior management for such Fiscal Year, (d) in the case of all such consolidated financial statements, a report and opinion thereon of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by Company and reasonably satisfactory to Administrative Agent, which report and opinion shall be prepared in accordance with audit standards of the Public Company Accounting Oversight Board and applicable Securities Laws unqualified as to the scope of the audit or the ability of Company and its Subsidiaries to continue as a going concern, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Company and its Subsidiaries as at the dates indicated and the consolidated results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards, and it being understood and agreed that the delivery of Company’s Form 10-K promptly after the filing thereof with the Securities and Exchange Commission shall satisfy the requirements set forth in this clause (subject to the time periods set forth in this clause (iii));

(iv) Compliance Certificates: together with each delivery of financial statements pursuant to subdivisions (ii) and (iii) above, (a) an Officer’s Certificate of Company stating that the signers have reviewed the terms of this Agreement and have made, or caused to be made under their supervision, a review in reasonable detail of the transactions and condition of Company and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signers do not have knowledge of the existence as at the date of such Officer’s Certificate, of any condition or event that constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof

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and what action Company has taken, is taking and proposes to take with respect thereto; and (b) a Compliance Certificate demonstrating in reasonable detail compliance at the end of the applicable accounting periods with the restrictions contained in subsection 7.4;

(v) SAP Financial Statements. (a) as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, copies of the unaudited Quarterly Statement of IDS Property Casualty Insurance Company, IDS Life Insurance Company and each other Insurance Subsidiary requested in writing by Administrative Agent, certified by the chief financial officer or the treasurer of such Insurance Subsidiary, all such statements to be prepared in accordance with SAP consistently applied throughout the periods reflected therein and (b) as soon as available and in any event within 100 days after the end of each Fiscal Year, copies of the audited Annual Statement of IDS Property Casualty Insurance Company, IDS Life Insurance Company and each other Insurance Subsidiary requested in writing by Administrative Agent certified by Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by Company and reasonably satisfactory to Administrative Agent, all such statements to be prepared in accordance with SAP consistently applied throughout the periods reflected therein.

(vi) SEC Filings and Press Releases: promptly upon their becoming available, copies of (a) regular and periodic reports and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Company or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority, and (b) all press releases and other statements made available generally by Company or any of its Subsidiaries to the public concerning material developments in the business of Company and its Subsidiaries, taken as a whole;

(vii) ERISA Events: promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Company, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;

(viii) ERISA Notices: with reasonable promptness, copies of all notices received by Company or any of its Subsidiaries from a Multiemployer Plan sponsor concerning an ERISA Event;

(ix) Ratings: reasonably promptly after becoming aware of any change in Company’s Debt Rating, a statement describing such change, whether such change was made by S&P, Moody’s or both and the effective date of such change; and

(x) Other Information: with reasonable promptness, such other information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent.

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6.2 Existence, etc.

Except as permitted under subsection 7.5, Company will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights and franchises material to its business; provided, however that neither Company nor any of its Subsidiaries shall be required to preserve any such right or franchise if the Governing Body of Company or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of Company or such Subsidiary, as the case may be, and that the loss thereof would not reasonably be expected to result in a Material Adverse Effect; provided further that Company will not be required to preserve and keep in full force and effect the existence of any Subsidiary, if the Governing Body of Company or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of Company or such Subsidiary and that the loss thereof would not reasonably be expected to result in a Material Adverse Effect.

6.3 Payment of Taxes and Claims.

Company will, and will cause each of its Significant Subsidiaries to, pay all material taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any material penalty accrues thereon, and all material claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any material penalty or fine shall be incurred with respect thereto; provided that no such tax, assessment, charge or claim need be paid if it is being contested in good faith by appropriate proceedings, so long as (i) such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor and (ii) in the case of a tax, assessment, charge or claim which has or may become a Lien against any of the assets of Company or its Significant Subsidiaries, the Lien is not being enforced by foreclosure or sale of any portion of such assets to satisfy such charge or claim or is otherwise permitted by this Agreement.

6.4 Maintenance of Properties; Insurance.

A. Maintenance of Properties. Company will, and will cause each of its Significant Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of Company and its Significant Subsidiaries (including all material intellectual property).

B. Insurance. Company will insure its and its Subsidiaries’ assets and businesses in such manner and to such extent as is customary for companies engaged in the same or similar businesses in similar locations.

6.5 Inspection Rights.

Company shall, and shall cause each of its Significant Subsidiaries to, permit any authorized representatives designated by Administrative Agent (and, during the continuance of an Event of Default, any Lender) to visit and inspect any of the properties of Company or of any of its Significant Subsidiaries, to inspect, copy and take extracts from its and their financial and

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accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants (provided that Company may, if it so chooses, be present at or participate in any such discussion), all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested or at any time or from time to time following the occurrence and during the continuation of an Event of Default.

6.6 Compliance with Laws, etc.

Company shall comply, and shall cause each of its Subsidiaries to comply, with the requirements of all applicable laws, rules, regulations and orders of any Government Authority (including all Environmental Laws), noncompliance with which would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

Section 7. NEGATIVE COVENANTS

Company covenants and agrees that, so long as any of the Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations (other than Unasserted Obligations) and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 7.

7.1 Liens and Related Matters.

A. Prohibition on Liens. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Company or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the UCC or under any similar recording or notice statute, except:

(i) Permitted Encumbrances;

(ii) Liens described in Schedule 7.1 annexed hereto;

(iii) Liens securing obligations in an aggregate amount not to exceed 10% of Consolidated Net Worth incurred in connection with any transaction (including an agreement with respect thereto) now existing or hereafter entered into which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) and any combination of these transactions, parallel loans, back-to-back loans or other similar arrangements or contracts, in each case entered into in the ordinary course of business for the purpose of asset and liability management;

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(iv) Liens on any property or assets existing at the time such property or asset was acquired (including Liens on the property or assets of any Person that becomes a Subsidiary of Company that existed at the time such Person became a Subsidiary by acquisition, merger, consolidation or otherwise), which Liens were not created in contemplation of such acquisition; provided that (i) such Liens shall not extend to or cover any property or assets of any character other than the property being acquired and (ii) such Liens shall secure only those obligations which such Liens secured on the date of such acquisition;

(v) Liens in respect of purchase money and Capital Lease obligations upon or in any real property or equipment acquired or held by Company or any Subsidiary in the ordinary course of business to secure the purchase price of such property or equipment or to secure Indebtedness incurred solely for the purpose of financing the acquisition of such property or equipment; provided that (i) such Liens shall not extend to or cover any property or assets of any character other than the property or equipment being financed and (ii) the aggregate amount of Indebtedness secured by such Liens does not exceed $100,000,000 at any time outstanding;

(vi) Liens on any real property securing Indebtedness in respect of which (i) the recourse of the holder of such Indebtedness (whether direct or indirect and whether contingent or otherwise) under the instrument creating the Lien or providing for the Indebtedness secured by the Lien is limited to such real property directly securing such Indebtedness and (ii) such holder may not under the instrument creating the Lien or providing for the Indebtedness secured by the Lien collect by levy of execution or otherwise against assets or property of such Borrower (other than such real property directly securing such Indebtedness) if such Borrower fails to pay such Indebtedness when due and such holder obtains a judgment with respect thereto, except for recourse obligations that are customary in “non-recourse” real estate transactions;

(vii) Liens on assets held by entities which are required to be included in Company’s consolidated financial statements solely as a result of the application of Financial Accounting Standards Board Interpretation No. 46;

(viii) other Liens securing liabilities in an aggregate amount not to exceed 5% of Consolidated Net Worth; and

(ix) the replacement, extension or renewal of any Lien permitted by clauses (ii), (iv) and (v) above upon or in the same property subject thereto arising out of the replacement, extension or renewal of the Indebtedness secured thereby (without any increase in the amount thereof).

B. No Further Negative Pledges. Neither Company nor any of its Subsidiaries shall enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than (i) any agreement evidencing Indebtedness secured by Liens permitted by this Agreement, as to the assets securing such Indebtedness, (ii) any agreement evidencing an asset sale, as to the assets being sold and (iii) the Bridge Loan Agreement and any indenture or other agreement pursuant to

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which any Indebtedness is issued, the proceeds of which are used to repay Indebtedness incurred under the Bridge Loan Agreement (and any indenture or other agreement entered into in connection with a refinancing or replacement thereof).

C. No Restrictions on Subsidiary Distributions to Company or Other Subsidiaries. Company will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary’s Capital Stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or advances to Company or any other Subsidiary of Company, or (iv) transfer any of its property or assets to Company or any other Subsidiary of Company, except in each case (a) as provided in this Agreement, (b) as to transfers of assets, as may be provided in an agreement with respect to a sale of such assets and (c) as required by law.

7.2 Acquisitions.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, acquire, by purchase or otherwise, all or substantially all the business, property or fixed assets of, or Capital Stock of any Person, or any division or line of business of any Person except Company and its Subsidiaries may acquire, in a single transaction or series of related transactions (a) all or substantially all of the assets or a majority of the outstanding Securities entitled to vote in an election of members of the Governing Body of a Person or (b) any division, line of business or other business unit of a Person (such Person or such division, line of business or other business unit of such Person being referred to herein as the “Target”), in each case that is a type of business (or assets used in a type of business) permitted to be engaged in by Company and its Subsidiaries pursuant to subsection 7.7, so long as (1) no Event of Default or Potential Event of Default shall then exist or would exist after giving effect thereto and (2) after giving effect to such acquisition and any financing thereof on a pro forma basis as if such acquisition had been completed on the first day of the four Fiscal Quarter period ending on the last day of the most recent Fiscal Quarter for which financial statements have been delivered pursuant to subsection 6.1(ii) (such last day, the “test date”), Company and its Subsidiaries would have been in compliance with each of the financial covenants set forth in subsection 7.4.

7.3 Restricted Junior Payments.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment so long as any Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby.

7.4 Financial Covenants.

A. Maximum Leverage Ratio. Company shall not permit the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter to exceed 40%.

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B. Consolidated Net Worth. Company shall maintain a Consolidated Net Worth at all times equal to at least 75% of the greater of (i) pro forma Consolidated Net Worth as of the Effective Date and (ii) pro forma Consolidated Net Worth as of June 30, 2005.

7.5 Restriction on Fundamental Changes; Asset Sales.

Company shall not, and shall not permit any of its Subsidiaries to, enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its business, property or assets, whether now owned or hereafter acquired, except:

(i) any Subsidiary of Company may be merged with or into Company or any wholly-owned Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or any wholly-owned Subsidiary; provided that, in the case of such a merger, Company or such wholly-owned Subsidiary shall be the continuing or surviving Person; and

(ii) any Person may be merged with or into Company or any Subsidiary if the acquisition of the Capital Stock of such Person by Company or such Subsidiary would have been permitted pursuant to subsection 7.2; provided that (a) in the case of Company, Company shall be the continuing or surviving Person, (b) if a Subsidiary is not the surviving or continuing Person, the surviving Person becomes a Subsidiary and (c) no Potential Event of Default or Event of Default shall have occurred or be continuing after giving effect thereto.

7.6 Transactions with Affiliates.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) of any kind with any Affiliate of Company, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to Company or such Subsidiary as would be obtainable by Company or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that the foregoing restriction will not apply to the Spin-Off Transaction or transactions between or among the Company and any of its wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries.

7.7 Conduct of Business.

From and after the Closing Date, Company shall not, and shall not permit any of its Subsidiaries to, engage in any businesses that are material to Company and its Subsidiaries, taken as a whole, other than the businesses engaged in by Company and its Subsidiaries on the Closing Date and businesses reasonably related thereto.

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Section 8. EVENTS OF DEFAULT

If any of the following conditions or events (“Events of Default”) shall occur:

8.1 Failure to Make Payments When Due.

Failure by Company to pay any principal of any Loan when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; failure by Company to pay when due any amount payable to an Issuing Lender in reimbursement of any drawing under a Letter of Credit; or failure by Company to pay any interest on any Loan or any fee or any other amount due under this Agreement within five Business Days after the date due; or

8.2 Default in Other Agreements.

(i) Failure of Company or any of its Subsidiaries to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in subsection 8.1) or Contingent Obligations with an aggregate principal amount of $50,000,000 or more, in each case beyond the end of any grace period provided therefor; or

(ii) breach or default by Company or any of its Subsidiaries with respect to any other material term of (a) one or more items of Indebtedness or Contingent Obligations in the individual or aggregate principal amounts referred to in clause (i) above or (b) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or be declared due and payable prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be (with all notices provided for therein having been given and all grace periods provided for therein having lapsed, such that no further notice or passage of time is required in order for such holders or such trustee to exercise such right, other than notice of their or its election to exercise such right); or

8.3 Breach of Certain Covenants.

Failure of Company to perform or comply with any term or condition contained in subsections 2.5, 6.1(i), 6.2 or Section 7 (other than subsection 7.1B, to the extent such failure to comply therewith relates solely to an agreement entered into by a Subsidiary of Company which is not a Significant Subsidiary) of this Agreement; or

8.4 Breach of Warranty.

Any representation, warranty or certification made by Company in any Loan Document or in any certificate at any time given by Company in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made; or

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8.5 Other Defaults Under Loan Documents.

Company shall default in the performance of or compliance with any term contained in this Agreement or any of the other Loan Documents, other than any such term referred to or covered in any other subsection of this Section 8, and such default shall not have been remedied or waived within 30 days after receipt by Company of notice from Administrative Agent or any Lender of such default; or

8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.

(i) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of Company or any of its Subsidiaries in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order shall remain unstayed for a period of 60 days; or any other similar relief shall be granted under any applicable federal or state law and shall remain unstayed for a period of 60 days; or

(ii) an involuntary case shall be commenced against Company or any of its Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, conservator, custodian or other officer having similar powers over Company or any of its Subsidiaries, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of Company or any of its Subsidiaries for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Company or any of its Subsidiaries, and any such event described in this clause (ii) shall continue for 60 days unless dismissed, bonded or discharged; or

8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.

(i) Company or any of its Subsidiaries shall have an order for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or Company or any of its Subsidiaries shall make any assignment for the benefit of creditors; or

(ii) Company or any of its Subsidiaries shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the Governing Body of Company or any of its Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to in clause (i) above or this clause (ii); or

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8.8 Judgments and Attachments.

Any money judgment, writ or warrant of attachment or similar process involving in the aggregate at any time an amount in excess of $50,000,000 to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage, shall be entered or filed against Company or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any event later than five days prior to the date of any proposed sale thereunder); or

8.9 Dissolution.

Any order, judgment or decree shall be entered against Company or any of its Subsidiaries decreeing the dissolution or split up of Company or that Subsidiary and such order shall remain undischarged or unstayed for a period in excess of 60 days; or

8.10 Employee Benefit Plans.

There shall occur one or more ERISA Events that individually or in the aggregate result in or would reasonably be expected to result in liability of Company in excess of $25,000,000; or there shall exist an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans to which Company or any of its Subsidiaries has contributed (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities), which would reasonably be expected to result in a Material Adverse Effect; or

8.11 Change in Control.

A Change in Control shall have occurred after the Spin-Off Transaction; or

8.12 Licensing.

Any License of any Regulated Subsidiary (a) shall be revoked by the Government Authority which issued such License, or any action (administrative or judicial) to revoke a License shall have been commenced against any Regulated Subsidiary and shall not have been dismissed within 180 days after the commencement thereof, (b) shall be suspended by such Government Authority for a period in excess of thirty (30) days or (c) shall not be reissued or renewed by such Government Authority upon the expiration thereof following application for such reissuance or renewal by any Regulated Subsidiary, in each case to the extent such revocation, action, suspension, nonreissuance or nonrenewal would reasonably be expected to have a Material Adverse Effect; or

8.13 Certain Proceedings.

Any Regulated Subsidiary shall become subject to any conservation, rehabilitation or liquidation order, directive or mandate issued by any Government Authority or any Regulated Subsidiary shall become subject to any other directive or mandate issued by any

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Government Authority which would reasonably be expected to have a Material Adverse Effect and which is not stayed within ten (10) days; or

8.14 Invalidity of Loan Documents; Repudiation of Obligations.

At any time after the execution and delivery thereof, (i) any Loan Document or any provision thereof, for any reason other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void, or (ii) Company shall contest the validity or enforceability of any Loan Document or any provision thereof in writing or deny in writing that it has any further liability, including with respect to future advances by Lenders, under any Loan Document or any provision thereof:

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on the Loans, (b) an amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (whether or not any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents or certificates required to draw under such Letter of Credit), and (c) all other Obligations shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company, and the obligation of each Lender to make any Loan, the obligation of Administrative Agent to issue any Letter of Credit and the right of any Lender to issue any Letter of Credit hereunder shall thereupon terminate, and (ii) upon the occurrence and during the continuation of any other Event of Default, Administrative Agent shall, upon the written request or with the written consent of Requisite Lenders, by written notice to Company, declare all or any portion of the amounts described in clauses (a) through (c) above to be, and the same shall forthwith become, immediately due and payable, and the obligation of each Lender to make any Loan, the obligation of Administrative Agent to issue any Letter of Credit and the right of any Lender to issue any Letter of Credit hereunder shall thereupon terminate; provided that the foregoing shall not affect in any way the obligations of Lenders under subsection 3.3C(i) or the obligations of Lenders to purchase assignments of any unpaid Swing Line Loans as provided in subsection 2.1A(ii).

Notwithstanding anything contained in the preceding paragraph, if at any time within 60 days after an acceleration of the Loans pursuant to clause (ii) of such paragraph Company shall pay all arrears of interest and all payments on account of principal which shall have become due otherwise than as a result of such acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified in this Agreement) and all Events of Default and Potential Events of Default (other than non-payment of the principal of and accrued interest on the Loans, in each case which is due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to Company, may at their option rescind and annul such acceleration and its consequences; but such action shall not affect any subsequent Event of Default or Potential Event of Default or impair any right consequent thereon. The provisions of this paragraph are intended merely to bind Lenders to a decision which may be made at the election of Requisite Lenders and are not intended, directly or indirectly, to benefit Company, and such provisions

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shall not at any time be construed so as to grant Company the right to require Lenders to rescind or annul any acceleration hereunder or to preclude Administrative Agent or Lenders from exercising any of the rights or remedies available to them under any of the Loan Documents, even if the conditions set forth in this paragraph are met.

Section 9. ADMINISTRATIVE AGENT

9.1 Appointment.

A. Appointment of Administrative Agent. Wells Fargo is hereby appointed Administrative Agent hereunder and under the other Loan Documents. Each Lender hereby authorizes Administrative Agent to act as its agent in accordance with the terms of this Agreement and the other Loan Documents. Wells Fargo agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. The provisions of this Section 9 are solely for the benefit of Agents and Lenders and none of Company or any of its Subsidiaries shall have rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties under this Agreement, Administrative Agent (other than as provided in subsection 2.1D) shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Company or any of its Subsidiaries.

9.2 Powers and Duties; General Immunity.

A. Powers; Duties Specified. Each Lender irrevocably authorizes Administrative Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Loan Documents as are specifically delegated or granted to Administrative Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Administrative Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and the other Loan Documents. Administrative Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. Administrative Agent shall not have, by reason of this Agreement or any of the other Loan Documents, a fiduciary relationship in respect of any Lender or Company; and nothing in this Agreement or any of the other Loan Documents, expressed or implied, is intended to or shall be so construed as to impose upon Administrative Agent any obligations in respect of this Agreement or any of the other Loan Documents except as expressly set forth herein or therein.

B. No Responsibility for Certain Matters. No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by such Agent to Lenders or by or on behalf of Company to such Agent or any Lender in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of Company or any other Person liable for the payment of any Obligations, nor shall such Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or

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agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default. Anything contained in this Agreement to the contrary notwithstanding, Administrative Agent shall not have any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component amounts thereof.

C. Exculpatory Provisions. No Agent or any of its officers, directors, employees or agents shall be liable to Lenders for any action taken or omitted by such Agent under or in connection with any of the Loan Documents except to the extent caused by such Agent’s gross negligence or willful misconduct. An Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection with this Agreement or any of the other Loan Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until such Agent shall have received instructions in respect thereof from Requisite Lenders (or such other Lenders as may be required to give such instructions under subsection 10.6) and, upon receipt of such instructions from Requisite Lenders (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions; provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable law. Without prejudice to the generality of the foregoing, (i) each Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication (including any electronic message, Internet or intranet website posting or other distribution), instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Company and its Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against an Agent as a result of such Agent acting or (where so instructed) refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under subsection 10.6).

D. Agents Entitled to Act as Lender. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, an Agent in its individual capacity as a Lender hereunder. With respect to its participation in the Loans and the Letters of Credit, an Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder, and the term “Lender” or “Lenders” or any similar term shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. An Agent and its Affiliates may accept deposits from, lend money to, acquire equity interests in and generally engage in any kind of commercial banking, investment banking, trust, financial advisory or other business with Company or any of its Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company for services in connection with this Agreement and otherwise without having to account for the same to Lenders.

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9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.

Each Lender agrees that it has made its own independent investigation of the financial condition and affairs of Company and its Subsidiaries in connection with the making of the Loans and the issuance of Letters of Credit hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.

9.4 Right to Indemnity.

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent and its officers, directors, employees, agents, attorneys, professional advisors and Affiliates to the extent that any such Person shall not have been reimbursed by Company, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable counsel fees and disbursements and fees and disbursements of any financial advisor engaged by Agents) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Agent or such other Person in exercising the powers, rights and remedies of an Agent or performing duties of an Agent hereunder or under the other Loan Documents or otherwise in its capacity as Agent in any way relating to or arising out of this Agreement or the other Loan Documents; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of an Agent resulting solely from such Agent’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. If any indemnity furnished to an Agent or any other such Person for any purpose shall, in the opinion of such Agent, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished.

9.5 Resignation of Agents; Successor Administrative Agent and Swing Line Lender.

A. Resignation; Successor Administrative Agent. Any Agent may resign at any time by giving 30 days’ prior written notice thereof to Lenders and Company. Upon any such notice of resignation by Administrative Agent, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Administrative Agent. If no such successor shall have been so appointed by Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, the retiring Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent. If Administrative Agent shall notify Lenders and Company that no Person has accepted such appointment as successor Administrative Agent, such resignation shall nonetheless become effective in accordance with Administrative Agent’s notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan

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Documents, and (ii) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by, to or through each Lender directly, until such time as Requisite Lenders appoint a successor Administrative Agent in accordance with this subsection 9.5A. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement (if not already discharged as set forth above). After any retiring Agent’s resignation hereunder, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement.

B. Successor Swing Line Lender. Any resignation of Administrative Agent pursuant to subsection 9.5A shall also constitute the resignation of Wells Fargo or its successor as Swing Line Lender, and any successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon its acceptance of such appointment, become the successor Swing Line Lender for all purposes hereunder. In such event (i) Company shall prepay any outstanding Swing Line Loans made by the retiring Administrative Agent in its capacity as Swing Line Lender, (ii) upon such prepayment, the retiring Administrative Agent and Swing Line Lender shall surrender any Swing Line Note held by it to Company for cancellation, and (iii) if so requested by the successor Administrative Agent and Swing Line Lender in accordance with subsection 2.1E, Company shall issue a Swing Line Note to the successor Administrative Agent and Swing Line Lender substantially in the form of Exhibit V annexed hereto, in the amount of the Swing Line Loan Commitment then in effect and with other appropriate insertions.

9.6 Duties of Other Agents.

To the extent that any Lender is identified in this Agreement as a co-agent, documentation agent or syndication agent, such Lender shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.

9.7 Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to Company or any of the Subsidiaries of Company, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Company) shall be entitled and empowered, by intervention in such proceeding or otherwise

(i) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Loans and any other Obligations that are owing and unpaid and to file such other papers or documents as may be necessary or advisable in order to have the claims of Lenders and Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and Agents and their

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agents and counsel and all other amounts due Lenders and Agents under subsections 2.3 and 10.2) allowed in such judicial proceeding, and

(ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Agents and their agents and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

Nothing herein contained shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lenders or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 5. MISCELLANEOUS

10.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit.

A. General. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders (it being understood that Lenders’ rights of assignment are subject to the further provisions of this subsection 10.1). Neither Company’s rights nor obligations hereunder nor any interest therein may be assigned or delegated by Company without the prior written consent of all Lenders (and any attempted assignment or transfer by Company without such consent shall be null and void). No sale, assignment or transfer or participation of any obligations of a Lender in respect of a Letter of Credit or any participation therein may be made separately from a sale, assignment, transfer or participation of a corresponding interest in the Revolving Loan Commitment and the Revolving Loans of the Lender effecting such sale, assignment, transfer or participation. Anything contained herein to the contrary notwithstanding, except as provided in subsection 2.1A(ii) and subsection 10.5, the Swing Line Loan Commitment and the Swing Line Loans of Swing Line Lender may not be sold, assigned or transferred as described below to any Person other than a successor Administrative Agent and Swing Line Lender to the extent contemplated by subsection 9.5. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Affiliates of each of Administrative Agent and Lenders and Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

B. Assignments.

(i) Amounts and Terms of Assignments. Any Lender may assign to one or more Eligible Assignees all or any portion of its rights and obligations under this

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Agreement; provided that (a), except in the case of an assignment of the entire remaining amount of the assigning Lender’s rights and obligations under this Agreement the aggregate amount of the Revolving Loan Exposure of the assigning Lender and the assignee subject to each such assignment shall not be less than $5,000,000, unless Administrative Agent otherwise consents (such consent not to be unreasonably withheld or delayed), provided that simultaneous assignments to or by two or more related Funds shall be treated as one assignment for purposes of this clause (a), (b) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned; and any assignment of all or any portion of a Revolving Loan Commitment, Revolving Loan or Letter of Credit participation shall be made only as an assignment of the same proportionate part of the assigning Lender’s Revolving Loan Commitment, Revolving Loans and Letter of Credit participations, (c) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment Agreement, together with a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not already be a Lender, shall deliver to Administrative Agent information reasonably requested by Administrative Agent, including forms, certificates or other information in compliance with subsection 2.7B(iv) and (d), except in the case of an assignment to another Lender, an Affiliate of a Lender (provided that such Affiliate has a long-term non-credit enhanced unsecured debt rating of at least A- (in the case of S&P) or A3 (in the case of Moody’s)) or an Approved Fund of a Lender, Administrative Agent and, if no Event of Default has occurred and is continuing, Company, shall have consented thereto (which consent shall not be unreasonably withheld or delayed).

Upon such execution, delivery and consent, from and after the effective date specified in such Assignment Agreement, (y) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (z) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive the termination of this Agreement under subsection 10.9B) and be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto; provided that, anything contained in any of the Loan Documents to the contrary notwithstanding, if such Lender is an Issuing Lender such Lender shall continue to have all rights and obligations of an Issuing Lender until the cancellation or expiration of any Letters of Credit issued by it and the reimbursement of any amounts drawn thereunder). The assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its Notes, if any, to Administrative Agent for cancellation, and thereupon new Notes shall, if so requested by the assignee and/or the assigning Lender in accordance with subsection 2.1E, be issued to the assignee and/or to the assigning Lender, substantially in the form of Exhibit IV or Exhibit V annexed hereto, as the case may be, with appropriate insertions, to reflect the amounts of the new Commitments and/or outstanding Revolving Loans, as the case may be, of the assignee and/or the assigning Lender. Other than as provided in subsection 2.1A(ii) and subsection 10.5, any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection

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10.1B shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection 10.1C.

(ii) Acceptance by Administrative Agent; Recordation in Register. Upon its receipt of an Assignment Agreement executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with the processing and recordation fee referred to in subsection 10.1B(i) and any forms, certificates or other evidence with respect to United States federal income tax withholding matters that such assignee may be required to deliver to Administrative Agent pursuant to subsection 2.7B(iv), Administrative Agent shall, if Administrative Agent and Company have consented to the assignment evidenced thereby (in each case to the extent such consent is required pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a counterpart thereof as provided therein (which acceptance shall evidence any required consent of Administrative Agent to such assignment), (b) record the information contained therein in the Register, and (c) give prompt notice thereof to Company. Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it as provided in this subsection 10.1B(ii).

C. Participations. Any Lender may, without the consent of, or notice to, Company or Administrative Agent, sell participations to one or more Persons (other than a natural Person or Company or any of its Affiliates) in all or a portion of such Lender’s rights and/or obligations under this Agreement; provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Company, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver directly affecting (i) subsection 2.4A(iii) or the extension of the scheduled final maturity date of any Loan allocated to such participation or (ii) a reduction of the principal amount of or the rate of interest payable on any Loan allocated to such participation. Subject to the further provisions of this subsection 10.1C, Company agrees that each Participant shall be entitled to the benefits of subsections 2.6D and 2.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection 10.1B. To the extent permitted by law, each Participant also shall be entitled to the benefits of subsection 10.4 as though it were a Lender, provided such Participant agrees to be subject to subsection 10.5 as though it were a Lender. A Participant shall not be entitled to receive any greater payment under subsections 2.6D and 2.7A than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with Company’s prior written consent. No Participant shall be entitled to the benefits of subsection 2.7 unless Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Company, to comply with subsection 2.7B(iv) as though it were a Lender.

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D. Pledges and Assignments. Any Lender may, without the consent of Administrative Agent or Company,

at any time pledge or assign a security interest in all or any portion of its Loans, and the other Obligations owed to such Lender, to secure obligations of such Lender, including without limitation (A) any pledge or assignment to secure obligations to any Federal Reserve Bank and (B) in the case of any Lender that is a Fund, any pledge or assignment to any holders of obligations owed, or securities issued, by such Lender including to any trustee for, or any other representative of, such holders; provided that (i) no Lender shall be relieved of any of its obligations hereunder as a result of any such assignment or pledge and (ii) in no event shall any assignee or pledgee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.

E. Information. Each Lender may furnish any information concerning Company and its Subsidiaries in the possession of that Lender from time to time to pledgees under subsection 10.10D, assignees and participants (including prospective assignees and participants), in each case subject to subsection 10.18.

F. Agreements of Lenders. Each Lender listed on the signature pages hereof hereby agrees, and each Lender that becomes a party hereto pursuant to an Assignment Agreement shall be deemed to agree, (i) that it is an Eligible Assignee described in clause (ii) of the definition thereof; (ii) that it has experience and expertise in the making of or purchasing loans such as the Loans; and (iii) that it will make or purchase Loans for its own account in the ordinary course of its business and without a view to distribution of such Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this subsection 10.1, the disposition of such Loans or any interests therein shall at all times remain within its exclusive control).

10.2 Expenses.

Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly (i) all reasonable and documented out-of-pocket costs and expenses incurred by Administrative Agent and the Syndication Agent, including reasonable and documented fees, expenses and disbursements of counsel to the Agents, in connection with the negotiation, preparation, execution and administration of the Loan Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by Company; (ii) all other costs and expenses incurred by the Administrative Agent and the Syndication Agent in connection with the syndication of the Commitments; (iii) all reasonable costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel) and reasonable fees, costs and expenses of accountants, advisors and consultants, incurred by Administrative Agent and its counsel at any time when an Event of Default has occurred and is continuing, relating to efforts to evaluate or assess Company or any of its Subsidiaries and its business or financial condition; and (iv) all reasonable costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel), reasonable fees, costs and expenses of accountants, advisors and consultants and costs of settlement, incurred by Administrative Agent and Lenders in enforcing any Obligations of or in collecting any payments due from Company hereunder or under the other Loan Documents (including in connection with the enforcement of the Loan Documents) or in connection with any

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refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings.

10.3 Indemnity.

In addition to the payment of expenses pursuant to subsection 10.2, whether or not the transactions contemplated hereby shall be consummated, Company agrees to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless Administrative Agent and Lenders (including Issuing Lenders), and the officers, directors, trustees, employees, agents, advisors and Affiliates of Administrative Agent and Lenders (collectively called the “Indemnitees”), from and against any and all Indemnified Liabilities (as hereinafter defined); provided that Company shall not have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise solely from the gross negligence or willful misconduct of that Indemnitee as determined by a final judgment of a court of competent jurisdiction.

As used herein, “Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby (including Lenders’ agreement to make the Loans hereunder or the use or intended use of the proceeds thereof or the issuance of Letters of Credit hereunder or the use or intended use of any thereof, the failure of an Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Government Authority, or any enforcement of any of the Loan Documents).

To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this subsection 10.3 may be unenforceable in whole or in part because they are violative of any law or public policy, Company shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

10.4 Set-Off.

In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence and during the continuation of any Event of Default each of Lenders and their Affiliates is hereby authorized by Company at any time or from time to time, without notice to Company or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits

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(general or special, time or demand, provisional or final, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by that Lender or any Affiliate of that Lender to or for the credit or the account of Company and each of its Subsidiaries against and on account of the Obligations of Company or any of its Subsidiaries to that Lender (or any Affiliate of that Lender) or to any other Lender (or any Affiliate of any other Lender) under this Agreement, the Letters of Credit and participations therein and the other Loan Documents, including all claims of any nature or description arising out of or connected with this Agreement, the Letters of Credit and participations therein or any other Loan Document, irrespective of whether or not (i) that Lender shall have made any demand hereunder or (ii) the principal of or the interest on the Loans or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have become due and payable pursuant to Section 8 and although said obligations and liabilities, or any of them, may be contingent or unmatured.

10.5 Ratable Sharing.

Lenders hereby agree among themselves that if any of them shall, whether by voluntary or mandatory payment (other than a payment or prepayment of Loans made and applied in accordance with the terms of this Agreement), by realization upon security, through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Loan Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to that Lender hereunder or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to such Lender) that is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall, unless such proportionately greater payment is required by the terms of this Agreement, (i) notify Administrative Agent and each other Lender of the receipt of such payment and (ii) apply a portion of such payment to purchase assignments (which it shall be deemed to have purchased from each seller of an assignment simultaneously upon the receipt by such seller of its portion of such payment) of the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided that (A) if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be rescinded and the purchase prices paid for such assignments shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest and (B) the foregoing provisions shall not apply to (1) any payment made by Company pursuant to and in accordance with the express terms of this Agreement or (2) any payment obtained by a Lender as consideration for the assignment (other than an assignment pursuant to this subsection 10.5) of or the sale of a participation in any of its Obligations to any Eligible Assignee or Participant pursuant to subsection 10.1B. Company expressly consents to the foregoing arrangement and agrees that any purchaser of an assignment so purchased may exercise any and all rights of a Lender as to such assignment as fully as if that Lender had complied with the provisions of subsection 10.1B with respect to such assignment. In order to further evidence such assignment (and without prejudice to the effectiveness of the assignment provisions set forth above), each purchasing Lender and each selling Lender agree to

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enter into an Assignment Agreement at the request of a selling Lender or a purchasing Lender, as the case may be, in form and substance reasonably satisfactory to each such Lender.

10.6 Amendments and Waivers.

No amendment, modification, termination or waiver of any provision of this Agreement or of the Notes, and no consent to any departure by Company therefrom, shall in any event be effective without the written concurrence of Requisite Lenders; provided that no such amendment, modification, termination, waiver or consent shall, without the consent of:

(i) each Lender with Obligations directly affected (whose consent shall be sufficient for any such amendment, modification, termination or waiver without the consent of Requisite Lenders) (1) reduce or forgive the principal amount of any Loan, (2) postpone the scheduled final maturity date of any Loan (but not the date of any scheduled installment of principal), (3) postpone the date on which any interest or any fees are payable, (4) decrease the interest rate borne by any Loan (other than any waiver of any increase in the interest rate applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any fees payable hereunder (other than any waiver of any increase in the fees applicable to Letters of Credit pursuant to subsection 3.2 following an Event of Default), (5) reduce the amount or postpone the due date of any amount payable in respect of any Letter of Credit reimbursement obligation, (6) extend the expiration date of any Letter of Credit beyond the Revolving Loan Commitment Termination Date, (7) except as provided in subsection 2.11, extend the Revolving Commitment Termination Date, (8) change in any manner the obligations of Lenders relating to the purchase of participations in Letters of Credit or (9) change in any manner the provisions of subsection 2.4B to provide that Lenders will not share pro rata in reductions of the Revolving Loan Commitment Amount;

(ii) each Lender, (1) change in any manner the definition of “Pro Rata Share” or the definition of “Requisite Lenders” (except for any changes resulting solely from an increase in the aggregate amount of the Commitments approved by Requisite Lenders), (2) change the provisions of subsection 2.4B(iii) to provide that Lenders will not share pro rata in payments, (3) change in any manner any provision of this Agreement that, by its terms, expressly requires the approval or concurrence of all Lenders, (4) increase the maximum duration of Interest Periods permitted hereunder, or (5) change in any manner or waive the provisions contained in subsection 2.4A(iii), subsection 2.4C, subsection 8.1, subsection 10.5 or this subsection 10.6.

In addition, no amendment, modification, termination or waiver of any provision (i) of any Note shall be effective without the written concurrence of the Lender which is the holder of that Note, (ii) of subsection 2.1A(ii) or of any other provision of this Agreement relating to the Swing Line Loan Commitment or the Swing Line Loans shall be effective without the written concurrence of Swing Line Lender, (iii) of Section 3 shall be effective without the written concurrence of Administrative Agent and, with respect to the purchase of participations in Letters of Credit, without the written concurrence of each Issuing Lender that has issued an outstanding Letter of Credit or has not been reimbursed for a payment under a Letter of Credit, (iv) of Section 9 or of any other provision of this Agreement which, by its terms, expressly

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requires the approval or concurrence of Administrative Agent shall be effective without the written concurrence of Administrative Agent; and (v) that increases the amount of a Commitment of a Lender shall be effective without the consent of such Lender.

Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Company in any case shall entitle Company to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this subsection 10.6 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by Company, on Company.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

10.7 Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if such action is taken or condition exists.

10.8 Notices; Effectiveness of Signatures; Posting on Electronic Delivery Systems. A. Notices. Unless otherwise specifically provided herein, any notice or other communication herein

required or permitted to be given shall be in writing and may be personally served, or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telefacsimile in complete and legible form, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided that notices to Administrative Agent, Swing Line Lender and any Issuing Lender shall not be effective until received. For the purposes hereof, the address of Company, Administrative Agent, Swing Line Lender and the Issuing Lender shall be as set forth on Schedule 10.8 and the address of each other Lender shall be as set forth on its Administrative Questionnaire or (i) as to Company and Administrative Agent, such other address as shall be designated by such Person in a written notice delivered to the other parties hereto and (ii) as to each other party, such other address as shall be designated by such party in a written notice delivered to Administrative Agent. Electronic mail and Internet and intranet websites may be used to distribute routine communications, such as financial statements and other information as provided in subsection 6.1. Administrative Agent or Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

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B. Effectiveness of Signatures. Loan Documents and notices under the Loan Documents may be transmitted

and/or signed by telefacsimile and by signatures delivered in ‘PDF’ format by electronic mail; provided, however, that after the Closing Date no signature with respect to any notice, request, agreement, waiver, amendment or other document that is intended to have a binding effect may be sent by electronic mail. The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as an original copy with manual signatures and shall be binding on Company, Agents and Lenders. Administrative Agent may also require that any such documents and signature be confirmed by a manually-signed copy thereof; provided, however, that the failure to request or deliver any such manually-signed copy shall not affect the effectiveness of any facsimile document or signature.

C. Posting on Electronic Delivery Systems. Company acknowledges and agrees that (I) Administrative Agent may make any material delivered by Company to Administrative Agent, as well as any amendments, waivers, consents, and other written information, documents, instruments and other materials relating to Company, any of its Subsidiaries, or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the “Communications”), available to the Lenders by posting such notices on an electronic delivery system (which may be provided by Administrative Agent, an Affiliate of Administrative Agent, or any Person that is not an Affiliate of Administrative Agent), such as IntraLinks, or a substantially similar electronic system (the “Platform”) and (II) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Company or its securities) (each, a “Public Lender”). Company acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution; provided that Administrative Agent agrees to use reasonable efforts to require that any Lender with access to the Platform agrees to keep the Communications confidential on substantially the same terms set forth in subsection 10.18, (ii) the Platform is provided “as is” and “as available” and (iii) neither Administrative Agent nor any of its Affiliates warrants the accuracy, completeness, timeliness, sufficiency, or sequencing of the Communications posted on the Platform. Administrative Agent and its Affiliates expressly disclaim with respect to the Platform any liability for errors in transmission, incorrect or incomplete downloading, delays in posting or delivery, or problems accessing the Communications posted on the Platform and any liability for any losses, costs, expenses or liabilities that may be suffered or incurred in connection with the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by Administrative Agent or any of its Affiliates in connection with the Platform.

The Company hereby agrees that (w) all Communications that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Communications “PUBLIC”, Company shall be deemed to have authorized Administrative Agent, any Issuing Lender and the Lenders to treat such Communications as not containing any material non-public information with respect to Company or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Communications constitute confidential information pursuant to

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subsection 10.18, they shall be treated as set forth in such subsection); (y) all Communications marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (z) Administrative Agent shall be entitled to treat any Communications that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor”.

Each Lender agrees that notice to it (as provided in the next sentence) (a “Notice”) specifying that any Communication has been posted to the Platform shall for purposes of this Agreement constitute effective delivery to such Lender of such information, documents or other materials comprising such Communication. Each Lender agrees (i) to notify, on or before the date such Lender becomes a party to this Agreement (pursuant to an Administrative Questionnaire or otherwise), Administrative Agent in writing of such Lender’s e-mail address to which a Notice may be sent (and from time to time thereafter to ensure that Administrative Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address. Notwithstanding the foregoing, Company shall not be responsible for any failure of the Platform or for the inability of any Lender to access any Communication made available by Company to Administrative Agent in connection with the Platform and in no event shall any such failure constitute an Event of Default hereunder.

10.9 Survival of Representations, Warranties and Agreements.

A. All representations, warranties and agreements made herein shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit hereunder.

B. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 10.2, 10.3, 10.4, 10.16 and 10.17 and the agreements of Lenders set forth in subsections 9.2C, 9.4, 10.5, 10.17 and 10.18 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination of this Agreement.

10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of an Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Loan Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise available.

10.11 Marshalling; Payments Set Aside.

Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of Company or any other party or against or in payment of any or all of the Obligations. To the extent that Company makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent for the benefit of Lenders), or Agents or Lenders enforce

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any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

10.12 Severability.

In case any provision in or obligation under this Agreement or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

10.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.

The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitments of any other Lender hereunder. Nothing contained herein or in any other Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or Lenders and Company, as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and, subject to subsection 9.6, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

To the extent permitted by law, Company shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement (including, without limitation, subsection 2.1C hereof), any other Loan Document, any transaction contemplated by the Loan Documents, any Loan or the use of proceeds thereof.

10.14 Applicable Law.

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

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10.15 Construction of Agreement; Nature of Relationship.

Company acknowledges that (i) it has been represented by counsel in the negotiation and documentation of the terms of this Agreement, (ii) it has had full and fair opportunity to review and revise the terms of this Agreement, (iii) this Agreement has been drafted jointly by the parties hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has any fiduciary relationship with or duty to Company arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent, the other Agents and Lenders, on one hand, and Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor. Accordingly, each of the parties hereto acknowledges and agrees that the terms of this Agreement shall not be construed against or in favor of another party.

10.16 Consent to Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER AND THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

(III) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND

(IV) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.16 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

10.17 Waiver of Jury Trial.

EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort

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claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.17 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

10.18 Confidentiality.

Each Lender shall hold all non-public information obtained pursuant to the requirements of this Agreement in accordance with such Lender’s customary procedures for handling confidential information of this nature, it being understood and agreed by Company that in any event a Lender may make disclosures (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, and legal counsel and other advisors who are engaged in evaluating, approving, negotiating, structuring or administering this Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential on substantially the same terms as provided herein), (b) to the extent requested by any Government Authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this subsection 10.18, to (i) any pledgee under subsection 10.10, any Eligible Assignee of or participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of Company, (g) with the consent of Company, (h) to the extent such information (i) becomes publicly available other than as a result of a breach of this subsection 10.18 or (ii) becomes available to Administrative Agent or any Lender on a nonconfidential basis from a source other than Company or a party not known by Administrative Agent or such Lender to be subject to similar confidentiality restrictions or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender’s or its Affiliates’ investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates and that no written or oral communications from counsel to an Agent and no information that is or is designated as privileged or as attorney work product may be disclosed to any Person unless such Person is a Lender or a Participant hereunder; provided that, unless specifically prohibited by applicable law or court order, each

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Lender shall notify Company of any request by any Government Authority or representative thereof (other than any such request in connection with any examination of the financial condition of such Lender by such Government Authority) for disclosure of any such non-public information prior to disclosure of such information; and provided, further that in no event shall any Lender be obligated or required to return any materials furnished by Company or any of its Subsidiaries. In addition, upon reasonable advance notice to Company, Administrative Agent and Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to Administrative Agent and Lenders, and Administrative Agent or any of its Affiliates may place customary “tombstone” advertisements relating hereto in publications (including publications circulated in electronic form) of its choice at its own expense (which shall be subject to review and comment by the Company prior to publication).

10.19 Counterparts; Effectiveness.

This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto.

10.20 USA Patriot Act.

Each Lender hereby notifies Company that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies Company, which information includes the name and address of Company and other information that will allow such Lender to identify Company in accordance with the Act.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

Signature Page to Ameriprise Credit Agreement

COMPANY:

AMERIPRISE FINANCIAL, INC.

By: /s/Arthur H. Berman

Title: Senior Vice President & Treasurer

LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

By: /s/Michael Giese

By: /s/Dan Weiler

CITIBANK, N.A.,

as a Lender

By:/s/David A. Dodge

Title: Managing Director

THE BANK OF NEW YORK,

as a Lender

By: /s/Michael Pensari

Title: Vice President

SUNTRUST BANK, INC.

as a Lender

By: /s/Brian Peters

Title: Managing Director

GREENWICH CAPITAL MARKETS, INC.,

as agent for THE ROYAL BANK OF SCOTLAND PLC,

as a Lender

By: /s/Diane Ferguson

Title: Managing Director

HSBC BANK USA, National Association,

as a Lender

By: /s/Lawrence Karp

Title: Senior Vice President

JPMORGAN CHASE BANK, N.A.,

as a Lender

By: /s/Erin O’Rourke

Title: Vice President

LLOYDS TSB BANK, plc.,

as a Lender

By: /s/James M. Rudd

Title: Vice President

By: /s/Melissa Curry

Title: Assistant Vice President

U.S. BANK NATIONAL ASSOCIATION,

as a Lender

By: /s/Christine Dean

Title: Assistant Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender

By: /s/William R. Goley

Title: Director

WILLIAM STREET COMMITMENT CORPORATION (recourse only to assets of William Street Commitment Corporation),

as a Lender

By: Mark Walton

Title: Assistant Vice President

Exhibit 12

AMERIPRISE FINANCIAL, INC. COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES

(1) Ratio calculated using thousands. The interest portion of rental expense represents one-third of rental expense relating to operating leases.

Years Ended December 31,

2005

2004

2003 2002

2001

(dollars in millions)

Earnings:

Income before income tax provision (benefit), discontinued operations and accounting change $ 745 $ 1,112 $ 873

$ 861 $ 35Interest and debt expense

73

52

45 32

26

Interest portion of rental expense 32 30 28 31 39

Amortization of capitalized interest

1

1

1 1

—

Equity method investees and minority interests

(2) 2

2 —

—

Total earnings (a) $ 849 $ 1,197 $ 949 $ 925 $ 100

Fixed charges:

Interest and debt expense

$ 73

$ 52

$ 45 $ 32

$ 26

Interest portion of rental expense

32

30

28 31

39

Capitalized interest

—

—

— 4

6

Total fixed charges (b) $ 105 $ 82 $ 73 $ 67 $ 71

Ratio of earnings to fixed charges (a/b) (1)

8.1

14.5

13.0 13.9

1.4

Exhibit 13

[PORTIONS OF THE AMERIPRISE FINANCIAL, INC. 2005 ANNUAL REPORT TO SHAREHOLDERS]

21

Management’s Discussion and Analysis 22 Forward-Looking Statements 53 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 54 Report of Independent Registered Public Accounting Firm 55 Consolidated Statements of Income 56 Consolidated Balance Sheets 57 Consolidated Statements of Cash Flows 58 Consolidated Statements of Shareholders’ Equity 60 Notes to Consolidated Financial Statements 61 Consolidated Five-Year Summary of Selected Financial Data 99 Glossary of Selected Terminology 101 General Information 102

Management’s Discussion and Analysis The following information should be read in conjunction with our consolidated financial statements and related notes that follow. Certain key terms are defined in the Glossary of Selected Terminology. Overview We are engaged in providing financial planning, products and services that offer solutions for our clients’ asset accumulation, income and protection needs. We also offer asset management and 401(k) products and services to institutional clients. As of December 31, 2005, we had 2.8 million individual, business and institutional clients and a network of over 12,000 financial advisors and registered representatives, including registered representatives of our subsidiary Securities America Financial Corporation (SAFC). The products and services we provide retail customers, and to a lesser extent, institutional customers, are the primary source of our revenue and net income. Revenue and net income are significantly impacted by the relative investment performance, total value and composition of assets we manage and administer for our retail and institutional clients. These factors, in turn, are largely determined by overall investment market performance and the depth and breadth of our individual client relationships. During the year, we continued to increase the number of financial planning relationships and increase the depth of our retail client relationships. Our average assets per retail client increased 7%. The percentage of our current clients who have received a financial plan, or have entered into an agreement to receive and have paid for a financial plan, increased to approximately 44% as of December 31, 2005, up from approximately 42% in the prior year. We compete with a large number of national and regional broker-dealers, banks and independent broker-dealers for both retail client relationships and financial advisors. We believe our focus on personalized financial planning leads to more satisfied clients and facilitates deeper and more persistent individual client relationships. We also believe it provides us a competitive advantage over firms focused primarily on financial transactions or product sales. Additionally, we believe our ability to establish and build financial planning and advice relationships, face-to-face, through our network of more than 12,000 financial advisors and registered representatives, provides competitive advantages, particularly in our target mass affluent market. Our asset management products and services, the financial results of which are reported in our Asset Accumulation and Income segment, compete with investment products from other asset management companies, banks and brokers. Investment performance is a critical component of competitive positioning for these products, and we have made substantial investments over the past five years that have driven performance improvements. However, we continue to manage through significant redemptions in our mutual funds that are caused by the transition to an open architecture environment. In 2005, we continued to take actions to improve investment performance, including repositioning and assigning a new investment management team for RiverSource New Dimensions Fund , which we believe will benefit fund shareholders and also improve net asset flows. Our mutual funds are distributed through our own proprietary network, and we anticipate to begin distribution through third parties in 2006. We transact our institutional business directly with clients, without an intermediary for distribution. Our variable and fixed annuity products, the financial results of which are reported in our Asset Accumulation and Income segment, compete with other products manufactured by insurance and annuity companies, which may be distributed directly, through independent agents, banks and other brokerages. We believe our focus on financial planning, particularly on meeting our clients’ retirement needs, provides us with a competitive advantage in identifying, developing and providing appropriate products for our clients. We distribute these products primarily through our own proprietary network and also through third parties, including banks and other brokerages. In 2005, this competitive advantage, combined with new products and our expansion of distribution channels, resulted in strong net asset flows in our variable annuity products. Our banking and brokerage products and services, which support our clients’ asset accumulation and income management objectives, are also reported in the Asset Accumulation and Income segment. We offer a broad set of brokerage capabilities through Ameriprise Financial Services, Inc., including wrap accounts, and banking through a transitional agreement with American Express Company (American Express). In 2006, we expect to reestablish our own Federal Savings Bank (FSB). We also offer short-term, cash management investment alternatives through our certificate company. We offer a number of products to protect our retail clients from risks. Our life and health insurance products and services include variable universal and universal life, disability insurance and term life. These products are distributed through our own proprietary advisor network and compete with products of other life and health insurers. We also selectively offer other companies’ protection products through our proprietary advisor network. We believe our focus on protecting against risks identified through the financial planning process results in more appropriate products for our clients, more satisfied clients, and better economics for us. We also provide auto and home insurance product selection distributed on a direct basis, primarily through marketing alliances.

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®

Financial Targets It is management’s priority to increase shareholder value over a multi-year horizon by achieving our financial targets, on average and over time. Management measures its progress against these goals excluding accounting changes and the impact of our separation from American Express, specifically, excluding discontinued operations, non-recurring separation costs and AMEX Assurance Company (AMEX Assurance). The financial targets are: • Annual revenue growth of 6 to 8 percent, • Annual net income growth of 10 to 13 percent, and • Return on average equity of 12 to 15 percent. During 2006, as part of our capital redeployment plan, management will evaluate the use of an earnings per common share measure for one of its financial targets. For the year ended 2005, our revenue growth, excluding the impact of the separation, exceeded our target. Our income and return on average equity, both excluding the impact of the separation, fell short of our targets. Owned, Managed and Administered Assets We present our owned, managed and administered assets as of the end of the periods indicated. These three categories of assets include the following: Owned assets. We refer to certain assets on our consolidated balance sheets as owned assets. These assets primarily include investments in the separate accounts and general accounts of our life insurance subsidiaries, investments of our face-amount certificate subsidiary, cash and cash equivalents, restricted and segregated cash and receivables. Separate account assets are assets that are maintained and established primarily for the purpose of funding our variable annuity and variable universal life insurance products. These assets are only available to fund the liabilities of the variable annuity contractholders and variable universal life insurance policyholders and others with contracts requiring premiums or other deposits to a separate account. We earn management fees based on the market value of assets held in these accounts. All investment performance of separate account assets, net of fees, is passed through to the contractholder or policyholder. Investments recorded on our consolidated balance sheets consist primarily of the fair value of our Available-for-Sale securities and trading securities, equity method investments in hedge funds, as well as mortgage loans on real estate, net of allowance for loan losses. We record the income associated with these investments, including net realized gains and losses associated with these assets and other-than-temporary impairments of these assets, in “Net investment income” in our consolidated statements of income. Managed assets. We refer to assets for which we provide investment management and other services as managed assets. Managed assets include assets of our retail clients that are invested in the RiverSource family of mutual funds and retail assets in our wrap accounts (including assets invested in mutual funds managed by other companies), for which we earn fees based on the asset levels of such accounts. Managed assets also include assets managed primarily for institutional clients, such as separately managed accounts, including defined benefit plans. Managed assets include assets managed by sub-advisors selected by us. We receive a fee based on the value of the managed assets, which we generally record under “Management, financial advice and service fees” in our consolidated statements of income (although we include fees from distribution of other companies’ products through our wrap accounts under “Distribution fees”). We do not record managed assets on our consolidated balance sheets. Administered assets. We refer to assets for which we provide administrative services for our clients as administered assets. These assets include assets held in clients’ brokerage accounts or invested in other companies’ products (excluding non-proprietary wrap assets included in managed assets above). Administered assets also include certain assets in defined contribution plans, such as mutual funds managed by other companies and investments in a plan sponsor’s stock. We do not exercise investment discretion over these assets and we are not paid a management fee based on the amount of assets administered. We generally record fees received from administered assets under “Distribution fees” in our consolidated statements of income. We do not record administered assets on our consolidated balance sheets. Our Segments We have two main operating segments aligned with the financial solutions we offer to address our clients’ needs: • Asset Accumulation and Income. This segment offers products and services, both our own and other companies’, to help our

retail clients address identified financial objectives related to asset accumulation and income management. Products and services in this segment are related to financial advice, asset management, brokerage and banking, and include mutual funds, wrap accounts, variable and fixed annuities, brokerage accounts, financial advice services and investment certificates. This operating segment also serves institutional clients by providing investment management services in separately managed accounts, sub-advisory, alternative investments and 401(k) markets. We earn revenues in this segment primarily through fees we receive based on managed assets and annuity separate account assets. These fees are impacted by both market movements and net asset flows. We also earn net investment income on owned assets, principally supporting the fixed annuity business, and distribution fees on sales of mutual funds and other products.

• Protection. This segment offers a variety of protection products, both our own and other companies’, including life, disability

income, long-term care and auto and home insurance to address the identified protection and risk management

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needs of our retail clients. We earn revenues in this operating segment primarily through premiums and fees that we receive to assume insurance-related risk, fees we receive on owned and administered assets and net investment income we earn on assets on our consolidated balance sheets related to this segment.

Our third operating segment, Corporate and Other, consists of income derived from corporate level assets and unallocated corporate expenses, as well as the results of SAFC, which through its operating subsidiary, Securities America, Inc. (SAI), operates its own separately branded distribution network. This segment also includes non-recurring costs associated with our separation from American Express. Significant Factors Affecting our Results of Operations and Financial Condition Separation from American Express On February 1, 2005, the American Express Board of Directors announced its intention to pursue the disposition of 100% of its shareholdings in our company through a tax-free distribution to American Express shareholders (the Separation). On September 30, 2005, American Express divested 100% of its shareholdings in our company to American Express shareholders (the Distribution). The Separation and Distribution resulted in specifically identifiable impacts to our reported consolidated balance sheets and statements of income. • American Express provided a capital contribution to our company of approximately $1.1 billion to fund costs related to the

Separation and Distribution, to adequately support strong debt ratings for our company on the Distribution and to indemnify us for the after-tax cost of $65 million with respect to the comprehensive settlement of a consolidated securities class action lawsuit.

• We replaced our inter-company indebtedness with American Express, initially with a bridge loan from selected financial

institutions, and on November 23, 2005 through the issuance of $1.5 billion of unsecured senior debt securities with 5- and 10-year maturities.

• We have incurred $293 million of pretax non-recurring separation costs through December 31, 2005, and expect to incur a total of

approximately $875 million. These costs include advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish our technology platforms. In addition, we have incurred higher ongoing expenses associated with establishing ourselves as an independent company.

• Two businesses were transferred to American Express. The assets, liabilities and results of operations of our former subsidiary,

American Express International Deposit Company (AEIDC), are classified as discontinued operations. As discussed in Note 1, effective September 30, 2005, we entered into an agreement to sell our interest in the AMEX Assurance legal entity to American Express within two years after the Distribution for approximately $115 million. This transaction, combined with ceding of all travel and other card insurance business to American Express, created a variable interest entity for U.S. GAAP purposes for which we are not the primary beneficiary. Accordingly, we deconsolidated AMEX Assurance as of September 30, 2005 for U.S. GAAP purposes.

Capital Contribution In connection with the Separation and Distribution, American Express provided us a capital contribution of approximately $1.1 billion. The capital contribution was intended to cover the separation costs described above, and to provide adequate support for a senior debt rating of our company on the Distribution that allows us to have efficient access to the capital markets and support the current financial strength ratings of our insurance subsidiaries. We contributed $650 million of the capital contribution from American Express to our subsidiary IDS Life Insurance Company (IDS Life) to absorb non-recurring separation costs expected to be incurred by that legal entity and to support its current financial strength ratings. New Financing Arrangements On November 23, 2005 we issued $800 million principal amount of 5.35% senior unsecured notes due November 15, 2010 and $700 million principal amount of 5.65% senior unsecured notes due November 15, 2015 (senior notes). The proceeds from the senior notes were used to repay a bridge loan, which was drawn on September 28, 2005 to repay American Express for inter-company loans, and for other general corporate purposes. In September 2005 we also obtained an unsecured revolving credit facility of $750 million expiring in September 2010 from various third-party financial institutions. Under the terms of the credit agreement we may increase the amount of this facility to $1.0 billion and as of December 31, 2005, no borrowings were outstanding under this facility. See “Liquidity and Capital Resources—Description of Indebtedness” and Note 8 to our consolidated financial statements. Replacement of Services and Operations Provided by American Express American Express has historically provided a variety of corporate and other support services for our businesses, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal, procurement and other services. American Express is continuing to provide us with many of these services pursuant to a transition services agreement. Those services are generally being provided for a term that began after the Distribution and will expire on the earlier to occur of the second anniversary of the Distribution or the date of termination of a particular service pursuant to the transition services agreement. Other than technology-related expenses, we currently expect that the

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aggregate costs we will pay to American Express under the transition services agreement for continuing services and the costs for establishing or procuring the services that have historically been provided by American Express will not significantly differ from the amounts reflected in our historical consolidated financial statements. However, we have incurred, and expect to incur, significant non-recurring costs for advertising and marketing to establish our new brands and to build our own technology infrastructure. Marketing and Re-Branding. As part of the separation, we have entered into a marketing and branding agreement with American Express that grants us the right to use the “American Express” brand name and logo in a limited capacity for up to two years from the Distribution in conjunction with our brand name and logo and, in the names of certain of our products, services and subsidiaries for transitional purposes. The agreement also provides for various reciprocal marketing arrangements and services between the parties. We do not expect to make any significant cash payments to American Express in connection with the marketing and branding agreement. Technology. As a stand-alone company, we are installing and implementing information technology infrastructure to support our business functions, including accounting and financial reporting, customer service and distribution, as well as other significant investments to enhance our capabilities as an independent business. AMEX Assurance Effective July 1, 2005, our subsidiary, AMEX Assurance, ceded 100% of its travel insurance and card related business offered to American Express customers, to an American Express subsidiary in return for an arm’s length ceding fee. As of September 30, 2005, we entered into an agreement to sell the AMEX Assurance legal entity to American Express within two years after the Distribution. IDS Property Casualty Insurance Company (IDS Property Casualty Co.), doing business as Ameriprise Auto & Home Insurance, uses certain insurance licenses held by AMEX Assurance. We intend on obtaining similar licenses at IDS Property Casualty Co. prior to the sale of AMEX Assurance to American Express. Threadneedle Acquisition On September 30, 2003, we acquired Threadneedle Asset Management Holdings Ltd. (Threadneedle) for £340 million in cash (or approximately $565 million at then prevailing exchange rates). In connection with the acquisition, we received a $564 million capital contribution from American Express, which was comprised of $536 million in cash and a $28 million non-cash reduction of liabilities owed to American Express. We also entered into profit-sharing arrangements for certain Threadneedle employees, one of which is based on an annual independent valuation of Threadneedle. For additional information relating to the Threadneedle profit-sharing arrangements, see Note 14 to our consolidated financial statements. We included Threadneedle in our consolidated financial statements as of September 30, 2003, and as a result, recorded $3.6 billion of assets and $3.0 billion of liabilities in our consolidated balance sheets, and added an additional $81.1 billion of owned, managed and administered assets. Approximately 5% of our 14% increase in revenue between 2003 and 2004 was attributable to the consolidation of Threadneedle, as well as 22% of the increase in owned, managed and administered assets in 2003. Equity Markets and Interest Rates Equity market and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects they have on the asset management fees we earn and the “spread” income generated on our annuities, face-amount certificates and universal life-type products. Asset management fees, which we include in “Management, financial advice and services fees” on our consolidated statements of income, are generally based on the market value of the assets we manage. The interest spreads we earn on our annuity, universal life-type and face-amount certificate products are the difference between the returns we earn on the investments that support our obligations on these products and the amounts we must credit contractholders and policyholders. Improvements in equity markets generally lead to increased value in our managed assets, while declines in equity markets generally lead to decreased value in our managed assets. Average equity markets were higher in 2005 compared to 2004, resulting in a favorable impact to our management fee revenue. Interest rate spreads contracted in 2005 compared to 2004, primarily due to rising short-term interest rates, which drove higher crediting rates on our face-amount certificate products. For additional information regarding our sensitivity to equity risk and interest rate risk, see “Quantitative and Qualitative Disclosures about Market Risks.” Net Flows Our owned, managed and administered assets are impacted by market movements and net flows of client assets. Net flows of client assets are a measure of new sales of, or deposits into, our products offset by redemptions of, or withdrawals from, our products. Net flows can have a significant impact on our results of operations due to their impact on our revenues and expenses. Since January 2004, in the aggregate, we have experienced net inflows in our protection, variable annuity, face-amount certificate, wrap account and other companies’ products we offer. During the same time period, we experienced significant net outflows in our proprietary mutual fund and institutional product offerings. In 1999 and 2000, we significantly expanded our distribution of other companies’ mutual funds and our offering of other companies’ investment products under variable universal life (VUL) and variable annuity (VA) policies. This expansion of our branded distribution channel resulted in, and continues to result in, a shift in net flows from proprietary products to non-proprietary products.

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Critical Accounting Policies The accounting and reporting policies that we use affect our consolidated financial statements. Certain of our accounting and reporting policies are critical to an understanding of our results of operations and financial condition, and in some cases the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of our consolidated financial statements. The accounting and reporting policies we have identified as fundamental to a full understanding of our results of operations and financial condition are described below. See Note 2 to our consolidated financial statements for further information about our accounting policies. Valuation of Investments The most significant component of our investments is our Available-for-Sale securities. Generally, we carry our Available-for-Sale securities at fair value on our consolidated balance sheets and we record unrealized gains (losses) in accumulated other comprehensive income (loss) within equity, net of income tax provision (benefit) and net of adjustments in other asset and liability balances, such as deferred acquisition costs (DAC), to reflect the expected impact on their carrying value had the unrealized gains (losses) been realized as of the respective balance sheet date. At December 31, 2005, we had net unrealized pretax losses on Available-for-Sale securities of $122 million. We recognize gains and losses in our results of operations upon disposition of the securities. We also recognize losses in our results of operations when our management determines that a decline in value is other-than-temporary. This determination requires the exercise of judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default or bankruptcy. We also consider the extent to which cost exceeds fair value and the duration of that difference, and our management’s judgment about the issuer’s current and prospective financial condition, as well as our ability and intent to hold until recovery. The fair value of approximately 96% of our investment portfolio classified as Available-for-Sale as of December 31, 2005 is determined by quoted market prices. As of December 31, 2005, we had $523 million in gross unrealized losses that related to $22.5 billion of Available-for-Sale securities, of which $5.8 billion have been in a continuous unrealized loss position for 12 months or more. As part of our ongoing monitoring process, our management determined that a majority of the gross unrealized losses on these securities is attributable to changes in interest rates. Additionally, because we have the ability as well as the intent to hold these securities for a time sufficient to recover our amortized cost, we concluded that none of these securities was other-than-temporarily impaired at December 31, 2005. Deferred Acquisition Costs For our annuity and life, disability income and long-term care insurance products, our DAC balances at any reporting date are supported by projections that show our management expects there to be adequate premiums or estimated gross profits after that date to amortize the remaining DAC balances. These projections are inherently uncertain because they require our management to make assumptions about financial markets, anticipated mortality and morbidity levels, and policyholder behavior over periods extending well into the future. Projection periods used for our annuity products are typically 10 to 25 years, while projection periods for our life, disability income and long-term care insurance products are often 50 years or longer. Our management regularly monitors financial market conditions and actual policyholder behavior experience and compares them to its assumptions. For annuity and universal life insurance products, the assumptions made in projecting future results and calculating the DAC balance and DAC amortization expense are our management’s best estimates. Our management is required to update these assumptions whenever it appears that, based on actual experience or other evidence, earlier estimates should be revised. When assumptions are changed, the percentage of estimated gross profits used to amortize DAC might also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in a decrease in the DAC balance and an increase in DAC amortization expense, while a decrease in amortization percentage will result in an increase in the DAC balance and a decrease in DAC amortization expense. The impact on results of operations of changing assumptions can be either positive or negative in any particular period and is reflected in the period in which such changes are made. For other life, disability income and long-term care insurance products, the assumptions made in calculating our DAC balance and DAC amortization expense are consistent with those used in determining the liabilities and therefore are intended to provide for adverse deviations in experience and are revised only if our management concludes experience will be so adverse that DAC is not recoverable. If management concludes that DAC is not recoverable, DAC is reduced to the amount that is recoverable based on best estimate assumptions and there is a corresponding expense recorded in our consolidated statements of income. For annuity and life, disability income and long-term care insurance products, key assumptions underlying these long-term projections include interest rates (both earning rates on invested assets and rates credited to policyholder accounts), equity market performance, mortality and morbidity rates and the rates at which policyholders are expected to surrender their contracts, make withdrawals from their contracts and make additional deposits to their contracts. Assumptions about interest rates are the primary factor used to project interest margins, while assumptions about rates credited to policyholder accounts and equity market performance are the primary factors used to project client asset value growth rates, and assumptions about surrenders, withdrawals and deposits comprise projected persistency rates. Our management must

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also make assumptions to project maintenance expenses associated with servicing our annuity and insurance businesses during the DAC amortization period. The client asset value growth rate is the rate at which contract values are assumed to appreciate in the future. The rate is net of asset fees and anticipates a blend of equity and fixed income investments. Our management reviews and, where appropriate, adjusts its assumptions with respect to client asset value growth rates on a quarterly basis. We use a mean reversion method as a monthly guideline in setting near-term client asset value growth rates based on a long-term view of financial market performance as well as actual historical performance. In periods when market performance results in actual contract value growth at a rate that is different than that assumed, we will reassess the near-term rate in order to continue to project our best estimate of long-term growth. The near-term growth rate is reviewed to ensure consistency with our management’s assessment of anticipated equity market performance. Our management is currently assuming a 7% long-term client asset value growth rate. If we increased or decreased our assumption related to this growth rate by 100 basis points, the impact on annual DAC amortization expense would be a decrease or increase of approximately $65 million. We monitor other principal DAC amortization assumptions, such as persistency, mortality, morbidity, interest margin and maintenance expense levels, each quarter and, when assessed independently, each could impact our DAC balances. For example, if we increased or decreased our interest margin on our universal life insurance and on the fixed portion of our variable universal life insurance products by 10 basis points, the impact on annual DAC amortization expense would be a decrease or increase of approximately $5 million. Additionally, if we extended or reduced the amortization periods by one year for variable annuities to reflect changes in premium paying persistency and/or surrender assumptions, the impact on annual DAC amortization expense would be a decrease or increase of approximately $30 million. The amortization impact of extending or reducing the amortization period any additional years is not linear. The analysis of DAC balances and the corresponding amortization is a dynamic process that considers all relevant factors and assumptions described previously. Unless our management identifies a significant deviation over the course of the quarterly monitoring, our management reviews and updates these DAC amortization assumptions annually in the third quarter of each year. An assessment of sensitivity associated with changes in any single assumption would not necessarily be an indicator of future results. For details regarding the balances of and changes in DAC for the years ended December 31, 2005, 2004 and 2003, see Note 5 to our consolidated financial statements. Derivative Financial Instruments and Hedging Activities The fair values of our derivative financial instruments are 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 data inputs. In certain instances, the fair value includes structuring costs incurred at the inception of the transaction. The accounting for the change in the fair value of a derivative financial instrument depends on its intended use and the resulting hedge designation, if any. We currently designate derivatives as cash flow hedges or hedges of net investment in foreign operations or, in certain circumstances, do not designate derivatives as accounting hedges. For derivative financial instruments that qualify as cash flow hedges, the effective portions of the gain or loss on the derivative instruments are reported in accumulated other comprehensive income (loss) and reclassified into earnings when the hedged item or transaction impacts earnings. Any ineffective portion of the gain or loss is also reported currently in earnings as a component of net investment income. For derivative financial instruments that qualify as net investment hedges in foreign operations, the effective portions of the change in fair value of the derivatives are recorded in accumulated other comprehensive income (loss) as part of the foreign currency translation adjustment. Any ineffective portions of net investment hedges are recognized in net investment income during the period of change. For derivative financial instruments that do not qualify for hedge accounting or are not designated as hedges, changes in fair value are recognized in current period earnings, generally as a component of net investment income. These derivatives primarily provide economic hedges to equity market exposures. Examples include structured derivatives, options and futures that economically hedge the equity components of certain annuity and certificate liabilities, equity swaps and futures that economically hedge exposure to price risk arising from proprietary mutual fund seed money investments, and foreign currency forward contracts to economically hedge foreign currency transaction exposures. For further details on the types of derivatives we use and how we account for them, see Note 15 to our consolidated financial statements. Income Tax Accounting Income taxes, as reported in our consolidated financial statements, represent the net amount of income taxes that we expect to pay to or receive from various taxing jurisdictions in connection with our operations. We provide for income taxes based on amounts that we believe we will ultimately owe. Inherent in the provision for income taxes are estimates and judgments regarding the tax treatment of certain items and the realization of certain offsets and credits. In the event that the ultimate tax treatment of items or the realization of offsets or credits differs from our estimates, we may be required to

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significantly change the provision for income taxes recorded in our consolidated financial statements. In connection with the provision for income taxes, our consolidated 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. Among our deferred tax assets is a significant deferred tax asset relating to capital losses realized for tax return purposes and capital losses that have been recognized for financial statement purposes but not yet for tax return purposes. Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes. Our life insurance subsidiaries will not be able to file a consolidated U.S. federal income tax return with the other members of our affiliated group for five tax years following the Distribution which will result in net operating and capital losses, credits, and other tax attributes generated by one group not being available to offset income earned or taxes owed by the other group during the period of non-consolidation. This lack of consolidation could affect our ability to fully realize certain of our deferred tax assets, including the capital losses referred to above. We are required to establish a valuation allowance for any portion of our deferred tax assets that our management believes will not be realized. It is likely that our management will need to identify and implement appropriate planning strategies to ensure our ability to realize our deferred tax asset relating to capital losses and avoid the establishment of a valuation allowance with respect to it. In the opinion of our management, it is currently more likely than not that we will realize the benefit of our deferred tax assets, including our capital loss deferred tax asset, and, therefore, no such valuation allowance has been established. Recent Accounting Pronouncements For information regarding recent accounting pronouncements and their expected impact on our future consolidated results of operations or financial condition, see Note 2 to our consolidated financial statements. Sources of Revenues and Expenses We earn revenues from fees received in connection with mutual funds, wrap accounts, assets managed for institutions and separate accounts related to our variable annuity and variable life insurance products. Our protection and annuity products generate revenues through premiums and other charges collected from policyholders and contractholders. We also earn investment income on owned assets supporting these products. We incur various operating costs, primarily compensation and benefit expenses, the majority of which is related to compensating our distribution channel, interest credited to investment certificates and fixed annuities, and provision for losses and benefits for annuities and protection products. Revenues Management, financial advice and service fees. Management, financial advice and service fees primarily represent management and service fees from managed assets and variable annuity fees, including support payments from other companies whose funds are held in separate accounts, as well as wrap account fees and fees received for financial planning and other services. Management and service fees are generally based on the market value of the underlying assets, whereas financial planning fees may be a flat fee or an hourly rate. Distribution fees. Distribution fees primarily include point-of-sale fees (such as front-end load mutual fund fees) and asset-based fees (such as 12b-1 distribution and servicing-related fees) that are generally based on a contractual fee as a percentage of assets. We also include fees received under marketing support arrangements for sales of mutual funds and other products of other companies, such as through our wrap accounts, 401(k) plans and on a direct basis, as well as surrender charges on fixed and variable universal life insurance and annuities and fees received from administered assets. Net investment income. Net investment income predominantly consists of interest earned on fixed maturity securities classified as Available-for-Sale, mortgage loans on real estate, policy loans and cash and cash equivalents; mark-to-market impact on trading securities and economic hedges and equity method investment in hedge funds; and net realized gains and losses on investments. Net realized gains and losses on investments consist of realized gains and losses on sales of securities and other-than-temporary impairments of securities held in our investment portfolio and gains and losses on certain derivative financial instruments. Premiums. Premiums consist of revenues from the auto and home, traditional life, disability income and long-term care insurance products of our Protection segment. Other revenues. Other revenues include certain charges assessed on fixed and variable universal life insurance and annuities, primarily the cost of insurance embedded in these products. Expenses Compensation and benefits. Our principal source of expenses is compensation and benefits, which represent the compensation-related expenses associated with sales commissions paid to our financial advisors and registered representatives, and employees of our company. Most commissions are variable, dependent upon the amount of sales to clients or the amounts of assets managed for clients. Field generally represents commissions, post-sale compensation, benefits and other costs associated with our financial advisor and registered representative network. Non-field represents all other human resource costs,

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including our corporate office employees, Threadneedle employees, other portfolio management employees and Ameriprise Auto & Home Insurance employees. Interest credited to account values. Interest credited to account values represents the amounts contributed to contractholder and policyholder account balances for annuity contracts, and variable and fixed universal life policies, as well as amounts credited to investment certificate holder account balances. Benefits, claims, losses and settlement expenses. Benefits, claims, losses and settlement expenses represent losses and claims on annuities and protection products (including life, disability, auto and home and long-term care insurance). It also includes changes in the related insurance reserves. Amortization of deferred acquisition costs. DAC represents the costs of acquiring new protection, annuity and mutual fund business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity, life, disability income and long-term care insurance and, to a lesser extent, deferred marketing and promotion expenses on auto and home insurance and deferred distribution fees for certain mutual fund products. We defer these costs to the extent they are recoverable from future profits. For our annuity and protection products, we amortize DAC over periods approximating the lives of the business, principally as a percentage of premiums or estimated gross profits associated with the products, depending on the product’s characteristics. For certain mutual fund products, we generally amortize DAC over fixed periods on a straight-line basis adjusted for redemptions. For more information regarding the assumptions underlying DAC amortization, see “—Critical Accounting Policies—Deferred Acquisition Costs” described previously. Separation Costs. Separation costs include expenses related to the separation from American Express. Separation costs primarily relate to advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish our technology platforms. Other expenses. Other expenses primarily include advertising costs, information technology costs, legal and regulatory costs, other professional services, communications costs and facilities expenses. These expenses are not associated with the separation from American Express. Expense Allocations Prior to the Distribution For the periods preceding the Distribution, we prepared our consolidated financial information as if we had been a stand-alone company. In the preparation of our consolidated financial information for those periods, we made certain allocations of expenses that our management believes to be a reasonable reflection of costs we would have otherwise incurred as a stand-alone company but were paid by American Express. For more information regarding these expenses, see Notes 1 and 21 to our consolidated financial statements. Our financial information presented may not be indicative of our consolidated results of operations, financial condition or cash flows in the future or what our consolidated results of operations, financial condition or cash flows would have been had we been a separate, stand-alone entity during all periods presented. Non-GAAP Financial Information We follow accounting principles generally accepted in the United States (GAAP). This report includes information on both a GAAP and non-GAAP basis. The non-GAAP presentation in this report excludes items that are a direct result of the Separation and Distribution, which consist of discontinued operations, AMEX Assurance and non-recurring separation costs, and also excludes the cumulative effect of accounting change. Our non-GAAP financial measures, which we view as important indicators of financial performance, include: • adjusted revenues or revenues excluding AMEX Assurance; • revenue growth excluding the impact of the separation; • expenses excluding separation costs and AMEX Assurance; • adjusted earnings or income before discontinued operations, cumulative effect of accounting change, AMEX Assurance and non-

recurring separation costs; • net income growth excluding the impact of the separation; and • return on average equity excluding the impact of the separation, or adjusted return on equity, using as the numerator adjusted

earnings for the last twelve months and as the denominator a five point average of equity excluding both the assets and liabilities of discontinued operations and equity allocated to expected non-recurring separation costs as of the last day of the preceding four quarters and the current quarter.

Management believes that the presentation of these non-GAAP financial measures excluding these specific income statement impacts best reflects the underlying performance of our ongoing operations and facilitates a more meaningful trend analysis. These non-GAAP measures are also used for goal setting, certain compensation related to our annual incentive award program and evaluating our performance on a basis comparable to that used by securities analysts.

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Consolidated Results of Operations The following table presents our consolidated results of operations for the periods indicated.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater.

30

2005

2004

2003

Years ended December 31, Amount

% Change(a)

Amount % Change(a)

Amount

(in millions, except percentages) Revenues

Management, financial advice and service fees $ 2,578

15% $ 2,248 32% $ 1,703

Distribution fees 1,150

4

1,101 9

1,015

Net investment income 2,241

5

2,137 3

2,069

Premiums 979

(4) 1,023 14 895

Other revenues 536

4

518 9

473

Total revenues 7,484

7

7,027 14

6,155

Expenses

Compensation and benefits

Field 1,515

14

1,332 25

1,067

Non-field 1,135

19

956 25

766

Total compensation and benefits 2,650

16

2,288 25

1,833

Interest credited to account values 1,310

3

1,268 (8) 1,384

Benefits, claims, losses and settlement expenses 880

6

828 12

740

Amortization of deferred acquisition costs 431

(1) 437 (9) 480

Interest and debt expense 73

40

52 15

45

Separation costs 293 — —

— —Other expenses

1,102

6

1,042 30

800

Total expenses 6,739

14

5,915 12 5,282

Income before income tax provision, discontinued operations and accounting change

745 (33) 1,112 27 873

Income tax provision 187

(35) 287 60

179

Income before discontinued operations and accounting change

558

(32) 825 19

694

Discontinued operations, net of tax 16

(60) 40 (10) 44

Cumulative effect of accounting change, net of tax

— # (71) # (13)Net income

$ 574

(28) $ 794 10

$ 725

The following table presents information regarding our aggregate owned, managed and administered assets as of the end of the periods indicated.

(a) Percentage change calculated using thousands.

(b) Includes cash and cash equivalents, restricted and segregated cash and receivables.

(c) Includes eliminations from managed assets for owned assets invested in our managed products and separately managed accounts

and among managed assets for RVS Fund assets sub-advised by Threadneedle. # Variance of 100% or greater.

31

2005

2004

2003

December 31,

Amount

% Change(a)

Amount % Change(a)

Amount

(in billions, except percentages)

Owned, Managed and Administered Assets

Owned Assets:

Managed owned assets

Separate accounts $ 41.6

16% $ 35.9 17% $ 30.8

Investments 39.1

(3) 40.2 4

38.5

Total managed owned assets 80.7

6

76.1 10

69.3

Other(b) 6.2

22

5.1 (8) 5.6

Total owned assets $ 86.9

7

$ 81.2 8

$ 74.9

Managed Assets:

Managed Assets—Retail

RiverSource (RVS) Mutual Funds $ 58.1 (11) $ 65.3

(5) $ 68.8Threadneedle Mutual Funds

14.0

15

12.2 14

10.7

Ameriprise Financial Wrap Account Assets—Other company products

46.2

36

34.0 50

22.6

SAI 8.4

52

5.5 38

4.0

Total managed assets—retail 126.7

8

117.0 10

106.1

Managed Assets—Institutional

Separately Managed Accounts/Sub-Advisory 20.4

(6) 21.6 (8) 23.6

Other Institutional 6.8

(26) 9.2 7

8.7

Threadneedle Separately Managed Accounts/Sub-Advisory

102.9

(1) 103.6 23

84.2

Total managed assets—institutional 130.1

(3) 134.4 15

116.5

Managed Assets—Retirement Services

Collective Funds 11.2

(8) 12.1 (4) 12.6

Managed Assets—Eliminations (4.0) 40

(6.5) 34

(9.9)Total managed assets

$ 264.0

3

$ 257.0 14 $ 225.3

Administered Assets $ 77.3 10 $ 70.0

15 $ 60.6Total Owned, Managed and Administered

Assets $ 428.2

5

$ 408.2 13

$ 360.8

(c)

The following table reconciles the GAAP consolidated statements of income to the non-GAAP supplemental information, which excludes AMEX Assurance, and the non-GAAP presentation of separation costs. Management believes that the presentation of these non-GAAP financial measures, which excludes discontinued operations, cumulative effect of accounting change, AMEX Assurance and non-recurring separation costs best reflects the underlying performance of our ongoing operations and facilitates a more meaningful trend analysis. The AMEX Assurance travel insurance and card related business was ceded to American Express effective July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005.

(a) Percentage change calculated using thousands.

(b) For the year ended December 31, 2005, AMEX Assurance premiums include $10 million in intercompany revenues related to

errors and omissions coverage. # Variance of 100% or greater.

32

GAAP

Non-GAAP Supplemental Information

Consolidated Statements of

Income Years Ended December 31,

%

AMEX Assurance

Years Ended December 31,

SeparationCosts

Non-GAAP Supplemental Information Years Ended December 31,

%

2005 2004

Change(a)

2005(b)

2004

2005 2005

2004

Change(a)

(in millions, except percentages)

(in millions, except percentages, unaudited)

Revenues

Management, financial advice and service fees

$ 2,578 $ 2,248

15% $ 3

$ 4

$

$ 2,575 $ 2,244

15%

Distribution fees 1,150

1,101 4 — — 1,150

1,101 4Net investment income

2,241 2,137

5

9

12

2,232 2,125

5

Premiums 979

1,023 (4) 127

245

852

778

10

Other revenues 536

518 4

(1) (1)

537 519

4

Total revenues 7,484

7,027 7 138 260

7,346

6,767 9Expenses

Compensation and benefits:

Field 1,515

1,332 14 37

2

1,478

1,330 11Non-field

1,135 956

19

—

—

1,135 956

19

Total compensation and benefits 2,650

2,288 16 37 2 2,613

2,286 14Interest credited to account values

1,310 1,268

3

—

—

1,310 1,268

3

Benefits, claims, losses and settlement expenses

880 828

6

(12) 42

892 786

13

Amortization of deferred acquisition costs

431 437

(1) 17

33

414 404

2

Interest and debt expense 73

52 40

—

—

73

52

40

Separation costs 293

— — —

— 293 —

— —Other expenses

1,102 1,042

6

14

30

1,088 1,012

8

Total expenses 6,739

5,915 14

56

107

293

6,390 5,808

10

Income before income tax provision, discontinued operations and accounting change

745 1,112

(33) 82 153 (293) 956 959 —

Income tax provision 187

287 (35) 26

51

(102) 263 236

12

Income before discontinued operations and accounting change

558 825

(32) $ 56

$ 102

$ (191) $ 693 $ 723

(4)Discontinued operations, net of tax

16 40

(60)

Cumulative effect of accounting change, net of tax

— (71) #

Net income $ 574

$ 794 (28)

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 Overall Consolidated net income in 2005 was $574 million, down $220 million from $794 million in 2004. Income before discontinued operations, accounting change, AMEX Assurance and non-recurring separation costs was $693 million for the year ended December 31, 2005, down $30 million, or 4% from $723 million a year ago. Net income for the year ended December 31, 2005 was negatively impacted by non-recurring pretax separation costs of $293 million ($191 million after-tax) and the comprehensive settlement of a consolidated securities class action lawsuit of $100 million pretax ($65 million after-tax). Other significant items included in net income for the year ended December 31, 2005 were an after-tax benefit of $44 million from the third quarter DAC assessment, $43 million in after-tax realized net investment gains, and $56 million in after-tax income from AMEX Assurance. Included in net income for the year ended December 31, 2004 were an after-tax benefit of $15 million from the third quarter DAC assessment, $6 million in after-tax realized net investment gains, and $102 million in after-tax income from AMEX Assurance. Revenues Total revenues for the year ended December 31, 2005 increased $457 million to $7.5 billion, up from $7.0 billion in the prior year. Excluding AMEX Assurance, revenues in 2005 were $7.3 billion, an increase of 9% over revenues of $6.8 billion in 2004. The 9% increase was primarily the result of a $331 million rise in management, financial advice and service fees, a $107 million increase in net investment income and a $74 million increase in premiums. Management, financial advice and service fees increased 15% to $2,578 million. Management, financial advice and service fees without AMEX Assurance increased $331 million to $2,575 million in 2005, primarily driven by higher average asset balances under management due to net inflows and market appreciation. This is reflected by an increase in Strategic Portfolio Services (SPS) Advantage wrap fees of $135 million, an increase in advisory and trust fees, including the impact of Threadneedle, of $93 million, and an increase in separate account fees of $77 million. These increases were partially offset by declines of $36 million in fees related to managing our proprietary mutual funds. Distribution fees increased $49 million, or 4% to $1,150 million and were not impacted by AMEX Assurance. This increase was primarily driven by a $61 million increase attributable to strong flows and favorable market impacts related to wrap accounts, a $33 million increase in fees from strong sales of non-proprietary mutual funds held outside of wrap accounts, and $32 million related to SAI. These increases were partially offset by declines in fees of $44 million from lower sales of REIT products and a $33 million decrease from lower distribution fees on RiverSource mutual funds. Net investment income increased $104 million or 5% to $2,241 million. Excluding AMEX Assurance, net investment income grew 5% to $2,232 million from $2,125 million in 2004 driven by a $2.0 billion increase in average earning assets, inclusive of cash equivalents. Included in net investment income are $66 million in pretax net investment gains, including a $36 million net gain on the sale of our retained interests in a collateralized debt obligation (CDO) securitization trust, which compares to $9 million of net investment gains for the year ended December 31, 2004, which included $28 million of non-cash charges related to the liquidation of secured loan trusts (SLTs). Also included in 2005 net investment income are $39 million in pretax gains on trading securities and equity method investments in hedge funds and $19 million in pretax gains from options hedging outstanding stock market certificates and equity indexed annuities. This compares to $54 million pretax gains on trading securities and equity method investments in hedge funds and $32 million in pretax gains from options hedging outstanding stock market certificates and equity indexed annuities in 2004. During the year ended December 31, 2005, gross realized gains and losses on the sale of Available-for-Sale securities were $137 million and $64 million, respectively, and other-than-temporary impairments were $21 million. This compares to gross realized gains and losses on the sale of Available-for-Sale securities of $65 million and $21 million, respectively, and other-than-temporary impairments of $2 million for the year ended December 31, 2004. Premiums declined $44 million to $979 million in 2005. Premiums excluding AMEX Assurance were $852 million, up $74 million, or 10% from $778 million in 2004. Our auto and home insurance premiums increased $71 million in 2005, driven by a 15% growth in average property and casualty policies in force. Most of the increase in policies in force was generated through the Costco alliance, which was renewed in January 2006 for an additional five-year period. In addition, disability income insurance premiums grew $11 million in 2005. Other revenues increased $18 million to $536 million in 2005. This increase was due to cost of insurance and other contract charges, which increased $18 million primarily as a result of a 7% increase in variable and fixed universal life contracts in force levels. Agency fees from franchisee financial advisors increased $6 million partially offset by decreases in other revenues of $5 million. Expenses Total expenses were $6.7 billion for the year ended December 31, 2005, up $824 million from $5.9 billion for the year ended December 31, 2004. Total expenses excluding separation costs and AMEX Assurance were $6.4 billion, an increase of $582 million, or 10% from $5.8 billion in 2004. The 10% increase is primarily due to a $327 million rise in total compensation and benefits, an additional $106 million of benefits, claims, losses and settlement expenses, an increase of $76 million related to other expenses and a $42 million increase in interest credited to account values.

33

Compensation and benefits—field increased $183 million to $1,515 million. Compensation and benefits—field without AMEX Assurance were $1,478 million, an 11% increase over $1,330 million in 2004, primarily due to increased sales force compensation driven by strong sales activity and higher wrap account assets. Gross Dealer Concession, an internal measure of field productivity, was up 10% during this same period. Compensation and benefits—non-field increased $179 million, or 19% to $1,135 million due to increased management incentives, higher benefit costs and merit adjustments. The additional ongoing costs associated with being an independent entity were primarily incurred in this expense line, including higher management and administration costs. Interest credited to account values increased $42 million, or 3% to $1,310 million. This increase was primarily driven by a $59 million increase in interest credited to certificate holders. These increases were due to higher certificate reserve volume and increased crediting rates driven by the higher short-term interest rate environment. This increase was partially offset by a $19 million decrease in the interest credited on fixed annuities due to declines in related reserve balances. Benefits, claims, losses and settlement expenses increased $52 million to $880 million. This increase is net of a $60 million decline from the impact of ceding the AMEX Assurance reserves. Excluding AMEX Assurance, benefits, claims, losses and settlement expenses increased $106 million, or 13% to $892 million in 2005 from $786 million in 2004. Higher average auto and home insurance policies in force resulted in an increase of $69 million and an increase in benefit expenses and reserves on life and long-term care insurance contracts drove expense up $37 million. Amortization of DAC was $431 million in 2005 compared to $437 million in 2004. Excluding AMEX Assurance, amortization of DAC was $414 million in 2005 compared to $404 million in 2004. DAC amortization in 2005 was reduced by $67 million as a result of the annual DAC assessment performed in the third quarter, while DAC amortization in 2004 was reduced by $66 million in the first quarter as a result of lengthening amortization periods for certain insurance and annuity products in conjunction with our adoption of SOP 03-1 and by $24 million as a result of the annual DAC assessment in the third quarter. Equity market conditions and other factors also resulted in increased amortization of DAC in 2005 compared to 2004, particularly for our growing variable annuity business. Somewhat offsetting the impacts of these increases was amortization of DAC associated with mutual funds, which was down $33 million. Sales of the classes of mutual fund shares for which we defer acquisition costs have declined sharply in recent years, leading to lower DAC balances and less DAC amortization. See Note 5 to our consolidated financial statements for additional details about DAC amortization. We annually perform a comprehensive review in the third quarter and update various DAC assumptions, such as persistency, mortality rate, interest margin and maintenance expense level assumptions. The impact on results of operations from changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period. As a result of these reviews, we took actions in 2005 and 2004 that impacted the DAC balances and expenses. The $67 million DAC amortization expense reduction in the third quarter of 2005 consisted of: • a $32 million reduction reflecting changes in previously assumed mortality rates; • a $33 million reduction reflecting lower than previously assumed surrender rates and higher associated surrender charges; • a $6 million reduction from improved average fee revenues; • a $5 million reduction from the annual extension of the mean reversion period by one year; and • a $9 million increase reflecting changes from previously assumed interest rate spreads, modeling changes, account maintenance

expenses, and other miscellaneous items. The $24 million DAC amortization expense reduction in the third quarter of 2004 consisted of: • a $4 million reduction reflecting changes in previously assumed mortality rates; • a $13 million reduction reflecting changes from previously assumed surrender and lapse rates; • a $3 million reduction from the annual extension of the mean reversion period by one year; and • a $4 million reduction reflecting higher than previously assumed interest rate spreads and other miscellaneous items. Interest and debt expense increased $21 million, or 40% to $73 million, primarily reflecting higher short-term interest rates during the year ended December 31, 2005 as compared to the year ended December 31, 2004. Other expenses increased $60 million to $1,102 million. Other expenses excluding AMEX Assurance were $1,088 million, an increase of $76 million, or 8% from $1,012 million in 2004. Other expenses in 2005 include $100 million (pre-tax) related to the comprehensive settlement of a consolidated securities class action lawsuit. Also included in 2005 are costs related to mutual fund industry regulatory matters of approximately $40 million, compared to approximately $80 million of similar costs incurred in 2004. See Note 18 to our consolidated financial statements. Separation costs incurred during the year of $293 million pretax ($191 million after-tax) were primarily related to advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish our technology platforms. We estimated that we will incur approximately $875 million in total pretax separation costs, some of which will be capitalized and amortized over future periods. The majority of such costs are estimated to be incurred by December 31, 2006. Income Taxes Income taxes decreased to $187 million for the year ended December 31, 2005, from $287 million for the year ended

34

December 31, 2004. The effective tax rate was 25.1% in the year ended December 31, 2005 compared to 25.8% during the year ended December 31, 2004. The lower effective tax rate and income taxes in 2005 relative to 2004 are principally due to the impact of relatively lower levels of pretax income compared to tax-advantaged items in 2005. Additionally, taxes applicable to prior years represent a $20 million tax expense in 2005 and a $20 million tax benefit in 2004. Excluding AMEX Assurance and the tax benefit attributable to separation costs, income taxes increased to $263 million in 2005 from $236 million in 2004, on income before income tax provision, discontinued operations, cumulative effect of accounting change, AMEX Assurance and non-recurring separation costs, of $956 million in 2005 and $959 million in 2004. The following table reconciles the GAAP consolidated statements of income to the non-GAAP supplemental information excluding AMEX Assurance. Management believes that the presentation of these non-GAAP financial measures, which excludes discontinued operations, cumulative effect of accounting change and AMEX Assurance best reflects the underlying performance of our ongoing operations and facilitates a more meaningful trend analysis. The AMEX Assurance travel insurance and card related business was ceded to American Express effective July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater.

35

GAAP Non-GAAP Supplemental Information

Consolidated Statements of

Income Years Ended December 31,

%

AMEX Assurance

Years Ended December 31,

Non-GAAP Supplemental Information Years Ended December 31,

%

2004 2003

Change(a)

2004

2003 2004

2003

Change(a)

(in millions, except percentages)

(in millions, except percentages, unaudited)

Revenues

Management, financial advice and service fees

$ 2,248 $ 1,703 32% $ 4 $ 2 $ 2,244

$ 1,701 32%Distribution fees

1,101 1,015

9

—

—

1,101 1,015

9

Net investment income 2,137

2,069 3 12 13 2,125 2,056 3

Premiums 1,023

895

14

245

219

778 676

15

Other revenues 518

473

9

(1) 1

519 472

10

Total revenues 7,027

6,155

14

260

235

6,767 5,920

14

Expenses

Compensation and benefits:

Field 1,332

1,067

25

2

2

1,330 1,065

25

Non-field 956

766

25

—

—

956 766

25

Total compensation and benefits 2,288

1,833

25

2

2

2,286 1,831

25

Interest credited to account values 1,268

1,384

(8) —

—

1,268 1,384

(8)Benefits, claims, losses and settlement

expenses 828

740 12 42 37 786 703 12

Amortization of deferred acquisition costs

437 480 (9) 33 29 404

451 (10)Interest and debt expense

52 45

15

—

—

52 45

15

Other expenses 1,042

800

30

30

32

1,012 768

31

Total expenses 5,915

5,282

12

107

100

5,808 5,182

12

Income before income tax provision, discontinued operations and accounting change

1,112 873

27

153

135

959 738

30

Income tax provision 287

179 60 51 45 236 134 75

Income before discontinued operations and accounting change

825 694

19

$ 102

$ 90

$ 723 $ 604

20

Discontinued operations, net of tax 40

44

(10)

Cumulative effect of accounting change, net of tax

(71) (13) #

Net income $ 794

$ 725

10

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 Overall Consolidated net income in 2004 was $794 million, up $69 million from $725 million in 2003. Income before discontinued operations, accounting change and AMEX Assurance was $723 million for the year ended December 31, 2004, up $119 million, or 20% from $604 million in the prior year, primarily as a result of higher management, financial advice and service fees. Revenues Total revenues were $7.0 billion for the year ended December 31, 2004, an increase of $872 million, or 14% compared to $6.2 billion for the year ended December 31, 2003. Excluding AMEX Assurance, revenues increased 14% to $6.8 billion from $5.9 billion in 2003. The increase of 14% is primarily due to an additional $543 million of management, financial advice and service fees, a $102 million increase in premiums, and an $86 million rise in distribution fees. Management, financial advice and service fees increased by $545 million, or 32% to $2,248 million for the year ended December 31, 2004 compared to $1,703 million in 2003, primarily as a result of higher average managed assets due to our acquisition of Threadneedle and a general improvement in equity markets. Management fees from Threadneedle increased by $295 million primarily due to the inclusion of Threadneedle for a full-year in 2004 as compared to only a quarter in 2003. Excluding the effects of Threadneedle, our management, financial advice and service fees increased due to higher wrap and separate account fees. Wrap account fees increased by $126 million and annuity and separate account fees increased by $67 million, both due to equity market improvements and net inflows, which were only partially offset by decreases in mutual fund performance-based fees. The impact of excluding AMEX Assurance from management, financial advice and service fees was immaterial. Distribution fees were $1,101 million for the year ended December 31, 2004, an $86 million, or 9% increase compared to $1,015 million for the same period in 2003. The increase was primarily due to a $69 million increase in mutual fund distribution and servicing-related fees, $21 million of brokerage related activity, and $19 million of distribution fees related to SAI, only partially offset by a $14 million decrease in fees from sales of other companies’ REIT products. Net investment income increased $68 million, or 3% to $2,137 million for the year ended December 31, 2004. Excluding AMEX Assurance, net investment income was $2,125 million in 2004, an increase of 3% compared with $2,056 million in 2003, primarily due to increased net realized gains on Available-for-Sale securities, net of other-than-temporary impairments, and reduced negative yield adjustments resulting from changes in cash flow estimates on certain structured investments. During 2004, gross realized gains and losses on the sale of Available-for-Sale securities were $65 million and $21 million, respectively, and other-than-temporary impairments were $2 million. This compares to 2003 gross realized gains and losses on the sale of Available-for-Sale securities of $307 million and $143 million, respectively, and other-than-temporary impairments of $152 million. Negative yield adjustments on SLTs were $2 million in 2004 compared to $34 million in 2003. The favorable impact of these comparative amounts was offset by $28 million of net charges related to the complete liquidation of one SLT and partial liquidation of two SLTs recorded in 2004. Premiums were $1,023 million for the year ended December 31, 2004, a $128 million, or 14% increase compared to $895 million for 2003. Premiums without AMEX Assurance were $778 million in 2004, an increase of 15% over premiums of $676 million in 2003. The growth in premiums was primarily due to an increase of $96 million, or 29% in premiums from our auto and home protection products, principally due to automobile insurance sold through our Costco alliance. The overall increase in premium revenues was partially offset by a $13 million decrease in long-term care insurance premiums, which declined as a result of our decision to no longer underwrite long-term care products as of December 31, 2002. Other revenues increased by $45 million, or 9% to $518 million for the year ended December 31, 2004 compared to $473 million in 2003, primarily as a result of a 7% increase in the number of fixed and variable universal life insurance contracts in force in 2004. The impact of excluding AMEX Assurance from other revenues was immaterial. Expenses Total expenses were $5.9 billion for the year ended December 31, 2004, a $633 million, or 12% increase compared to $5.3 billion for the year ended December 31, 2003. Total expenses excluding AMEX Assurance were $5.8 billion compared to $5.2 billion in 2003. The increase of 12% is primarily due to an additional $455 million of total compensation and benefits and a $244 million rise in other expenses, partially offset by a decrease of $116 million related to interest credited to account values. Compensation and benefits—field increased by $265 million, or 25% to $1,332 million in 2004 compared to $1,067 million in 2003. This increase was primarily due to a higher average number of branded financial advisors, increased advisor production levels resulting in higher commissions, as well as the effect of reduced levels of expense deferrals resulting from the changing mix of product sales. The impact of excluding AMEX Assurance from compensation and benefits—field was immaterial. Compensation and benefits—non-field increased by $190 million, or 25% to $956 million for the year ended December 31, 2004 compared to $766 million in 2003. Of this increase, $173 million was due to the full-year effect of our September 2003 acquisition of Threadneedle. Excluding the effects of our Threadneedle acquisition, the average number of employees dropped slightly in 2004 compared to 2003.

36

Interest credited to account values decreased by $116 million, or 8% to $1,268 million in 2004, down from $1,384 million in 2003. This was primarily due to a $96 million decrease in fixed annuities and universal life insurance contracts due to lower crediting rates. The crediting rates on these products decreased primarily due to decreases in long-term interest rates and to a lesser extent due to the impact of lower appreciation in the S&P 500 on equity-indexed annuities in 2004 compared to 2003. Despite the decrease in crediting rates on fixed annuity and universal life products, persistency remained high and in force levels for annuity and life products were up in 2004. Benefits, claims, losses and settlement expenses increased by $88 million to $828 million in 2004 from $740 million in 2003. Benefits, claims, losses and settlement expenses, excluding AMEX Assurance, were $786 million in 2004 compared to $703 million in 2003, an increase of 12%. This includes a $70 million increase as a result of higher average number of policies in force, partially offset by a reduction in long-term care benefit expenses as a result of our decision to cease underwriting long-term care insurance effective December 31, 2002. Amortization of DAC was $437 million for the year ended December 31, 2004, a $43 million decrease over the $480 million DAC amortization expense in 2003. DAC amortization without AMEX Assurance was $404 million, down 10% from $451 million in 2003. This decrease was primarily due to a $66 million adjustment associated with the lengthening of amortization periods for certain insurance and annuity products in conjunction with our adoption of SOP 03-1, and approximately $24 million in net favorable DAC adjustments in the third quarter of 2004 as a result of changes to our DAC assumptions as compared to a $2 million net favorable DAC adjustment in the third quarter of 2003. The $24 million DAC amortization expense reduction in the third quarter of 2004 consisted of: • a $4 million reduction reflecting changes in previously assumed mortality rates; • a $13 million reduction reflecting changes from previously assumed surrender and lapse rates; • a $3 million reduction from the annual extension of the mean reversion period by one year; and • a $4 million reduction reflecting higher than previously assumed interest rate spreads and other miscellaneous items. The $2 million DAC amortization expense reduction in the third quarter of 2003 consisted of: • a $106 million reduction resulting from extending 10-15 year amortization periods for certain flex annuity products to 20 years

based on current measurements of meaningful life; • a $92 million increase resulting from the recognition of premium deficiency on our long-term care products; and • a $12 million net increase across our universal life, variable universal life and annuity products, primarily reflecting lower than

previously assumed interest rate spreads, separate account fee rates and account maintenance expenses. Interest and debt expense increased by $7 million, or 15% to $52 million in 2004 from $45 million in 2003, primarily as a result of increased borrowing under our debt arrangements with American Express. This increase was partially offset by a reduction in the amount of our other debt. AMEX Assurance had no impact on interest and debt expense. Other expenses increased by $242 million to $1,042 million in 2004 compared to $800 million in 2003. Other expense excluding AMEX Assurance rose 31% to $1,012 million from $768 million in 2003, reflecting the full-year effect of our acquisition of Threadneedle, which increased other expenses by $114 million. Higher costs related to various mutual fund regulatory and legal matters increased other expenses by approximately $80 million, and greater advertising and promotion expense increased other expenses by $39 million. Income Taxes Income taxes increased to $287 million in 2004 from $179 million in 2003. Our effective tax rate increased to 25.8% in 2004 from 20.5% in 2003. The higher effective tax rate and income taxes in 2004 relative to 2003 are principally due to the impact of lower levels of tax-advantaged items in pretax income and reduced low income housing credits during 2004, and the one-time effect, recognized in 2003, of favorable technical guidance issued by the Internal Revenue Service related to the taxation of dividend income. Excluding AMEX Assurance, income taxes increased to $236 million in 2004 from $134 million in 2003, on income before income tax provision, discontinued operations, cumulative effect of accounting change and AMEX Assurance of $959 million in 2004 and $738 million in 2003.

37

Results of Operations by Segment Years Ended December 31, 2005, 2004 and 2003 The following tables present summary income statement and balance sheet financial data by segment derived from the Notes to our consolidated financial statements for the periods indicated.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater.

38

2005

2004

2003

Years ended December 31, Amount

% Change(a)

Amount % Change(a)

Amount

(in millions, except percentages)

Total revenues by segment

Asset Accumulation and Income $ 5,024 7% $ 4,676

17% $ 4,005Protection

1,946

1

1,923 11

1,733

Corporate and Other 546

27

431 3

419

Eliminations (32) #

(3) (50) (2)Consolidated

$ 7,484

7

$ 7,027 14

$ 6,155

Total expenses by segment

Asset Accumulation and Income $ 4,377

10

$ 3,985 18

$ 3,376

Protection 1,526 6 1,435

(2) 1,462Corporate and Other

868

74

498 12

446

Eliminations (32) #

(3) (50) (2)Consolidated

$ 6,739

14

$ 5,915 12

$ 5,282

Income before income tax provision, discontinued operations and accounting change by segment

Asset Accumulation and Income $ 647 (6) $ 691

10 $ 629Protection

420

(14) 488 80

271

Corporate and Other (322) #

(67) #

(27)Consolidated

$ 745

(33) $ 1,112 27

$ 873

December 31,

2005 2004

% Change

(in millions)

Total assets by segment

Asset Accumulation and Income $ 74,032

$ 69,516 6%Protection

16,587 13,465

23

Corporate and Other

2,502 4,259

(41) Assets of discontinued operations

— 5,873 #

Consolidated

$ 93,121 $ 93,113

—

(a)

Asset Accumulation and Income The following table presents financial information for our Asset Accumulation and Income segment for the periods indicated.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater. Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 Income before income tax provision, discontinued operations and accounting change was $647 million for the year ended December 31, 2005, down $44 million, or 6% from $691 million a year ago. Revenues Total revenues of $5.0 billion rose $348 million, or 7% from $4.7 billion in the prior year period. The 7% increase is primarily the result of a $257 million rise in management, financial advice and service fees and an additional $67 million related to net investment income. Management, financial advice and service fees increased $257 million, or 13% to $2,243 million primarily as a result of strong inflows and market appreciation driving a $135 million increase in fees attributable to our wrap accounts, a $72 million rise due to increases in variable annuity asset levels and an additional $77 million of revenue from Threadneedle. The total increase was partially offset by fee declines of $36 million related to the outflows in proprietary mutual funds. Distribution fees grew $13 million, or 2% to $797 million, on a $61 million increase attributable to strong flows and favorable market impacts related to wrap accounts and a $33 million increase in fees from strong sales of non-proprietary mutual funds held outside of wrap accounts. These increases were partially offset by declines in fees of $44 million from lower sales of REIT products and a $33 million decrease from lower distribution fees on RiverSource mutual funds. Net investment income increased $67 million, or 4% to $1,927 million, driven by higher average invested assets offset by lower investment yields. Net investment income in 2005 included an increase in net realized investment gains of $36 million compared to 2004. Net investment income included market driven appreciation of $19 million, a decline of $13 million from the prior year, related to options hedging outstanding stock market certificates and equity indexed annuities. Expenses Total expenses of $4.4 billion rose $392 million, or 10% from $4.0 billion for the year ended December 31, 2004. This increase was primarily due to a $240 million, or 15% rise in other expenses, an additional $92 million of expenses related to compensation and benefits-field, and a $41 million increase in interest credited to account values. Compensation and benefits—field increased $92 million, or 10% to $983 million reflecting higher commissions paid driven by stronger sales activity and higher wrap account assets. Interest credited to account values increased $41 million, or 4% to $1,166 million due to a $59 million increase in interest credited to certificate products, driven by both higher interest

39

2005

2004

2003

Years ended December 31, Amount

% Change(a)

Amount % Change(a)

Amount

(in millions, except percentages) Revenues

Management, financial advice and service fees $ 2,243

13% $ 1,986 35% $ 1,477

Distribution fees 797

2

784 7

736

Net investment income 1,927

4

1,860 5

1,774

Other revenues 57

24

46 #

18

Total revenues 5,024

7

4,676 17

4,005

Expenses

Compensation and benefits—field 983

10

891 26

705

Interest credited to account values 1,166 4 1,125

(9) 1,232Benefits, claims, losses and settlement expenses

36

(31) 52 #

23

Amortization of deferred acquisition costs 324

6

305 44

212

Interest and debt expense 49

50

33 7

30

Other expenses 1,819

15

1,579 34

1,174

Total expenses 4,377

10

3,985 18

3,376

Income before income tax provision, discontinued operations and accounting change

$ 647

(6) $ 691 10

$ 629

crediting rates and higher average volumes. This increase was partially offset by a $19 million decrease in interest credited to fixed annuity products due primarily to average volume declines. Benefits, claims, losses and settlement expenses decreased $16 million, or 31%, primarily reflecting a decline in incurred claims related to Guaranteed Minimum Death Benefit and gain gross-up (GGU) rider contracts as a result of equity market conditions. This was partially offset by growth in the value of Guaranteed Minimum Withdrawal Benefit rider contracts resulting from strong sales. Amortization of DAC was $324 million in 2005 compared to $305 million in 2004. DAC amortization in 2005 was reduced by $14 million as a result of the annual DAC assessment performed in the third quarter, while DAC amortization in 2004 was reduced by $43 million in the first quarter as a result of lengthening amortization periods on certain variable annuity products in conjunction with our adoption of SOP 03-1 and by $8 million as a result of the annual DAC assessment in the third quarter. Equity market conditions and other factors also resulted in increased amortization of DAC in 2005 compared to 2004, particularly for our growing variable annuity business. Somewhat offsetting the impacts of these increases was amortization of DAC associated with mutual funds, which was down $33 million. Sales of the classes of mutual fund shares for which we defer acquisition costs have declined sharply in recent years, leading to lower DAC balances and less DAC amortization. Other expenses increased $240 million, or 15% on higher non-field compensation and benefits attributable to management incentives, higher benefit costs and merit adjustments, and the $100 million comprehensive settlement of a consolidated securities class action lawsuit, partially offset by a decrease in mutual fund industry regulatory costs of approximately $40 million. Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 Income before income tax provision, discontinued operations and accounting change was $691 million for the year ended December 31, 2004, up $62 million, or 10% from $629 million a year ago. Revenues Total revenues were $4.7 billion for the year ended December 31, 2004, a $671 million, or 17% increase compared to $4.0 billion for the year ended December 31, 2003. The increase in total revenue is primarily a result of a $509 million rise in management, financial advice and service fees, an $86 million increase in net investment income and an additional $48 million of distribution fees. Management, financial advice and service fees increased $509 million, or 35% as a result of higher average managed assets and the acquisition of Threadneedle. A significant portion of the increase in our managed assets was due to the full-year impact of our September 2003 acquisition of Threadneedle and net inflows of our SPS wrap product, as well as general improvement in the equity markets. The $48 million, or 7% increase in distribution fees is primarily a result of greater mutual fund fees driven principally by fees earned on sales of non-proprietary mutual funds within our wrap products as well as increased retail and institutional brokerage fees, partially offset by decreases in fees from sales of other companies’ REIT products. Net investment income increased $86 million, or 5%, reflecting higher net realized gains on Available-for-Sale securities and significant improvements in other net gains and losses as noted in the discussion of our consolidated results of operations. Expenses Total expenses were $4.0 billion for the year ended December 31, 2004, a $609 million, or 18% increase compared to $3.4 billion for the year ended December 31, 2003. This increase was primarily due to a $405 million, or 34% rise in other expenses, a $186 million increase in compensation and benefits-field, and an additional $93 million of amortization of DAC. The increase was partially offset by a $107 million decrease related to interest credited to account values. Compensation and benefits-field increased $186 million, or 26% due to higher commissions from increased financial advisor production levels, and a reduction in the level of expense deferrals as a result of the changing mix of product sales. Interest credited to account values decreased by $107 million, or 9%, primarily due to lower interest crediting rates on our annuity and face amount certificate products. Amortization of DAC was $305 million in 2004 compared to $212 million in 2003. DAC amortization in 2004 was reduced by $43 million in the first quarter as a result of lengthening amortization periods on certain variable annuity products in conjunction with our adoption of SOP 03-1 and by $8 million as a result of the annual DAC assessment in the third quarter. DAC amortization in 2003 was reduced by $109 million as a result of the annual DAC assessment in the third quarter, primarily as a result of extending amortization periods on certain other variable annuity products. Other expenses increased $405 million, or 34% primarily due to the full-year effect of our September 2003 acquisition of Threadneedle, higher salaries and benefits, and increased management incentive costs for employees.

40

Protection The following table presents financial information for our Protection segment for the periods indicated.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater. The following table reconciles the Protection segment to non-GAAP supplemental information excluding AMEX Assurance. Management believes that the presentation of financial measures excluding AMEX Assurance best reflects the underlying performance of our ongoing operations and facilitates a more meaningful trend analysis. The AMEX Assurance travel insurance and card related business was ceded to American Express effective July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005.

(a) Percentage change calculated using thousands.

(b) For the year ended December 31, 2005, AMEX Assurance premiums include $10 million in intercompany revenues related to

errors and omissions coverage. # Variance of 100% or greater.

41

2005

2004

2003

Years ended December 31, Amount

% Change(a)

Amount % Change(a)

Amount

(in millions, except percentages) Revenues

Management, financial advice and service fees $ 67

15% $ 58 30% $ 44

Distribution fees 106

1

105 3

102

Net investment income 337

7

316 10

288

Premiums 1,001 (2) 1,023

14 895Other revenues

435

4

421 4

404

Total revenues 1,946

1

1,923 11

1,733

Expenses

Compensation and benefits—field 126 41 90

14 79Interest credited to account values

144

—

143 (6) 152

Benefits, claims, losses and settlement expenses 844

9

777 8

717

Amortization of deferred acquisition costs 108

(18) 132 (51) 268

Interest and debt expense 24

28

19 28

15

Other expenses 280 1 274

19 231Total expenses

1,526

6

1,435 (2) 1,462

Income before income tax provision, discontinued operations and accounting change

$ 420

(14) $ 488 80

$ 271

Non-GAAP Supplemental Information

Protection Years Ended December 31, %

AMEX Assurance

Years Ended December 31,

Protection excluding AMEX

Assurance Years Ended December 31, %

2005 2004

Change(a)

2005(b)

2004 2005

2004

Change(a)

(in millions, except

percentages, unaudited)

(in millions, except percentages, unaudited)

Revenues

Management, financial advice and service fees

$ 67 $ 58 15% $ 3

$ 4 $ 64 $ 54 17%

Distribution fees 106

105

1

—

—

106 105

1

Net investment income 337

316 7 9 12 328 304 8

Premiums 1,001

1,023

(2) 127

245

874 778

12

Other revenues 435

421

4

(1) (1) 436 422

4

Total revenues 1,946

1,923

1

138

260

1,808 1,663

9

Expenses

Compensation and benefits—field 126

90 41 37

2 89 88 3

Interest credited to account values 144

143

—

—

—

144 143

—

Benefits, claims, losses and settlement expenses

844 777

9

(12) 42

856 735

17

Amortization of deferred acquisition costs

108 132

(18) 17

33

91 99

(8) Interest and debt expense

24 19

28

—

—

24 19

28

Other expenses 280

274

1

14

30

266 244

8

Total expenses 1,526

1,435

6

56

107

1,470 1,328

11

Income before income tax provision, discontinued operations and accounting change

$ 420 $ 488 (14) $ 82 $ 153 $ 338

$ 335 1

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 Income before income tax provision, discontinued operations and accounting change was $420 million for the year ended December 31, 2005, compared to $488 million a year ago. Excluding AMEX Assurance, income before income tax provision, discontinued operations and accounting change was $338 million in 2005 compared to $335 million in 2004. Revenues Total revenues of $1.9 billion increased $23 million from $1.9 billion in the year ago period. Revenues excluding AMEX Assurance were $1.8 billion in 2005, an increase of $145 million, or 9% over revenues of $1.7 billion in 2004. The 9% increase is primarily due to an additional $96 million related to premiums, a $24 million increase in net investment income and a $14 million rise in other revenues. Net investment income increased $21 million from $316 million for the year ended December 31, 2004. Net investment income excluding AMEX Assurance rose $24 million, or 8%, primarily due to higher average invested assets. Premiums of $1,001 million for the year ended December 31, 2005 decreased $22 million from $1,023 million in the year ago period. Premiums excluding AMEX Assurance were $874 million in 2005, an increase of $96 million, or 12%, primarily due to a $71 million rise in premiums from auto and home insurance products. Other revenues increased $14 million, or 4% as a result of a $13 million increase in the cost of insurance on higher average variable and fixed universal life policies in force. Expenses Total expenses of $1.5 billion increased $91 million from $1.4 billion in the year ended December 31, 2004. Excluding AMEX Assurance, total expenses increased 11% to $1.5 billion in 2005 from $1.3 billion in 2004. The increase of $142 million, or 11% is due to a $121 million rise in benefits, claims, losses and settlement expenses and a $22 million increase in other expenses. Compensation and benefits—field increased by $36 million to $126 million in 2005 compared to $90 million in 2004. Compensation and benefits—field excluding AMEX Assurance increased 3% to $89 million in 2005 from $88 million in 2004. Benefits, claims, losses and settlement expenses were $844 million in 2005, an increase of $67 million over 2004. Excluding AMEX Assurance, these expenses rose $121 million, or 17% to $856 million in 2005 from $735 million in 2004. The increase primarily included a $69 million increase due to higher average auto and home insurance policies in force, a $17 million increase due to higher life insurance in force levels, and a $13 million increase in the expense for future policy benefits in 2005 related to the inclusion of an explicit maintenance reserve for long-term care insurance. Amortization of DAC was $108 million in 2005 compared to $132 million in 2004. Amortization of DAC excluding AMEX Assurance was $91 million in 2005 compared to $99 million in 2004. DAC amortization in 2005 was reduced by $53 million as a result of the annual DAC assessment performed in the third quarter, while DAC amortization in 2004 was reduced by $23 million in the first quarter as a result of lengthening amortization periods on certain life insurance products in conjunction with our adoption of SOP 03-1 and by $16 million as a result of the annual DAC assessment in the third quarter.

42

The following table reconciles the Protection segment to non-GAAP supplemental information excluding AMEX Assurance. Management believes that the presentation of financial measures excluding AMEX Assurance best reflects the underlying performance of our ongoing operations and facilitates a more meaningful trend analysis. The AMEX Assurance travel insurance and card related business was ceded to American Express effective July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005.

(a) Percentage change calculated using thousands.

# Variance of 100% or greater. Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 Income before income tax provision, discontinued operations and accounting change was $488 million for the year ended December 31, 2004, compared to $271 million for the year ended December 31, 2003. Excluding AMEX Assurance, income before income tax provision, discontinued operations and accounting change was $335 million in 2004 compared to $136 million in 2003. Revenues Total revenues were $1.9 billion for the year ended December 31, 2004, a $190 million increase compared to $1.7 billion for the year ended December 31, 2003. Revenues excluding AMEX Assurance increased 11% to $1.7 billion from $1.5 billion in 2003. The increase of $165 million, or 11% is primarily due to an additional $102 million of premiums, a $29 million increase in net investment income and a $19 million rise in other revenues. Net investment income increased $28 million from $288 million for the ended December 31, 2003. Net investment income without AMEX Assurance was $304 million for the year ended December 31, 2004, an increase of $29 million, or 10% from $275 million for the year ended December 31, 2003. The increase was primarily driven by reduced losses on Available-for-Sale securities and significant improvement in other net gains and losses. Premiums for the year ended December 31, 2004 were $1,023 million, an increase of $128 million from the year ended December 31, 2003. Premiums excluding AMEX Assurance were $778 million for the year ended December 31, 2004, a $102 million, or 15% increase over the year ago period, reflecting increased sales of our auto and home protection products, primarily auto insurance sold through our Costco alliance. Expenses Total expenses were $1.4 billion for the year ended December 31, 2004, a decrease of $27 million from $1.5 billion for the year ended December 31, 2003. Excluding AMEX Assurance, total expenses were $1.3 billion in 2004, a decrease of 3% from total expenses of $1.4 billion in 2003. The 3% decrease was primarily due to a $140 million decline in amortization of DAC, partially offset by a $55 million increase in benefits, claims, losses and settlement expenses and an additional $45 million of other expenses.

43

Non-GAAP Supplemental Information

Protection Years Ended December 31,

%

AMEX Assurance

Years Ended December 31,

Protection excluding AMEX

Assurance Years Ended December 31,

%

2004 2003 Change(a) 2004 2003

2004 2003 Change(a)

(in millions, except

percentages, unaudited)

(in millions, except percentages, unaudited)

Revenues

Management, financial advice and service fees

$ 58 $ 44 30% $ 4 $ 2 $ 54

$ 42 30%Distribution fees

105 102

3

—

—

105 102

3

Net investment income 316

288

10

12

13

304 275

10

Premiums 1,023

895

14

245

219

778 676

15

Other revenues 421

404

4

(1) 1

422 403

4

Total revenues 1,923

1,733 11 260 235 1,663 1,498 11

Expenses

Compensation and benefits—field 90

79 14 2 2 88 77 14

Interest credited to account values 143

152

(6) —

—

143 152

(6) Benefits, claims, losses and settlement

expenses 777

717

8

42

37

735 680

8

Amortization of deferred acquisition costs

132 268 (51) 33 29 99

239 (59)Interest and debt expense

19 15

28

—

—

19 15

28

Other expenses 274

231

19

30

32

244 199

23

Total expenses 1,435

1,462

(2) 107

100

1,328 1,362

(3) Income before income tax provision,

discontinued operations and accounting change

$ 488 $ 271 80 $ 153 $ 135 $ 335

$ 136 #

Benefits, claims, losses and settlement expenses were $777 million for the year ended December 31, 2004 compared to $717 million for the year ended December 31, 2003. Benefits, claims, losses and settlement expenses without AMEX Assurance increased $55 million, or 8% from $680 million for 2003. This increase resulted from a rise in the average number of policies in force. Amortization of DAC was $132 million in 2004 compared to $268 million in 2003. Amortization of DAC excluding AMEX Assurance was $99 million in 2004 compared to $239 million in 2003. DAC amortization in 2004 was reduced by $23 million in the first quarter as a result of lengthening amortization periods on certain life insurance products in conjunction with our adoption of SOP 03-1, and by $16 million as a result of the annual DAC assessment in the third quarter. DAC amortization in 2003 was increased by $107 million as a result of the annual DAC assessment in the third quarter, primarily as a result of recognizing a premium deficiency related to the Company’s long-term care business. Other expenses were $274 million for the year ended December 31, 2004 compared to $231 million for the year ended December 31, 2003. Other expenses excluding AMEX Assurance were $244 million for the year ended December 31, 2004, an increase of $45 million, or 23% compared to $199 million for the year ended December 31, 2003. The additional expenses were primarily due to higher advertising and promotional expenses. Corporate and Other The following table presents financial information for our Corporate and Other segment for the periods indicated.

(a) Percentage change calculated using thousands.

(b) Represents the elimination of intercompany errors and omissions recorded in the Protection segment.

# Variance of 100% or greater. Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 Loss before income tax provision, discontinued operations and accounting change was $322 million for the year ended December 31, 2005, compared to $67 million a year ago. Loss before income tax provision, discontinued operations, accounting change and separation costs was $29 million, an improvement of $38 million over the loss in 2004. Revenues Total revenues of $546 million increased $115 million, or 27% from $431 million for the year ended December 31, 2004, primarily due to a $64 million increase in management, financial advice and service fees, a $35 million increase in distribution fees and an additional $22 million of other revenue at SAI. The total increase was offset by $22 million of declines related to premium revenues. Management, financial advice and service fees grew $64 million, or 32%, to $268 million for the year ended December 31, 2005, including an increase of $34 million due to growth in assets managed and advice fees at SAI. Distribution fees grew $35 million, or 17% to $247 million for the year ended December 31, 2005, and included a $32 million increase from greater sales activity at SAI. Net investment loss decreased $16 million, or 39% to a loss of $23 million for the year ended December 31, 2005. These losses are primarily the result of amortization of affordable housing investments.

44

2005 2004 2003Years ended December 31,

Amount

% Change(a)

Amount % Change(a)

Amount

(in millions, except percentages)

Revenues

Management, financial advice and service fees $ 268

32% $ 204 12% $ 182

Distribution fees 247

17

212 20

177

Net investment income (loss) (23) 39

(39) #

7

Premiums(b) (22) —

— —

—

Other revenues 76

37

54 3

53

Total revenues 546

27

431 3

419

Expenses

Compensation and benefits—field 406

15

351 24

283

Interest credited to account values —

—

— —

—

Benefits, claims, losses and settlement expenses —

#

(1) —

—

Amortization of deferred acquisition costs (1) —

— —

—

Interest and debt expense — — —

— —Separation costs

293

—

— —

—

Other expenses 170

15

148 (10) 163

Total expenses 868

74

498 12

446

Loss before income tax provision, discontinued operations and accounting change

$ (322) #

$ (67) #

$ (27)

Expenses Total expenses of $868 million increased by $370 million from $498 million for the year ended December 31, 2004. Total expenses before separation costs were $575 million, an increase of $77 million over 2004. This increase was primarily attributable to higher expense in compensation and benefits—field, which rose $55 million to $406 million as a result of higher commissions paid at SAI. Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 Loss before income tax provision and discontinued operations was $67 million for the year ended December 31, 2004, compared to $27 million for the year ended December 31, 2003. Revenues Total revenues were $431 million for the year ended December 31, 2004, a $12 million, or 3% increase compared to $419 million for the year ended December 31, 2003. The increase in revenues primarily resulted from increased distribution fees and management, financial advice and service fees due to increased activity at SAI. Expenses Total expenses were $498 million for the year ended December 31, 2004, a $52 million, or 12% increase compared to $446 million for the year ended December 31, 2003. This increase in total expenses was primarily due to an increase in field compensation and benefits, which resulted principally from increased commissions paid as a result of increased activity at SAI. Financial Condition The following table presents selected information from our audited consolidated balance sheets as of December 31 for the years indicated.

(a) Percentage change calculated using thousands.

(b) Includes $32,530 million and $33,153 million as of December 31, 2005 and 2004, respectively, of investments held by our

insurance subsidiaries. (c)

All amounts are held by our insurance subsidiaries. # Variance of 100% or greater. We took several actions in 2005 to strengthen our balance sheet and reduce our risk profile: • We improved the credit quality of our balance sheet by liquidating $1.2 billion of lower quality, structured assets. This included

the liquidation of two SLTs and the sale of beneficial interests in a CDO securitization trust. • We improved our capital structure by: (i) receiving $1.065 billion of equity capital infusion from American Express Company and

(ii) issuing $1.5 billion of long-term, senior, unsecured debt to refinance short-term bridge financing and for general corporate purposes.

• We improved the capitalization of IDS Life. Our year-end reported Risk-Based Capital (as defined by the National Association of

Insurance Commissioners, see Note 11 to our consolidated financial statements) ratio improved to 435% in 2005 from 355% in 2004.

• We reduced interest rate risk by shortening the duration of our investment portfolio. Our total assets increased slightly and our liabilities decreased as of December 31, 2005 from December 31, 2004. The transfer of AEIDC to American Express on August 1, 2005 decreased total assets and liabilities. AEIDC had total assets and liabilities of $5.9 billion and $5.6 billion, respectively, as of December 31, 2004. The decreases attributed to the AEIDC transfer were offset by an increase in separate account assets and liabilities, which increased primarily as a result of net client inflows and market appreciation. Investments primarily include corporate debt and mortgage and other asset-backed securities. At December 31, 2005, our corporate debt securities comprise a diverse portfolio with the largest concentrations, accounting for approximately 69% of the portfolio, in the following industries: banking and finance, utilities, and communications and media. Investments also include $3.1 billion and $3.2 billion of mortgage loans on real estate as of December 31, 2005 and December 31, 2004, respectively. Investments are principally funded by sales of insurance, annuities and investment certificates and by reinvested income. Maturities of these investments are largely matched with the expected future payments of insurance and annuity obligations. Investments include $2.8 billion of below investment grade securities (excluding net unrealized appreciation and depreciation) at December 31, 2005 and $3.0 billion at December 31, 2004. These investments represent 7.2% and 7.8% of our investment portfolio at December 31, 2005 and December 31, 2004, respectively. Non-performing assets relative to invested assets (excluding short-term cash positions) were 0.02% at December 31, 2005 and 0.03% at December 31, 2004. Our management believes a more relevant measure of exposure of our below investment grade securities and non-performing assets should exclude $197 million and $230 million at December 31, 2005 and December 31, 2004,

45

2005

2004

% Change(a)

(in millions, except percentages)

Investments(b)

$ 39,100

$ 40,232 (3)%

Separate account assets(c)

41,561

35,901 16

Total assets

93,121

93,113 —

Future policy benefits and claims(c)

32,731

33,253 (2)

Investment certificate reserves

5,649

5,831 (3)

Payable to American Express

52

1,751 (97)

Debt

1,833 385 #

Separate account liabilities(c)

41,561

35,901 16

Total liabilities

85,434

86,411 (1)

Total shareholders’ equity

7,687 6,702 15

respectively, of below investment grade securities (excluding net unrealized appreciation and depreciation), which were recorded as a result of the adoption of FIN 46. These assets are not available for our general use as they are for the benefit of the CDO-debt holders, and reductions in value of such investments will be fully absorbed by the third party investors. Excluding the impacts of FIN 46, investments include $2.6 billion at December 31, 2005 and $2.8 billion at December 31, 2004 of below investment grade securities (excluding net unrealized appreciation and depreciation). They represent 6.7% of our investment portfolio at December 31, 2005, down from 7.2% at December 31, 2004. Non-performing assets relative to invested assets (excluding short-term cash positions) were not substantial at both December 31, 2005 and December 31, 2004. As of December 31, 2005, we continued to hold investments in CDOs that we manage that were not consolidated pursuant to the adoption of FIN 46 as we were not considered the primary beneficiary. As a condition to managing certain CDOs, we are generally required to invest in the residual or “equity” tranche of the CDO, which is typically the most subordinated tranche of securities issued by the CDO entity. As an investor in the residual tranche of CDOs, our return correlates to the performance of portfolios of high-yield bonds and/or bank loans comprising the CDOs. Our exposure as an investor is limited solely to our aggregate investment in the CDOs, and we have no obligations or commitments, contingent or otherwise, that could require any further funding of such investments. As of December 31, 2005, the carrying values of the CDO residual tranches we manage were $37 million. Our exposure to CDOs and other structured investments, namely SLTs, was significantly higher in prior periods. During the second quarter of 2005, we sold all of our retained interest in a CDO-related securitization trust and realized a net pretax gain of $36 million. The carrying value of this retained interest was $705 million at December 31, 2004, of which $523 million was considered investment grade. Additionally, we have liquidated our interest in all three SLTs which were previously consolidated under FIN 46. One SLT was liquidated in 2004, resulting in a cumulative net pretax charge of $24 million during the year ended December 31, 2004 and the other two SLTs were liquidated in 2004 and 2005 resulting in a $4 million pretax charge in 2004 and a $14 million pretax gain for the year ended December 31, 2005. There is no remaining exposure related to these SLTs as of December 31, 2005. Separate account assets represent funds held for the exclusive benefit of variable annuity and variable life insurance contract holders. These assets are generally carried at market value, and separate account liabilities are equal to separate account assets. We earn investment management, administration and other fees from the related accounts. The increase in separate account assets and liabilities to $41.6 billion as of December 31, 2005 compared to $35.9 billion as of December 31, 2004, resulted from net inflows of $3.2 billion and market appreciation and foreign currency translation of $2.5 billion. We hold reserves for current and future obligations that are primarily related to fixed annuities, certain guaranteed payments under variable annuities, face-amount certificates and life, disability and long-term care insurance. Reserves related to fixed annuities, guarantees under variable annuities and life, disability and long-term care insurance are reflected in future policy benefits and claims in our consolidated balance sheets. We record reserves associated with our obligations related to face-amount certificates under investment certificate reserves in our consolidated balance sheets. Reserves for fixed annuities, universal life contracts and face-amount certificates are equal to the underlying contract accumulation values. Reserves for other life, disability and long-term care insurance products are based on various assumptions, including mortality rates, morbidity rates and policy persistency. Liquidity and Capital Resources Our legal entity organizational structure has an impact on our ability to meet cash flow needs as an organization. Following is

46

a simplified organizational structure. Names reflect current legal entity names of subsidiaries. IDS Property Casualty Co., doing business as Ameriprise Auto & Home Insurance, uses certain insurance licenses held by AMEX Assurance. The AMEX Assurance travel insurance and card related business was ceded to American Express effective July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005. As of September 30, 2005, we entered into an agreement to sell the AMEX Assurance legal entity to American Express within two years after the Distribution.

We are primarily a parent holding company for the operations carried out by our subsidiaries. Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends from our subsidiaries, particularly our life insurance subsidiary, IDS Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (formerly American Express Certificate Company), or ACC, our investment advisory company, RiverSource Investments, LLC, our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, Inc. (formerly American Express Financial Advisors Inc.), or AMPF, and our clearing broker-dealer subsidiary, American Enterprise Investment Services, or AEIS. The payment of dividends by many of our subsidiaries, including IDS Life, IDS Property Casualty Co., ACC, AMPF and AEIS, is restricted. In addition to the particular regulations restricting dividend payments, we take into account the overall health of the business, capital levels and risk management considerations in determining a dividend strategy for payments to our company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries. The ability of our subsidiaries to pay dividends is subject to regulatory limits. The following table sets out the dividends paid to our company (including extraordinary dividends paid with necessary advance notifications to regulatory authorities), net of capital contributions made by our company, and the dividend capacity (amount within the limitations of the applicable regulatory authorities as further described below) for each of IDS Life, ACC, AMPF, IDS Property Casualty Co. and AEIS subsidiaries for the periods indicated:

47

Years ended December 31,

2005 2004

2003

(in millions)

Dividends paid/(contributions made), net

IDS Life $ (270) $ 930 $ —ACC

25 —

50

AMPF

(100) 20

20

AEIS

15 61

—

IDS Property Casualty Co.

52 87

58

Total

$ (278) $ 1,098

$ 128

Dividend capacity

IDS Life $ 380 $ 449 $ 241

ACC

29 15

21

AMPF

47 103

74

AEIS

95 137

109

IDS Property Casualty Co.

35 31

18

Total

$ 586 $ 735

$ 463

For IDS Life, the dividend capacity is based on the greater of (1) the previous year’s statutory net gain from operations and (2) 10% of the previous year-end statutory capital and surplus. Dividends that, together with the amount of other distributions made within the preceding 12 months, exceed this statutory limitation are referred to as “extraordinary dividends” and require advance notice to the Minnesota Department of Commerce, IDS Life’s primary state regulator, and are subject to potential disapproval. IDS Life exceeded the statutory limitation during 2004, as reflected above by paying $930 million to our company, a portion of which was an extraordinary dividend (which we then paid to American Express, see “—Cash Flows—Financing Cash Flows”). Notice of non-disapproval was received from the Minnesota Department of Commerce prior to paying these extraordinary dividends. For ACC, the dividend capacity is based on capital held in excess of regulatory requirements. In 2004, ACC’s dividend capacity was significantly reduced because of capital required due to growth in the balance sheet resulting from increased product sales. For AMPF and AEIS, the dividend capacity is based on an internal model used to determine the availability of dividends, while maintaining net capital at a level sufficiently in excess of minimum levels defined by Securities and Exchange Commission (SEC) rules. For IDS Property Casualty Co., the dividend capacity is based on the lesser of (1) 10% of the previous year-end capital and surplus and (2) the greater of (a) net income (excluding realized gains) of the previous year and (b) the aggregate net income of the previous three years excluding realized gains less any dividends paid within the first two years of the three-year period. Dividends that, together with the amount of other distributions made within the preceding 12 months, exceed this statutory limitation are referred to as “extraordinary dividends” and require advance notice to the Office of the Commissioner of Insurance of the State of Wisconsin, the primary state regulator of IDS Property Casualty Co., and are subject to potential disapproval. For IDS Property Casualty Co., dividends paid in 2003 and 2004 and the dividend capacity in 2004 increased significantly due to the inclusion of AMEX Assurance as a subsidiary of IDS Property Casualty Co. The portion of dividends paid by IDS Property Casualty Co. in 2005, 2004 and 2003 in excess of the dividend capacity set forth in the table above were extraordinary dividends and received approval from the Office of the Commissioner of Insurance of the State of Wisconsin. On January 26, 2006, our Board of Directors declared a regular quarterly cash dividend of $0.11 per common share. The dividend is payable February 17, 2006 to our stockholders of record at the close of business on February 2, 2006. In addition, we announced that our Board of Directors authorized the repurchase of up to 2 million shares of our common stock. The authorization is effective until the end of 2006. Cash Flows We had $2.5 billion in cash and cash equivalents at December 31, 2005, up from $1.1 billion at December 31, 2004, including cash from discontinued operations, primarily due to a $1.1 billion capital contribution from American Express. We believe cash flows from operations, available cash balances and short-term borrowings will be sufficient to fund our operating liquidity needs. Operating Cash Flows For the year ended December 31, 2005, net cash provided by operating activities was $945 million compared to $683 million for the same period in 2004. This increase reflects a net decrease in trading securities and equity method investments in hedge funds and a net increase in accounts payable and accrued expenses partially offset by lower net income. For the year ended December 31, 2004, net cash provided by operating activities was $683 million, significantly higher than for the year ended December 31, 2003. We generated net cash from operating activities in amounts greater than net income during 2004 primarily due to adjustments for depreciation and amortization, which represent expenses in our consolidated statements of income but do not require cash at the time of provision. Net cash used to fund seed money in our mutual funds and hedge funds, which are classified as trading securities and used to fund equity method investments in hedge funds, substantially decreased in 2004 compared to 2003. Operating cash flows also increased in 2004 due to net cash provided by changes in derivatives and other assets, which can vary significantly due to the amount and timing of payments. Investing Cash Flows Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net flows of our investment certificate, fixed annuity and universal life products reflected in financing activities. For the year ended December 31, 2005, net cash used in investing activities was $255 million compared to $1.6 billion used in investing activities during the same period in 2004. This change resulted primarily from $4.3 billion in proceeds from the sales of Available-for-Sale securities for the year ended December 31, 2005, compared to $2.0 billion in the same period one year ago. This was partially offset by $8.7 billion in purchases of Available-for-Sale securities during the year ended December 31, 2005 compared to $7.3 billion in purchases for the same period in 2004.

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For the year ended December 31, 2004, we used $1.6 billion net cash in investing activities, a decrease from the $8.2 billion used in 2003. The change primarily reflects a $3.4 billion increase in cash flows from unsettled securities transactions payable and receivable, related to investment transactions near the end of 2002 that settled in 2003. Positive net flows on investment certificate, fixed annuity and universal life products were $1.8 billion for the year ended December 31, 2004 and $3.6 billion for the same period in 2003. Financing Cash Flows Our financing activities primarily include the issuance and payment of debt and our sale of annuities and face-amount certificates. We generated $207 million net cash from financing activities as of December 31, 2005, compared to $820 million for the same period in 2004. This change primarily reflects the $1.1 billion capital contribution from American Express, as well as other debt and capital settlements described below. We generated $820 million from financing activities in 2004, down significantly from $4.3 billion in 2003. This decline was principally the result of increased dividend payments to American Express in 2004 as well as a decrease in consideration received from sales of our annuity products. We paid an aggregate of $1.3 billion in dividends, including extraordinary dividends received from IDS Life of $930 million, to American Express during 2004, compared to $334 million in dividends in 2003. Description of Indebtedness Senior Notes On November 23, 2005, we issued $800 million principal amount of 5.35% unsecured senior notes due November 15, 2010 and $700 million principal amount of 5.65% unsecured senior notes due November 15, 2015. Interest payments on the debt will be payable May 15 and November 15 of each year with the first payment due May 15, 2006. In order to hedge the forecasted interest expense associated with our $1.5 billion debt issuance, we entered into forward-interest rate swaps, which have been settled, that have effectively lowered this expense. The impacts of this hedging strategy were to reduce the effective annual interest rates of the 2010 notes and the 2015 notes by 0.53% and 0.48%, respectively, or by approximately $4.2 million and $3.3 million of annual interest expense. We may redeem the notes, in whole or in part, at any time at our option at the redemption price specified in the prospectus supplement filed with the SEC on November 22, 2005. The proceeds from the issues were used to replace an existing $1.4 billion bridge loan and for other general corporate purposes. Credit Facility On September 30, 2005, we obtained an unsecured revolving credit facility of $750 million expiring in September 2010 from various third party financial institutions and as of December 31, 2005, no borrowings were outstanding under this facility. Under the terms of the revolving credit facility, we may increase the amount of the facility to $1.0 billion. Sale-and-Leaseback Transaction In December 2004, our subsidiary, IDS Property Casualty Co., entered into a sale-and-leaseback of one of its facilities for an initial term of ten years, with up to six renewal terms of five years each. We initially accounted for this transaction as a financing due to uncertainties surrounding our level of ongoing occupancy. As a result, we included the $18 million in proceeds from this transaction in long-term debt. As of September 30, 2005, the uncertainties surrounding our level of occupancy were resolved resulting in accounting for this transaction as a sale-leaseback rather than a financing. CDOs As of December 31, 2005 we had $283 million of non-recourse long-term debt relating to a CDO that was consolidated beginning December 31, 2003, compared to $317 million at December 31, 2004. We consolidated this CDO effective with our adoption of FIN 46. This debt will be repaid from the cash flows of the investments held within the portfolio of the CDO, which assets are held for the benefit of the CDO debt holders. Medium-Term Notes On February 8, 1994, we issued $50 million aggregate principal amount of 6.625% fixed-rate unsecured medium-term notes due February 15, 2006 in a private placement to institutional investors. The agreement to the medium-term notes does not impose financial covenants on our company other than an agreement to maintain at all times a consolidated net worth of at least $400 million. Under the medium-term notes, we have agreed not to pledge the shares of our principal subsidiaries. The Company was in compliance with these covenants as of December 31, 2005. Events of default under the medium-term notes include a default in payment and certain defaults or acceleration of certain other financial indebtedness. Uncommitted Lines of Credit One of our broker-dealer subsidiaries has uncommitted lines of credit with a bank totaling $75 million, comprised of a $50 million secured bank credit line, collateralized by customers’ excess margin securities, and a $25 million unsecured line. The credit limits are periodically set by the bank and daily availability is not guaranteed. There were no borrowings outstanding under these lines of credit at December 31, 2005.

49

Contractual Commitments The contractual obligations identified in the table below include both our on and off-balance sheet transactions that represent material expected or contractually committed future obligations. Payments due by period as of December 31, 2005 are as follows:

(a) See Note 8 to our consolidated financial statements for more information regarding our debt.

(b) These scheduled payments are represented by reserves of approximately $32 billion at December 31, 2005 and are based on

interest credited, mortality, morbidity, lapse, surrender and premium payment assumptions. Actual payment obligations may differ if experience varies from these assumptions. Separate account liabilities have been excluded as associated contractual obligations would be met by separate account assets.

(c) The payments due by year are based on contractual term maturities. However, contractholders have the right to redeem the

investment certificates earlier and at their discretion subject to surrender charges, if any. Redemptions are most likely to occur in periods of substantial increases in interest rates.

(d) The purchase obligation amounts include expected spending by period under contracts that were in effect at December 31, 2005.

Minimum contractual payments associated with purchase obligations, including termination payments, were $7 million. (e)

Interest on debt was estimated based on rates in effect as of December 31, 2005. For additional information relating to these contractual commitments, see Note 18 to our consolidated financial statements. The information in the table above does not give effect to amounts related to our purchase of certain assets and liabilities, primarily consumer loans and deposits of American Express Bank, FSB, a subsidiary of American Express, that will be consummated upon our obtaining a federal savings bank charter, which is expected in 2006. It is expected that the assets and liabilities will be transferred at fair value at the time the purchase is completed. Had the purchase occurred as of December 31, 2005, we would have, on a historical carrying value basis, assumed deposit liabilities of $1.2 billion and would have acquired loan balances of $0.6 billion and cash of $0.6 billion. The pretax profits related to these assets and liabilities for 2005 and 2004 were $11 million and $8 million, respectively. Mortgage loan funding commitments were $116 million and $95 million at December 31, 2005 and 2004, respectively. Off-Balance Sheet Arrangements Retained Interests in Assets Transferred to Unconsolidated Entities In 2001, we placed a majority of our rated CDO securities and related accrued interest, as well as a relatively minor amount of other liquid securities, having an aggregate book value of $905 million into a securitization trust. We sold interests in the trust to institutional investors for $120 million in cash (excluding transaction expenses), and retained an aggregate allocated book amount of $785 million. We sold our retained interests in the CDO securitization trust in the second quarter of 2005 for a net pretax gain of $36 million. Investment Portfolio Our investment portfolio is a high-quality and diversified portfolio, both by sector and issuer, with 7.2% rated below investment grade as of December 31, 2005. We manage our investment portfolio with an emphasis on investment income and capital preservation. Our current strategy focuses on cash-flow certainty and credit quality.

50

Payments due in year ending

Contractual Obligations Total 20062007- 2008

2009- 2010

2011 and Thereafter

(in millions)

Balance Sheet:

Debt(a)

$ 1,833

$ 50

$ — $ 800

$ 983

Insurance and annuities(b)

53,467

3,715

7,264 6,859

35,629

Investment certificates(c)

5,649

5,048

601 —

—

Off-Balance Sheet:

Lease obligations

646

80

129 96

341

Purchase obligations(d)

249

133

107 8

1

Interest on debt(e)

713 102 202 197 212

Total

$ 62,557

$ 9,128

$ 8,303 $ 7,960

$ 37,166

Quantitative and Qualitative Disclosures about Market Risks We have two principal components of market risk: interest rate risk and equity market risk. Interest rate risk results from investing in assets that are somewhat longer and reset less frequently than the liabilities they support. We manage interest rate risk through the use of a variety of tools that include modifying the maturities of investments supporting our fixed annuities, insurance and certificate products. Additionally, we enter into derivative financial instruments, such as interest rate swaps, caps, floors and swaptions, which change the interest rate characteristics of client liabilities or investment assets. Because certain of our investments and asset management activities are impacted by the value of our managed equity-based portfolios, from time to time we enter into risk management strategies that may include the use of equity derivative financial instruments, such as equity options, to mitigate our exposure to volatility in the equity markets. In addition we have a principal component of market risk in foreign currency related to our net investment in Threadneedle, as described further below. Interest Rate Risk Our interest rate exposures arise primarily with respect to our protection, annuity and face-amount certificate products, our investment portfolio and our debt. Such client liabilities and investment assets generally do not create naturally offsetting positions as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals than the yield on underlying investments. Further, the expected maturities on the investment assets may not align with the certificate maturities and surrender or other benefit payments from fixed annuity and insurance products. Therefore, our interest spread margins are affected by changes in the general level of interest rates. The extent to which the level of rates affects spread margins is managed primarily by a combination of modifying the maturity structure of the investment portfolio to more closely align with the client liability maturities, and the use of derivative financial instruments to modify the interest rate risk characteristics associated with certain client liabilities and investment assets. From time to time, we enter into interest rate swaps or other interest rate related derivative instruments that effectively decrease the mismatch between the repricing of client liabilities and the investments supporting the liabilities. This helps align the interest rate characteristics of the client liabilities with the interest rate characteristics of the investment assets. These derivative financial instruments are generally economic hedges that do not qualify for hedge accounting. As of December 31, 2005 and 2004, we had no derivatives outstanding utilizing this specific risk management strategy. Additionally, from time to time, we enter into interest rate swaps to “lock in” interest rates at a specified market rate related to the forecasted interest credited on debt and client liabilities, such as client investor certificates or other funding instruments. These liabilities generally contain a fixed interest rate provision, which is set at the time of the future issuance. These hedging activities are generally eligible for hedge accounting. The total notional of derivatives outstanding under this risk management strategy was nil and $300 million as of December 31, 2005 and 2004, respectively. The total fair value of these derivative financial instruments, excluding accruals, was nil and $0.4 million as of December 31, 2005 and 2004, respectively. The total amounts recognized in the consolidated statements of income for these contracts were losses of $13.3 million, $5.4 million and $5.3 million for the years ended December 31, 2005, 2004 and 2003, respectively. Net cash received (paid) related to these derivative financial instruments totaled $58 million, $(5.6) million and $(5.1) million for the years ended December 31, 2005, 2004 and 2003, respectively. Further, from time to time, we also enter into swaptions or other interest rate floors and caps to mitigate the impact of increasing interest rates related to the forecasted interest payments of future annuity sales to clients. Such annuities generally contain fixed interest rate provisions, which are set at the time of the future issuance, and impact the total interest payment cash flows related to the annuities. Therefore, this strategy allows us to “lock in” interest rate risk associated with the forecasted annuity sale cash flows at a specified market rate in the event that interest rates rise but not “lock in” the interest rate risk on the event that interest rates decline. The total notional of derivatives outstanding under this risk management strategy was $1.2 billion as of December 31, 2005 and 2004. The total fair value of these derivative financial instruments was $8.4 million and $27 million as of December 31, 2005 and 2004, respectively. We recognized $1.8 million of losses in the consolidated statement of income for the year ended December 31, 2005. No losses were recognized for the years ended December 31, 2004 and 2003. No cash was paid for the years ended December 31, 2005 and 2004. Total cash paid was $72 million for the year ended December 31, 2003. The negative effect on our pretax earnings of a 100 basis point increase in interest rates, which assumes repricings and client behavior based on the application of proprietary models, to the book of business at December 31, 2005 and 2004 would be approximately $41 million and $36 million, respectively. Equity Market Risk We have three primary exposures to the general level of equity markets. One exposure is that we earn fees from the management of equity securities in variable annuities, variable insurance, our own mutual funds and other managed assets. The amount of fees is generally based on the value of the portfolios, and thus is subject to fluctuation with the general level of equity market values. To reduce the sensitivity of our fee revenues to the general performance of equity markets, we may from time to time enter into various combinations of financial instruments such as equity market put and collar options that mitigate the negative effect on fees that would result

51

from a decline in the equity markets. For example, in 2005, we purchased put options to mitigate reductions in our management fees in the event of a downturn in the equity markets. The second exposure is the equity risk related to certain face-amount certificate and annuity products that pay interest based upon the relative change in the S&P 500 index. We enter into options and futures contracts to economically hedge this risk. These products generally have rates that are paid to clients based on equity market performance, with minimum guarantees. The minimum guarantees are provided by a portfolio of fixed income securities, while the equity based return is provided by a portfolio of equity options and futures constructed to replicate the return to the policyholder. Finally, although we currently bear all risk related to guaranteed minimum death and income benefits associated with certain of our variable annuity products, we hedge our guaranteed minimum withdrawal benefit risk using structured option contracts, which are designed to mitigate economic risk and our exposure to income statement volatility. Such annuities, which were first introduced in 2004, typically have account values that are based on an underlying portfolio of mutual funds which fluctuate based on equity market performance. The guaranteed minimum withdrawal benefit guarantees that over a period of approximately 14 years the client can withdraw an amount equal to what has been paid into the contract, regardless of the performance of the underlying funds. This option is an embedded derivative that is accounted for at fair value, with changes in fair value recorded through earnings. To economically hedge these changes in market value, we may pursue a portfolio of equity futures contracts constructed to offset a portion of the changes in the option mark-to-market. For all of our economic equity risk hedges, the total notional of derivatives outstanding under this risk management strategy was $1.3 billion and $283 million as of December 31, 2005 and 2004, respectively. The total net fair value of these derivative financial instruments was $168 million and $70 million as of December 31, 2005 and 2004, respectively. The total amounts recognized in the consolidated statements of income for these contracts were $14 million, $16 million and $7 million for the years ended December 31, 2005, 2004 and 2003, respectively. Cash (paid)/received related to these derivative financial instruments totaled $(90) million, $19 million and $(30) million for the years ended December 31, 2005, 2004 and 2003, respectively. The negative effect on our pretax earnings of a 10% decline in equity markets would be approximately $105 million and $88 million based on managed assets, certificate and annuity business inforce and index options as of December 31, 2005 and 2004, respectively. Foreign Currency Risk Our September 2003 acquisition of U.K.-based Threadneedle resulted in foreign currency exposures. We manage these foreign currency exposures primarily by entering into agreements to buy and sell currencies on a spot basis or through foreign currency forward contracts, which are derivative financial instruments. We use foreign currency forward contracts to hedge our foreign currency exposure related to the net investment in the foreign operations of Threadneedle. These foreign currency forwards are designated and accounted for as hedges. The total principal of foreign currency derivative products outstanding was $725 million and $746 million as of December 31, 2005 and 2004, respectively. The total net fair value of these derivative financial instruments was $7 million and $(51) million as of December 31, 2005 and 2004, respectively. The total amounts recognized in the consolidated statements of income for these contracts were nil for the years ended December 31, 2005, 2004 and 2003, respectively. Based on the year-end 2005 foreign exchange positions, the effect on our earnings and equity of a hypothetical 10% change in the value of the U.S. dollar would be immaterial. Risk Management Our owned investment securities are, for the most part, held to support our life insurance, annuity and face-amount certificate products. We primarily invest in long-term and intermediate-term fixed income securities to provide our contractholders with a competitive rate of return on their investments while controlling risk. In addition to our general investment strategy described previously under “—Liquidity and Capital Resources—Investment Portfolio,” our investment in fixed income securities is designed to provide us with a targeted margin between the interest rate earned on investments and the interest rate credited to clients’ accounts. We do not trade in securities to generate short-term profits for our own account. We regularly review models projecting various interest rate scenarios and risk/return measures and their effect on profitability. We structure our investment security portfolios based upon the type and behavior of the products in the liability portfolios to achieve targeted levels of profitability within defined risk parameters and to meet contractual obligations. Part of our strategy includes the use of derivatives, such as interest rate caps, swaps and floors, for risk management purposes. Our potential credit exposure to a counterparty from derivatives is aggregated with all of our other exposures to the counterparty to determine compliance with established credit and market risk limits at the time we enter into a derivative transaction. Credit exposures may take into account enforceable netting arrangements. Before executing a new type or structure of derivative contract, we determine the variability of the contract’s potential market and credit exposures and whether such variability might reasonably be expected to create exposure to a counterparty in excess of established limits. Contingent Liquidity Planning We have developed contingent funding plans that enable us to meet client obligations during periods in which our clients do not roll over maturing certificate contracts and elect to withdraw funds from their annuity and insurance contracts. We designed these plans to allow us to meet these client withdrawals by selling or obtaining financing, through repurchase agreements of portions of our investment securities portfolio.

52

Forward-Looking Statements This report contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those described in these forward-looking statements. We have made various forward-looking statements in this report. Examples of such forward-looking statements include: • statements of our plans, intentions, expectations, objectives or goals, including those relating to the establishment of our new

brands, our mass affluent client acquisition strategy and our competitive environment; • statements about our future economic performance, the performance of equity markets and interest rate variations and the

economic performance of the United States; and • statements of assumptions underlying such statements. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements. Such factors include, but are not limited to: • the impact of the separation from American Express; • our ability to establish our new brands; • our capital structure as a stand-alone company, including our ratings and indebtedness, and limitations on our subsidiaries to pay

dividends; • changes in the interest rate and equity market environments; • changes in the regulatory environment, including ongoing legal proceedings and regulatory actions; • our investment management performance; • effects of competition in the financial services industry and changes in our product distribution mix and distribution channels; • risks of default by issuers of investments we own or by counterparties to derivative or reinsurance arrangements; • experience deviations from our assumptions regarding morbidity, mortality and persistency in certain of our annuity and

insurance products; and • general economic and political factors, including consumer confidence in the economy. We caution you that the foregoing list of factors is not exhaustive. There may also be other risks that we are unable to predict at this time that may cause actual results to differ materially from those in forward-looking 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. We undertake no obligation to update publicly or revise any forward-looking statements.

53

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Our consolidated financial statements for the years ended December 31, 2005, 2004 and 2003 have been audited by Ernst & Young LLP, our independent registered public accounting firm. Through 2004, Ernst & Young LLP provided audit services to our company as part of the audit services it provided to American Express. In 2004, the American Express Audit Committee of its Board of Directors determined to request proposals from auditing firms for their 2005 audit. This request was made pursuant to the American Express Audit Committee charter, which requires a detailed review of the outside audit firm at least every ten years. At a meeting held on November 22, 2004, the American Express Audit Committee approved the future engagement of PricewaterhouseCoopers LLP as the independent registered public accountants for the fiscal year ended December 31, 2005 and dismissed Ernst & Young LLP for the 2005 fiscal year. This decision also applied to our company. Ernst & Young LLP continued as auditors of American Express and our company for the year ended December 31, 2004. Ernst & Young LLP’s reports on our consolidated financial statements for the fiscal years ended December 31, 2004 and 2003, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audits of our consolidated financial statements for each of the two fiscal years ended December 31, 2004 and 2003, there were no disagreements with Ernst & Young LLP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Ernst & Young LLP, would have caused Ernst & Young LLP to make reference to the matter in their report. During the two most recent fiscal years and subsequent interim period preceding the dismissal of Ernst & Young LLP, there were no “reportable events” (as defined in Regulation S-K, Item 304(a)(1)(v)). In connection with the Separation and Distribution from American Express, on February 18, 2005, the American Express Audit Committee of its Board of Directors dismissed PricewaterhouseCoopers LLP and engaged Ernst & Young LLP to be the independent registered public accountants of our company for the year ended December 31, 2005. PricewaterhouseCoopers LLP continues as the independent registered public accounting firm for the consolidated financial statements of American Express for the 2005 fiscal year. PricewaterhouseCoopers LLP did not issue any report on our consolidated financial statements for either of the past two years. During the period from November 22, 2004 and through February 18, 2005, there were no disagreements between our company and PricewaterhouseCoopers LLP on any matters of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, which, if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to make reference to the matter in their report. There have been no “reportable events,” as defined in Item 304(a)(1)(v) of Regulation S-K, during the period between November 22, 2004 to February 18, 2005.

54

Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders of Ameriprise Financial, Inc. We have audited the accompanying consolidated balance sheets of Ameriprise Financial, Inc. (formerly known as American Express Financial Corporation) (the Company) as of December 31, 2005 and 2004, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements 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. 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 consolidated financial position of Ameriprise Financial, Inc. at December 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. As discussed in Note 2 to the consolidated financial statements, in 2005 the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment”, in 2004 the Company adopted the provisions of American Institute of Certified Public Accountants Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” and in 2003 the Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities.”

Minneapolis, Minnesota February 27, 2006

55

/s/ Ernst & Young LLP

Consolidated Statements of Income Ameriprise Financial, Inc.

See Notes to Consolidated Financial Statements.

56

Years Ended December 31, 2005 2004 2003

(in millions, except per share amounts)

Revenues

Management, financial advice and service fees

$ 2,578 $ 2,248

$ 1,703

Distribution fees

1,150 1,101

1,015

Net investment income

2,241 2,137 2,069

Premiums

979 1,023

895

Other revenues

536 518

473

Total revenues

7,484 7,027

6,155

Expenses

Compensation and benefits

2,650 2,288

1,833

Interest credited to account values 1,310 1,268 1,384

Benefits, claims, losses and settlement expenses

880 828

740

Amortization of deferred acquisition costs

431 437

480

Interest and debt expense

73 52

45

Separation costs

293 —

—

Other expenses

1,102 1,042

800

Total expenses

6,739 5,915

5,282

Income before income tax provision, discontinued operations and accounting change

745 1,112

873

Income tax provision

187 287

179

Income before discontinued operations and accounting change 558 825 694

Discontinued operations, net of tax

16 40

44

Cumulative effect of accounting change, net of tax

— (71) (13)

Net income $ 574 $ 794 $ 725

Earnings per Common Share—Basic and Diluted

Income before discontinued operations and accounting change

$ 2.26 $ 3.35

$ 2.82

Discontinued operations, net of tax

0.06 0.16

0.18

Cumulative effect of accounting change, net of tax

— (0.29) (0.05)

Net income

$ 2.32 $ 3.22

$ 2.95

Weighted average common shares outstanding for earnings per common share (as

adjusted for September 2005 stock split):

Basic 247.1 246.2 246.2

Diluted

247.2 246.2

246.2

Consolidated Balance Sheets Ameriprise Financial, Inc.

See Notes to Consolidated Financial Statements.

57

December 31, 2005 2004

(in millions, except share data)

Assets

Cash and cash equivalents

$ 2,474

$ 1,024

Investments

39,100

40,232

Receivables

2,172

2,160Deferred acquisition costs

4,182

3,956

Separate account assets 41,561 35,901Restricted and segregated cash

1,067

1,536

Other assets

2,565

2,431

Assets of discontinued operations — 5,873Total assets

$ 93,121

$ 93,113

Liabilities

Future policy benefits and claims

$ 32,731

$ 33,253

Investment certificate reserves 5,649 5,831Accounts payable and accrued expenses

2,728

2,456

Payable to American Express

52

1,751

Debt

1,833

385

Separate account liabilities

41,561

35,901

Other liabilities

880

1,203

Liabilities of discontinued operations

—

5,631

Total liabilities

85,434

86,411

Shareholders’ Equity

Common shares ($.01 par value, 1,250 million shares authorized; 249.9 million issued and outstanding as of December 31, 2005; $.01 par value, 100 shares authorized, issued and outstanding (prior to adjusting for September 2005 stock split) as of December 31, 2004) 2 —

Additional paid-in capital

4,091

2,907

Retained earnings

3,745

3,415

Accumulated other comprehensive (loss) income, net of tax:

Net unrealized securities (losses) gains

(129) 425

Net unrealized derivatives gains (losses)

6

(28)Foreign currency translation adjustment

(25) (16) Minimum pension liability

(3) (1) Total accumulated other comprehensive (loss) income

(151) 380

Total shareholders’ equity

7,687

6,702

Total liabilities and shareholders’ equity

$ 93,121

$ 93,113

Consolidated Statements of Cash Flows Ameriprise Financial, Inc.

See Notes to Consolidated Financial Statements.

58

Years Ended December 31, 2005 2004 2003

(in millions)

Cash Flows from Operating Activities

Net income

$ 574 $ 794

$ 725

Less: Income from discontinued operations, net of tax

(16) (40) (44) Income before discontinued operations

558 754

681

Adjustments to reconcile income before discontinued operations to net cash provided by (used in) operating activities:

Cumulative effect of accounting change, net of tax

— 71

13

Amortization of deferred acquisition and sales inducement costs 471 471 504

Capitalization of deferred acquisition and sales inducement costs

(787) (692) (699) Depreciation, amortization, accretion and other

295 289

236

Other-than-temporary impairments and provision for loan losses

22 13

172

Deferred income taxes

34 (34) 11

Net realized investment gains

(74) (45) (165)Changes in operating assets and liabilities:

Segregated cash (73) 105 (43)Trading securities and equity method investments in hedge funds, net

205 (11) (385)

Future policy benefits and claims, net

21 5

14

Receivables

(70) (328) (249) Other assets, other liabilities, accounts payable and accrued expenses, net

343 85

(460) Net cash provided by (used in) operating activities 945

683 (370) Cash Flows from Investing Activities

Available-for-Sale securities:

Proceeds from sales

4,336 2,034

13,673

Maturities, sinking fund payments and calls

4,060 3,199

5,585

Purchases (8,685) (7,300) (23,626)Open securities transactions payable and receivable, net

(26) 35

(3,345) Proceeds from sales and maturities of mortgage loans on real estate 590

581 582Funding of mortgage loans on real estate

(486) (326) (360) Proceeds from sales of other investments

206 268

173

Purchase of other investments

(168) (222) (234) Purchase of land, buildings, equipment and software

(141) (125) (133) Proceeds from sale of land, buildings and equipment —

4 —Proceeds from transfer of AMEX Assurance deferred acquisition costs

117 —

—

Deconsolidation of AMEX Assurance (29) — —Change in restricted cash

542 300

(3) Acquisitions, net of cash acquired

— —

(482) Cash transferred to American Express related to AEIDC

(572) —

—

Other, net

1 2

3

Net cash used in investing activities

$ (255) $ (1,550) $ (8,167)

Consolidated Statements of Cash Flows (Continued) Ameriprise Financial, Inc.

See Notes to Consolidated Financial Statements.

59

Years Ended December 31, 2005 2004 2003

(in millions)

Cash Flows from Financing Activities

Investment certificates:

Payments from certificate owners

$ 3,244 $ 3,286

$ 2,571

Interest credited to account values

199 140 141

Certificate maturities and cash surrenders

(3,628) (2,375) (2,416) Policyholder and contractholder account values:

Consideration received

1,532 2,350

4,267

Interest credited to account values

1,111 1,128

1,243

Surrenders and death benefits

(3,330) (2,716) (2,236) Debt issuance costs

(7) —

—

Proceeds from issuance of debt

2,850 18 —

Principal repayments of debt

(1,391) (78) —

Payable to American Express, net (1,576) 263 269Capital transactions with American Express, net

1,256 40

566

Capital contributions to discontinued operations

— (15) —

Dividends paid to American Express

(53) (1,325) (334) Dividends paid to shareholders

(27) —

—

Dividends received from discontinued operations

48 95 130

Customer deposits and other, net (21) 9 117Net cash provided by financing activities

207 820

4,318

Discontinued Operations

Net cash provided by operating activities

46 229

299

Net cash used in investing activities (10) (1,093) (249)Net cash provided by (used in) financing activities 482

898 (52) Cash provided by (used in) discontinued operations 518

34 (2)Effect of exchange rate changes on cash (19) 13 (1) Net increase (decrease) in cash and cash equivalents

1,396 — (4,222)

Cash and cash equivalents at beginning of year

1,078 1,078

5,300

Cash and cash equivalents at end of year $ 2,474 $ 1,078 $ 1,078

Cash and cash equivalents of discontinued operations included above:

At beginning of year

$ 54 $ 20

$ 22

At end of year

$ — $ 54

$ 20

Supplemental Disclosures:

Interest paid

$ 93 $ 43

$ 44

Income taxes paid, net

$ 146 $ 319

$ 247

Supplemental schedule of noncash transactions in connection with separation:

Non-cash dividend of AEIDC to American Express

$ 164 $ —

$ —

Consolidated Statements of Shareholders’ Equity Ameriprise Financial, Inc.

See Notes to Consolidated Financial Statements.

60

Years Ended December 31, 2005, 2004 and 2003

Number of Shares

Total

Common Shares

Additional Paid-In Capital

Retained Earnings

Accumulated Other

ComprehensiveIncome (Loss)

(in millions, except number of shares)

Balances at December 31, 2002 100

$ 6,450

$ —

$ 2,273 $ 3,555

$ 622

Comprehensive income:

Net income

725 725

Change in unrealized holding gains on securities, net (135)

(135)Change in derivative losses, net

(7)

(7)

Minimum pension liability adjustment

5

5

Foreign currency translation adjustment (10)

(10)Total comprehensive income

578

Cash dividends paid to American Express (334)

(334)Capital transactions with American Express, net

594

594

Balances at December 31, 2003 100

7,288

—

2,867 3,946

475

Comprehensive income:

Net income

794 794

Change in unrealized holding gains on securities, net

(77)

(77)Change in unrealized derivative losses, net

(12)

(12)

Foreign currency translation adjustment (6)

(6)Total comprehensive income

699

Cash dividends paid to American Express

(1,325) (1,325)

Capital transactions with American Express, net

40

40

Balances at December 31, 2004 100

6,702

—

2,907 3,415

380

Comprehensive income:

Net income

574 574

Change in unrealized holding gains on securities, net

(554)

(554)Change in unrealized derivative losses, net

34

34

Minimum pension liability adjustment

(2)

(2)Foreign currency translation adjustment

(9)

(9)Total comprehensive income

43

Dividends paid to shareholders (27)

(27)Cash dividends paid to American Express

(53) (53)

Non-cash dividends paid to American Express

(164) (164)

Transfer of pension obligations and assets from American Express Retirement Plan

(18)

(18)

Share-based incentive employee compensation plan 3,726,554

(52)

(52)

Stock split of common shares issued and outstanding 246,148,900 — 2 (2)

Capital transactions with American Express, net

1,256

1,256

Balances at December 31, 2005 249,875,554

$ 7,687

$ 2

$ 4,091 $ 3,745

$ (151)

Notes to Consolidated Financial Statements 1. Separation and Distribution from American Express Ameriprise Financial, Inc. (the Company or Ameriprise Financial) was formerly a wholly-owned subsidiary of American Express Company (American Express). On February 1, 2005, the American Express Board of Directors announced its intention to pursue the disposition of 100% of its shareholdings in the Company (the Separation) through a tax-free distribution to American Express shareholders. In preparation for the disposition, the Company approved a stock split of its 100 common shares entirely held by American Express into 246 million common shares. Effective as of the close of business on September 30, 2005, American Express completed the separation of Ameriprise Financial and the distribution of the Ameriprise Financial common shares to American Express shareholders (the Distribution). The Distribution was effectuated through a pro-rata dividend to American Express shareholders consisting of one share of Ameriprise Financial common stock for every 5 shares of American Express common stock owned by its shareholders on September 19, 2005, the record date. Prior to August 1, 2005, Ameriprise Financial was named American Express Financial Corporation (AEFC). In connection with the Separation and Distribution, Ameriprise Financial entered into the following transactions with American Express: • Effective August 1, 2005, the Company transferred its 50% ownership interest and the related assets and liabilities of its

subsidiary, American Express International Deposit Company (AEIDC), to American Express for $164 million through a non-cash dividend equal to the net book value excluding $26 million of net unrealized investment losses of AEIDC. In connection with the AEIDC transfer American Express paid the Company a $164 million capital contribution. The assets, liabilities and results of operations of AEIDC are shown as discontinued operations in the accompanying Consolidated Financial Statements. Refer to Note 7 for more information.

• Effective July 1, 2005, the Company’s subsidiary, AMEX Assurance Company (AMEX Assurance), ceded 100% of its travel

insurance and card related business offered to American Express customers, to an American Express subsidiary in return for an arm’s length ceding fee. As of September 30, 2005, the Company entered into an agreement to sell the AMEX Assurance legal entity to American Express within two years after the Distribution for a fixed price equal to the net book value of AMEX Assurance as of the Distribution, which is approximately $115 million. These transactions created a variable interest entity, for U.S. GAAP purposes, for which the Company is not the primary beneficiary. Accordingly, the Company deconsolidated AMEX Assurance for U.S. GAAP purposes as of September 30, 2005. See Note 4 for additional information about AMEX Assurance.

In connection with the Separation and Distribution, American Express provided the Company a capital contribution of approximately $1.1 billion, which is in addition to the $164 million capital contribution noted above. As a result of the Distribution, Ameriprise Financial entered into an unsecured bridge loan in the amount of $1.4 billion. That loan was drawn in September 2005 and was repaid using proceeds from a $1.5 billion senior note issuance in November 2005. Refer to Note 8 for more information. Ameriprise Financial has incurred significant non-recurring separation costs as a result of the separation from American Express. Separation costs generally consisted of expenses related to advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish the Company’s technology platforms. During the year ended December 31, 2005, $293 million ($191 million after-tax) of such costs were incurred. American Express has historically provided a variety of corporate and other support services for Ameriprise Financial, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal, procurement and other services. American Express is continuing to provide Ameriprise Financial with many of these services pursuant to a transition services agreement for transition periods of up to two years following the Distribution, and Ameriprise Financial is arranging to procure other services pursuant to arrangements with third parties or through the Company’s own employees. Ameriprise Financial and American Express completed the split of the American Express Retirement Plan and, as such, Ameriprise Financial recorded a $32 million ($18 million after-tax) adjustment to additional paid-in-capital. See Note 14 for more information. Additionally, a tax allocation agreement with American Express was signed effective September 30, 2005. See Note 17 for more information. 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The Company is a financial planning and financial services company that offers solutions for its clients’ asset accumulation, income management and protection needs. The Company has two main operating segments: (i) Asset Accumulation and Income; and (ii) Protection. These two operating segments are aligned with the financial solutions the Company offers to address its clients’ needs. The Asset Accumulation and Income business offers mutual funds as well as its own annuities and other asset accumulation and income management

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products and services to retail clients through its advisor network. The Company offers its annuity products through outside channels, such as banks and broker-dealer networks. This segment also serves institutional clients in the separately managed account, sub-advisory and 401(k) markets, among others. The Protection segment offers various life, disability income, long-term care, and brokered insurance products through the Company’s advisor network. The Company offers auto and home insurance products on a direct basis to retail clients principally through its strategic marketing alliances. The Company has a Corporate and Other segment, which consists of income derived from corporate level assets and unallocated corporate expenses, primarily separation costs, as well as the results of its subsidiary, Securities America Financial Corporation, which operates its own independent separately branded distribution platform. On September 30, 2003, the Company acquired Threadneedle Asset Management Holdings Limited (Threadneedle), one of the leading asset management groups in the United Kingdom, for cash of £340 million (approximately $565 million at September 30, 2003 exchange rates). As a result, the Company acquired $3.6 billion of assets, $3.0 billion of liabilities, both of which were consolidated into the Company’s Consolidated Balance Sheets, and $81.1 billion of assets under management. Included in the assets under management are certain assets of Zurich Financial Services, U.K., which Threadneedle will continue to manage for an initial term of up to eight years from the date of acquisition of Threadneedle by the Company, subject to certain performance criteria. Threadneedle entered into an agreement with The Zurich Group when the Company acquired Threadneedle from Zurich in 2003 for Threadneedle to continue to manage certain assets of Zurich Financial Services. Principles of Consolidation The Company consolidates all non-variable interest entities in which it holds a greater than 50% voting interest, except for immaterial seed money investments in mutual and hedge funds, which are accounted for as trading securities. Entities in which the Company holds a greater than 20% but less than 50% voting interest are accounted for under the equity method. Additionally, other investments in hedge funds in which the Company holds an interest that is less than 50% are accounted for under the equity method. All other investments are accounted for under the cost method where the Company owns less than a 20% voting interest and does not exercise significant influence, or as Available-for-Sale or trading securities, as applicable. The Company also consolidates all variable interest entities (VIEs) for which it is considered to be the primary beneficiary pursuant to Financial Accounting Standards Board (FASB) Interpretation No. 46, “Consolidation of Variable Interest Entities,” as revised (FIN 46). The determination as to whether an entity is a VIE is based on the amount and characteristics of the entity’s equity. In general, FIN 46 requires a VIE to be consolidated when an enterprise has a variable interest for which it is deemed to be the primary beneficiary, which means that it will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual return, or both. Qualifying Special Purpose Entities (QSPEs) under Statement of Financial Accounting Standards (SFAS) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” (SFAS No. 140) are not consolidated. Such QSPEs included a securitization trust containing a majority of the Company’s rated collateralized debt obligations (CDOs) for which the Company sold all of its retained interests in 2005. See Note 4 for more information. Other entities where the Company has an interest, is the sponsor or transferor are evaluated using the control, risk and reward criteria as outlined under U.S. generally accepted accounting principles (GAAP). The accompanying Consolidated Financial Statements are prepared in accordance with U.S. GAAP. All material intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications of prior period amounts have been made to conform to the current presentation. Foreign Currency Translation Net assets of foreign subsidiaries, whose functional currency is other than the U.S. dollar, are translated into U.S. dollars based upon exchange rates prevailing at the end of each year. The resulting translation adjustment, along with any related hedge and tax effects, are included in accumulated other comprehensive income (loss), a component of shareholders’ equity. Revenues and expenses are translated at the average month end exchange rates during the year. Gains and losses related to non-functional currency transactions, including non-U.S. operations where the functional currency is the U.S. dollar, are reported net in other revenues in the Company’s Consolidated Statements of Income. Amounts Based on Estimates and Assumptions Accounting estimates are an integral part of the Consolidated Financial Statements. In part, they are based upon assumptions concerning future events. Among the more significant are those that relate to investment securities valuation and recognition of other-than-temporary impairments, amortization of deferred acquisition costs (DAC), income taxes and recognition of deferred tax assets and liabilities. These accounting estimates reflect the best judgment of management and actual results could differ. Revenues The Company generates revenue from a wide range of investment and insurance products. Principal sources of revenue include management, financial advice and service fees, distribution fees, net investment income and premiums.

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Management, Financial Advice and Service Fees Management, financial advice and service fees relate primarily to managed assets for proprietary mutual funds, separate account and wrap account assets, as well as employee benefit plan and institutional investment management and administration services. The Company’s management and risk fees are generally computed as a contractual rate applied to the underlying asset values, and are generally accrued daily and collected monthly. Many of the Company’s mutual funds have a performance incentive adjustment (PIA). This PIA increases or decreases the level of management fees received based on the specific fund’s relative performance as measured against a designated external index. PIA fee revenue is recognized when the experience period has ended. Employee benefit plan and institutional investment management and administration services fees are negotiated and are also generally based on underlying asset values. Fees from financial planning and advice services are recognized as services are performed. Distribution Fees Distribution fees primarily include point-of-sale fees (such as front-load mutual fund fees) and asset-based fees (such as 12b-1 distribution and servicing-related fees) that are generally based on a contractual fee as a percentage of assets and recognized when earned, which generally is upon receipt. Distribution fees also include fees received under marketing support arrangements for sales of mutual funds and other products of other companies, such as through the Company’s wrap accounts, 401(k) plans and on a direct basis, as well as surrender charges on fixed and variable universal life insurance and annuities. Net Investment Income Net investment income predominantly includes interest income on fixed maturity securities classified as Available-for-Sale, mortgage loans on real estate, policy loans, other investments, and cash and cash equivalents; mark-to-market of trading securities and derivatives not qualifying as accounting hedges; pro rata share of net income or loss of equity method investments in hedge funds; and realized gains and losses on the sale of securities and charges for securities determined to be other-than-temporarily impaired. Interest income is accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums and discounts on all performing fixed maturity securities classified as Available-for-Sale, excluding structured securities, and mortgage loans on real estate so that the related security or loan recognizes a constant rate of return on the outstanding balance throughout its term. Interest income on beneficial interests in structured securities is recognized according to Emerging Issues Task Force (EITF) Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets” (EITF 99-20). Realized gains and losses on securities, other than trading securities and equity method investments in hedge funds, are recognized using the specific identification method on a trade date basis, and charges are recorded when securities are determined to be other-than-temporarily impaired. Premiums Premium revenues include premiums on auto and home, traditional life, disability income and long-term care insurance. Premiums on auto and home insurance are recognized ratably over the coverage period, whereas premiums on traditional life, disability income and long-term care insurance are recognized as revenue when due. Other Revenues Other revenues include certain charges assessed on fixed and variable universal life insurance and annuities, which consist of cost of insurance charges and administration charges against contractholder account balances and are recognized as revenue when assessed. The amounts collected from contractholders are considered deposits and are not included in revenue. Cost of insurance and administrative charges on universal and variable universal life insurance were $462 million, $444 million and $424 million for the years ended December 31, 2005, 2004 and 2003, respectively. Expenses Compensation and Benefits Compensation and benefits represent compensation-related expenses associated with employees and sales commissions and other compensation paid to financial advisors and registered representatives, net of acquisition costs capitalized and amortized as part of DAC. Stock-Based Compensation Effective January 1, 2003, the Company adopted the fair value provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” and effective July 1, 2005 the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” related to stock-based awards granted by American Express to the Company’s employees and granted by the Company subsequent to the Distribution. The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model and is expensed on a straight-line basis over the vesting period. See Recently Issued Accounting Standards section below and Note 10 for further discussion. Interest Credited to Account Values Interest credited to account values represents amounts earned by universal life policyholders, investment certificate holders and annuity contractholders in accordance with contract provisions. Benefits, Claims, Losses and Settlement Expenses Benefits, claims, losses and settlement expenses consist of amounts paid, changes in amounts payable for claims

63

reported and changes in claims incurred but not reported under insurance policies, certain annuity contracts and optional death and income benefit guarantee riders along with costs to process and pay such amounts. Amounts are net of expected reinsurance recovery. Amortization of Deferred Acquisition Costs DAC represent the costs of acquiring new business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity and insurance and, to a lesser extent, certain mutual fund products. These costs are deferred to the extent they are recoverable from future profits. For annuity and insurance products, DAC are amortized over periods approximating the lives of the business, generally as a percentage of premiums or estimated gross profits depending on the products’ characteristics. For certain mutual fund products, DAC are generally amortized over fixed periods on a straight-line basis adjusted for redemptions. For the Company’s annuity and insurance products, the projections underlying the amortization of DAC require the use of certain assumptions, including interest margins, mortality and morbidity rates, persistency rates, maintenance expense levels and customer asset value growth rates for variable products. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. The customer asset value growth rate is the rate at which variable product contract values are assumed to appreciate in the future. The rate is net of asset fees and anticipates a blend of equity and fixed income investments. Management reviews and, where appropriate, adjusts its assumptions with respect to customer asset value growth rates on a quarterly basis. Management monitors other principal DAC amortization assumptions, such as persistency, mortality and morbidity rates, interest margin and maintenance expense level assumptions each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring process, management reviews and updates these DAC amortization assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an increase of DAC amortization, while a decrease in amortization percentage will result in a decrease of DAC amortization. The impact on consolidated results of operations of changing assumptions with respect to the amortization of DAC can either be positive or negative in any particular period and is reflected in the period in which such changes are made. Separation Costs Separation costs include expenses related to the separation from American Express. Separation costs primarily relate to advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish the Company’s technology platforms. Other Expenses Other expenses primarily include advertising costs, information technology costs, legal and regulatory costs, other professional services, communications costs and facilities expenses. These expenses are not associated with the separation from American Express. The Company expenses advertising costs, recorded in other expenses, in the year in which the advertisement first takes place, except for certain direct-response advertising costs primarily associated with the solicitation of auto and home insurance products. Direct-response advertising expenses directly attributed to the sale of auto and home insurance products are capitalized and amortized on a calendar year cost pool basis over the period premiums are expected to be received. Changes in expected future premiums are reflected in amortization prospectively. Income Taxes The Company’s provision for income taxes represents the net amount of income taxes that the Company expects to pay or to receive from various taxing jurisdictions in connection with its operations. The Company provides for income taxes based on amounts that the Company believes it will ultimately owe. Inherent in the provision for income taxes are estimates and judgments regarding the tax treatment of certain items and the realization of certain offsets and credits. Balance Sheet Cash and Cash Equivalents The Company has defined cash equivalents to include time deposits and other highly liquid investments with original maturities of 90 days or less. Investments Investments consist of the following: Available-for-Sale Securities Available-for-Sale securities are carried at fair value on the Consolidated Balance Sheets with unrealized gains (losses) recorded in accumulated other comprehensive income (loss) within equity, net of income tax provision (benefit) and net of adjustments in other asset and liability balances, such as DAC, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet date. Gains and losses are recognized in consolidated results of operations upon disposition of the securities. In addition, losses are also recognized when management determines that a decline in value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default or bankruptcy. The Company also considers the extent to which

64

cost exceeds fair value, the duration of that difference, and management’s judgment about the issuer’s current and prospective financial condition, as well as the Company’s ability and intent to hold until recovery. Fair value is generally based on quoted market prices. However, the Company’s Available-for-Sale securities portfolio also contains structured investments of various asset quality, including CDOs (backed by high-yield bonds and bank loans), which are not readily marketable. As a result, the carrying values of these structured investments are based on future cash flow projections that require a significant degree of management judgment as to the amount and timing of cash payments, defaults and recovery rates of the underlying investments and, as such, are subject to change. Mortgage Loans on Real Estate, Net Mortgage loans on real estate reflect principal amounts outstanding less allowances for losses. The allowance for mortgage loan losses is measured as the excess of the loan’s recorded investment over the present value of its expected principal and interest payments discounted at the loan’s effective interest rate, or the fair value of collateral. Additionally, the level of the allowance for losses considers other factors, including historical experience and economic and political conditions. Management regularly evaluates the adequacy of the allowance for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. The Company generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management’s judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Trading Securities and Equity Method Investments in Hedge Funds Trading securities and equity method investments in hedge funds include common stocks, hedge fund investments and mutual fund, hedge fund and separate account seed money. Trading securities are carried at fair value on the Consolidated Balance Sheets with unrealized and realized gains (losses) recorded in the Consolidated Statements of Income within net investment income. The carrying value of equity method investments in hedge funds reflects the Company’s original investment and its share of earnings or losses of the hedge funds subsequent to the date of investment, and approximates fair value. Policy Loans Policy loans include life insurance policy, annuity and investment certificate loans. These loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of underlying products. Other Investments Other investments reflect the Company’s interest in affordable housing partnerships, syndicated loans and real estate investments. Affordable housing partnerships are carried at amortized cost, as the Company has no influence over the operating or financial policies of the general partner. Syndicated loans reflect amortized cost less allowance for losses. Real estate investments reflect properties acquired in satisfaction of debt and are carried at the lower of cost or the property’s net realizable value. Receivables Receivables include reinsurance recoverables, premiums due and other receivables, including open securities transactions receivable and accrued investment income. Reinsurance The Company reinsures a portion of the risks associated with its life and long-term care insurance products through reinsurance agreements with unaffiliated insurance companies. Reinsurance is used in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and to effect business-sharing arrangements. The Company evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The Company remains primarily liable as the direct insurer on all risks reinsured. Generally, the Company reinsures 90% of the death benefit liability related to variable, universal and term life insurance products. The Company began reinsuring risks at this level beginning in 2001 for term life insurance and 2002 for variable and universal life insurance. Policies issued prior to these dates are not subject to these same reinsurance levels. The maximum amount of life insurance risk retained by the Company is $750,000 on any policy insuring a single life and $1.5 million on any flexible premium survivorship variable life policy. For existing long-term care policies, the Company retained 50% of the risk and the remaining 50% of the risk was ceded to General Electric Capital Assurance Company. Risk on variable life and universal life policies is reinsured on a yearly renewable term basis. Risk on term life and long-term care policies is reinsured on a coinsurance basis. The Company retains all risk for new claims on disability income contracts. Risk is currently managed by limiting the amount of disability insurance written on any one individual. The Company also retains all accidental death benefit and waiver of premium risk. Brokerage Customer Receivables Included in receivables are receivables from brokerage customers, which primarily represent credit extended to brokerage customers to finance their purchases of securities on margin. At December 31, 2005 and 2004, receivables from brokerage customers were $279 million and $290 million, respectively. Customer receivables are primarily collateralized by securities with market values in excess of the amounts due.

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Deferred Acquisition Costs DAC represent the costs of acquiring new business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity and insurance and, to a lesser extent, certain mutual fund products. These costs are deferred to the extent they are recoverable from future profits. For annuity and insurance products, DAC are amortized over periods approximating the lives of the business, generally as a percentage of premiums or estimated gross profits depending on the products’ characteristics. For certain mutual fund products, DAC are generally amortized over fixed periods on a straight-line basis adjusted for redemptions. Separate Account Assets and Liabilities Separate account assets and liabilities are funds held for the exclusive benefit of variable annuity and variable life insurance contractholders. The Company receives investment management fees, mortality and expense risk fees, minimum death benefit guarantee fees and cost of insurance charges from the related accounts. The Company provides contractual mortality assurances to variable annuity contractholders that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. The Company makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. The Company also guarantees that the rates at which administrative charges are deducted from contract funds will not exceed contractual maximums. For variable life insurance, the Company guarantees that the rates at which insurance charges and administrative charges are deducted from contract funds will not exceed contractual maximums. Restricted and Segregated Cash The Company has restricted cash, primarily related to Threadneedle and consolidated VIEs, totaling $5 million and $547 million at December 31, 2005 and 2004, respectively, which cannot be utilized for operations. At December 31, 2005 and 2004, amounts segregated under federal and other regulations reflect resale agreements of $1,062 million and $989 million, respectively, segregated in special bank accounts for the benefit of the Company’s brokerage customers. The Company’s policy is to take possession of securities purchased under agreements to resell. Such securities are valued daily and additional collateral is obtained when appropriate. Other Assets Other assets include land, buildings, equipment and software, goodwill and other intangible assets, deferred sales inducement costs, derivatives and other miscellaneous assets. Land, Buildings, Equipment and Software Land, buildings, equipment and software are carried at cost less accumulated depreciation or amortization. The Company capitalizes certain costs to develop or obtain software for internal use. The Company generally uses the straight-line method of depreciation and amortization over periods ranging from three to thirty years. At December 31, 2005 and 2004, land, buildings, equipment and software were $658 million and $677 million, respectively, net of accumulated depreciation of $668 million and $566 million, respectively. Depreciation expense for the years ended December 31, 2005, 2004 and 2003 was $144 million, $133 million and $114 million, respectively. Goodwill and Other Intangible Assets Goodwill represents the amount of an acquired company’s acquisition cost in excess of the fair value of assets acquired and liabilities assumed. The Company evaluates goodwill for impairment annually and whenever events and circumstances make it likely that impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell or dispose of a reporting unit. In determining whether impairment has occurred, the Company uses a comparative market multiples approach. In applying this methodology, a number of factors, including actual operating results, future business plans, economic projections and other market data are applied. Intangible assets are amortized over their estimated useful lives unless they are deemed to have indefinite useful lives. The Company evaluates intangible assets for impairment annually and whenever events and circumstances make it likely that impairment may have occurred, such as a significant adverse change in the business climate or a decision to sell or dispose of a reporting unit. For intangible assets subject to amortization, impairment is recognized if the carrying amount is not recoverable or the carrying amount exceeds the fair value of the intangible asset. Deferred Sales Inducement Costs Deferred sales inducement costs (DSIC) consist of bonus interest credits and premium credits added to certain annuity contract values. These benefits are capitalized to the extent they are incremental to amounts that would be credited on similar contracts without the applicable feature. These costs were previously included in DAC and were reclassified as part of the adoption of American Institute of Certified Public Accountants (AICPA) Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (SOP 03-1). The amounts capitalized are amortized using the same methodology and assumptions used to amortize DAC. Derivative Financial Instruments and Hedging Activities Derivative financial instruments are classified on the Consolidated Balance Sheets at fair value within other assets

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or liabilities. The fair value of the Company’s derivative financial 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 data inputs. In certain instances, the fair value includes structuring costs incurred at the inception of the transaction. The accounting for the change in the fair value of a derivative financial instrument depends on its intended use and the resulting hedge designation, if any. The Company currently designates derivatives as fair value hedges, cash flow hedges or hedges of net investment in foreign operations or, in certain circumstances, does not designate derivatives as accounting hedges. For derivative financial instruments that qualify as fair value hedges, changes in the fair value of the derivatives as well as of the corresponding hedged assets, liabilities or firm commitments are recognized in current earnings as a component of net investment income. If a fair value hedge is designated or terminated prior to maturity, previous adjustments to the carrying value of the hedged item are recognized into earnings to match the earnings pattern of the hedged item. For derivative financial instruments that qualify as cash flow hedges, the effective portions of the gain or loss on the derivative instruments are reported in accumulated other comprehensive income (loss) and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented in the Consolidated Statements of Income with the hedged instrument or transaction impact. Any ineffective portion of the gain or loss is reported currently in earnings as a component of net investment income. If a hedge is de-designated or terminated prior to maturity, the amount previously recorded in accumulated other comprehensive income (loss) is recognized into earnings over the period that the hedged item impacts earnings. For any hedge relationships that are discontinued because the forecasted transaction is not expected to occur according to the original strategy, any related amounts previously recorded in accumulated other comprehensive income (loss) are recognized in earnings immediately. For derivative financial instruments that qualify as net investment hedges in foreign operations, the effective portions of the change in fair value of the derivatives are recorded in accumulated other comprehensive income (loss) as part of the foreign currency translation adjustment. Any ineffective portions of net investment hedges are recognized in net investment income during the period of change. For derivative financial instruments that do not qualify for hedge accounting or are not designated as hedges, changes in fair value are recognized in current period earnings, generally as a component of net investment income. Derivative financial instruments that are entered into for hedging purposes are designated as such at the time that the Company enters into the contract. For all derivative financial instruments that are designated for hedging activities, the Company formally documents all of the hedging relationships between the hedge instruments and the hedged items at the inception of the relationships. Management also formally documents its risk management objectives and strategies for entering into the hedge transactions. The Company formally assesses, at inception and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of hedged items. If it is determined that a derivative is not highly effective as a hedge, the Company will discontinue the application of hedge accounting. See Note 15 for more information about derivatives and hedging activities of the Company. Future Policy Benefits and Claims Fixed Annuities and Variable Annuity Guarantees Liabilities for fixed and variable deferred annuities are equal to accumulation values, which are the cumulative gross deposits, credited interest and fund performance less withdrawals and mortality and expense risk charges. The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (GMDB) provisions. When market values of the customer’s accounts decline, the death benefit payable on a contract with a GMDB may exceed the contract accumulation value. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings; these are referred to as gain gross-up (GGU) benefits. In addition, the Company offers contracts containing guaranteed minimum income benefit (GMIB), guaranteed minimum withdrawal benefit (GMWB) and guaranteed minimum accumulation benefit (GMAB) provisions. Effective January 1, 2004, liabilities for GMDB, GGU and GMIB benefits have been established under SOP 03-1. Actuarial models to simulate various equity market scenarios are used to project these benefits and contract assessments and include making significant assumptions related to customer asset value growth rates, mortality, persistency and investment margins. These assumptions, as well as their periodic review by management, are consistent with those used for DAC purposes. Prior to the adoption of SOP 03-1, amounts paid in excess of contract value were expensed when payable. See Recently Issued Accounting Standards section below and Note 12 for more information about these guaranteed benefits. GMWB and GMAB provisions are considered embedded derivatives under SFAS 133, “Accounting for Derivative Instruments and Hedging Activities,” (SFAS 133) and, accordingly, are carried at fair value within future policy benefits and claims on the Consolidated Balance Sheets. The fair value of these embedded derivatives is based on the present value of future benefits less applicable fees charged for the provision. Changes in fair value are reflected in benefits, claims, losses and settlement expenses within the Consolidated Statements of Income.

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Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Accounting for equity indexed deferred annuities issued before 1999 differs from those issued in 1999 and later due to the treatment of embedded equity options within the contracts. Embedded equity options are considered embedded derivatives under SFAS 133. However, SFAS 133 allowed companies to elect whether to separately account for embedded derivatives which are part of contracts issued prior to January 1, 1999. The Company elected not to separately account for embedded derivatives related to contracts issued prior to January 1, 1999. Liabilities for fixed annuities in a benefit or payout status are based on future estimated payments using established industry mortality tables and interest rates, ranging from 4.6% to 9.5% at December 31, 2005, depending on year of issue, with an average rate of approximately 6.0%. Life, Disability Income and Long-term Care Insurance Liabilities for insurance claims that have been reported but not yet paid (unpaid claims liabilities) are equal to the death benefits payable under the policies. For claims, unpaid claims liabilities are equal to benefit amounts due and accrued including the expense of reviewing claims and making benefit payment determinations. Liabilities for claims that have been incurred but not reported are estimated based on periodic analysis of the actual lag between when a claim occurs and when it is reported. Where applicable, amounts recoverable from other insurers who share in the risk of the products offered (reinsurers) are separately recorded as receivables. Liabilities for fixed and variable universal life insurance are equal to accumulation values which are the cumulative gross deposits, credited interest and fund performance less withdrawals and expense and mortality charges. Liabilities for future benefits on term and whole life insurance are based on the net level premium method, using anticipated premium payments, mortality rates, policy persistency and interest rates earned on the assets supporting the liability. Anticipated mortality rates are based on established industry mortality tables, with modifications based on Company experience. Anticipated policy premium payments and persistency rates vary by policy form, issue age and policy duration. Anticipated interest rates range from 4% to 10% at December 31, 2005, depending on policy form, issue year and policy duration. The Company issues only non-participating life insurance policies, which do not pay dividends to policyholders from the insurers’ earnings. Liabilities for future policy benefits include both policy reserves and claim reserves on disability income and long-term care products. Policy reserves are the amounts needed to meet obligations for future claims and are based on the net level premium method, using anticipated premium payments and morbidity, mortality, policy persistency and discount rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for disability income policies, occupation class. Anticipated discount rates for disability income policy reserves are 7.5% at policy issue and grade to 5% over 5 years. Anticipated discount rates for long-term care policy reserves are currently 5.3% at December 31, 2005 grading up to 9.4% over 40 years. Claim reserves on disability income and long-term care products are the amounts needed to meet obligations for continuing claim payments on already incurred claims. Claim reserves are calculated based on claim continuance tables which estimate the likelihood that an individual will continue to be eligible for benefits and anticipated interest rates earned on assets supporting the reserves. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both disability income and long-term care range from 3.0% to 8.0% at December 31, 2005, with an average rate of approximately 4.9%. Auto and Home Reserves Auto and home reserves include amounts determined from loss reports and individual cases, as well as an amount, based on past experience, for losses incurred but not reported. Such liabilities are necessarily based on estimates and, while management believes that the reserve amounts are adequate at December 31, 2005 and 2004, the ultimate liability may be in excess of or less than the amounts provided. The Company’s methods for making such estimates and for establishing the resulting liability are continually reviewed, and any adjustments are reflected in the Consolidated Statements of Income in the period such adjustments are made. Investment Certificate Reserves Investment certificates may be purchased either with a lump sum or 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 generally accumulate interest at specified percentage rates. Reserves 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. 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 Consolidated Balance Sheets. The fair value of these embedded derivatives incorporate current market data inputs. Changes in fair value are reflected in interest credited to account values within the Consolidated Statements of Income.

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Accounts Payable and Accrued Expenses Included in accounts payable and accrued expenses are payables to brokerage customers, which represent credit balances and other customer funds pending completion of securities transactions. The Company pays interest on certain customer credit balances. Amounts payable to brokerage customers were $1.2 billion at both December 31, 2005 and 2004. Recently Issued Accounting Standards On November 3, 2005, the FASB issued FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” FSP FAS 115-1 and FAS 124-1 address the determination as to when an investment is considered impaired, whether that impairment is other-than-temporary and the measurement of loss. It also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP FAS 115-1 and FAS 124-1 are effective for reporting periods beginning after December 15, 2005. The Company anticipates the impact of FSP FAS 115-1 and FAS 124-1 on the Company’s consolidated results of operations and financial condition will not be material. In September 2005, the AICPA issued SOP 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts” (SOP 05-1). SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments.” SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006, with earlier adoption encouraged. The Company is currently evaluating the impact of SOP 05-1 on the Company’s consolidated results of operations and financial condition. Effective July 1, 2005, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123(R)). SFAS No. 123(R) requires entities to measure and recognize the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). In January 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123), prospectively for all American Express stock options granted to the Company’s employees after December 31, 2002. Substantially all stock options for which intrinsic value accounting was continued under Accounting Principles Board (APB) Opinion No. 25 were vested as of June 30, 2005. SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under previous literature. The effect of adopting SFAS No. 123(R) on the Company’s consolidated results of operations and financial condition, using a modified prospective application, was insignificant. In March 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107 (SAB No. 107), which summarizes the staff’s views regarding share-based payment arrangements for public companies. The Company took into account the views included in SAB No. 107 in its adoption of SFAS No. 123(R). In June 2005, the FASB approved EITF Issue No. 04-5, “Determining whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (EITF 04-5). EITF 04-5 provides guidance on whether a partnership should be consolidated by one of its partners. EITF 04-5 is effective for general partners of all new limited partnerships formed and for existing limited partnerships for which the partnership agreements are modified after June 29, 2005. For general partners in all other limited partnerships, this guidance is effective no later than January 1, 2006. The Company is currently evaluating partnership interests, particularly certain property funds managed by Threadneedle, to determine whether there will be an impact on its consolidated results of operations and financial condition. In May 2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections,” (SFAS 154). This Statement replaces APB Opinion No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not anticipate SFAS 154 will materially impact its Consolidated Financial Statements upon its adoption on January 1, 2006. In December 2004, the FASB issued FSP FAS 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (the Act) (FSP FAS 109-2), which would allow additional time beyond the financial reporting period of enactment to evaluate the effect of the Act on the Company’s plan for reinvestment or repatriation of foreign earnings for purposes of calculating the income tax provision. The Act contains a provision that permits an 85% dividend received deduction for qualified repatriations of earnings that would otherwise be permanently reinvested outside the United States. The Company does not plan to reinvest or repatriate any foreign earnings as a result of the Act. In June 2004, the FASB issued FSP No. 97-1, “Situations in Which Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses

69

from the Sale of Investments (SFAS No. 97), Permit or Require Accrual of an Unearned Revenue Liability” (FSP 97-1). The implementation of the SOP 03-1 raised a question regarding the interpretation of the requirements of SFAS No. 97 concerning when it is appropriate to record an unearned revenue liability. FSP 97-1 clarifies that SFAS No. 97 is clear in its intent and language, and requires the recognition of an unearned revenue liability for amounts that have been assessed to compensate insurers for services to be performed over future periods. SOP 03-1 describes one situation, when assessments result in profits followed by losses, where an unearned revenue liability is required. SOP 03-1 does not amend SFAS No. 97 or limit the recognition of an unearned revenue liability to the situation described in SOP 03-1. The guidance in FSP 97-1 is effective for financial statements for fiscal periods beginning after June 18, 2004. The adoption of FSP 97-1 did not have a material impact on the Company’s consolidated results of operations or financial condition. In May 2004, the FASB issued FSP FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”. The Company elected to early adopt the provisions of FSP FAS 106-2 on a prospective basis as of April 1, 2004. The adoption of FSP FAS 106-2 did not have a material impact on the Company’s accumulated plan benefit obligation or net periodic postretirement benefit expense for 2004. Effective January 1, 2004, the Company adopted SOP 03-1 which provides guidance on: (i) the classification and valuation of long-duration contract liabilities; (ii) the accounting for sales inducements; and (iii) separate account presentation and valuation. The adoption of SOP 03-1 as of January 1, 2004, resulted in a cumulative effect of accounting change that reduced first quarter 2004 results by $71 million ($109 million pretax). The cumulative effect of accounting change consisted of: (i) $43 million pretax from establishing additional liabilities for certain variable annuity guaranteed benefits ($33 million) and from considering these liabilities in valuing DAC and DSIC associated with those contracts ($10 million); and (ii) $66 million pretax from establishing additional liabilities for certain variable universal life and single pay universal life insurance contracts under which contractual costs of insurance charges are expected to be less than future death benefits ($92 million) and from considering these liabilities in valuing DAC associated with those contracts ($26 million offset). Prior to the Company’s adoption of SOP 03-1, amounts paid in excess of contract value were expensed when payable. Amounts expensed in 2004 to establish and maintain additional liabilities for certain variable annuity guaranteed benefits were $53 million (of which $33 million was part of the adoption charges described previously) as compared to amounts expensed in 2003 and 2002 of $32 million and $37 million, respectively. The Company’s accounting for separate accounts was already consistent with the provisions of SOP 03-1 and, therefore, there was no impact related to this requirement. The AICPA released a series of technical practice aids (TPAs) in September 2004, which provide additional guidance related to, among other things, the definition of an insurance benefit feature and the definition of policy assessments in determining benefit liabilities, as described within SOP 03-1. The TPAs did not have a material effect on the Company’s calculation of liabilities that were recorded in the first quarter of 2004 upon adoption of SOP 03-1. In January 2003, the FASB issued FIN 46, which addresses consolidation by business enterprises of VIEs and was subsequently revised in December 2003. The VIEs primarily impacted by FIN 46, which the Company consolidated as of December 31, 2003, relate to structured investments, including a CDO and three secured loan trusts (SLTs) that were both managed and partially owned by the Company. The consolidation of FIN 46-related entities resulted in a cumulative effect of accounting change that reduced 2003 net income through a non-cash charge of $13 million ($20 million pretax). The net charge was comprised of a $57 million ($88 million pretax) non-cash charge related to the consolidated CDO offset by a $44 million ($68 million pretax) non-cash gain related to the consolidated SLTs. See Note 4 for more information about VIEs. 3. Investments The following is a summary of investments at December 31:

70

2005

2004

(in millions)

Available-for-Sale securities, at fair value $ 34,217 $ 34,979Mortgage loans on real estate, net

3,146

3,249

Trading securities, at fair value and equity method investments in hedge funds

676

858

Policy loans

616

602

Other investments

445

544

Total

$ 39,100

$ 40,232

Available-for-Sale Securities Available-for-Sale securities at December 31, 2005 are distributed by type as presented below:

Available-for-Sale securities at December 31, 2004 are distributed by type as presented below:

At December 31, 2005 and 2004, fixed maturity securities, excluding net unrealized appreciation and depreciation, comprised approximately 88% and 87%, respectively, of the Company’s total investments. These securities are rated by Moody’s and Standard & Poor’s (S&P), except for approximately $1.2 billion of securities at both December 31, 2005 and 2004, which are rated by the Company’s internal analysts using criteria similar to Moody’s and S&P. Ratings on investment grade securities are presented using S&P’s convention and, if the two agencies’ ratings differ, the lower rating is used. A summary by rating (excluding net unrealized appreciation and depreciation) on December 31 is as follows:

At December 31, 2005 and 2004, approximately 44% and 62% of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than 10% of shareholders’ equity.

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Amortized Cost

Gross Unrealized

Gains

Gross Unrealized

Losses

Fair Value

(in millions)

Corporate debt securities

$ 18,836

$ 291

$ (300) $ 18,827

Mortgage and other asset-backed securities

14,071

50

(211) 13,910

Structured investments 37 — — 37State and municipal obligations

879

23

(5) 897

U.S. government and agencies obligations

377

17

(7) 387

Foreign government bonds and obligations

128

17

—

145

Common and preferred stocks

11

3

—

14

Total

$ 34,339

$ 401

$ (523) $ 34,217

Amortized Cost

Gross Unrealized

Gains

Gross Unrealized

Losses

Fair Value

(in millions) Corporate debt securities

$ 19,452

$ 728 $ (68) $ 20,112

Mortgage and other asset-backed securities

12,610

167 (48) 12,729

Structured investments

773

— (41) 732

State and municipal obligations

757

26 (3) 780

U.S. government and agencies obligations

406

15 (1) 420

Foreign government bonds and obligations

108

17 (1) 124

Common and preferred stocks

77

5 —

82

Total

$ 34,183

$ 958 $ (162) $ 34,979

Rating

2005

2004

AAA

44% 41%AA

7

4

A

19

20BBB

23

27

Below investment grade

7

8

Total

100% 100%

The following table provides 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 as of December 31, 2005:

The following table provides 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 as of December 31, 2004:

In evaluating potential other-than-temporary impairments, the Company considers the extent to which amortized cost exceeds fair value and the duration of that difference. A key metric in performing this evaluation is the ratio of fair value to amortized cost. The following table summarizes the unrealized losses by ratio of fair value to amortized cost as of December 31, 2005:

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Less than 12 months

12 months or more Total

Description of Securities

Fair Value

UnrealizedLosses

Fair Value

Unrealized Losses

Fair

Value

Unrealized Losses

(in millions)

Corporate debt securities $ 8,445

$ (187) $ 2,771

$ (113) $ 11,216

$ (300)Mortgage and other asset-backed securities

7,886

(114) 2,875

(97) 10,761

(211)Structured investments

10 — — — 10 —

State and municipal obligations 172

(4) 24

(1) 196

(5)U.S. government and agencies obligations

193

(4) 97

(3) 290

(7)Foreign government bonds and obligations

13

—

—

— 13

—

Common and preferred stocks —

—

5

— 5

—

Total $ 16,719

$ (309) $ 5,772

$ (214) $ 22,491

$ (523)

Less than 12 months

12 months or more Total

Description of Securities

Fair Value

UnrealizedLosses

Fair Value

Unrealized Losses

Fair

Value

UnrealizedLosses

(in millions)Corporate debt securities

$ 3,956

$ (38) $ 1,171

$ (30) $ 5,127

$ (68)Mortgage and other asset-backed securities

4,004

(30) 732

(18) 4,736

(48)Structured investments

—

—

705

(41) 705

(41)State and municipal obligations

50

—

75

(3) 125

(3)U.S. government and agencies obligations

207

(1) 2

— 209

(1)Foreign government bonds and obligations

1

—

9

(1) 10

(1)Total

$ 8,218

$ (69) $ 2,694

$ (93) $ 10,912

$ (162)

Less than 12 months

12 months or more

Total

Ratio of Fair Value to Amortized Cost

Number

of Securities

Fair

Value

Gross Unrealized

Losses

Numberof

Securities

Fair Value

Gross Unrealized

Losses

Number of

Securities

Fair Value

Gross Unrealized

Losses

(in millions, except number of securities)

95%–100% 973

$ 16,221 $ (269) 357

$ 5,309

$ (181) 1,330 $ 21,530

$ (450)90%–95%

47 391

(25) 34

439

(29) 81 830

(54)80%–90%

12 104

(14) 6

24

(4) 18 128

(18)Less than 80%

3 3

(1) —

—

—

3 3

(1)Total

1,035 $ 16,719

$ (309) 397

$ 5,772

$ (214) 1,432 $ 22,491

$ (523)

A majority of the gross unrealized losses related to corporate debt securities and substantially all of the gross unrealized losses related to mortgage and other asset-backed securities are attributable to changes in interest rates. A portion of the gross unrealized losses particularly related to corporate debt securities is also attributed to credit spreads and specific issuer credit events. As noted in the table above, a significant portion of the unrealized loss relates to securities that have a fair value to amortized cost ratio of 95% or above resulting in an overall 98% ratio of fair value to amortized cost for all securities with an unrealized loss. From an overall perspective, the gross unrealized losses are not concentrated in any individual industries or with any individual securities. However, the securities with a fair value to amortized cost ratio of 80%-90% primarily relate to the auto and paper industries. The largest unrealized loss associated with an individual issuer, excluding GNMA, FNMA, and FHLMC mortgage backed securities, is $6 million. The securities related to this issuer have a fair value to amortized cost ratio of 80%-90% and have been in an unrealized loss position for less than 12 months. The three securities with a fair value to amortized cost ratio less than 80% are all included in the portfolio of securities that the Company was required to consolidate as part of a CDO in applying FIN 46. More information about this CDO is provided below and in Note 4. The Company monitors the investments and metrics described previously on a quarterly basis to identify and evaluate investments that have indications of possible other-than-temporary impairments. See the Available-for-Sale Securities section of Note 2 for information regarding the Company’s policy for determining when an investment’s decline in value is other-than-temporary. As stated earlier, the Company’s ongoing monitoring process has revealed that a significant portion of the gross unrealized losses on its Available-for-Sale securities are attributable to changes in interest rates. Additionally, the Company has the ability and intent to hold these securities for a time sufficient to recover its amortized cost and has, therefore, concluded that none are other-than-temporarily impaired at December 31, 2005. The change in net unrealized securities gains (losses) in other comprehensive income (loss) 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 (holding gains (losses)); (ii) (gains) losses that were previously unrealized, but have been recognized in the current period net income due to sales and other-than-temporary impairments of Available-for-Sale securities (reclassification of realized gains (losses)); and (iii) other items primarily consisting of adjustments in asset and liability balances, such as DAC, DSIC and annuity liabilities to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective consolidated balance sheet dates. The following table presents these components of other comprehensive income (loss), net of tax:

The change in other comprehensive loss related to discontinued operations was $13 million, $16 million and $21 million for the years ended December 31, 2005, 2004 and 2003, respectively, net of tax benefits of $7 million, $9 million and $11 million, respectively. The following is a distribution of Available-for-Sale securities by maturity as of December 31, 2005:

The expected payments on mortgage and other asset-backed securities and structured investments may not coincide with their contractual maturities. As such, these securities, as well as common and preferred stocks, were not included in the maturities distribution. Included in net realized gains and losses are gross realized gains and losses on sales of securities, as well as other-than-temporary impairment losses on investments, classified as Available-for-Sale, using the specific identification method, as noted in the following table for the years ended December 31:

73

2005 2004

2003

(in millions)

Holding (losses) gains, net of tax of $303, $12, and $59, respectively

$ (562) $ 22 $ (109)Reclassification of realized gains, net of tax of $18, $15, and $4, respectively (34) (27) (8)DAC, DSIC and annuity liabilities (in 2005 and 2004), net of tax of $30, $30,

and $2, respectively

55 (56) 3

Net unrealized securities losses $ (541) $ (61) $ (114)

Amortized Cost

Fair Value

(in millions)Due within 1 year

$ 948

$ 952

Due after 1 year through 5 years 6,024 6,010

Due after 5 years through 10 years 11,423

11,375

Due after 10 years 1,825

1,919

20,220

20,256

Mortgage and other asset-backed securities 14,071 13,910

Structured investments 37

37

Common and preferred stocks 11

14

Total $ 34,339

$ 34,217

2005 2004

2003

(in millions)

Gross realized gains from sales

$ 137

$ 65

$ 307

Gross realized losses from sales

$ (64) $ (21) $ (143)Other-than-temporary impairments

$ (21) $ (2) $ (152)

The $21 million of other-than-temporary impairments in 2005 primarily related to corporate debt securities within the auto industry which were downgraded in 2005 and subsequently deteriorated throughout the year in terms of their fair value to amortized cost ratio. The $2 million of other-than-temporary impairments in 2004 related to four issuers within corporate debt securities. The $152 million of other-than-temporary impairments in 2003 consisted of $90 million related to corporate debt securities, $55 million related to the Company’s interests in the CDO securitization trust described below, and $7 million related to other securities. The other-than-temporary impairments related to corporate debt securities were spread across twelve issuers with approximately $71 million resulting from continued operating difficulties and bankruptcies of certain large airline carriers and the related overall impact on the airline industry. The other-than-temporary impairments related to the Company’s interests in the CDO securitization trust primarily resulted from defaults associated with a specific CDO within the securitization trust. As of December 31, 2004, the Company held retained interests in a non consolidated CDO securitization for which it transferred a majority of its rated CDO securities. The retained interests had a carrying value of $705 million, of which $523 million is considered investment grade and are accounted for in accordance with EITF Issue No. 99-20. The Company sold all of its retained interests in the CDO securitization during 2005 generating a $36 million net pretax gain. As previously described, the 2003 adoption of FIN 46 required the consolidation of a CDO which contains debt issued to investors that is non-recourse to the Company and solely supported by a portfolio of high-yield bonds and loans. The Company manages the portfolio of high-yield bonds and loans for the benefit of CDO debt held by investors and retains an interest in the residual and rated debt tranches of the CDO structure. This CDO primarily included below investment grade corporate debt securities which had a fair value of $214 million and $249 million at December 31, 2005 and 2004, respectively. These corporate debt securities are included within the Available-for-Sale category but are not available for the general use of the Company as they are for the benefit of CDO debt holders. More information about this CDO is provided in Note 4. Mortgage Loans on Real Estate, Net The following is a summary of mortgage loans on real estate at December 31:

Mortgage loans are first mortgages on real estate. The Company holds the mortgage documents, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreements. At December 31, 2005 and 2004, the Company’s recorded investment in impaired mortgage loans on real estate was $14 million and $16 million, with related allowances for loan losses of $4 million and $5 million, respectively. During 2005 and 2004, the average recorded investment in impaired mortgage loans on real estate was $8 million and $17 million, respectively. For each of the years ended December 31, 2005, 2004 and 2003, the Company recognized interest income related to impaired mortgage loans on real estate of nil, $1 million and $1 million, respectively. The balances of and changes in the allowance for loan losses as of and for the years ended December 31, are as follows:

74

2005

2004

(in millions)

Mortgage loans on real estate $ 3,190

$ 3,298

Less: allowance for loan losses (44) (49)

Mortgage loans on real estate, net $ 3,146

$ 3,249

2005 2004

2003

(in millions)Balance, beginning of year

$ 49 $ 54

$ 47

Provision for loan losses

— 9

15

Foreclosures, write-offs and loan sales

(5) (14) (8)Balance, end of year $ 44

$ 49 $ 54

Concentrations of credit risk of mortgage loans on real estate by region at December 31 were:

Concentrations of credit risk of mortgage loans on real estate by property type at December 31 were:

Commitments to fund mortgages are made in the ordinary course of business. The estimated fair value of the mortgage commitments as of December 31, 2005 and 2004, was not material.

75

2005 2004

On-Balance

SheetFunding

Commitments

On-Balance Sheet

Funding Commitments

(in millions)

Mortgage loans by U.S. region:

North Central

$ 919

$ 6 $ 1,025

$ 16

Atlantic

920

22 939

27

Mountain 390 16 407 22

Pacific

422

27 385

14

South Central

351

24 318

9

New England

188

21 224 7

3,190

116 3,298

95

Less: allowance for loan losses

(44) — (49) —

Total

$ 3,146

$ 116 $ 3,249

$ 95

2005 2004

On-Balance Sheet

Funding Commitments

On-Balance

Sheet

Funding Commitments

(in millions)

Mortgage loans by U.S. property type:

Office buildings $ 1,170 $ 31 $ 1,214 $ 8

Shopping centers and retail

754

36 803

40

Apartments 504 10 544 25

Industrial buildings

492

19 418

16

Hotels and motels

99

6 116

—

Medical buildings

65

3 66

—

Retirement homes

5

— 10

—

Other

101

11 127

6

3,190 116

3,298 95Less: allowance for loan losses

(44) — (49) —

Total $ 3,146 $ 116 $ 3,249 $ 95

Trading Securities and Equity Method Investments in Hedge Funds Trading securities and equity method investments in hedge funds are primarily comprised of seed money investments in mutual funds and hedge funds managed by the Company, as well as publicly traded mutual funds and other hedge funds managed by third parties. There were $27 million, $50 million, and $71 million of net pretax gains for the years ended December 31, 2005, 2004 and 2003, respectively, related to trading securities and equity method investments in hedge funds held at each balance sheet date. 4. Variable Interest Entities The variable interest entities for which the Company was considered the primary beneficiary and which were consolidated beginning December 31, 2003, relate to structured investments, including a CDO and three SLTs, which were both managed and partially-owned by the Company. The consolidated CDO contains debt issued to investors that is non-recourse to the Company and solely supported by a portfolio of high-yield bonds and loans. The Company manages the portfolio of high-yield bonds and loans for the benefit of CDO debt held by investors and retains an interest in the residual and rated debt tranches of the CDO structure. The consolidated SLTs provide returns to investors primarily based on the performance of an underlying portfolio of high-yield loans which were managed by the Company. One of the SLTs originally consolidated was liquidated in 2004 and the remaining two SLTs were liquidated in 2005 resulting in no SLTs being consolidated as of December 31, 2005. The 2005 and 2004 results of operations (reported in net investment income) include income of $14 million, compared to non-cash charges of $28 million, respectively, related to the liquidation of the SLTs. The $28 million non-cash charge in 2004 was comprised of $24 million pretax, related to the complete liquidation of one SLT, and $4 million pretax, related to the then expected impact of liquidating the two remaining SLTs. Ongoing results of operations related to the consolidated CDO are non-cash items and primarily relate to interest earned on the portfolio of high-yield bonds, gains and losses on the sale of bonds and loans and interest paid on the CDO debt and, to a much lesser extent, interest income on loans and provision expense for loan loss reserves. Changes in value of the portfolio of high-yield bonds will be reflected within other comprehensive income (loss) unless a decline in value is determined to be other-than-temporary, in which case a charge will be recorded within the results of operations. These impacts will be dependent upon market factors during such time and will result in periodic net operating income or expense. The Company expects, in the aggregate, such operating income or expense related to the CDO, including the December 31, 2003 FIN 46 implementation non-cash charge of $88 million pretax ($57 million after-tax), to reverse themselves over time as the structure matures, because the debt issued to the investors in the consolidated CDO is non-recourse to the Company, and further reductions in the value of the related assets will be absorbed by the third party investors. The following table presents the consolidated assets, essentially all of which are restricted, and other balances related to these entities at December 31:

(a) Securities are classified as Available-for-Sale and include $8 million ($5 million after-tax) and $22 million ($14 million after-tax)

of unrealized appreciation as of December 31, 2005 and 2004, respectively. (b)

Represents the estimated fair market value of the total return swap derivatives related to the consolidated SLTs, which had a notional amount of $1.8 billion as of December 31, 2004.

The Company has other significant variable interests for which it is not the primary beneficiary and, therefore, does not consolidate. These interests are represented by carrying values of $37 million of CDO residual tranches managed by the Company, $178 million of affordable housing partnerships and approximately $115 million related to AMEX Assurance. For the CDOs managed by the Company, the Company has evaluated its variability in losses and returns considering its investment levels, which are less than 50% of the residual tranches, and the fee received from managing the structures and has determined that consolidation is not required. The Company manages approximately $6.0 billion of underlying collateral within the CDO structures it manages. The Company’s maximum exposure to loss as a result of its investment in these entities is represented by the carrying values. The Company is a limited partner in affordable housing partnerships in which the Company has a less than 50% interest in the partnerships and receives the benefits and accepts the risks consistent with other limited partners. In the limited cases in which the Company has a greater than 50% interest in affordable housing partnerships, it was determined that the relationship with the general partner is an agent relationship and the general partner was most closely related to the partnership as it is the key decision maker and controls the operations. The Company’s maximum exposure to loss as a result of its investment in these entities is represented by the carrying values.

76

2005 2004 (in millions)

Restricted cash

$ —

$ 543

Available-for-Sale securities(a)

214

249

Derivative financial instruments(b)

—

43

Loans and other assets

10

10

Total assets

$ 224

$ 845

Debt

$ 283

$ 317

Deferred tax liability

3

8

Other liabilities — 119Total liabilities

$ 286

$ 444

AMEX Assurance maintains the required licenses to offer insurance in various states and both IDS Property Casualty Insurance Company (IDS Property Casualty Co.), a subsidiary of the Company, and American Express utilize those licenses to offer their products in exchange for a ceding fee. AMEX Assurance entered into separate reinsurance agreements with IDS Property Casualty Co. and American Express to transfer insurance related risks to the respective companies. As described in Note 1, effective September 30, 2005, the Company entered into an agreement to sell its interest in the AMEX Assurance legal entity to American Express within two years after the Distribution for a fixed price. This transaction, combined with ceding of all travel and other card insurance business to American Express, created a variable interest entity for which the Company has a significant interest but is not the primary beneficiary based on the Company’s variability in losses and returns relative to other variable interest holders. Accordingly, the Company deconsolidated AMEX Assurance as of September 30, 2005. AMEX Assurance had $413 million of total assets as of December 31, 2004, and $215 million of total revenues and $103 million of net income for the year ended December 31, 2004. The maximum exposure to loss as a result of the Company’s interest in AMEX Assurance is represented by the agreed-upon fixed sales price, which approximates $115 million. 5. Deferred Acquisition Costs and Deferred Sales Inducement Costs The balances of and changes in DAC as of and for the years ended December 31, were:

(a) Primarily relates to a $66 million reduction in DAC amortization expense to reflect the lengthening of the amortization periods

for certain annuity and life insurance products impacted by the Company’s adoption of SOP 03-1 on January 1, 2004, partially offset by a $10 million increase in amortization expense due to a long-term care DAC valuation system conversion.

The balances of and changes in DSIC as of and for the years ended December 31, were:

6. Goodwill and Other Intangibles Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are instead subject to impairment tests. Management completed goodwill impairment tests during the years ended December 31, 2005, 2004 and 2003. Such tests did not indicate impairment.

77

2005 2004

2003

(in millions)

Balance, beginning of year $ 3,956 $ 3,743 $ 3,590

Impact of SOP 03-1

— 20

—

Capitalization of acquisition costs

693 621

627

DAC transfer related to AMEX Assurance ceding arrangement

(117) —

—

Amortization, excluding impact of changes in assumptions

(498) (517) (482)Amortization, impact of annual third quarter changes in DAC-related assumptions

67 24

2

Amortization, impact of other quarter changes in DAC-related assumptions(a)

— 56

—

Impact of change in net unrealized securities losses

81 9

6

Balance, end of year $ 4,182 $ 3,956 $ 3,743

2005 2004 2003

(in millions)

Balance, beginning of year

$ 303 $ 279

$ 231

Impact of SOP 03-1

— (3) —

Capitalization of sales inducements

94 71

72

Amortization (40) (34) (24)Impact of change in net unrealized securities losses (gains) 13

(10) —Balance, end of year

$ 370 $ 303 $ 279

Definite lived intangible assets as of December 31 consisted of:

The aggregate amortization expense for these intangible assets during the years ended December 31, 2005, 2004 and 2003 was $28 million, $29 million and $8 million, respectively. These assets have a weighted-average useful life of 12 years. Estimated amortization expense associated with intangible assets for the five years ending December 31, 2010 is as follows (in millions): 2006, $27; 2007, $26; 2008, $23; 2009, $21 and 2010, $19. As of December 31, 2005 and 2004, the Company did not have identifiable intangible assets with indefinite useful lives. The changes in the carrying amount of goodwill reported in the Company’s segments for 2005 and 2004 were as follows:

(a) Primarily reflects foreign currency translation adjustments related to the Company’s ownership of Threadneedle.

7. Discontinued Operations Effective August 1, 2005, the Company transferred its 50% ownership interest and the related assets and liabilities of its consolidated subsidiary, AEIDC, to American Express for $164 million through a non-cash dividend equal to the net book value excluding net unrealized investment losses of $26 million and accordingly no gain or loss was recorded. In connection with the AEIDC transfer, American Express made a cash capital contribution of $164 million to the Company. The assets, liabilities and operations of AEIDC are shown as discontinued operations in the accompanying Consolidated Financial Statements. The components of earnings from discontinued operations for the years ended December 31 are as follows:

78

2005

2004

Gross

Carrying Amount

AccumulatedAmortization

Net Carrying Amount

Gross Carrying Amount

AccumulatedAmortization

Net Carrying Amount

(in millions)

Customer Relationships $ 107

$ (16) $ 91 $ 118 $ (10) $ 108

Contracts 138

(33) 105

152 (20) 132

Other 56

(14) 42

60 (9) 51

Total $ 301

$ (63) $ 238

$ 330 $ (39) $ 291

Asset Accumulationand Income

Protection

Corporate and Other

Consolidated

(in millions)

Balance at January 1, 2004 $ 468 $ 70 $ 36 $ 574

Acquisitions

9

— —

9

Foreign currency translation(a)

50

— —

50

Balance at December 31, 2004 527 70 36 633

Acquisitions

5

— —

5

Foreign currency translation and other adjustments(a)

(61) — —

(61)Balance at December 31, 2005 $ 471 $ 70

$ 36 $ 577

2005 2004

2003

(in millions)Net investment income

$ 165 $ 222

$ 210

Expenses:

Interest credited to account values

104 84

60

Other expenses

36 77

82

Total expenses

140 161

142

Income before income tax provision

25 61

68

Income tax provision

9 21

24

Income from discontinued operations, net of tax

$ 16 $ 40

$ 44

The assets and liabilities associated with discontinued operations included in the Company’s Consolidated Balance Sheet as of December 31, 2004 consisted of the following:

8. Debt Debt at December 31 is as follows:

On November 23, 2005 the Company issued $1.5 billion of unsecured debt including $800 million of five-year notes which mature November 15, 2010 and $700 million of 10-year notes which mature November 15, 2015. The five-year notes carry a 5.35% fixed interest rate and the 10-year notes carry a 5.65% fixed interest rate, with effective interest rates of 4.8% and 5.2%, respectively, after considering the impact of accounting hedges. Interest payments are due semiannually on May 15 and November 15, and the Company may redeem the notes, in whole or in part, at any time at its option at the redemption price specified in the prospectus supplement filed with the SEC on November 22, 2005. The proceeds from the issuance were used to repay the approximately $1.4 billion balance outstanding on a bridge loan and to provide capital for other general corporate purposes. On September 30, 2005 the Company obtained an unsecured revolving credit facility for $750 million expiring in September 2010 from various third-party financial institutions. Under the terms of the credit agreement the Company may increase the amount of this facility to $1.0 billion and as of December 31, 2005 no borrowings were outstanding under this facility. The Company has agreed under this credit agreement not to pledge the shares of its principal subsidiaries and was in compliance with this covenant as of December 31, 2005. In addition, a letter of credit was issued against this facility for approximately $0.8 million in December 2005. The letter of credit

79

(in millions)

Assets:

Cash and cash equivalents $ 54Investments, at fair value

5,752

Receivables 43Other assets

24

Total assets

$ 5,873

Liabilities:

Investment certificate reserves

$ 5,501

Payable to American Express 118Other liabilities

12

Total liabilities

$ 5,631

2005 2004

OutstandingBalance

Year-End Stated Rate

on Debt

OutstandingBalance

Year-End Stated Rate

on Debt

(in millions, except percentages)

Senior notes due 2010 $ 800 5.4% $ — —%Senior notes due 2015

700

5.7 —

—

Payable to American Express:

Line of credit

—

— 1,068

2.2

Notes due 2007

—

— 250

3.9

Notes due 2017 — — 260 7.9

Medium-term notes due 2006

50

6.6 50

6.6

Fixed rate sale-leaseback financing due 2014 — — 18 4.9

Fixed and floating rate notes due 2011:

Floating senior notes

151

5.2 191

3.2

Fixed rate notes

79

8.6 73

8.6

Fixed rate senior notes

46

7.2 46

7.2

Fixed rate notes 7 13.3 7 13.3

Total $ 1,833 $ 1,963

is automatically extended annually on December 20 until the Company elects to cancel the agreement. The Company paid to American Express $1.5 billion in September 2005 to close out a $1.1 billion revolving credit facility, pay off a $253 million fixed rate loan and settle a $136 million net intercompany payable. The proceeds from the bridge loan mentioned above were used to repay these obligations. On August 5, 2005 the Company repaid $270 million of intercompany debt and accrued interest related to construction financing using cash received from the transfer of our 50% ownership interest in AEIDC to American Express, and proceeds from the sale of our retained interests in the CDO securitization trust. On February 8, 1994 the Company issued $50 million aggregate principal amount of 6.625% fixed-rate unsecured medium-term notes due February 15, 2006 in a private placement to institutional investors. The agreement to the medium-term notes does not impose financial covenants on the Company other than an agreement to maintain at all times a consolidated net worth of at least $400 million. Under this agreement, the Company has also agreed not to pledge the shares of our principal subsidiaries. The Company was in compliance with these covenants as of December 31, 2005. Events of default under the medium-term notes include a default in payment and certain defaults or acceleration of certain other financial indebtedness. The balance related to the fixed rate sale-leaseback financing due 2014 qualified for sale-leaseback reporting as of September 30, 2005 as all uncertainties related to the impact of the spin-off on occupancy were resolved. The sale-leaseback is a transaction that provided for up to six renewal terms of five years each. As a result of the December 31, 2003 adoption of FIN 46, the fixed and floating rate notes due 2011 balances are related to a consolidated CDO. This debt is non-recourse to the Company and will be extinguished from the cash flows of the investments held within the portfolio of the CDO. In addition, one of the Company’s broker-dealer subsidiaries has uncommitted lines of credit with a bank totaling $75 million, comprised of a $50 million secured bank credit line, collateralized by customers’ excess margin securities, and a $25 million unsecured line. The credit limits are periodically set by the bank and daily availability is not guaranteed. There were no borrowings outstanding under these lines of credit at December 31, 2005 and 2004. At December 31, 2005, aggregate annual maturities of debt were as follows:

9. Related Party Transactions The Company may engage in transactions in the ordinary course of business with significant shareholders, between the Company and its directors and officers or with other companies whose directors or officers may also serve as directors or officers for the Company or its subsidiaries. The Company carries out these transactions on customary terms. The transactions have not had a material impact on the Company’s consolidated results of operations or financial condition. The Company may have a number of ordinary course relationships with certain of its significant shareholders or their subsidiaries. Berkshire Hathaway Inc. (Berkshire) owned approximately 12% of the Company’s common stock at December 31, 2005. The Company or its subsidiaries may engage in reinsurance or other commercial transactions with Berkshire or its subsidiaries and may pay or receive fees in these transactions. The Company does not believe that these transactions are material to it or to Berkshire. Davis Selected Advisers, L.P. (Davis) owned approximately 8% of the Company’s common stock at December 31, 2005. In the ordinary course of business, the Company obtains investment advisory or sub-advisory services from Davis or its affiliates. The Company, or the mutual funds or other clients that we provide advisory services to, pay fees to Davis for its services. The Company’s executive officers and directors may from time to time take out loans from certain of its subsidiaries on the same terms that these subsidiaries offer to the general public. The Company’s executive officers and directors may also have transactions with the Company or its subsidiaries involving other goods and services, such as insurance and investment services. All indebtedness from these transactions is in the ordinary course of the Company’s business and is on the same terms, including interest rates, in effect for comparable transactions with the general public. Such indebtedness involves normal risks of collection and does not have features or terms that are unfavorable to the Company’s subsidiaries.

80

(in millions)

2006

$ 50

2007

—

2008 —2009

—

2010

800

Thereafter 983Total future maturities

$ 1,833

The Company has entered into various transactions with American Express in the normal course of business. The Company earned approximately $10 million, $11 million and $13 million during the nine months ended September 30, 2005 and the years ended December 31, 2004 and 2003, respectively, in revenues from American Express. The Company received approximately $26 million, $70 million and $82 million for the nine months ended September 30, 2005 and the years ended December 31, 2004 and 2003, respectively, of reimbursements from American Express for the Company’s participation in certain corporate initiatives. As a result of the Separation from American Express, the Company determined it appropriate to reflect certain reimbursements previously received from American Express for costs incurred related to certain American Express-related corporate initiatives, as capital contributions rather than reductions to expense amounts. These amounts were approximately $26 million, $41 million and $36 million for the nine months ended September 30, 2005 and the years ended December 31, 2004 and 2003, respectively. 10. Share-Based Compensation The Ameriprise Financial 2005 Incentive Compensation Plan (2005 ICP) was approved as of September 30, 2005. Under the 2005 ICP, stock and cash incentive awards may be granted to employees, directors and independent contractors including stock options, restricted stock awards, restricted stock units, performance shares and similar awards designed to comply with the applicable federal regulations and laws of jurisdiction. Under the 2005 ICP, the maximum number of shares of common stock that may be covered by the stock-based awards shall generally not exceed 37.9 million shares. At September 30, 2005, the Company also entered into an Employee Benefits Agreement (EBA) with American Express as part of the Distribution. In accordance with the EBA, all American Express stock options and restricted stock awards held by the Company’s employees and vesting on or before December 31, 2005 will remain American Express stock options or restricted stock awards. However, all American Express stock options and restricted stock awards held by the Company’s employees and not vesting on or before December 31, 2005, will be substituted by a stock option or restricted stock award issued under the 2005 ICP and subject to the terms and conditions after the Distribution that are substantially similar to the terms and conditions applicable to the original American Express stock options and restricted stock awards. Stock options granted under the 2005 ICP must have an exercise price not less than 100% of the current fair market value of a share of common stock on the grant date and a term of no more than ten years. Options substituted pursuant to the EBA on September 30, 2005 resulted from converting the number of American Express options and strike prices to a number of the Company’s stock options and strike prices in order to maintain the same intrinsic value to the employee. The conversion was based on the pre-distribution American Express closing price relative to the post-distribution Ameriprise Financial closing price on September 30, 2005. The stock options substituted maintain a vesting schedule which is the same as the American Express stock options. Generally, these stock options had an original vesting schedule of four years and vested ratably at 25 percent per year. A similar conversion process was completed to determine the number of the Company’s restricted stock awards granted on September 30, 2005 to replace American Express restricted stock awards. The restricted stock awards also maintain a vesting schedule which is the same as the American Express restricted stock awards and generally have an original vesting schedule of four years with 25 percent ratable vesting per year. A summary of the conversion of American Express stock options to the Company’s stock options under the EBA as of September 30, 2005 is presented below (shares in millions):

(a) Conversion factor for number of shares is the ratio of the American Express pre-distribution closing stock price ($57.44) to the

Company’s post-distribution stock price ($35.80). Conversion factor for the strike price is the ratio of the Company’s post-distribution stock price ($35.80) to the American Express pre-distribution closing stock price ($57.44).

A summary of the Company’s stock option plans as of December 31, 2005 and changes during the period then ended is presented below (shares and intrinsic value in millions):

The weighted average grant date fair value for options granted during 2005 was $9.61. The fair value of each option granted during 2005 was estimated on the date of grant using a Black-Scholes option-pricing model with the assumptions detailed

81

Shares

Weighted Average Exercise

PriceAmerican Express non-vested options outstanding

4.1

$ 46.45

Conversion factor(a)

1.6045

.6233

Ameriprise Financial non-vested options outstanding 6.6 $ 28.95

Shares

Weighted Average Exercise

Price

Weighted Average

Remaining Contractual

Term

Aggregate Intrinsic

Value

Outstanding at beginning of year — $ —

Converted American Express shares

6.6

28.95

Granted

4.9

35.05

Exercised

—

—

Forfeited

(.2) 29.16

Outstanding at end of year 11.3 $ 31.60 8.8 years $ 81.4

Options exercisable at end of year

—

— —

—

below. The weighted average grant date fair value of American Express options granted to the Company’s employees in 2005, 2004, and 2003 was $12.59, $13.27, and $10.08, respectively, using a Black-Scholes option-pricing model with the assumptions determined by American Express. The Company has compared the pre-distribution fair value of the American Express options as of September 30, 2005 to the post-distribution fair value of the converted Company’s options using the Company’s stock volatility and other applicable assumptions and determined there was no incremental value associated with the substituted awards. Therefore, the grant date fair values as determined while the Company was a part of American Express will be expensed over the remaining vesting periods for those converted options. The following weighted average assumptions were used for grants to the Company’s employees in 2005:

The dividend yield assumption assumes the Company’s dividend payout would continue with no changes. The expected volatility was based on historical and implied volatilities experienced by a peer group of companies due to the limited trading experience of the Company’s shares. The risk free interest rate is based on the yield of U.S. Treasury instruments of comparable life and the expected life of the options was based on experience while the Company was a part of American Express. A summary of the conversion of American Express non-vested shares to the Company’s non-vested shares under the EBA as of September 30, 2005 is presented below (shares in millions):

(a) Conversion factor for number of shares is the ratio of the American Express pre-distribution closing stock price ($57.44) to the

Company’s post-distribution stock price ($35.80). Conversion factor for the weighted average grant date fair value is the ratio of the Company’s post-distribution stock price ($35.80) to the American Express pre-distribution closing stock price ($57.44).

A summary of the Company’s restricted stock awards as of December 31, 2005 and changes during the period then ended is presented below (shares in millions):

The components of the Company’s pretax stock-based compensation expense, net of cancellations, for the years ended December 31, were:

The total income tax benefit recognized by the Company for stock options and restricted stock awards granted to the Company’s employees was $19 million, $13 million and $7 million for the years ended December 31, 2005, 2004, and 2003, respectively. As of December 31, 2005, there was $155 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2005 ICP. That cost is expected to be recognized over a weighted-average period of 2.8 years. 11. Shareholders’ Equity and Related Regulatory Requirements Restrictions on the transfer of funds exist under regulatory requirements applicable to certain of the Company’s subsidiaries. At December 31, 2005, the aggregate amount of unrestricted net assets was approximately $2.2 billion. Certain of the Company’s wholly-owned subsidiaries are subject to regulatory capital requirements. Actual capital and

82

Dividend yield 1.0%

Expected volatility 27%

Risk-free interest rate 4.3%

Expected life of stock option (years) 4.5

Shares

Weighted Average

Grant Date Fair Value

American Express non-vested awards outstanding 1.8 $ 47.48Conversion factor(a)

1.6045

.6233

Ameriprise Financial non-vested awards outstanding

2.8

$ 29.59

Shares

Weighted Average

Grant Date Fair Value

Non-vested shares at beginning of year

—

$ —

Converted American Express shares 2.8 29.59Granted

1.0

35.16

Vested

—

—

Forfeited

(.1) 30.40

Non-vested shares at end of year

3.7

$ 31.09

2005 2004

2003

(in millions)

Stock options

$ 22 $ 16

$ 7

Restricted stock awards

33 22 14

Total

$ 55 $ 38

$ 21

regulatory capital requirements for such subsidiaries as of December 31, 2005, unless otherwise noted below, were:

(1) Actual capital is determined on a statutory basis.

(2) Actual capital is determined on an adjusted U.S. GAAP basis.

(3) Actual capital is determined on a U.K. GAAP basis. Both actual capital and regulatory capital requirements are as of June 30,

2005, based on the most recent required U.K. filing. # Amounts are less than $1 million and are nil due to rounding. The National Association of Insurance Commissioners (NAIC) defines Risk-Based Capital (RBC) requirements for insurance companies. The RBC requirements are used by the NAIC and state insurance regulators to identify companies that merit regulatory actions designed to protect policyholders. In addition to these RBC requirements, IDS Property Casualty Co. is subject to the statutory surplus requirements of the State of Wisconsin. State insurance statutes also contain limitations as to the amount of dividends and distributions that insurers may make without providing prior notification to state regulators. For IDS Life Insurance Company (IDS Life), the limitation is based on the greater of the previous year’s statutory net gain from operations or 10% of the previous year-end statutory capital and surplus, as prescribed by the insurance laws of the State of Minnesota. Dividends, whose amount, together with that of other distributions made within the preceding 12 months, exceed this statutory limitation, are referred to as “extraordinary dividends,” require advance notice to the Minnesota Department of Commerce, IDS Life’s primary regulator, and are subject to their potential disapproval. Ameriprise Certificate Company (ACC) is registered as an investment company under the Investment Company Act of 1940 (the 1940 Act). ACC markets and sells investment certificates to clients. ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the SEC and the Minnesota Department of Commerce. The terms of the investment certificates issued by ACC and the provisions of the 1940 Act also require the maintenance by ACC of qualified assets. Under the provisions of its certificates and the 1940 Act, ACC was required to have qualified assets (as that term is defined in Section 28(b) of the 1940 Act) in the amount of $5.6 billion and $5.8 billion at December 31, 2005 and 2004, respectively. ACC had qualified assets of $6.0 billion and $6.2 billion at December 31, 2005 and 2004, respectively. Threadneedle’s required capital is based on the requirements specified by the United Kingdom’s regulator, the Financial Services Authority (FSA), under its Capital Adequacy Directive (CAD) for asset managers. The Company has four broker-dealer subsidiaries, American Enterprise Investment Services (AEIS), Ameriprise Financial Services, Inc. (AMPF), Securities America, Inc. (SAI) and IDS Life. The introducing broker-dealers, AMPF and SAI, and the clearing broker-dealer, AEIS, are subject to the net capital requirements of the NASD and the Uniform Net Capital requirements of the SEC under Rule 15c3-1 under the Securities Exchange Act of 1934. IDS Life’s capital requirements are as set forth above. Ameriprise Trust Company is subject to capital adequacy requirements under the laws of the State of Minnesota as enforced by the Minnesota Department of Commerce. During 2005, the Company paid dividends to American Express of $217 million, including non-cash dividends of $164 million. Additionally, in 2005 the Company paid cash dividends to other shareholders of $27 million. During 2004, the Company paid dividends to American Express of $1.3 billion, which included dividends from IDS Life of $930 million, some of which were considered extraordinary and therefore required prior notification to the Minnesota Department of Commerce, as described above. During 2003, the Company paid dividends to American Express of $334 million. Effective September 30, 2003, the Company received a $564 million capital contribution for the acquisition of Threadneedle (see Note 2), which was comprised of $536 million in cash and the non-cash reduction of liabilities due to American Express of $28 million. Government debt securities of $16 million and corporate debt securities of $17 million at December 31, 2005 and 2004, respectively, held by the Company’s life insurance subsidiaries were on deposit with various states as required by law and satisfied legal requirements.

83

Actual Capital

Regulatory CapitalRequirement

(in millions)

IDS Life Insurance Company(1) $ 3,270 $ 751

American Enterprise Life Insurance Company(1)

583 125

IDS Property Casualty Insurance Company(1)

448 104

Ameriprise Certificate Company(2)

333 304

AMEX Assurance Company(1)

115 23

IDS Life Insurance Company of New York(1) 246 40

Threadneedle Asset Management Holdings Ltd.(3)

141 125

American Enterprise Investment Services(2) 97 7

Ameriprise Financial Services, Inc.(2)

47 #

American Partners Life Insurance Company(1) 67 11

American Centurion Life Assurance Company(1)

62 13

Ameriprise Trust Company

47 36

Securities America, Inc.(2)

15 #

12. Variable Annuity Guarantees This note discusses variable annuity guarantees for which liabilities are established under SOP 03-1, specifically GMDB, GGU and GMIB. See Note 15 for more information about guarantees for which liabilities are established under SFAS 133, specifically GMWB and GMAB. The majority of the variable annuity contracts offered by the Company contain GMDB provisions. When market values of the customer’s accounts decline, the death benefit payable on a contract with a GMDB may exceed the contract accumulation value. The Company also offers GGU provisions on variable annuities with death benefit provisions and contracts containing GMIB provisions. If elected by the contract owner and after a stipulated waiting period from contract issuance, a GMIB guarantees a minimum lifetime annuity based on a specified rate of contract accumulation value growth and predetermined annuity purchase rates. The Company has established additional liabilities for these variable annuity death benefits and GMIB provisions. The variable annuity death benefit liability is determined each period by estimating the expected value of death benefits in excess of the projected contract accumulation value and recognizing the excess over the estimated meaningful life based on expected assessments (e.g., mortality and expense fees, contractual administrative charges and similar fees). Similarly, the GMIB liability is determined each period by estimating the expected value of annuitization benefits in excess of the projected contract accumulation value at the date of annuitization and recognizing the excess over the estimated meaningful life based on expected assessments. The majority of the GMDB contracts provide for six year reset contract values. In determining the additional liabilities for variable annuity death benefits and GMIB, the Company projects these benefits and contract assessments using actuarial models to simulate various equity market scenarios. Significant assumptions made in projecting future benefits and assessments relate to customer asset value growth rates, mortality, persistency and investment margins and are consistent with those used for DAC asset valuation for the same contracts. As with DAC, management will review, and where appropriate, adjust its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management will review and update these assumptions annually in the third quarter of each year. The following provides summary information related to variable annuity contracts for which the Company has established additional liabilities for death benefits and GMIB as of December 31:

* Represents current death benefit less total contract value for GMDB, amount of gross up for GGU and accumulated guaranteed minimum benefit base less total contract value for GMIB and assumes the actuarially remote scenario that all claims become payable on the same day.

84

Variable Annuity GMDB, GMIB and GGU by Benefit Type 2005

2004

(dollars in millions)

Contracts with GMDB providing for return of premium:

Total contract value $ 9,106.9 $ 3,241.6Contract value in separate accounts

$ 7,409.9

$ 1,727.4

Net amount at risk* $ 16.7 $ 110.9Weighted average attained age

60

62

Contracts with GMDB providing for six-year reset:

Total contract value

$ 24,608.2

$ 27,453.2

Contract value in separate accounts

$ 20,362.3

$ 22,787.1

Net amount at risk* $ 762.7 $ 1,267.2Weighted average attained age

61

60

Contracts with GMDB providing for one-year ratchet:Total contract value

$ 5,129.2

$ 4,039.4

Contract value in separate accounts

$ 4,210.8

$ 3,078.5

Net amount at risk*

$ 45.4

$ 55.6

Weighted average attained age

61

61

Contracts with other GMDB: Total contract value

$ 993.2

$ 494.7

Contract value in separate accounts $ 891.9 $ 397.7Net amount at risk*

$ 16.4

$ 11.7

Weighted average attained age

59

66

Contracts with GGU death benefit:

Total contract value

$ 619.8

$ 450.1

Contract value in separate accounts $ 535.8 $ 363.8Net amount at risk*

$ 34.8

$ 18.2

Weighted average attained age 61 64Contracts with GMIB:

Total contract value

$ 792.6

$ 603.3

Contract value in separate accounts

$ 711.8

$ 517.6

Net amount at risk*

$ 16.0

$ 11.9

Weighted average attained age 60 59

For the year ended December 31, 2005, additional liabilities and incurred benefits were:

The additional liabilities for guaranteed benefits established under SOP 03-1 are supported by general account assets. Changes in these liabilities are included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income. Contract values in separate accounts were invested in various equity, bond and other funds as directed by the contractholder. No gains or losses were recognized on assets transferred to separate accounts for the periods presented. 13. Fair Value of Financial Instruments The following table discloses fair value information for financial instruments. Certain items, such as life insurance obligations, employee benefit obligations, lease contracts, investments accounted for under the equity method, DAC and DSIC are not reflected in the table as they are not required to be disclosed in such table by SFAS No. 107, “Disclosure about Fair Value of Financial Instruments.” The fair values of financial instruments are estimates based upon market conditions and perceived risks at December 31, 2005 and 2004 and require management judgment to estimate such values. These figures may not be indicative of future fair values. Additionally, management believes the value of excluded assets and liabilities is significant. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented herein. The following table discloses carrying value and fair value information for financial instruments at December 31:

As of December 31, 2005 and 2004, the carrying and fair values of off-balance sheet financial instruments are not material. See Notes 2 and 3 for carrying and fair value information regarding Available-for-Sale securities, mortgage loans on real estate (net of allowance for loan losses), trading securities and other investments. The following methods were used to estimate the fair values of financial assets and financial liabilities: Financial Assets Assets for which carrying values approximate fair values include cash and cash equivalents, restricted and segregated cash and certain other assets. The carrying value approximates fair value due to the short-term nature of these instruments. Available-for-Sale securities are carried at fair value in the Consolidated Balance Sheets. Gains and losses are recognized in the results of operations upon disposition. In addition, impairment losses are recognized when management determines that a decline in value is other-than-temporary. The fair value of mortgage loans on real estate, except those with significant credit deterioration, are estimated

85

GMDB & GGU

GMIB

(in millions)

Liability balance at January 1

$ 29.9

$ 3.0

Reported claims 12.1 —Liability balance at December 31

16.5

3.5

Incurred claims (reported + change in liability)

(1.3) 0.5

2005 2004

Carrying Value

Fair Value

Carrying

Value

Fair Value

(in millions)

Financial Assets

Assets for which carrying values approximate fair values

$ 4,158

$ 4,158 $ 3,162

$ 3,162

Available-for-Sale securities 34,217 34,217 34,979 34,979

Mortgage loans on real estate, net

3,146

3,288 3,249

3,492

Trading securities

185

185 520

520

Other investments

259

268 274

283

Separate account assets

41,561

41,561 35,901

35,901

Derivative financial instruments

215

215 214 214

Financial Liabilities

Liabilities for which carrying values approximate fair values

$ 1,217

$ 1,217 $ 2,315

$ 2,315

Fixed annuity reserves

24,638

23,841 25,523

24,733

Investment certificate reserves

5,649

5,640 5,831

5,826

Debt for which it is:

Practicable to estimate fair value

1,833

1,761 317 236

Not practicable

—

— 560

—

Separate account liabilities 36,784 35,376 31,731 30,611

Derivative financial instruments

38

38 138

138

using discounted cash flow analysis, based on current interest rates for loans with similar terms to borrowers of similar credit quality. For loans with significant credit deterioration, fair values are based on estimates of future cash flows discounted at rates commensurate with the risk inherent in the revised cash flow projections or, for collateral dependent loans, on collateral value. Trading securities are carried at fair value in the Consolidated Balance Sheets with changes in fair value recognized in current period earnings. Other investments include the Company’s interest in syndicated loans, which are carried at amortized cost less allowance for losses in the Consolidated Balance Sheets. Fair values are based on quoted market prices. Separate account assets are carried at fair value in the Consolidated Balance Sheets. Derivative financial instruments are carried at fair value within other assets or other liabilities. The fair value of the Company’s derivative financial instruments are 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 data inputs. Financial Liabilities Liabilities for which carrying values approximate fair values primarily include customer deposits. The carrying value approximates fair value due to the short-term nature of these instruments. Fair values of fixed annuities in deferral status are estimated as the accumulated value less applicable surrender charges. For annuities in payout status, fair value is estimated using discounted cash flows based on current interest rates. The fair value of these reserves excludes life insurance-related elements of $1.5 billion as of both December 31, 2005 and 2004. If the fair value of the fixed annuities were realized, the surrender charges received would be offset by the write off of DAC and DSIC associated with fixed annuities of $496 million and $534 million as of December 31, 2005 and 2004, respectively. For variable rate investment certificates that reprice within a year, fair values approximate carrying values. For other investment certificates, fair value is estimated using discounted cash flows based on current interest rates. The valuations are reduced by the amount of applicable surrender charges. Long-term debt for which fair value has been estimated consists of debt related to the senior notes due 2010 and 2015 and the CDO which was consolidated upon adoption of FIN 46 (see Notes 4 and 8 for more information). The fair value for these instruments was estimated using quoted market prices. It was not practicable to estimate the fair value of the $510 million of long-term debt due to American Express at December 31, 2004. The notes had stated maturities and called for interest only payments on a semi-annual basis. Interest rates charged were based on borrowing rates established by American Express’ finance subsidiary. These notes were carried at the amount of principal that was outstanding and were repaid in full during 2005. As of December 31, 2005, due to the short-term nature of the $50 million medium-term notes, carrying value approximates fair value. It was not practicable to estimate the fair value of these notes at December 31, 2004. The notes have stated maturities and call for interest only payments at 6.625% through maturity in February 2006. Fair values of separate account liabilities, excluding life insurance-related elements of $4.8 billion and $4.2 billion in 2005 and 2004, respectively, are estimated as the accumulated value less applicable surrender charges. If the fair value of the separate account liabilities were realized, the surrender charges received would be offset by the write off of the DAC and DSIC associated with separate account liabilities of $2.0 billion and $1.7 billion as of December 31, 2005 and 2004, respectively. 14. Retirement Plans and Profit Sharing Arrangements On September 30, 2005, the Company entered into an Employee Benefits Agreement (the EBA) with American Express that allocates certain liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Distribution including the general treatment of outstanding American Express equity awards, certain outstanding annual and long-term incentive awards, existing deferred compensation obligations, and certain retirement and welfare benefit obligations. The EBA provides that as of the date of the Distribution, Ameriprise Financial generally will assume, retain and be liable for all wages, salaries, welfare, incentive compensation and employee-related obligations and liabilities for all of its current and former employees. The EBA also provides for the transfer of qualified plan assets and transfer of liabilities relating to the pre-distribution participation of Ameriprise Financial’s employees in American Express’ various retirement, welfare, and employee benefit plans from such plans to the applicable plans Ameriprise Financial has adopted for the benefit of its employees. Pension Plans The Company’s employees in the United States are eligible to participate in the Ameriprise Financial Retirement Plan (the Plan), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement Income Security Act of 1974, as amended (ERISA), under which the cost of retirement benefits for eligible employees in the United States is measured by length of service, compensation and other factors and is currently being funded through a trust. Funding of retirement costs for the Plan complies with the applicable minimum funding requirements specified by ERISA. The Plan is a cash balance plan by which the employees’ accrued benefits

86

are based on notional account balances, which are maintained for each individual. Each pay period these balances are credited with an amount equal to a percentage, determined by an employee’s age plus service, of compensation as defined by the Plan (which includes, but is not limited to, base pay, certain incentive pay and commissions, shift differential, overtime and transition pay). Employees’ balances are also credited daily with a fixed rate of interest that is updated each January 1 and is based on the average of the daily five-year U.S. Treasury Note yields for the previous October 1 through November 30, with a minimum crediting rate of 5%. Employees have the option to receive annuity payments or a lump sum payout at vested termination or retirement. In addition, the Company sponsors an unfunded non-qualified Supplemental Retirement Plan (the SRP) for certain highly compensated employees to replace the benefit that cannot be provided by the Plan due to Internal Revenue Service limits. The SRP generally parallels the Plan but offers different payment options. Most employees outside the United States are covered by local retirement plans, some of which are funded, while other employees receive payments at the time of retirement or termination under applicable labor laws or agreements. As described previously, the Company entered into an EBA with American Express as part of the Distribution and pursuant to the EBA, the liabilities and plan assets associated with the American Express Retirement Plan, Supplemental Retirement Plan and a retirement plan including employees from Threadneedle were split. The split resulted in an allocation of unrecognized net losses to the surviving plans administered separately by the Company and American Express in proportion to the projected benefit obligations of the surviving plans. As a result of this allocation, the Company recorded $32 million of additional pension liability with a corresponding adjustment to additional paid in capital within equity (net of taxes). The Company measures the obligations and related asset values for its pension and other postretirement benefit plans annually as of September 30. The components of the net periodic pension cost for all defined benefit plans are as follows:

The prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants. The following tables provide a reconciliation of the changes in the benefit obligation and fair value of assets for all plans: Reconciliation of Change in Benefit Obligation

Reconciliation of Change in Fair Value of Plan Assets

The Company complies with the minimum funding requirements in all countries. The following table reconciles the plans’ funded status (benefit obligation less fair value of plan assets) to the amounts recognized in the Consolidated Balance Sheets: Funded Status

The following table provides the amounts recognized in the Consolidated Balance Sheets as of December 31:

87

2005 2004

2003

(in millions)

Service cost

$ 34 $ 31

$ 18

Interest cost

17 15

13

Expected return on plan assets

(19) (19) (18)Amortization of prior service cost

(2) (2) (2)Recognized net actuarial loss 1

— —Settlement loss

1 1

2

Net periodic pension benefit cost

$ 32 $ 26

$ 13

2005

2004

(in millions)Benefit obligation, October 1 prior year

$ 276

$ 231

Service cost

34

31

Interest cost

17

15

Benefits paid

(6) (6)Actuarial loss

21

16

Settlements

(15) (12)Foreign currency rate changes

(2) 1

Benefit obligation at September 30,

$ 325

$ 276

2005

2004

(in millions)

Fair value of plan assets, October 1 prior year $ 224 $ 196Actual return on plan assets

33

36

Employer contributions

9

9

Benefits paid

(6) (6)Settlements

(15) (12)Foreign currency rate changes

(1) 1

Fair value of plan assets at September 30,

$ 244

$ 224

2005

2004

(in millions)Funded status at September 30,

$ (81) $ (52)Unrecognized net actuarial loss 25 49Unrecognized prior service cost

(7) (8)Fourth quarter contributions

8

—

Net amount recognized at December 31,

$ (55) $ (11)

2005

2004

(in millions)

Accrued benefit liability $ (67) $ (31)Prepaid benefit cost

9

18

Minimum pension liability adjustment

3

2

Net amount recognized at December 31,

$ (55) $ (11)

The accumulated benefit obligation for all retirement plans as of September 30, 2005 and 2004 was $272 million and $241 million, respectively. The accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations that exceed the fair value of plan assets as of September 30, 2005 and 2004 are as follows:

The projected benefit obligation and fair value of plan assets for the pension plans with projected benefit obligations that exceed the fair value of plan assets as of September 30, 2005 and 2004 are as follows:

The weighted average assumptions used to determine benefit obligations were:

(a)

Assumptions were derived from averages of all American Express plans and are not necessarily indicative of assumptions Ameriprise Financial would have used for a stand alone pension plan.

The weighted average assumptions used to determine net periodic benefit cost were:

(a)

Assumptions were derived from averages of all American Express plans and are not necessarily indicative of assumptions Ameriprise Financial would have used for a stand alone pension plan.

In developing the 2005 expected long-term rate of return assumption, management evaluated input from an external consulting firm, including their projection of asset class return expectations, and long-term inflation assumptions. The Company also considered the historical returns on the Plan’s assets. The asset allocation for the Company’s pension plans at September 30, 2005 and 2004, and the target allocation for 2006, by asset category, are below. Actual allocations will generally be within 5% of these targets.

(a)

Percentages were derived from averages of all American Express plans and are not necessarily indicative of percentage allocations Ameriprise Financial would have used for a stand alone pension plan.

The Company invests in an aggregate diversified portfolio to ensure that adverse or unexpected results from a security class will not have a detrimental impact on the entire portfolio. Diversification is interpreted to include diversification by asset type, performance and risk characteristics and number of investments. Asset classes and ranges considered appropriate for investment of the plans’ assets are determined by each plan’s investment committee. The asset classes typically include domestic and foreign equities, emerging market equities, domestic and foreign investment grade and high-yield bonds and domestic real estate. The Company’s retirement plans expect to make benefit payments to retirees as follows (in millions): 2006, $19; 2007, $19; 2008, $20; 2009, $21; 2010, $24 and 2011-2015, $144. In addition, the Company expects to contribute $8 million to its pension plans in 2006. Defined Contribution Plans In addition to the plans described previously, certain Company employees participate in the Ameriprise Financial 401(k) plan, under which purchases of Ameriprise Financial’s common shares are made on behalf of participating U.S. employees. Under the terms of the 401(k), employees have the option of investing in the Ameriprise Stock Fund through accumulated payroll deductions. In addition, at least quarterly Ameriprise Financial makes automatic cash contributions equal to 1% per annum of a qualifying employee’s base salary. Such contributions are invested automatically in the Ameriprise Stock Fund, which invests primarily in Ameriprise Financial’s common stock and can be redirected at any time into other 401(k) investment options. The Company’s defined contribution plan expense was $34 million, $31 million and $28 million in 2005, 2004 and 2003, respectively. Other Postretirement Benefits The Company sponsors defined postretirement benefit plans that provide health care and life insurance to retired U.S. employees. Net periodic postretirement benefit costs were $2 million, $2 million and $5 million in 2005, 2004 and 2003, respectively. Effective January 1, 2004, American Express

88

2005

2004

(in millions)

Accumulated benefit obligation

$ 47 $ 27Fair value of plan assets

$ 15

$ —

2005

2004

(in millions)Projected benefit obligation

$ 325

$ 262

Fair value of plan assets

$ 244

$ 210

2005

2004(a)

Discount rates

5.5% 5.6%Rates of increase in compensation levels

4.4% 4.1%

2005 2004(a)

2003(a)

Discount rates

5.7% 5.7% 6.2%Rates of increase in compensation levels

4.4% 4.0% 4.0%Expected long-term rates of return on assets

8.2% 7.9% 8.1%

Target

Allocation

Percentage of Plan Assets at

2006 2005 2004(a)

Equity securities 70% 71% 68%Debt securities

25

25

27

Other

5

4

5

Total

100

100

100

decided to no longer provide a subsidy for these benefits for employees who were not at least age 40 with at least five years of service as of that date. The following table provides a reconciliation of the changes in the defined postretirement benefit plan obligation: Reconciliation of Change in Benefit Obligation

The recognized liabilities for the Company’s defined postretirement benefit plans are unfunded and are as follows: Reconciliation of Accrued Benefit Cost and Total Amount Recognized

The weighted average assumptions used to determine benefit obligations were:

A one percentage-point change in the assumed healthcare cost trend rates would not have a material effect on the Company’s postretirement benefit obligation or net periodic postretirement benefit costs. The defined postretirement benefit plans expect to make benefit payments to retirees as follows: 2006, $3 million; 2007, $3 million; 2008, $3 million; 2009, $3 million; 2010, $3 million and 2011-2015, $13 million. Profit Sharing Arrangements On an annual basis, Threadneedle employees are eligible for two profit sharing arrangements: (i) a profit sharing plan for all employees based on individual performance criteria, and (ii) an equity participation plan (EPP) for certain key personnel. This employee profit sharing plan provides for profit sharing of 33% for 2004 and 30% for 2005 and thereafter based on an internally defined recurring pretax operating income measure for Threadneedle, which primarily includes pretax income related to investment management services and investment portfolio income excluding gains and losses on asset disposals, certain reorganization expenses, equity participation plan expenses and other non-recurring expenses. Compensation expense related to the employee profit sharing plan was $60 million and $50 million for the years ended December 31, 2005 and 2004, respectively. Compensation expense for the period from October 1, 2003 through December 31, 2003 did not relate to the employee profit sharing plan. The EPP is a cash award program for certain key personnel who are granted awards based on a formula tied to Threadneedle’s financial performance. The EPP provides for 50% vesting after three years, 50% vesting after four years and required cash out after 5 years. All awards are settled in cash, based on a value as determined by an annual independent valuation of Threadneedle’s fair market value. The value of the award is recognized as compensation expense evenly over the four year vesting period. However, each year’s EPP expense is adjusted to reflect Threadneedle’s current valuation. Increases in value of vested awards are expensed immediately. Increases in the value of unvested shares are amortized over the remaining vesting period. Compensation expense related to the EPP was $47 million and $26 million for the years ended December 31, 2005 and 2004, respectively. Compensation expense for the period from October 1, 2003 through December 31, 2003 related to EPP was immaterial. 15. Derivatives and Hedging Activities Derivative financial instruments enable the end users to manage exposure to credit and various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including commodity, equity, foreign exchange and interest rate indices or prices. The Company enters into various derivative financial instruments as part of its ongoing risk management activities. The Company does not engage in any derivative instrument trading activities. Credit risk associated with the Company’s derivatives is limited to the risk that a derivative counterparty will not perform in accordance with the terms of the contract. To mitigate such risk, counterparties are all required to be preapproved. Additionally, the Company may, from time to time, enter into master netting agreements wherever practical. As of December 31, 2005 and 2004, the total net fair values, excluding accruals, of derivative product assets were $215 million and $214 million, respectively, and derivative product liabilities were $38 million and $138 million, respectively. The total notional amount of derivatives as of December 31, 2005 was $3.4 billion. The following summarizes the Company’s use of derivative financial instruments.

89

2005 2004 (in millions)

Benefit obligation, October 1 prior year

$ 39

$ 46

Service cost

1

1

Interest cost

2

2

Benefits paid (11) (15)Participant contributions

6

5

Plan amendments

—

2

Actuarial gain

(5) (2)Benefit obligation at September 30, $ 32 $ 39

2005

2004

(in millions)

Funded status at September 30, $ (32) $ (39)Unrecognized net actuarial (gain) loss

(3) 3

Unrecognized prior service cost

(2) (2)Fourth quarter payments 2 1Net amount recognized at December 31,

$ (35) $ (37)

2005

2004

Discount rates

5.5% 5.75%Healthcare cost increase rate:

Following year

10.0% 10.5%Decreasing to the year 2016 5% 5%

Cash Flow Hedges The Company uses interest rate products, primarily swaps and swaptions, to manage funding costs related to the Company’s debt, investment certificate and fixed annuity businesses. The interest rate swaps are used to hedge the exposure to interest rates on the forecasted interest payments associated with debt issuances and on investment certificates which reset at shorter intervals than the average maturity of the investment portfolio. Additionally, the Company uses interest rate swaptions to hedge the risk of increasing interest rates on forecasted fixed annuity sales. During 2005, 2004 and 2003, the Company recognized the following impacts in other comprehensive income (loss) related to its cash flow hedging activity, net of tax:

The change in other comprehensive income (loss) related to discontinued operations was: ($1) million, ($5) million and ($2) million for the years ended December 31, 2005, 2004 and 2003, respectively, net of tax of $1 million, $3 million and $1 million, respectively. At December 31, 2005, the Company expects to reclassify $8 million of net pretax gains on derivative instruments from accumulated other comprehensive income (loss) to earnings during the next twelve months. In the event that cash flow hedge accounting is no longer applied as the derivative is de-designated as a hedge by the Company, the hedge is not considered to be highly effective, or the forecasted transaction being hedged is no longer likely to occur, the reclassification from accumulated other comprehensive income (loss) into earnings may be accelerated and all future market value fluctuations will be reflected in earnings. There were no cash flow hedges for which hedge accounting was terminated for these reasons during 2005, 2004 or 2003. No hedge relationships were discontinued during the years ended December 31, 2005, 2004 and 2003 due to forecasted transactions no longer expected to occur according to the original hedge strategy. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 30 years and relates to forecasted debt interest payments. For the year ended December 31, 2005, there were $2 million in losses on derivative transactions or portions thereof that were ineffective as hedges, excluded from the assessment of hedge effectiveness or reclassified into earnings as a result of the discontinuance of cash flow hedges. For the years ended December 31, 2004 and 2003 there were no derivative transactions or portions thereof that were ineffective as hedges. Hedges of Net Investment in Foreign Operations The Company designates foreign currency derivatives, primarily forward agreements, as hedges of net investments in certain foreign operations. For the year ended December 31, 2005, the net amount of losses related to the hedges included in foreign currency translation adjustments was $46 million, net of tax. The related amounts due to or from counterparties are included in other liabilities or other assets. Derivatives Not Designated as Hedges The Company has economic hedges that either do not qualify or are not designated for hedge accounting treatment. Certain annuity and investment certificate products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the amount of expenses incurred by the Company related to equity-indexed annuities and stock market certificate products will positively or negatively impact earnings. As a means of economically hedging its obligations under the provisions of these products, the Company writes and purchases index options and occasionally enters into futures contracts. Purchased options used in conjunction with these products are reported in other assets and written options are included in other liabilities. Additionally, certain annuity products contain GMWB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments. The GMWB provision is considered an embedded derivative and is valued each period by estimating the present value of future benefits less applicable fees charged for the rider using actuarial models, which simulate various economic scenarios. The Company economically hedges the exposure related to the GMWB provision using various equity futures and structured derivatives. As of December 31, 2005 and 2004, the fair value of the purchased derivatives used in conjunction with these products was $207 million and $144 million, respectively. As of December 31, 2005 and 2004, the fair value of the written options was $39 million and $74 million, respectively. Futures contracts are settled daily by exchanging cash with the counterparty and gains and losses are reported in earnings. The Company enters into financial futures and equity swaps to manage its exposure to price risk arising from seed money investments made in proprietary mutual funds for which the related gains and losses are recorded currently in earnings. The futures contracts generally mature within four months and the related gains and losses are reported currently in earnings. As of December 31, 2005 and 2004, the fair value of the financial futures and equity swaps was not significant. The Company uses interest rate caps, swaps and floors to protect the margin between the interest rates earned on investments and interest rates credited to holders of certain investment certificates and fixed annuities. Balances as of December 31, 2005 and 2004 were not material.

90

2005 2004

2003

(in millions)Holding gains (losses), net of tax of $20, $5, and $4, respectively

$ 36 $ (10) $ (8)

Reclassification for realized (gains) losses, net of tax of $1, $2, and $2, respectively

(1) 3

3

Net unrealized derivative gains (losses)

$ 35 $ (7) $ (5)

The Company consolidated certain derivatives as a result of consolidating certain SLT investments as described in Note 4. These derivatives were primarily total return swaps with value that was based on the interest and gains and losses related to a reference portfolio of high-yield loans. Embedded Derivatives As noted above, certain annuity and investment certificate products have returns tied to the performance of equity markets. The equity component of the annuity and investment certificate product obligations are considered embedded derivatives. Additionally, certain annuities contain GMWB and GMAB provisions, which are also considered embedded derivatives. The fair value of the embedded derivatives is included as part of the stock market investment certificate reserves or equity indexed annuities. The change in fair values of the embedded derivatives are reflected in the interest credited to account values as it relates to annuity and investment certificate products with returns tied to the performance of equity markets. The changes in fair values of the GMWB and GMAB embedded derivatives are reflected in benefits, claims, losses and settlement expenses. The total fair value of these instruments, excluding the host contract, was $84 million and $79 million at December 31, 2005 and 2004, respectively. 16. Other Expenses Other expenses consisted of the following:

(1) Includes expenses related to regulatory and legal matters. 17. Income Taxes Provisions (benefits) for income taxes were:

The principal reasons that the aggregate income tax provision is different from that computed by using the U.S. statutory rate of 35% are as follows:

The Company’s effective income tax rate decreased to 25.1% in 2005 from 25.8% in 2004 primarily due to the impact of relatively lower levels of pretax income compared to tax-advantaged items in 2005. Additionally, taxes applicable to prior years represent a $20 million tax expense in 2005 and a $20 million tax benefit in 2004. Accumulated earnings of certain foreign subsidiaries, which totaled $107 million at December 31, 2005, are intended to be permanently reinvested outside the United States. Accordingly, federal taxes, which would have aggregated $7 million, have not been provided on those earnings. Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for U.S. GAAP reporting versus income tax return purposes. The significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2005 and 2004 are reflected in the following table:

91

2005 2004

2003

(in millions)

Professional and advertising fees(1)

$ 507

$ 433

$ 336

Information technology, communication and facilities

424

447

342

Other

171

162

122

Total $ 1,102 $ 1,042 $ 800

2005 2004

2003

(in millions)

Federal income tax:

Current

$ 121

$ 286

$ 138

Deferred

36

(26) 12

Total federal income tax

157

260

150

State, local and other income taxes—current

32

35

30

Foreign taxes—deferred

(2) (8) (1)Total

$ 187

$ 287

$ 179

2005

2004

2003

Tax at U.S. statutory rate

35.0% 35.0% 35.0%Changes in taxes resulting from:

Dividend exclusion (4.7) (2.3) (5.9)Tax-exempt interest income (1.4) (0.8) (0.9)Tax credits

(8.3) (6.3) (9.4)State taxes, net of federal benefit

1.4

0.8

2.0

Taxes applicable to prior years

2.7

(1.8) —

Other, net

0.4

1.2 (0.3)Income tax provision

25.1% 25.8% 20.5%

2005

2004

(in millions)

Deferred income tax assets: Liabilities for future policy benefits

$ 1,105

$ 1,035

Investment impairments and write downs 98 182Deferred compensation

148

71

Unearned revenues

29

37

Net unrealized losses on Available-for-Sale securities

69

—

Accrued liabilities

123

146

Investment related

46 69Other

189

159

Total deferred income tax assets

$ 1,807

$ 1,699

A portion of IDS Life’s income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a “policyholders’ surplus account.” At December 31, 2005, IDS Life had a policyholders’ surplus account balance of $1.1 million. The American Jobs Creation Act of 2004, which was enacted on October 22, 2004, provides a two-year suspension of the tax on policyholders’ surplus account distributions. IDS Life has made distributions of $19 million, which will not be subject to tax under the two-year suspension. Previously, the policyholders’ surplus account was only taxable if dividends to shareholders exceeded the shareholders’ surplus account and/or IDS Life is liquidated. Deferred income taxes of $0.4 million have not been established as distributions of the remaining policyholders’ surplus account are contemplated in 2006. The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Included in deferred tax assets is a significant deferred tax asset relating to capital losses realized for tax return purposes and capital losses that have been recognized for financial statement purposes but not yet for tax return purposes. Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes. The Company has $231 million in capital loss carryforwards that expire December 31, 2009. The deferred tax benefit of these capital loss carryforwards is reflected in the investment related deferred tax assets, net of other related items. Based on analysis of the Company’s tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will generate sufficient taxable income to enable the Company to utilize all of its deferred tax assets. Accordingly, no valuation allowance for deferred tax assets has been established as of December 31, 2005 and 2004. As a result of the Company’s separation from American Express, the Company will be required to file a short period income tax return through September 30, 2005 which will be included as part of the American Express consolidated income tax return for the year ended December 31, 2005. Additionally, its life insurance subsidiaries will not be able to file a consolidated U.S. federal income tax return with the other members of the Company’s affiliated group for five tax years following the Distribution. Therefore, the Company will also be required to file two separate short period consolidated income tax returns for the period October 1, 2005 through December 31, 2005, one including the Company’s life insurance subsidiaries and one for all of the non-life insurance companies required to be included in a consolidated income tax return. On September 30, 2005, the Company entered into a Tax Allocation Agreement (the Tax Allocation Agreement) with American Express. The Tax Allocation Agreement governs the allocation of consolidated U.S. federal and applicable combined or unitary state and local income tax liabilities between American Express and the Company for tax periods prior to September 30, 2005, and in addition provides for certain restrictions and indemnities in connection with the tax treatment of the Distribution and addresses other tax-related matters. The items comprising comprehensive income in the Consolidated Statements of Shareholders’ Equity are presented net of the following income tax (benefit) provision amounts:

Tax benefits related to other comprehensive income of discontinued operations were $8 million, $12 million and $12 million for the years ended December 31, 2005, 2004 and 2003, respectively. 18. Commitments and Contingencies The Company is committed to pay aggregate minimum rentals under noncancelable operating leases for office facilities and equipment in future years as follows (millions): 2006, $80; 2007, $71; 2008, $58; 2009, $50; 2010, $46 and an aggregate of $341 thereafter. The operating lease expense was approximately $95 million, approximately $90 million and approximately $82 million for the years ended December 31, 2005, 2004 and 2003, respectively. Mortgage loan funding commitments were $116 million and $95 million at December 31, 2005 and 2004, respectively. The Company’s life and annuity products all have minimum interest rate guarantees in their fixed accounts. As of December 31, 2005, these guarantees range from 1.5% to 5%. To the extent the yield on the Company’s invested asset portfolio declines below its target spread plus the minimum guarantee, the Company’s profitability would be negatively affected.

92

2005 2004 (in millions)

Deferred income tax liabilities:

Deferred acquisition costs

$ 1,259

$ 1,283

Net unrealized gains on Available-for-Sale securities

—

222

Depreciation expense 138 129Intangible assets

79

116

Other

249

132

Total deferred income tax liabilities

1,725

1,882

Net deferred income tax assets (liabilities)

$ 82

$ (183)

2005 2004

2003

(in millions)

Net unrealized securities losses

$ (291) $ (33) $ (61)Net unrealized derivative gains (losses)

19

(3) (2)Foreign currency translation losses

(5) (10) (5)Minimum pension liability (losses) gains

(1) —

2

Net income tax benefit

$ (278) $ (46) $ (66)

The Company, through its Threadneedle subsidiary, has approximately $2 million in commitments to provide additional capital in the form of equity interests on non-interest bearing subordinated loans to two of Threadneedle’s equity investments. The addtional capital can be called at the discretion of the investees. The Company and its subsidiaries are involved in the normal course of business in legal, regulatory and arbitration proceedings, including class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which the Company operates. The Company can also be subject to litigation arising out of its general business activities, such as its investments, contracts, leases and employment relationships. These proceedings are subject to uncertainties and, as such, the Company is unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the Company’s consolidated results of operations, financial condition or credit ratings. In addition, from time to time the Company receives requests for information from, and has been subject to examination or investigation by, the SEC, NASD and various other regulatory authorities concerning its business activities and practices, including: sales and product or service features of, or disclosures pertaining to, financial plans, its mutual funds, annuities, insurance products and brokerage services; non–cash compensation paid to its financial advisors; supervision of its financial advisors; operational and data privacy issues; and sales of, or brokerage or revenue sharing practices relating to, other companies’ REIT shares, mutual fund shares or other investment products. The number of reviews and investigations has increased in recent years with regard to many firms in the financial services industry, including the Company. The Company has cooperated and will continue to cooperate with the applicable regulators regarding their inquiries. In November 2002, a suit, now captioned Haritos et al. v. American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The suit was filed by plaintiffs who purport to represent a class of all persons that have purchased financial plans from the Company’s advisors from November 1997 through July 2004. Plaintiffs allege that the sale of the plans violates the Investment Advisers Act of 1940. The suit seeks an unspecified amount of damages, rescission of the investment advisor plans and restitution of monies paid for such plans. On January 3, 2006, the Court granted the parties joint stipulation to stay the action pending the approval of the proposed settlement in the putative class action, “In re American Express Financial Advisors Securities Litigation,” which is described below. In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express mutual funds and they purport to bring the action derivatively on behalf of those funds under the 1940 Act. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota. In response to the Company’s motion to dismiss the complaint, the Court dismissed one of plaintiffs’ four claims and granted plaintiffs limited discovery. In October 2005, the Company reached a comprehensive settlement regarding the consolidated securities class action lawsuit filed against the Company, its former parent and affiliates in October 2004 called “In re American Express Financial Advisors Securities Litigation.” The settlement, under which the Company denies any liability, includes a one-time payment of $100 million to the class members. The class members include individuals who purchased mutual funds in the Company’s Preferred Provider Program, Select Group Program, or any similar revenue sharing program, purchased mutual funds sold under the American Express® or AXP® brand; or purchased for a fee financial plans or advice from the Company between March 10, 1999 and through the date on which a formal stipulation of settlement is signed. The settlement will be submitted to the Court for approval. Two lawsuits making similar allegations (based solely on state causes of actions) are pending in the United States District Court for the Southern District of New York: “Beer v. American Express Company and American Express Financial Advisors” and “You v. American Express Company and American Express Financial Advisors.” Plaintiffs have moved to remand the cases to state court. The Court’s decision on the remand motion is pending. As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. The Company has continued to receive requests for information from, and has been subject to examination by, the SEC, NASD and various other regulatory agencies concerning its business activities and practices, including: sales and product or service features of, or disclosures pertaining to, financial plans, its mutual funds, annuities, insurance products and brokerage services; non–cash compensation paid to its financial advisors; supervision of its financial advisors; operational issues relating to the RiverSource mutual funds; and sales of, or brokerage or revenue sharing practices relating to, other companies’ REIT shares, mutual fund shares or other investment products.

93

Other open matters relate, among other things, to the portability (or network transferability) of the Company’s RiverSource mutual funds, the suitability of product recommendations made to retail financial planning clients, licensing matters related to sales by its financial advisors to out-of-state clients and net capital and reserve calculations. The Company has also received a number of regulatory inquiries in connection with its notification of the theft of a laptop computer containing certain client and financial advisor information. These open matters relate to the activities of various Ameriprise legal entities, including Ameriprise Financial Services, Inc. (formerly known as “American Express Financial Advisors Inc.” or AEFA), Ameriprise Enterprise Investment Services, Inc. (its clearing-broker subsidiary) and SAI. The Company has cooperated and will continue to cooperate with the regulators regarding their inquiries. In 2005 the Company resolved by settlement a number of pending matters that pre-dated the Distribution. The majority of these settlements involved AEFA. On December 1, 2005, the Company announced settlement of two additional SEC enforcement matters relating to periods before the Distribution. The first matter involved allegations that AEFA failed to adequately disclose the details of various revenue sharing programs the Company maintained in connection with sales of certain non-proprietary mutual funds and 529 college savings plans. The SEC announcement also covers a second enforcement action alleging that AEFC permitted improper market timing in the Company’s own mutual funds (including market timing by a limited number of the Company’s employees through their own personal 401(k) retirement accounts) as well as in certain of the Company’s annuity products, notwithstanding prohibitions against this practice in the product disclosures. Under the terms of the settlements the Company agreed to a censure and to pay an aggregate of $45 million ($30 million allocated to revenue sharing and $15 million to market timing) in the form of civil penalties and disgorgement. The Company is required to develop plans of distribution with the assistance of an independent distribution consultant. Regarding revenue sharing, the plan will address how such funds will be distributed to benefit customers that purchased the particular mutual funds between January 1, 2001 through August 31, 2004. A second plan will address how funds will be distributed to benefit investors in the Company’s mutual funds for market-timing activity that took place between January 1, 2002 and September 30, 2003. The distribution plans will be subject to final approval by the SEC. As part of the settlements, the Company also agreed to certain undertakings regarding disclosure, compliance and training. Additionally on December 1, 2005, the Company announced that it had reached agreement with the NASD to settle alleged violations of NASD conduct rules prohibiting directed brokerage in connection with its revenue sharing programs with certain preferred non-proprietary mutual funds. Under the settlement the Company received a censure and paid a fine of $12.3 million. During the course of 2005 the Company reached settlements with four states in regulatory matters regarding supervisory practices, financial advisor misappropriations of customer funds, 529 plan and Class B mutual fund sales practices, incentives for AEFA’s branded financial advisors to sell both its proprietary mutual funds and other companies’ mutual funds, the sale of proprietary mutual fund products to financial planning clients, and the matters raised in the SEC and NASD enforcement actions described above. As part of these state settlements the Company paid approximately $13.4 million total in fines and penalties and also agreed, in certain instances, to provide restitution and to independent consultant review of certain of its practices and policies, including certain of its sales and advice supervisory practices. One such review was delivered in January 2006, and the Company has commenced implementation of the recommended enhancements. The Company will continue to meet its obligations under these settlements throughout 2006. There are pending investigations and demands made by regulators of other states regarding matters substantially similar to those which have settled, as well as the open matters described above, and there can be no assurance that any one or more of these investigations, demands and matters will settle or otherwise conclude without a material adverse effect on the Company’s consolidated results of operations, financial condition or credit ratings. The IRS routinely examines the Company’s federal income tax returns and recently completed its audit of the Company for the 1993 through 1996 tax years. The IRS is currently conducting an audit of the Company for the 1997 through 2002 tax years. Management does not believe there will be a material adverse effect on the Company’s consolidated results of operations and financial condition as a result of these audits. 19. Earnings per Common Share Basic and diluted earnings per share are calculated by dividing historical earnings for the years ended December 31, 2005, 2004 and 2003 by the weighted average shares outstanding for all periods presented as retroactively adjusted for the stock split. For the years ended December 31, 2004 and 2003 the Company had no dilutive shares outstanding

94

as all share-based compensation was granted on American Express common shares and, as a result, there were no share-based awards outstanding until the September 30, 2005 conversion described in Note 10. The computations of basic and diluted EPS for the years ended December 31, 2005, 2004 and 2003 are as follows:

20. Segment Information The Company has two main operating segments: (i) Asset Accumulation and Income and (ii) Protection. These two operating segments are aligned with the financial solutions the Company offers to address its clients’ needs. The Asset Accumulation and Income business offers mutual funds, annuities and other asset accumulation and income management products and services to retail clients through its financial advisor network. The Company also offers its annuity products through outside channels, such as banks and broker-dealer networks. This operating segment also serves institutional clients in the separately managed account, sub-advisory and 401(k) markets, among others. The Protection segment offers various life insurance, disability income and long-term care, and brokered insurance products through the Company’s financial advisor network. The Company also offers auto and home insurance products on a direct basis to retail clients principally through its strategic marketing alliances. The Company also has a Corporate and Other segment, which consists of income derived from corporate level assets and unallocated corporate expenses, primarily separation costs, as well as the results of its subsidiary, Securities America Financial Corporation, which operates its own independent separately branded distribution platform. The Corporate and Other segment also includes the assets representing capital that have not been allocated to any other segment. Financial results of the Corporate and Other segment primarily reflect the Company’s financing activities (including interest expense), income on capital not allocated to other segments, income tax items and certain income, expenses and other after-tax adjustments not allocated to the segments based on the nature of such items. The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany revenues, which are eliminated in consolidation. The Company allocates capital to each segment based upon an internal capital allocation method that allows the Company to more efficiently manage its capital. The Company evaluates the performance of each segment based on income before income tax provision, discontinued operations and accounting change. The Company allocates certain non-recurring items, such as separation costs, to the Corporate and Other segment. The following is a summary of assets by operating segment as of December 31:

95

2005 2004

2003

(in millions, except per share amounts) Numerator:

Income before discontinued operations and accounting change

$ 558

$ 825

$ 694

Discontinued operations, net of tax

16

40

44

Cumulative effect of accounting change, net of tax

—

(71) (13)Net income

$ 574

$ 794

$ 725

Denominator:

Basic: Weighted-average shares outstanding during the period 247.1 246.2 246.2Add: dilutive effect of stock options

.1

—

—

Diluted: Weighted-average shares outstanding during the period

247.2

246.2

246.2

Basic and Diluted EPS:

Income before discontinued operations and accounting change

$ 2.26

$ 3.35

$ 2.82

Discontinued operations, net of tax 0.06 0.16 0.18Cumulative effect of accounting change, net of tax — (0.29) (0.05)Net income

$ 2.32 $ 3.22 $ 2.95

2005

2004

(in millions)

Asset Accumulation and Income

$ 74,032

$ 69,516

Protection 16,587 13,465Corporate and Other

2,502

4,259

Assets of discontinued operations

—

5,873

Total assets

$ 93,121

$ 93,113

The following is a summary of segment operating results for the years ended December 31:

(a) Represents the amortization expense for deferred acquisition costs, deferred sales inducement costs and intangible assets.

96

Asset

Accumulation and Income

Protection

Corporate and Other

Eliminations

Consolidated

(in millions)

2005—Segment Data

Revenue from external customers $ 5,015

$ 1,924

$ 545

$ —

$ 7,484

Intersegment revenue 9

22

1

(32) —

Total revenues 5,024

1,946

546

(32) 7,484

Amortization expense(a) 391

107

—

—

498

All other expenses 3,986

1,419

868

(32) 6,241

Total expenses 4,377

1,526

868

(32) 6,739

Income (loss) before income tax provision and discontinued operations

$ 647

$ 420

$ (322) $ —

745

Income tax provision

187

Income before discontinued operations

558

Discontinued operations, net of tax

16

Net income

$ 574

2004—Segment Data

Revenue from external customers $ 4,675

$ 1,923

$ 429

$ —

$ 7,027

Intersegment revenue 1

—

2

(3) —

Total revenues 4,676 1,923 431 (3) 7,027

Amortization expense(a) 368

132

—

—

500

All other expenses 3,617

1,303

498

(3) 5,415

Total expenses 3,985

1,435

498

(3) 5,915

Income (loss) before income tax provision, discontinued operations and accounting change

$ 691

$ 488

$ (67) $ —

1,112

Income tax provision

287

Income before discontinued operations and accounting change

825

Discontinued operations, net of tax

40

Cumulative effect of accounting change, net of tax

(71)Net income

$ 794

(a) Represents the amortization expense for deferred acquisition costs, deferred sales inducement costs and intangible assets. 21. Quarterly Financial Data (Unaudited)

97

Asset

Accumulation and Income

Protection

Corporate and Other

Eliminations

Consolidated

(in millions)

2003—Segment Data

Revenue from external customers $ 4,004

$ 1,733

$ 418

$ —

$ 6,155

Intersegment revenue 1

—

1

(2) —

Total revenues 4,005

1,733

419

(2) 6,155

Amortization expense(a) 244

268

—

—

512

All other expenses 3,132

1,194

446

(2) 4,770

Total expenses 3,376

1,462

446

(2) 5,282

Income (loss) before income tax provision, discontinued operations and accounting change

$ 629

$ 271

$ (27) $ —

873

Income tax provision

179

Income before discontinued operations and accounting change

694

Discontinued operations, net of tax 44

Cumulative effect of accounting change, net of tax

(13)

Net income $ 725

2005

2004

12/31(a)(f)

9/30(b)(f)

6/30(b)

3/31(b)

12/31(b)

9/30(b)

6/30(b)

3/31(b)(c)

(in millions, except per share data) Revenues

$ 1,869

$ 1,873

$ 1,895

$ 1,847

$ 1,843

$ 1,712

$ 1,740

$ 1,732

Separation costs(d)

125

92

56

20

—

—

—

—

Income before income tax provision, discontinued operations and accounting change

127

181

191

246

260

261

266

325

Net income

$ 111

$ 125

$ 155

$ 183$ 235

$ 199

$ 186$ 174Earnings per common share—Basic and Diluted:

Income before discontinued operations and accounting change(e)

$ 0.44

$ 0.50

$ 0.61

$ 0.71

$ 0.92

$ 0.77

$ 0.71

$ 0.95

Discontinued operations, net of tax(e)

—

—

0.02

0.03

0.03

0.04

0.04

0.05

Cumulative effect of accounting change, net of tax(e)

—

—

—

—

—

—

—

(0.29)Net income(e)

$ 0.44

$ 0.50

$ 0.63

$ 0.74

$ 0.95

$ 0.81

$ 0.75

$ 0.71

Weighted Average Common Shares Outstanding for Earnings per Common Share (as adjusted for September 2005 stock split):

Basic

249.9 246.2 246.2 246.2 246.2

246.2

246.2 246.2Diluted

250.3

246.2

246.2

246.2

246.2

246.2

246.2

246.2

Cash dividends declared per common share

$ 0.11

—

—

—

—

—

—

—

Common share price:

High

$ 43.90

—

—

—

—

—

—

—

Low

$ 32.39

—

—

—

—

—

—

—

98

(a) The fourth quarter of 2005 reflects the costs of certain corporate and other support services provided by American Express to the Company after the Distribution pursuant to a transition services agreement. Other than technology-related expenses, the Company’s management believes that the aggregate costs paid to American Express under this transition services agreement for continuing services and the costs for establishing or procuring these services that were historically provided by American Express were not significantly different from the amounts reflected in the quarterly periods prior to the Distribution.

(b) During the quarterly periods through September 30, 2005, the Company was operated as a wholly-owned subsidiary of American Express. In connection with the preparation of the consolidated financial information for those periods, the Company made certain allocations of expenses that its management believed to be a reasonable reflection of costs the Company would have otherwise incurred as a stand-alone entity but that were paid by American Express.

(c) Effective January 1, 2004, the Company adopted SOP 03-1, which resulted in a cumulative effect of accounting change that reduced first quarter 2004 results by $71 million ($109 million pretax).

(d) The Company began to incur separation costs beginning with the quarterly period ended March 31, 2005, when the American Express Board of Directors announced its intention to pursue the Separation. The Company continued to incur separation costs in subsequent quarterly periods. The separation costs in the quarterly periods ended September 30, 2005 and December 31, 2005 reflect the completion of the Distribution and the costs incurred by the Company to establish itself as an independent entity.

(e) Quarterly EPS amounts are not additive due to dilutive shares.(f) The quarterly period ended September 30, 2005 reflects the ceding of the AMEX Assurance travel insurance and card related

business effective July 1, 2005. AMEX Assurance was deconsolidated effective September 30, 2005.

Consolidated Five-Year Summary of Selected Financial Data The following table sets forth selected consolidated financial information from our audited consolidated financial statements as of December 31, 2005, 2004 and 2003 and for the four-year period ended December 31, 2005, and unaudited consolidated financial statements as of December 31, 2002 and 2001 and for the year ended December 31, 2001. Our consolidated financial statements include various adjustments to amounts in our consolidated financial statements as a subsidiary of American Express Company. The selected financial data presented below should be read in conjunction with our consolidated financial statements and the accompanying notes included elsewhere in this report and “Management’s Discussion and Analysis.” Our consolidated financial information may not be indicative of our future performance and does not necessarily reflect what our consolidated results of operations and financial condition would have been had we operated as a separate, stand-alone entity during the periods presented, including many changes that have or will occur in the operations and capitalization of our company as a result of the Separation and Distribution from American Express Company.

99

Years Ended December 31, 2005(a)(e)

2004(b)(e)

2003(c)(e) 2002(e)

2001(d)(f)

(in millions)

Income Statement Data:

Revenues $ 7,484

$ 7,027

$ 6,155

$ 5,575

$ 4,744

Expenses 6,739

5,915

5,282

4,714

4,709

Income before discontinued operations and accounting change

558

825

694

632

91

Net income 574 794 725 674 87

Cash Dividends:

American Express Company 53

1,325

334

377

170

Shareholders 27

—

—

—

—

As of December 31,

2005(e)

2004(b)(e)

2003(c)(e) 2002(f)

2001(d)(f)

(in millions)

Balance Sheet Data:

Investments $ 39,100

$ 40,232

$ 38,534

$ 34,683

$ 30,555

Separate account assets 41,561 35,901 30,809 21,981 27,334

Total assets(g) 93,121

93,113

85,384

74,448

71,718

Future policy benefits and claims 32,731

33,253

32,235

28,959

24,810

Investment certificate reserves 5,649

5,831

4,784

4,493

4,162

Payable to American Express 52

1,751

1,447

1,261

732

Debt 1,833 385 445 120 120

Separate account liabilities 41,561

35,901

30,809

21,981

27,334

Total liabilities(h) 85,434 86,411 78,096 67,998 66,098

Shareholders’ equity 7,687

6,702

7,288

6,450

5,620

(a) During 2005, we recorded significant non-recurring separation costs as a result of the separation from American Express. During the year ended December 31, 2005, $293 million ($191 million after-tax) of such costs were incurred. Separation costs generally consisted of expenses related to advisor and employee retention program costs, costs associated with establishing the Ameriprise Financial brand and costs to separate and reestablish our technology platforms. See Note 1 to our consolidated financial statements.

(b) Effective January 1, 2004, we adopted SOP 03-1, which resulted in a cumulative effect of accounting change that reduced first quarter 2004 results by $71 million ($109 million pretax). See Note 2 to our consolidated financial statements.

(c) The consolidation of FIN 46-related entities in December 2003 resulted in a cumulative effect of accounting change that reduced 2003 net income through a non-cash charge of $13 million ($20 million pretax). See Note 2 to our consolidated financial statements.

(d) In 2001, we recorded aggregate restructuring charges of $70 million ($107 million pretax). The aggregate restructuring charges consisted of $36 million for severance relating to the original plans to eliminate approximately 1,300 jobs (including off-shore outsourcing of certain client service positions related to advisor field office closings and headquarters re-engineering efforts) and $71 million of exit and asset impairment charges primarily relating to the consolidation of headquarters and advisor field office facilities.

100

During 2001, we also recognized pretax losses of approximately $1 billion (including $182 million and $826 million in the first and second quarters, respectively) from the write down and sale of certain high-yield debt securities. The second quarter pretax losses of $826 million included $403 million to recognize the impact of higher default rate assumptions on certain structured investments; $344 million to write down lower-rated securities (most of which were sold in 2001) in connection with our decision to lower our risk profile by reducing the size of our high-yield portfolio, allocating our investment portfolio toward stronger credits, and reducing the concentration of exposure to individual companies and industry sectors; and $79 million to write down certain other investments. On January 1, 2001, we adopted the FASB’s consensus on EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets,” which resulted in a cumulative effect of accounting change that reduced 2001 results by approximately $22 million (approximately $34 million pretax). Additionally, on January 1, 2001, we adopted SFAS No. 133, which resulted in a cumulative effect of accounting change that reduced 2001 results by approximately $1 million (approximately $2 million pretax).

(e) Derived from audited consolidated financial statements. (f) Derived from unaudited consolidated financial statements. (g) Total assets as of December 31, 2004, 2003, 2002 and 2001 include assets of discontinued operations of $5,873 million, $4,807

million, $4,829 million, and $4,505 million, respectively. (h) Total liabilities as of December 31, 2004, 2003, 2002 and 2001 include liabilities of discontinued operations of $5,631 million,

$4,579 million, $4,575 million and $4,319 million, respectively.

Glossary of Selected Terminology Administered Assets—Administered assets include assets for which we provide administrative services such as assets of our clients invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in customers’ brokerage accounts. We do not exercise management discretion over these assets and do not earn a management fee. These assets are not reported on our Consolidated Balance Sheets. AMEX Assurance Company—This company is a legal entity owned by IDS Property Casualty Insurance Company that offers travel and other card insurance to American Express customers. This business had historically been reported in the Travel Related Services segment of American Express. Under the separation agreement, 100 percent of this business was ceded to an American Express subsidiary in return for an arm’s length ceding fee. Ameriprise Financial expects to sell the legal entity of AMEX Assurance to American Express within two years after September 30, 2005 for a fixed price equal to the net book value of AMEX Assurance. Clients With a Financial Plan Percentage—The month-end number of our current clients who have received a financial plan, or have entered into an agreement to receive and have paid for a financial plan, divided by the number of active retail client groups serviced by branded employee and franchisee advisors and our customer service organization. Deferred Acquisition Costs (DAC)—These represent the costs of acquiring new insurance, annuity and mutual fund business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity, life and health insurance and, to a lesser extent, auto and home insurance and certain mutual fund products. These costs are deferred to the extent they are recoverable from future profits. Gross Dealer Concession—This is an internal measure, commonly used in the financial services industry, of the sales production of the advisor channel excluding Securities America, Inc. Managed Assets—Managed assets includes client assets for which we provide investment management and other services, such as the assets of the RiverSource family of mutual funds, assets of institutional clients and assets held in our wrap accounts (retail accounts for which we receive a fee based on assets held in the account). Managed assets also includes assets managed by sub-advisors selected by us. Managed assets do not include owned assets or administered assets. These assets are not reported on our Consolidated Balance Sheets. Mass Affluent—These are individuals with $100,000 to $1 million in investable assets and household income above $50,000. We track clients with $100,000 or more in assets with us as a proxy for mass affluent clients. Owned Assets—Owned assets include certain assets on our Consolidated Balance Sheets, principally investments in the general and separate accounts of our life insurance subsidiaries, as well as cash and cash equivalents, restricted and segregated cash and receivables. Securities America—Securities America Financial Corporation (SAFC) is a corporation whose sole function is to hold the stock of its operating subsidiaries, Securities America, Inc. (SAI) and Securities America Advisors, Inc. (SAA). SAI is a registered broker-dealer and an insurance agency. SAA is an SEC registered investment advisor. Separate Accounts—Represent assets and liabilities that are maintained and established primarily for the purpose of funding variable annuity and insurance products. The assets of the separate account are only available to fund the liabilities of the variable annuity contract holders and others with contracts requiring premiums or other deposits to the separate account. Clients elect to invest premiums in stock, bond and/or money market funds depending on their risk tolerance. All investment performance, net of fees, is passed through to the client. Total Clients—This is the sum of all individual, business and institutional clients. Wrap Accounts—Wrap accounts enable our clients to purchase other securities such as mutual funds in connection with investment advisory fee-based “wrap account” programs or services. We offer clients the opportunity to select products that include proprietary and non-proprietary funds. We currently offer both discretionary and non-discretionary investment advisory wrap accounts. In a discretionary wrap account, an unaffiliated investment advisor or our investment management subsidiary, RiverSource Investments, LLC chooses the underlying investments in the portfolio on behalf of the client. In a non-discretionary wrap account, the client chooses the underlying investments in the portfolio based, to the extent the client elects, in part or whole on the recommendations of their financial advisor. Investors in our wrap accounts generally pay an asset based fee based on the assets held in their wrap accounts. These investors also pay any related fees or costs included in the underlying securities held in that account, such as underlying mutual fund operating expenses and Rule 12b-1 fees.

101

General Information Executive Offices Ameriprise Financial, Inc. 707 2nd Avenue South Minneapolis, Minnesota 55402 (612) 671-3131 Ameriprise Financial, Inc. 200 Vesey Street New York, NY 10285-4004 Information Available to Shareholders Copies of our company’s Annual Report on Form 10-K, proxy statement, press releases and other documents, as well as information on financial results and products and services are available through the Ameriprise Financial website at ameriprise.com. Written copies of these materials, as well as a report of our company’s 2005 political contributions, are available upon written request to the Secretary’s Office at the address listed above right. Stock Exchange Listing New York Stock Exchange (Symbol: AMP) Independent Registered Public Accounting Firm Ernst & Young LLP Suite 1400 220 South 6th Street Minneapolis, MN 55402 Transfer Agent The Bank of New York P. O. Box 11002 New York, NY 10286-1002 (866) 337-4999 (U.S. and Canada only) (212) 815-3700 (International) Email: AMPShareowners@bankofny.com Annual Meeting The Annual Meeting of Shareholders of Ameriprise Financial will be held at the company’s Minneapolis headquarters, 707 2nd Avenue South, Minneapolis, MN 55402, on Wednesday, April 26, 2006, at 11 a.m., Central Time. A written transcript or an audiocassette of the meeting will be available upon written request to the Secretary’s Office. There will be a modest charge to defray production and mailing costs. Shareholders As of February 28, 2006, there were approximately 38,350 shareholders of record. Corporate Governance Copies of the Ameriprise Financial Corporate Governance Principles, as well as the charters of the three standing committees of the Board of Directors and the Ameriprise Financial Company Code of Conduct, are available on the company’s website at ir.ameriprise.com. Copies of these materials also are available without charge upon written request to the Secretary’s Office at the address listed above right. We filed with the Securities and Exchange Commission the Certifications of our chief executive officer and chief financial officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 as exhibits 31.1 and 31.2, respectively, to our Annual Report on Form 10-K for the year ended, December 31, 2005. Shareholder and Investor Inquiries Written shareholder inquiries may be sent to The Bank of New York, P. O. Box 11002, New York, NY 10286-1002 or to the Secretary’s Office, Ameriprise Financial, 1098 Ameriprise Financial Center, Minneapolis, MN 55474. Written inquiries from the investment community should be sent to Investor Relations, 243 Ameriprise Financial Center, Minneapolis, MN 55474. Trademarks and Service Marks The following trademarks and service marks of Ameriprise Financial, Inc., and its affiliates may appear in the report: Ameriprise FinancialSM AmeripriseSM Auto & Home Insurance AmeripriseSM Brokerage AmeripriseSM Certificates

Ameriprise Gold Financial ServicesSM Ameriprise ONESM Financial Account Ameriprise Platinum Financial ServicesSM AmeripriseSM Premier Portfolio Services AmeripriseSM Retirement Services AmeripriseSM Strategic Portfolio Services Advantage Dream BookSM New Retirement MindscapeSM RiverSourceSM Annuities RiverSourceSM Insurance RiverSourceSM Investments ThreadneedleSM We Shape Financial Solutions for a LifetimeSM What’s next.SM

102

Exhibit 21

SUBSIDIARIES OF AMERIPRISE FINANCIAL, INC.*

Subsidiary Name

Jurisdiction of Incorporation

Ameriprise Financial Services, Inc.

Delaware

American Express Financial Advisors Japan Inc.

Delaware

American Express Management Company S.A.

LuxembourgIDS Life Insurance Company

Minnesota

IDS REO 1, LLC

Minnesota

IDS REO 2, LLC

Minnesota

American Enterprise Life Insurance Company

Indiana

American Enterprise REO 1, LLC

Minnesota

American Partners Life Insurance Company

Arizona

American Centurion Life Assurance Company

New York

IDS Life Insurance Company of New York

New York

Ameriprise Certificate Company

Delaware

Investors Syndicate Development Corporation

Delaware

RiverSource Investments LLC

Minnesota

Advisory Capital Strategies Group, Inc.

Minnesota

Boston Equity General Partner LLC

Delaware

Advisory Quantitative Equity (General Partner) LLC

Delaware

Advisory Credit Opportunities GP LLC

Delaware

Advisory Capital Partners LLC

Delaware

Advisory European (General Partners) Inc.

Cayman Islands

Advisory Select LLC

Delaware

Advisory Convertible Arbitrage LLC

Delaware

Kenwood Capital Management LLC (51.1%)

Delaware

American Express Asset Management International (Japan) Ltd.

Delaware

IDS Capital Holdings, Inc.

Minnesota

IDS Management Corporation

Minnesota

IDS Cable Corporation

Minnesota

IDS Cable II Corporation

Minnesota

IDS Futures Corporation

Minnesota

IDS Partnership Services corporation

Minnesota

IDS Realty Corporation

Minnesota RiverSource Distributors, Inc.

Delaware

Ameriprise Trust Company

Minnesota American Enterprise Investment Services Inc.

Minnesota

RiverSource Service Corporation

Minnesota

American Express Asset Management International Inc.

Delaware

American Express Asset Management Ltd.

England

RiverSource Tax Advantaged Investment Inc.

Delaware

AEXP Affordable Housing LLC

Delaware

IDS Property Casualty Insurance Company

Wisconsin

Ameriprise Insurance Company

Wisconsin

Ameriprise Auto & Home Insurance Agency Inc.

Wisconsin

AMEX Assurance Company

Illinois

Securities America Financial Corporation

Nebraska

Securities America Advisors, Inc.

Nebraska

Realty Assets, Inc.

Nebraska

Securities America, Inc.

Nebraska American Express Property Casualty Insurance Agency of Kentucky Inc.

Kentucky

American Express Property Casualty Insurance Agency of Maryland Inc.

Maryland

American Express Property Casualty Insurance Agency of Mississippi Inc.

Mississippi

American Express Insurance Agency of Alabama Inc.

Alabama

American Express Insurance Agency of Arizona Inc.

Arizona

*Excludes subsidiaries that, when considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary.

American Express Insurance Agency of Idaho Inc.

Idaho

American Express Insurance Agency of Indiana Inc.

Indiana

American Express Insurance Agency of Maryland Inc.

Maryland American Express Insurance Agency of Massachusetts Inc.

Massachusetts

American Express Insurance Agency of Nevada Inc.

Nevada American Express Insurance Agency of New Mexico Inc.

New Mexico

American Express Insurance Agency of Oklahoma Inc.

Oklahoma

American Express Insurance Agency of Texas Inc.

Texas

IDS Insurance Agency of Utah Inc.

Utah

American Express Insurance Agency of Wyoming Inc.

Wyoming Threadneedle Asset Management Holdings Ltd.

England

Threadneedle Investment (Channel Islands) Ltd.

Jersey, Channel Islands

Threadneedle Asset Management Finance Ltd.

England

Threadneedle Asset Management Ltd.

England

Threadneedle Portfolio Services Ltd.

England

Threadneedle Investment Services Ltd.

England

Threadneedle Asset Management (Nominees) Ltd.

England

Threadneedle Investment Services GMbH

Germany

Threadneedle International Fund Management Ltd.

England

EMX Company Ltd. (22.5% owned)

England

Cofunds Holdings Ltd. (16.3% owned)

England

Investment Manager Selection (Holdings) Ltd. (12% owned)

England

Eagle Star ISA Manager Ltd.

England

Eagle Star Unit Managers Ltd.

England

ADT Nominees Ltd.

England

Threadneedle International Ltd.

England

Threadneedle Management Services Ltd.

England

Threadneedle Rural Property Services Ltd.

England

Threadneedle Property Services Ltd.

England

Threadneedle Pension Trustees Ltd.

England

Threadneedle Pensions Ltd.

England

Crockhamwell Road Management Ltd. (50% owned)

England

Threadneedle Property GP Holdings Ltd.

England

Threadneedle Property Investments Ltd.

England

Sackville Property (GP) Ltd.

England

Sackville Tandem Property (GP) Ltd.

England

Sackville Tandem Property Nominees Ltd.

England

Sackville TPEN Property (GP) Ltd.

England

Sackville TPEN Property Nominee Ltd.

England

Sackville TPEN Property Nominee (2) Ltd.

England

Sackville TSP Property (GP) Ltd.

England

Sackville TSP Property Nominee Ltd.

England

Exhibit 23

Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in this Annual Report (Form 10-K) of Ameriprise Financial, Inc. of our report dated February 27, 2006, with respect to the consolidated financial statements of Ameriprise Financial, Inc., included in the 2005 Annual Report to Shareholders of Ameriprise Financial, Inc. Our audits also included the financial statement schedules of Ameriprise Financial, Inc., listed in Item 15(a). These schedules are the responsibility of Ameriprise Financial, Inc.’s management. Our responsibility is to express an opinion based on our audits. In our opinion, as to which the date is February 27, 2006, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. We consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-3 No. 333-128834) of Ameriprise Financial, Inc., (2) Registration Statement (Form S-8 No. 333-128789) pertaining to the Ameriprise Financial 2005 Incentive Compensation

Plan of Ameriprise Financial, Inc., (3) Registration Statement (Form S-8 No. 333-127890) pertaining to the Ameriprise 401 (k) Plan of Ameriprise Financial, Inc.,

and (4) Registration Statement (Form S-8 No. 333-127891) pertaining to the Ameriprise Financial Deferred Equity Program for

Independent Financial Advisors of Ameriprise Financial, Inc.; of our report dated February 27, 2006, with respect to the consolidated financial statements of Ameriprise Financial, Inc. incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedules of Ameriprise Financial, Inc. included in this Annual Report (Form 10-K) of Ameriprise Financial, Inc.

Minneapolis, Minnesota March 8, 2006

/s/Ernst & Young LLP

Exhibit 31.1

CERTIFICATION

I, James M. Cracchiolo, certify that: 1. I have reviewed this Annual Report on Form 10-K of Ameriprise Financial, Inc.; 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)) 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) 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

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act

Rules 13a-15(f) and 15d-15(f)) 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 weaknesses 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: March 8, 2006

/s/ James M. Cracchiolo

James M. Cracchiolo

Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Walter S. Berman, certify that: 1. I have reviewed this Annual Report on Form 10-K of Ameriprise Financial, Inc.; 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)) 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) 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

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act

rules 13a-15(f) and 15d-15(f) 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 weaknesses 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: March 8, 2006

/s/ Walter S. Berman

Walter S. Berman

Chief Financial Officer

Exhibit 32

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 Financial, Inc. (the “Company”) for the year ended December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), James M. Cracchiolo, as Chief Executive Officer of the Company, and Walter S. Berman as 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 Section 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.

[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.] [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 is expressly and specifically incorporated by reference in any such filing.]

/s/ James M. Cracchiolo

Name: James M. Cracchiolo

Title: Chief Executive Officer

Date: March 8, 2006

/s/ Walter S. Berman

Name: Walter S. Berman

Title: Chief Financial Officer

Date: March 8, 2006